Opinion
Civil Action No. 3:03-CV-0729-B.
September 27, 2004
MEMORANDUM ORDER
Before the Court is Defendant's Motion for Summary Judgment, filed June 8, 2004. Having reviewed the pleadings and evidence on file, the Court GRANTS Defendant's motion for the reasons that follow.
I. Factual and Procedural Background
The facts are derived from the parties' pleadings and on the evidence contained in the summary judgment record. Unless characterized as a contention by one of the parties, these facts are undisputed.
Defendant The McGraw Hill Companies ("McGraw Hill") operates various business, among which is its "F.W. Dodge" Division. (Brewis Decl. ¶ 3, App. 84). F.W. Dodge provides information to construction contractors and suppliers. ( Id.) In 1996, Plaintiff Paul Tilford ("Tilford") began working at F.W. Dodge's Monrovia, California office as a temporary employee. (Tilford Depo., App. 5-6). Tilford later voluntarily transferred to F.W. Dodge's office in Dallas, Texas. (Tilford Depo., App. 14).
Throughout this order, the Defendant will be referred to interchangeably as "McGraw Hill" and "F.W. Dodge."
During his employment in Dallas, Tilford interviewed for a position as Training Manager with Cliff Brewis, Senior Director of Regional Editorial Operations for McGraw Hill's West Region. (Brewis Decl. ¶¶ 2, 4, App. 84-85). Although Tilford was not offered the Training Manager post, Brewis claims that he was impressed with Tilford and that he told Tilford that he would keep him in mind for a position that was expected to open up soon in the West Region. (Brewis Decl. ¶ 4, App. 85). After Tilford's interview with Brewis, at some point in October 2000 Tilford came across a listing on the company's intranet system for an open "Architectural Specialist" position in San Francisco, California. (Tilford Depo., App. 17-18). On October 26, 2000, Tilford e-mailed Brewis to inquire whether the posted Architectural Specialist position was the same position Brewis had earlier mentioned that Tilford might be fit for. (Tilford Depo., App. 18; E-mail from Paul Tilford to Cliff Brewis (Oct. 26, 2000), App. 62). Brewis confirmed that that was indeed the position he was thinking about, and he invited Tilford to apply. (Brewis Decl. ¶ 5, App. 85).
Thereafter, Tilford and Brewis had several discussions and exchanged several e-mail messages regarding the Architectural Specialist position. ( Id.). Tilford claims that during conversations he had with Brewis, Brewis told him that, "if you take the A[rchitectural] S[pecialist] position, I see you being the field manager when that req[uistion] is open." (Tilford Depo., App. 21). But Brewis contends that the Field Manager position was vacant at the time that this alleged promise was made and that McGraw Hill had already decided not to fill the Field Manager position. (Brewis Decl. ¶ 6, App. 85-86). In any event, Tilford and Brewis ultimately agreed that Tilford would come to California and become an Architectural Specialist in the Sacramento office at the salary of $42,000 per year. (Brewis Decl. ¶ 5, App. 85).
According to Tilford, in December 2000, before leaving for California, Brewis sent him an undated letter (hereinafter the "Undated Letter") offering him an "editorial position" at the salary of $55,000 per year. (Tilford Depo., App. 58-59; Undated Letter, App. 75). Tilford later received another letter from Brewis, dated January 15, 2001, in which Brewis welcomed Tilford to his "new position" in Sacramento, California at a salary of $42,000 per year — the same salary that the two men had negotiated for Tilford to receive as an Architectural Specialist. (Tilford Depo., App. 59-61; Brewis Decl. ¶ 5, App. 85; Letter from Cliff Brewis to Paul Tilford (January 15, 2001) [the "January 15, 2001 letter"], App. 76). In mid-February 2001, Tilford moved to Sacramento and began working as an Architectural Specialist. (Tilford Depo., App. 35-36). In March 2001, Tilford claims to have heard rumors that the company was not going to open a Field Manager's position after all, but rather that the Field Manager's duties were to be assumed by Will Hernandez, a current Field Manager, whose territory was to be expanded to include the Sacramento office. (Tilford Depo., App. 38-39); Brewis Decl. ¶ 6, App. 86). This news was upsetting to Tilford because he felt that Brewis had earlier offered that job to him, and because Tilford had experienced a poor working relationship with Hernandez in the past. (Tilford Depo., App. 39, 47). In June 2001, Tilford learned that the rumors were in fact true — Hernandez would be the Field Manager responsible for Tilford's region. (Tilford Depo., App. 38).
On June 27, 2002, Tilford filed suit against McGraw Hill in Texas state court, bringing claims for breach of contract and promissory estoppel. McGraw Hill removed the case to federal court on grounds of diversity. McGraw Hill moved for summary judgment on June 8, 2004. To date, Tilford has not responded to the motion, which is now ripe for determination.
II. Analysis
A. Legal Standards
Summary judgment is appropriate when the pleadings and record evidence show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). Only disputes about material facts will preclude the granting of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The burden rests on the movant to prove that no genuine issue of material fact exists. Latimer v. Smithkline French Lab., 919 F.2d 301, 303 (5th Cir. 1990). If the non-movant bears the burden of proof at trial, the summary judgment movant need not support its motion with evidence negating the non-movant's case. Rather, the movant may satisfy its burden by pointing to the absence of evidence to support the non-movant's case. Id.; Little, 37 F.3d at 1075.
Once the movant meets its burden, the non-movant must show that summary judgement is not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). "This burden is not satisfied with `some metaphysical doubt as to material facts,' . . . by `conclusory allegations,' . . . by `unsubstantiated assertions,' or by only a `scintilla' of evidence." Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). The non-moving party must "come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587 (emphasis in original) (quoting FED.R.CIV.P. 56(e)). To determine whether a genuine issue exists for trial, the court must view all of the evidence in the light most favorable to the non-movant, and the evidence must be sufficient such that a reasonable jury could return a verdict for the non-movant. Munoz v. Orr, 200 F.3d 291, 302 (5th Cir. 2000); Anderson, 477 U.S. at 248.
Having failed to respond to McGraw Hill's motion, Tilford has not designated specific facts showing that there is a genuine issue for trial and is therefore relegated to his unsworn pleadings, which are not summary judgment evidence. Bookman v. Shubzda, 945 F.Supp. 999, 1002 (N.D. Tex. 1996) (citing Solo Serve Corp. v. Westowne Assocs., 929 F.2d 160, 165 (5th Cir. 1991)). While Tilford's failure to oppose summary judgment does not permit the Court to enter a "default" judgment, the Court is allowed to accept the evidence presented by McGraw Hill as undisputed. Eversley v. MBank Dallas, 843 F.2d 172, 174 (5th Cir. 1988); see also Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (holding that a party opposing summary judgment is required to identify specific evidence in the record and articulate the precise manner in which that evidence supports his claim). McGraw Hill's evidentiary assertions will therefore be accepted as undisputed. Id. at 458 (noting that it is not the court's duty to sift through the record in search for evidentiary support for a party's opposition to summary judgment).
B. Choice of Law
McGraw Hill predicates its motion on Texas law, but the motion does not address why Texas law should apply in this diversity case. Not having filed a response to the motion, Tilford appears to have acquiesced in the application of Texas law. A party has "an obligation to call the applicability of another state's law to the court's attention in time to be properly considered." Kucel v. Walter E. Heller Co., 813 F.2d 67, 74 (5th Cir. 1987). Nevertheless, a court may determine the choice-of-law issue on its own motion where manifest justice would otherwise result. Am. Int'l Trading Corp. v. Petroleos Mexicanos, 835 F.2d 536, 540 (5th Cir. 1987). Manifest injustice exists only in extreme circumstances, however, and requires more than a mere showing that the application of another state's law would produce a different result. Id.
The Court also notes that Tilford seeks attorney's fees under Chapter 38 of the Texas Civil Practice and Remedies Code, which provides for the recovery of attorney's fees in breach of contract actions. TEX. CIV. PRAC. REM. CODE § 38.001(8); (Pl.'s Orig. Pet. ¶ 11).
The Court finds that the application of Texas law to this case would not be manifestly unjust. In making the choice-of-law determination, a federal court sitting in diversity applies the choice-of-law rules of the forum state. Mayo v. Hartford Life Ins. Co., 354 F.3d 400, 403 (5th Cir. 2004). Absent a valid choice-of-law agreement, Texas courts apply the "most significant relationship" test of the Restatement (Second) of Conflict of Laws. Mayo, 354 F.3d at 403. In basic contract cases, the most significant relationship test is applied through the lens of section 188 of the Restatement. Perez v. Alcoa Fujikura, Ltd., 969 F.Supp. 991, 1003 (W.D. Tex. 1997); RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 188 (1971). In cases involving personal service contracts, Texas courts have applied section 196 of the Restatement. Maxus Exploration Co. v. Moran Bros., Inc., 817 S.W.2d 50, 53 (Tex. 1991). That section provides that contracts for the rendition of services are enforced under the laws of the state where the services, or a major portion of the services, are rendered. Id.; RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 196 (1971).
Section 188(2) lists the following factors that should be considered: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation and place of business of the parties. RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 188(2) (1971).
The presumption set forth in section 196, however, is not conclusive. Perez, 969 F.Supp. at 1003 ("If an analysis of the relevant contacts shows that another state has a more significant relationship to the claim, then that state's laws should be applied."). Here, applying the factors listed in section 188(2) of the Restatement, it is at least arguable that Texas law should be applied despite the fact that Tilford was to perform under the agreements at issue in California. For example, the promises allegedly made by McGraw Hill upon which Tilford founds this lawsuit occurred while Tilford was living and working for McGraw Hill in Texas, and he is now again a Texas resident. (Pl.'s Orig. Pet. ¶ 2). Moreover, it appears from the record that Tilford conducted negotiations with McGraw Hill about his employment from Texas. (Tilford Depo., App. 16-17; Undated Letter, App. 75; January 15, 2001 letter, App. 76). Given these contacts with the state of Texas, the Court finds that, regardless of whether Texas or California law should more appropriately be applied, the application of Texas law is not manifestly unjust.
Tilford alleges to have made a trip to California, however, to meet with Brewis and Jeff Greene, an Interim Manager for McGraw Hill, to discuss his employment situation. (Pl.'s Orig. Pet. ¶ 5).
And, as discussed infra, the result would be the same even if California law applied.
C. Breach of Contract
Although Tilford's state court petition is not a model of clarity, it is possible to distill from it that Tilford essentially claims that McGraw Hill breached two promises it made to him. First, he alleges that McGraw Hill breached its promise, memorialized in the Undated Letter, to place him in an editorial position in the company's Sacramento office at $55,000 per year. (Pl.'s Orig. Pet. ¶ 6). Second, he maintains that McGraw Hill failed to live up to its obligation to place him in the Field Manager's position once that position was funded. (Pl.'s Orig. Pet. ¶¶ 6-7). Each of these discrete claims will be addressed in turn.
(i) Editorial Position
Tilford contends that Brewis promised him an editorial position, paying $55,000 annually, in the Undated Letter. The Court takes note that McGraw Hill has challenged that letter's authenticity, charging that Tilford manufactured it. (Def.'s Br. in Supp. Mot. Summary J. 6, n. 1; Brewis Depo., App. 83). The Court further notes that Tilford has failed to authenticate the letter under either Rule 901 or 902 of the Federal Rules of Evidence. Nevertheless, even if the Undated Letter's authenticity were unquestioned, Tilford's contract claim would still fail for the following reasons.
Under Texas law, unless there is a specific agreement to the contrary, the employer/employee relationship is presumed to be at will. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex. 1998). To rebut the at-will presumption, "the employer must unequivocally indicate a definite intent to be bound not to terminate the employee except under clearly specified circumstances." Id. Here, it is undisputed that Tilford had no written contract of employment with McGraw Hill. (Tilford Depo, App. 29). McGraw Hill could, therefore, terminate or demote Tilford for good cause, bad cause, or no cause. Brown, 965 S.W.2d at 502; see also Rollins v. City of Dallas, Texas, 1999 WL 1267229, at *4 (N.D. Tex. Dec. 29, 1999) (finding that agreement will not affect at-will relationship unless it expressly limits the employer's right to terminate or demote an employee).
Although the Court is applying Texas law, it notes that California has a statutory presumption of at-will employment. CAL. LABOR CODE § 2922.
California has a like rule. There, the at-will presumption may be overcome only by evidence that "the parties agreed that the employer's power to terminate would be limited in some way. . . ." Haycock v. Hughes Aircraft Co., 22 Cal. App. 4th 1473, 1488 (Cal.App. [2nd Dist., Div. 5] 1994).
Here, the Undated Letter simply offered Tilford a generic "editorial position" and specified an annual salary. (Undated Letter, App. 75). Importantly, the letter did not "unequivocally indicate a definite intent" to disturb Tilford's at-will status. Brown 965 S.W.2d at 502; Saucedo v. Rheem Mfg. Co., 974 S.W.2d 117, 128 (Tex.App.-San Antonio 1998, pet. denied) (finding on rehearing that written confirmation provided by employer that employee would make $36,000 annually was too indefinite to modify at-will relationship); Hamilton v. Segue Software Inc., 232 F.3d 473, 480 (5th Cir. 2000) (finding that statement of annualized base salary in offer letter did not limit the employer's right to terminate). Therefore, McGraw Hill remained free to either terminate Tilford or to modify the terms of his employment as it saw fit. "Generally, when the employer notifies an [at-will] employee of changes in employment terms, the employee must accept the new terms or quit. If the employee continues working with knowledge of the changes, he has accepted the changes as a matter of law." Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 229 (Tex. 1986). Therefore, even assuming that McGraw Hill offered Tilford an editorial position at $55,000 per year, the summary judgment proof establishes that that offer was revoked and replaced with the company's offer to pay Tilford $42,000 a year which was contained in the January 15, 2001 letter. (January 15, 2001 letter, App. 76). Tilford accepted the new terms by working as an Architectural Specialist and receiving pay at a rate of $42,000 a year. (Tilford Depo., App. 42).
In DiGiacinto v. Ameriko-Omserv Corporation, a California appellate court found no breach of contract where an employee accepted a unilateral pay decrease imposed by his employer by continuing to work for the employer after receiving notice of the change. 59 Cal. App 4th 629, 639 (Cal.App. [2nd Dist., Div. 7] 1997).
ii) Field Manager Position
To the extent Tilford's breach of contract claim is premised on Brewis's alleged promise to place him in a Field Manager's position once a position became funded, that claim must fail for several reasons. According to Tilford, Brewis told him that "I see you [Tilford] being the field manager when that req[uisition] is open." (Tilford Depo., App. 21). First, that statement, if made, was simply too vague and indefinite to even qualify as an "offer." Baldwin v. New, 736 S.W.2d 148, 152 (Tex.App. — Dallas 1987, writ denied). Second, as discussed above, the statement was not sufficiently definite to alter the parties' at-will relationship. Brown, 965 S.W.2d at 502. And finally, the fulfillment of the alleged promise was plainly conditioned upon the occurrence of a stated event — the funding of the position. The undisputed summary judgment evidence establishes that McGraw Hill's corporate office never funded the position; therefore, the obligation to place Tilford in the position never arose. (Brewis Decl. ¶ 6, App. 85-86). Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992).
D. Promissory Estoppel
Tilford claims that he relocated to California from Texas in reliance on McGraw Hill's promises. To establish a promissory estoppel claim under Texas law, a plaintiff must prove: (1) the existence of a promise; (2) the foreseeability of reliance on the promise by the promisor; and (3) detrimental reliance by the promisee. English v. Fisher, 660 S.W.2d 521, 524 (Tex. 1983). To prove the detrimental reliance element, the reliance on the promise must be reasonable and justified. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 436 (Tex. 1997). State and federal courts in Texas have concluded that, as a matter of law, an employee cannot justifiably rely on a promise of at-will employment. Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929, 937 (Tex.App. — Houston [14th Dist.] 1994, no pet.); Hinds v. Orix Capital Mkts., L.L.C., 2003 WL 22132791, at *6-7 (N.D. Tex. Sept. 11, 2003) (approving Collins). Such promises are illusory because at-will employment does not constrain the employer's future actions. Id. The Court is persuaded by those decisions and finds that Tilford cannot sustain a promissory estoppel claim.
And in any case, no reasonable jury could find that Tilford's reliance on either of McGraw Hill's alleged promises was reasonable. As explained above, even assuming that Brewis sent Tilford the Undated Letter offering Tilford an editorial position paying $55,000 a year, it is undisputed that Tilford later received, on or around January 15, 2001, a letter informing him that he was to receive $42,000 a year. (Tilford Depo., App. 59). Because Tilford received this letter after receiving the Undated Letter and before moving to California, it cannot be said that he reasonably relied on the promises contained in the Undated Letter before moving to California.
Nor was Tilford's reliance on Brewis's alleged promise with respect to the Field Manager position reasonable as a matter of law. As discussed above, that promise was far too vague and indefinite to constitute either an offer or a modification of at-will employment, and the Court finds that the promise cannot support a promissory estoppel claim for the same reasons. Gilmartin v. KVTV — Channel 13, 985 S.W.2d 553, 558-59 (Tex.App.-San Antonio 1998, no pet.) (finding promises relating to future employment were too indefinite to permit a promissory estoppel claim).
III. Conclusion
For the reasons set forth in this order, it is ORDERED that Defendant's Motion for Summary Judgment be, and it is hereby, GRANTED.
SO ORDERED.