Opinion
NO. 2015 CA 1158
07-12-2016
SHARON STUMP, DONALD "DUCK" WILLIAMS II, JON SHANNON WHITE, ROY SANDEFER, AND KEVIN HALL, INDIVIDUALLY AND ON BEHALF OF ALL OTHER SIMILARLY SITUATED v. SAMUEL M. CAMP, JUDITH M. CAMP, CAMLINE, LLC F/K/A AND PAMLAB, LLC
Ryan E. Loyacano Leandre Millet LaPlace, Louisiana Counsel for Plaintiffs/Appellants Sharon Stump, Donald "Duck" Williams, II, Jon Shannon White, Roy Sandefer, and Kevin Hall, individually and on behalf of all other similarly situated Charles F. Seeman, III Rene' E. Thorne New Orleans, Louisiana Counsel for Defendants/Appellees Samuel M. Camp, Judith M. Camp, Camline, LLC f/k/a and Pamlab, LLC
NOT DESIGNATED FOR PUBLICATION Appealed from the 22nd Judicial District Court In and for the Parish of St. Tammany State of Louisiana
Case No. 2013-15378B The Honorable August Hand, Judge Presiding Ryan E. Loyacano
Leandre Millet
LaPlace, Louisiana Counsel for Plaintiffs/Appellants
Sharon Stump, Donald "Duck"
Williams, II, Jon Shannon White,
Roy Sandefer, and Kevin Hall,
individually and on behalf of all
other similarly situated Charles F. Seeman, III
Rene' E. Thorne
New Orleans, Louisiana Counsel for Defendants/Appellees
Samuel M. Camp, Judith M. Camp,
Camline, LLC f/k/a and Pamlab,
LLC BEFORE: McDONALD, McCLENDON, AND THERIOT, JJ. THERIOT, J.
Plaintiffs-appellants, Sharon Stump, Donald "Duck" Williams, II, Jon Shannon White, Roy Sandefer, and Kevin Hall, individually and on behalf of others similarly situated (collectively "plaintiff-employees"), appeal the judgment of the Twenty-Second Judicial District Court that granted the motion for summary judgment of the defendants-appellees, Samuel M. Camp, Judith M. Camp, Camline, LLC f/k/a Pamlab, LLC (collectively "Pamlab"), and dismissed the petition filed by the plaintiff-employees with prejudice. For the following reasons, we affirm.
The employees are officially employed by Pamlab, of which the Camps are members.
FACTS AND PROCEDURAL HISTORY
The instant case is a class action suit filed by the employees against their employer. See La. C.C.P. art. 591. The plaintiff-employees allege that, during their employment with Pamlab, they participated in an Incentive Point Employee Compensation Plan ("the Point Plan") offered by Pamlab. As alleged in the petition, points were awarded to the employees during the course of their employment, and the plaintiff-employees alleged that Pamlab informed them that the points equated to stock and was a form of "deferred compensation" that would be of high value if the company was ever sold. The plaintiff-employees also alleged that the reason Pamlab did not offer actual stock to the employees was to ensure that employees could not leave the company and still derive a monetary benefit from its growth. Pamlab would pay what the plaintiff-employees called "dividends" from time to time to point holders, much in the same way stock dividends are paid out to stockholders.
In a letter dated January 9, 2012, Pamlab informed all employees that the Point Plan had been terminated as of June 14, 2011, unbeknownst to the employees. The letter explained that Pamlab's bank required that the Point Plan be terminated before an Employee Stock Ownership Plan could be funded. No monies were disbursed to the employees who held points because, as the letter pointed out, there had been no "conversion event," which was described in the Point Plan as either a change of control or going public
Despite the termination of the Point Plan, Pamlab paid a fixed dollar amount to each employee whose points had been terminated, conditioned upon their signing a Release Agreement and Participation Election. Said agreement released any claims the employee might have had against Pamlab as a result of the termination of the Point Plan. The agreement also provided the employees with two options: either participate in a new Incentive Point Plan (the "New Plan") beginning on February 1, 2012, or accept a cash sum paid in five annual installments without eligibility to participate in the New Plan. Pamlab informed all employees that under the New Plan, they would retain the same number of points they had under the former Point Plan, but that payment on the new points would be according to the conditions of the New Plan. The employees were required to sign the Release Agreement and indicate their choice of option no later than January 31, 2012.
The dollar amount varied between each employee. The employees presumed that the variation was due to the number of points each employee held. --------
The plaintiff-employees, claiming that they were "shocked" by the sudden realization that their incentive points had been terminated, did not trust the New Plan and did not elect to participate in it. Part 10 of the New Plan provided that it was to terminate on June 30, 2017, at which time all incentive points would be cancelled and the holders would have no rights to any form of payment. Pamlab reserved the right to amend or terminate the New Plan at any time, even before the aforementioned termination date. It was because of this provision that the plaintiff-employees claimed they chose not to participate in the New Plan and chose the point buyout option.
On February 26, 2013, Pamlab announced that it had been sold to Nestle Health Science ("Nestle"). The plaintiff-employees claimed the announcement took them completely by surprise. The sale became effective on April 1, 2013, which was a "conversion event" as defined in the New Plan. Because of the sale of Pamlab, the employees who decided to participate in the New Plan profited tremendously when they sold their points. The employees who chose the cash buyout received nothing more than the much smaller installment payments to which they had agreed. After announcing the sale, Pamlab accelerated the yearly installments and paid the employees all that was owed under the option of the points buyout. Despite the plaintiff-employees' opinion that they had been defrauded by Pamlab, they nevertheless accepted the accelerated payments on March 29, 2013.
According to their petition, the plaintiff-employees believed that Pamlab had a "gentleman's agreement" with Nestle concerning the sale when the letter of January 9, 2012 was issued, but that Pamlab withheld the information about the pending sale from its employees. The plaintiff-employees averred that Pamlab should have disclosed whatever it knew about the sale at that time to all employees so they could have made a more informed decision as to whether they should have participated in the New Plan, but Pamlab opted to withhold the information to avoid the expense of paying its employees the full value of their points. The plaintiff-employees claimed that Pamlab was liable to them for error of consent, fraud, and bad faith breach of contract.
Pamlab filed a motion for summary judgment on August 5, 2014, prior to the case being certified as a class action. Pamlab argued that there was no genuine issue of material fact since the plaintiff-employees voluntarily agreed to the Election and Release Agreement, and accepted and retained the money from the points buyout, thereby confirming their consent regardless of any vices of consent that might have existed.
The trial court ruled in favor of Pamlab and signed a judgment on December 10, 2014, granting summary judgment and dismissing the plaintiff-employees' petition with prejudice. It is from this judgment that the plaintiff-employees appeal.
ASSIGNMENTS OF ERROR
The plaintiff-employees raise two assignments of error:
1. The trial court committed legal error and abused its discretion in granting Pamlab's motion for summary judgment because prior tender is not required to file a breach of contract claim based upon fraud.
2. The trial court committed legal error and abused its discretion in granting Pamlab's motion for summary judgment in finding that the employees had actual knowledge of the fraud and therefore confirmed the vice of consent through tacit acceptance.
STANDARD OF REVIEW
A motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Samaha v. Rau, 2007-1726 (La. 2/26/08), 977 So.2d 880, 882. Appellate courts review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Kennedy v. Sheriff of East Baton Rouge, 2005-1418 (La. 7/10/06), 935 So.2d 669, 686. A motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admission on file, together with the affidavits, if any, admitted for purposes of the motion for summary judgment, show that there is no genuine issue of material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P art. 966(B); Samaha, 977 So.2d at 883.
DISCUSSION
The two assignments of error of the plaintiff-employees essentially concern the same issue: whether the plaintiff-employees' retention of the cash payment vitiates any breach of contract or vice of consent. Jurisprudence indicates that formal tender or performance is not required by the plaintiff when the defendant has actively breached the contract, since tender would then become a vain and useless act. See Brooks v. Shipp, 481 So.2d 655, 658 (La. App. 1 Cir. 1985); Cast-Crete Corp. v. West Baro Corp., 339 So.2d 413, 416 (La. App. 1 Cir. 1976), writ denied, 341 So.2d 900 (La. 1977); Meunier v. Liang, 521 So.2d 475, 476 (La. App. 4 Cir. 1988); Bergeron v. Bertrand, 514 So.2d 622, 624 (La. App. 4 Cir. 1987).
In the instant case, the contractual obligation owed by the plaintiff-employees was not the return of the cash they received. The obligation owed by the plaintiff-employees under the New Plan was to choose either to participate in the New Plan, or to choose the points buyout option. Since the plaintiff-employees chose the buyout option, Pamlab's contractual duty was to pay the plaintiff-employees their respective cash sums. The tender or performance of the employees was to choose either option, which was done. Pamlab made the payments pursuant to the New Plan; there was no breach of contract.
The trial court was correct in its reasons that in order to invalidate a contract based on fraud, the aggrieved party must return the consideration received, or otherwise confirm or validate the fraud. See Aultman v. Entergy Corp., 98-2244 (La. App. 1 Cir. 11/5/99), 747 So.2d 1151, 1155; see also Brock v. Town of Kentwood, 199 So. 133, 134 (La. 1940); Vest v. Richardson (on rehearing), 253 So.2d 97 (La. App. 4 Cir. 1971), writ denied, 254 So.2d 618 (La. 1971). The letter dated January 9, 2012, given to all the employees, as well as the Release Agreement and Participation Election, put the employees on notice of their two options and the "pros and cons" of choosing one option over the other. Each of the plaintiff-employees in their depositions acknowledged receipt of and understanding of the January 9, 2012 letter.
Despite the plaintiff-employees' belief that Pamlab had acted fraudulently, they never returned the points buyout cash to Pamlab, thereby barring themselves from attacking the validity of the Release Agreement and Election Participation as a matter of law. See Aultman, 747 So.2d at 1155.
While several of the plaintiff-employees stated in their depositions that they were told Pamlab "was not for sale", they provided only speculation and no evidence as to the truth of those statements. The record does not contain any evidence as to what was known by Pamlab concerning the sale to Nestle as of January 9, 2012. The record does show that the plaintiff-employees had to choose an option by January 31, 2012. The record also shows that over one year later, on February 26, 2013, Pamlab announced it was being sold to Nestle. Due to the lack of evidence on the part of the plaintiff-employees and considering the length of time between the option deadline and the sale announcement, plaintiff-employees have failed to establish that a question of material fact exists to overcome movers motion for summary judgment. Plaintiff-employees' assignments of error lack merit.
DECREE
The judgment of the trial court granting the motion for summary judgment on behalf of the defendants-appellees, Samuel M. Camp, Judith M. Camp, Camline, LLC f/k/a Pamlab, LLC, and dismissing with prejudice the petition of the plaintiffs-appellants, Sharon Stump, Donald "Duck" Williams, II, Jon Shannon White, Roy Sandefer, and Kevin Hall, individually and on behalf of others similarly situated, is affirmed. Costs of this appeal are assessed to the plaintiffs-appellants.
AFFIRMED. McCLENDON, J., concurring.
Consent may be vitiated by error, fraud or duress. LSA-C.C. art. 1948. The plaintiffs challenge the releases in this matter based on error and fraud.
In their motion for summary judgment, the defendants pointed out the absence of factual support for an element of the plaintiffs' claim. Specifically, the defendants asserted that the plaintiffs voluntarily consented to the terms of the release agreement. The burden shifted to the plaintiffs to produce factual support sufficient to establish that they would be able to satisfy their evidentiary burden of proof at trial. Because the plaintiffs failed to present sufficient evidence that they were induced into signing the release agreements by either fraud or error, I find that there is no genuine issue of material fact. Although the jurisprudence of this Court is unclear as to whether a tender back of payment is required in cases involving fraud, compare Patrick v. Dupont, 14-0810 (La.App. 1 Cir. 3/11/15) (unpublished), writ denied, 15-0705 (La. 6/1/15), 171 So.3d 263, and Aultman v. Entergy Corp., 98-2244 (La.App. 1 Cir. 11/5/99), 747 So.2d 1151, under the facts of this case, I find that the defendants are entitled to summary judgment.
Therefore, I respectfully concur with the result reached by the majority.