Opinion
Civil No. 3:96-CV-1929-H (S. E. BROWN), Civil No. 3:96-CV-2985-H (VERNON ADAMS), Civil No. 3:96-CV-3057-H (FELICIA ADAIR), Civil No. 3:96-CV-3098-H (HENRY RELFORD), Civil No. 3:97-CV-0055-H (LOUISA ADAIR), Civil No. 3:97-CV-l 185-H (ESTELLA BROWN)
February 27, 2004
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants Meridian Housing Co.'s and H. Dean Smith's ("VPG-Related Parties") Motion for Summary Judgment-VPG Releases, filed September 15, 2003; the Plaintiffs' Responses to this Motion, filed October 6, 2003 (Turley and Ridgeway Plaintiffs) and October 7, 2003 (Pendley Plaintiffs); and the Defendants' Reply, filed October 28, 2003.
Upon review of the pleadings, Parties' briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that the VPG-Related Parties' Motion for Summary Judgment should be DENIED as to Meridian and should be GRANTED in part and DENIED in part as to H. Dean Smith.
I. BACKGROUND
In this Motion Defendants Meridian and H. Dean Smith argue that under the terms of the February 26, 2001 Settlement Agreement between VPG and the Settling Plaintiffs (which include all of the remaining Plaintiffs), all claims against Meridian and H. Dean Smith should be dismissed. (Mot. at 8). They argue that the Settlement Agreement names them as "VPG Releasees"-not subject to claims from these Plaintiffs.
The Defendants also argue that the claims of the remaining Plaintiffs are extinguished under the doctrine of circular indemnity-the Plaintiffs have agreed to indemnify VPG for any claims against them; Meridian and H. Dean Smith had brought cross-claims against VPG based in these Plaintiffs' complaints against Meridian and Smith. The Court has recently dismissed the VPG-Related Parties' cross-claims against VPG. Therefore this argument is moot.
In addition, the Defendants move for summary judgment on the grounds that there is no evidence that Meridian or Smith committed any ultra vires acts. (Mot. at 11). The Turley and Pendley Plaintiffs respond that evidence for ultra vires acts is presented in their Responses (both filed October 6, 2003) to Meridian's Motion for Summary Judgment-Proximate Cause (filed September 15, 2003). (Turley Pls.' Resp. at 8; Pendley Pls.' Resp. at 3, incorporating the Turley Plaintiffs' Response). The Ridgeway Plaintiffs respond that evidence for ultra vires acts is presented in their Response to the Defendants' Motion for Summary Judgment-Proximate Cause, filed October 6, 2003, and in their Response to the Defendants' Motion for Summary Judgment "for certain claims." The Court will rule on the question of evidence for ultra vires acts in connection with those Motions.
The Turley and Ridgeway Plaintiffs argue that Meridian and H. Dean Smith are specifically excluded from the definition of "VPG Releasees" in the Settlement Agreement (Turley Pls.' Resp. at 4; Ridgeway Pls.' Resp. at 5). The Pendley Plaintiffs argue that the Settlement Agreement does not release Meridian or Dean Smith for any acts before 1967, and it does not release them from ultra vires acts after 1967.
The question before the Court is thus: to what extent, if any, are Meridian and H. Dean Smith included, as "VPG Releasees" in the Settlement Agreement between the settling Plaintiffs and VPG? To the extent they are not included as releasees, this Motion for Summary Judgment must be denied.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits and other summary judgment evidence show that no reasonable trier of fact could find for the nonmoving party as to any material fact. FED.R.CIV.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potoma Ins. Co. of III, 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. CIV. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the nonmoving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991).
III. ANALYSIS
A. Settlement Agreement
On February 26, 2001 certain Plaintiffs in this lawsuit (including the remaining Turley, Pendley, and Ridgeway Plaintiffs) entered into a settlement agreement with Voluntary Purchasing Group. ( See General Release of All Claims, Indemnity, Assignment and Settlement Agreement ("Settlement Agreement"), VPG-Related Parties' App. at Tab 1). This Agreement released VPG/the "VPG Releasees" from:
any and all Claims, whether known or unknown, that the Settling Parties, or the other Releasing Parties, or any of them, may have or may have had or may in the future have against the VPG Releasees, or any of them, arising at any time from the beginning of time through the date hereof, or hereafter arising . . . (Settlement Agreement at 15) (emphasis added).
In this Agreement the VPG-Releasees are defined as:
. . . the past, present, or future principles, directors, officers, shareholders, parent, affiliated and subsidiary corporations or entities, affiliates, employees, contractors, insurers, attorneys, agents, and servants of Voluntary Purchasing Groups, Inc., and Ferti-Lome Distributors, Incorporated whether in one or more of the above capacities or their individual capacities, along with their respective representatives, heirs, successors, grantees, and assigns. (Settlement Agreement at 6).
Meridian does not argue that it should be considered a "VPG Releasee" based on this provision (i.e., it does not claim to be included in any of the above categories). H. Dean Smith was included in these categories for conduct after January 1, 1968. He became an officer of VPG on that date when he was named VPG's president and chief executive officer. ( See Defs.' Mot. at App. #5). He also became anemployee of VPG on September 9, 1969. ( See Defs.' Mot at App. #7). Therefore, H. Dean Smith is a Releasee under the terms of the Settlement Agreement for conduct after January 1, 1968 while he was an officer/employee of VPG.
The Defendants provide evidence that Universal/Meridian sold "all of [its] operating assets" to VPG on October 17, 1967 (effective January 1, 1968), and that it entered into a "Management Services Contract" with VPG on that date which provided "the managerial services" of H. Dean Smith as "President and chief executive officer" of VPG "in consideration for the granting of deferred payment terms to VPG by Universal." ( See Defs' Mot. at App. #5).
The Settlement Agreement excludes all of the other Defendants in the VPG litigation from the definition of "VPG Releasee": "VPG-Releasees shall not include any other defendants in the Lawsuits other than the VPG Releasees . . . (Id.)
In addition, it specifically excludes Meridian and H. Dean Smith for any ultra vires acts they may have committed:
. . . and does not include Universal Chemical Company, now know as Meridian Housing Company, Bonny Corporation, or Dean Smith and/or Mike Smith
for any ultra vires acts that may have been committed by them outside the scope of their duties and authority as officers, directors, employees, servants and/or agents of VPG. (Id.)
B. Bar Order
This Court's Bar Order of June 2002 makes it clear that Meridian and Smith have not previously been viewed by the Court as "VPG Releasees" under the terms of the Settlement Agreement. ( See Bar Order at 2).
On June 5, 2002 the Court entered an Order ("Bar Order") barring two kinds of third-party claims against VPG by Dean Smith and Meridian: (1) third party claims based in claims by any Plaintiff against H. Dean Smith and Meridian for their conduct before VPG came into existence, and (2) third party claims based in claims by settling Plaintiffs against Smith and Meridian for their conduct after VPG came into existence, if those claims were the subject of the Settlement Agreement. (Bar Order at 2).
This order bars:
"third-party claims by Michael Smith, Dean Smith, James T. `Cooter' Moody, and Meridian Housing Company-and by any of Meridian's predecessors-in-interest, against VPG for contribution, indemnity and/or advancement of costs based upon (1) any claims of liability for damages brought by any Plaintiff based upon conduct attributed to such third parties, alleged to have occurred prior to the 1967 incorporation of VPG and (2) any claims brought by any settling Plaintiff relating to conduct which occurred after VPG came into existence and which claims are the subject of the settlement agreement dated February 26, 2001 . . ." (Order Adopting the Report and Recommendation of the United States Magistrate Judge, entered June 5, 2002 at 2).
Thus, the Bar Order clearly contemplates that even after the Settlement Agreement took effect, the settling Plaintiffs might bring claims against Meridian and Smith for conduct before and after the incorporation of VPG in 1967.
IV. CONCLUSION
The Court finds that Meridian is not a "VPG Releasee." The Court also finds that H. Dean Smith is only a "VPG Releasee" for conduct during the time he was an officer or employee of VPG, except for any ultra vires conduct.
The VPG-Related Parties' Motion for Summary Judgment-VPG Releases is DENIED as to claims against Meridian, and is DENIED as to H. Dean Smith for all claims relating to conduct before January 1, 1968 and for claims relating to alleged ultra vires activities after January 1, 1968. The Motion is GRANTED as to H. Dean Smith for all non-ultra vires claims against him from the time he was an officer or employee of VPG.
The Court will rule on the question of which, if any, specific claims against H. Dean Smith for non-ultra vires activities should be dismissed in connection with the Defendants' other Motions for Summary Judgment.
SO ORDERED.