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Beggins v. CBRE Capital Markets of Texas, L.P.

United States District Court, S.D. Texas, Houston Division

June 26, 2018



          Lee H. Rosenthal Chief United States District Judge

         This case is about whether the plaintiff, Joseph Beggins, was entitled to receive more than half a million dollars when his employment ended. Beggins was a seconded chief executive officer for GEMSA Loan Services, a partnership between General Electric and the defendant, CBRE Capital Markets of Texas, L.P. When General Electric decided to leave the partnership, CBRE offered Beggins a retention bonus if he agreed to oversee the transition for the rest of the year. Beggins did oversee the transition, but Beggins and CBRE could not agree on some retention-agreement provisions. Beggins ended his work for CBRE, but it did not pay Beggins the retention bonus. Beggins tried to apply for benefits under CBRE's severance pay policy, but CBRE did not respond to Beggins's benefits claim. Beggins sued, asserting claims for breach of contract, promissory estoppel, negligent misrepresentation, and wrongful denial of ERISA benefits. (Docket Entry No. 11). After discovery, CBRE moved for summary judgment on all four claims, and Beggins responded, agreeing to dismiss the promissory estoppel and breach of contract claims. (Docket Entry Nos. 19 ¶ 3; 20 ¶ 1). CBRE replied. (Docket Entry No. 20). The court granted leave for CBRE to amend its answer and both parties submitted supplemental briefing to CBRE's motion for summary judgment and Beggins's response. (Docket Entry Nos. 24, 25, 26).

         Based on the motion, response, reply, the supplemental briefs, the record, and the applicable law, CBRE's motion for summary judgment, (Docket Entry No. 16), is granted in part and denied in part. The reasons for this ruling are explained below. A scheduling and status conference is set for Friday, July 13 at 3:00p.m.

         I. Background

         Beggins led GEMSA Loan Services as its seconded chief executive officer for over a decade. (Docket Entry No. 16 ¶ 19). GEMSA was a partnership between a CBRE subsidiary and a General Electric Corporation subsidiary. (Id.). Du ring this time, Beggins was considered a CBRE employe e, paid by CBRE. (Docket Entry No. 19, Ex. A, Joseph Beggins Dep. 33: 10-24).

         In April 2015, General Electric decided to leave the GEMSA partnership, requiring a reduction in the number of employees and the partnership's dissolution. (Docket Entry No. 16 ¶ 20). CBRE planned to end Beggins's employment, but General Electric wanted Beggins to stay and protect its interests in the transition period. (Docket Entry No. 19, Ex. B, Chris Shamaly Dep. 51: 4-13). CBRE offered Beggins a retention agreement as an incentive to help with the transition through the end of the year. (Docket Entry No. 16 ¶ 20).

         In May 2015, General Electric's global head of asset management, Joe Manasseri, called Beggins to tell him that he would soon receive a formal retention agreement calling for an $800, 000 payment. (Docket Entry No. 19, Ex. A, Joseph Beggins Dep. 120: 15-121: 12). One month later, Beggins received a phone call from a GEMSA board member, Neil Sullivan, to discuss the agreement. Sullivan told Beggins that the amount would be closer to $827, 000. (Id. 113: 1-25). General Electric decided to structure the agreement to pay $200, 000 for Beggins's continued employment through the year's end and to pay $627, 000 in place of the amount Beggins would have received under CBRE's severance policy. (Id., Ex. B, Chris Shamaly Dep. 46: 1-20).

         On July 22, 2015, another GEMSA board member, Jeff Majewski, sent Beggins a copy of the retention agreement and a release form. (Id. ¶ 12). The retention agreement provided in relevant part:

1. Background: You are currently employed by CBRE and seconded to GEMSA Loan Services . . . as that company's Chief Executive Officer. . . . The [General Electric] Partner has informed the CBRE Partner that it intends to . . . withdraw as a partner of GEMSA on or about August 31, 2015 . . . .
2. Retention Period: CBRE desires that you continue employment with CBRE at your current salary through the earlier to occur of either (a) the last day of the month in which the IT Migration Occurs, or (b) December 31, 2015 . . . .
. . .
5. Payments: In lieu of any bonus consideration that you may have been eligible for under GEMSA or CBRE bonus plan and CBRE's Severance Policy, CBRE agrees to pay you a “Retention Bonus” equal to $827, 202 . . . within twenty (20) days following the completion of working through the Retention Period . . .
6. Breach: If you do not either (a) return a fully executed copy of this Agreement by email by the date set forth below, or (b) meet the Retention Period obligations . . . CBRE may terminate your employment effective August 31, 2015 and you will not be eligible for the Retention Bonus . . . but instead will receive severance equal to $471, 868 . . . .
. . .
10. Employee Release of Claims: As a condition of receiving the Retention Bonus and/or severance, employee agrees to execute CBRE's General Release and Agreement at the end of employee's employment. . . .

(Docket Entry No. 16, Ex. A at 7-8). The CBRE General Release provided:

Employee does hereby, and for Employee's heirs, legal representatives, agents, successors in interest, and assigns, irrevocably and unconditionally release, acquit, and forever discharge CBRE and all of its Agents . . . of and from all claims, actions, causes of action, rights, demands, debts, obligations, damages, or accounts of whatever nature arising through the date hereof . . . which Employee has against [CBRE and all of its Agents] by reason of or arising out of Employee's employment with CBRE or any other matters of whatever nature, whether known or unknown . . . .

(Id., Ex. B ¶ 7(A)).

         Beggins consulted with his attorney and sent proposed changes to the retention agreement and release form two weeks later. (Id., Ex. F). In one of the many revisions, Beggins proposed to change the language releasing “CBRE and all of its Agents” in the CBRE General Release to just “CBRE Capital Markets.” (Docket Entry No. 16, Ex. F at 79). Beggins wanted to preserve any claims he might have against General Electric for his pension benefits. (Docket Entry No. 19, Ex. A, Joseph Beggins Dep. 153: 1-13).

         Beggins sent the edits to Majewski, who forwarded the changes to Chris Shamaly in CBRE's general counsel office. (Docket Entry No. 19, Ex. D at 3). Shamaly told Majewski that the changes to the release were “probably not acceptable” by CBRE's human resources office, but that he would “send it to them for review.” (Id.). Shamaly forwarded the changes to Nadine Chang, assistant general counsel for CBRE, stating: “Have you had a chance to look at this? . . . If none of his lawyer's changes are acceptable, that's okay. At a minimum, I assume the changes to the [release agreement] are not all acceptable.” (Id. at 4). Chang responded, “His changes are ridiculous. We should discuss.” (Id.).

         A few days later, Majewski sent back a new agreement incorporating and rejecting some of Beggins's proposals. (Docket Entry No. 16, Ex. G). CBRE rejected Beggins's proposal to change “CBRE and all of its Agents” to limit the release to “CBRE Capital Markets.” (Id.).

         On the same day, Beggins spoke by phone with Majewski and Shamaly to discuss the release and explain that he did not want to release General Electric. (Docket Entry No. 19, Ex. A, Joseph Beggins Dep. 166: 12-19; Ex. B, Chris Shamaly Dep. 13: 2-18). Beggins asked Majewski and Shamaly what the word “agents” meant in the general release. They told him they did not know. (Id., Ex. A, Joseph Beggins Dep. 166: 7-19). Majewski and Shamaly told Beggins that he could send back another edited agreement that expressly excluded General Electric from the release provision, instead of changing “CBRE and all of its Agents” to “CBRE Capital Markets.” (Id. 168: 3-11, 213: 7-14).

         One week later, Beggins sent another proposed agreement to Majewski. (Docket Entry No. 16, Ex. H). In the revised release form, instead of changing the “CBRE and all its Agents” language, Beggins added the following line:

It is acknowledged that [CBRE and all of its Agents] does not include the General Electric Company, General Electric Capital Corporation or any of its respective subsidiaries, affiliates, divisions, predecessors, successors, officers, directors, shareholders, employees, representatives or agents.

(Id. at 109). Beggins did not get a response. On September 1, 2015, he emailed Sullivan, Majewski, Shamaly, and Chang to ask whether CBRE had decided to accept or reject his most recent proposed agreement. (Id., Ex. I at 124). Chang responded that CBRE was in the process of revising the documents. (Id.). Beggins contacted Chang again on September 10 for an update and did not receive a response. (Id. at 123). On September 16, Beggins contacted Chang for a third time and Chang responded:

Apologies for the delay. We will be updating the retention and general release agreement that you marked up and returned to us. We will not accept the change that you made that indicates that [General Electric] Corporation and [General Electric] Capital are excluded from the arbitration agreement or release, however, I believe we are close to agreement on the other changes that you made.

(Id. at 122). Beggins responded: “Thank you Nadine, that is all I needed to know. Much appreciated.” (Id.). Beggins testified that he understood this interaction to mean he would receive the standard CBRE retention agreement and release with the previous “CBRE and all of its Agents” language. (Docket Entry No. 19, Ex. A, Joseph Beggins ...

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