Le v. Exeter Finance Corp et al
Filing
104
Memorandum Opinion and Order: Dismissing with prejudice Plaintiff's remaining quantum meruit claim. (Ordered by Judge Sam A. Lindsay on 3/9/2020) (chmb)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
BINH HOA LE,
Plaintiff,
v.
EXETER FINANCE CORP. and
ENZO PARENT, LLC,
Defendants.
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Civil Action No. 3:15-CV-3839-L
MEMORANDUM OPINION AND ORDER
The court enters this memorandum opinion and order to address Plaintiff Binh Hoa Le’s
(“Plaintiff” or “Le”) remaining quantum meruit claim. On March 31, 2019, the court granted the
summary judgment filed by Defendants Exeter Finance Corp. (“Exeter”) and Enzo Parent, LLC
(“Enzo”) (collectively, “Defendants”) as to all claims asserted by Le, except his quantum meruit
claim. Although summary judgment on this claim for the reasons relied on by Defendants was not
appropriate, the court believed that the claim failed for other reasons. It, therefore, moved sua sponte
for summary judgment as to this claim and allowed the parties to file briefs in response. Some of
the arguments in Defendants’ submission (Doc. 94) were broader in scope than the grounds
identified by the court. Plaintiff was, therefore, allowed to file a response and submit evidence in
support of his response. Thereafter, Defendants were allowed to file a reply.
The factual and procedural history and the applicable summary judgment standard are
discussed at length in the court’s March 31, 2019 memorandum opinion and order. For purposes of
brevity, the court does not repeat verbatim here these facts or the legal standard applicable to
summary judgments and, instead, limits its analysis to the facts and law necessary to decide whether
Memorandum Opinion and Order – Page 1
a genuine dispute of material fact exists regarding the elements of Plaintiff’s remaining quantum
meruit claim. After considering the parties’ briefs, admissible summary judgment evidence,1 and
applicable law, the court determines that Defendants are entitled, as a matter of law, to judgment on
Plaintiff’s remaining quantum meruit claim, and dismisses with prejudice this claim.
I.
Requirements for Quantum Meruit Claims Under Texas Law
In response to Defendants’ summary judgment motion, Plaintiff clarified that his quantum
meruit claim is based on promised pay in the form of severance and a retention bonus, and he
contended that he was entitled to recover on his quantum meruit claim under the Texas law if the
court determined that his contract claim based on these same grounds failed.
Quantum meruit is an equitable theory of recovery based on an implied agreement to pay for
benefits received. Heldenfels Brothers, Incorporated v. City of Corpus Christi, 832 S.W.2d 39, 41
(Tex. 1992). “‘The purpose of this common law doctrine is to prevent a party from being ‘unjustly
enriched’ by ‘retain[ing] the benefits of the . . . performance without paying anything in return.’” Hill
v. Shamoun & Norman, LLP, 544 S.W.3d 724, 732 (Tex. 2018) (quoting Truly v. Austin, 744 S.W.2d
934, 938 (Tex. 1988)). The right to recover under a theory of quantum meruit is independent of any
contract, Vortt Expl. Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990), because
“[r]ecovery on an express contract and on quantum meruit are inconsistent.” Woodard v. Southwest
States, Inc., 384 S.W.2d 674, 675 (Tex. 1964). The existence of a valid, express contract that “covers
1
In moving sua sponte for summary judgment, the court initially directed the parties to limit their citations to
evidence in the existing summary judgment record, the scope of which was determined by the court’s March 31, 2019
memorandum opinion and order and rulings regarding a number of expert issues and other procedural matters.
Subsequently, however, the court allowed Plaintiff to submit new evidence in support of his most recent response for
the reason noted that was not limited to the existing record.
Memorandum Opinion and Order – Page 2
the subject matter of the parties’ dispute, therefore, generally precludes recovery under a
“quasi-contract theory.” Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000).
To recover based on a theory of quantum meruit, the plaintiff must prove:
(1) valuable services were rendered or materials furnished;
(2) for the person sought to be charged;
(3) those services and materials were accepted by the person sought to be charged,
and were used and enjoyed by him; and
(4) the person sought to be charged was reasonably notified that the plaintiff
performing such services or furnishing such materials was expecting to be paid by
the person sought to be charged.
Hill, 544 S.W.3d at 732-33 (citing Vortt Expl. Co., 787 S.W.2d at 944). “The measure of damages
for recovery under a quantum-meruit theory is the reasonable value of the work performed and the
materials furnished.” Hill, 544 S.W.3d at 733 (citation omitted). Evidence of the reasonable value
of services or work performed is, therefore, required to recover based on a theory of quantum meruit.
M.J. Sheridan & Son Co., Inc. v. Seminole Pipeline Co., 731 S.W.2d 620, 625 (Tex. App.—Houston
[1st Dist.] 1987, no writ); see also Air Conditioning, Inc. v. L.E. Travis & Sons, Inc., 578 S.W.2d
554, 556 (Tex. Civ. App.—Austin 1979, no writ) (distinguishing proof required for contract damages
versus quantum meruit damages); Four Points Bus., Inc. v. Rojas, No. 01-12-00413-CV, 2013 WL
4676314, *4 (Tex. App.—Houston [1st Dist.] 2013, no pet. h.).
II.
Discussion
The court previously concluded that summary judgment based on Defendants’ argument
regarding unpaid severance was not appropriate because no valid written severance agreement exists.
Absent a valid contract, Defendants were also not entitled to summary judgment on Plaintiff’s
Memorandum Opinion and Order – Page 3
quantum meruit claim on this ground. In addition, the court noted that Defendants had not addressed
Plaintiff’s contention that his quantum meruit claim is also based on a retention bonus. The court,
nevertheless, had a number of concerns regarding the viability of Plaintiff’s quantum meruit claim.
The first of these was whether Le could satisfy the first element of his quantum meruit
claim—that valuable services were rendered or materials furnished—or whether he could establish
the reasonable value of those services or materials. In addition, the court noted that it appeared that
Plaintiff was attempting to hold Defendants to an alleged promise to pay severance while avoiding
the reciprocal noncompetition duty that could be reasonably inferred from former Exeter Chief
Executive Officer (“CEO”) Mark Floyd’s (“Floyd”) July 18, 2013 e-mail and subsequent July 25,
2013 letter offer. Regarding Le’s quantum meruit claim based on a retention bonus, the court also
noted that there was no indication he had performed any “additional tasks of handling the
restructuring of the branches and RIF layoffs” between January 2015 and February 23, 2015, or did
anything other than what he was already being compensated to do under his annual salary as Exeter’s
Chief Human Resources Officer or CHRO during this time. Pl.’s Summ J. Resp. App. 121. Even
if Le could establish that he partially performed, the court questioned whether he could establish the
reasonable value of any such work performed by him, as it agreed with Defendants that he was
precluded from presenting any evidence of damages regarding the unpaid retention and additional
equity allegedly promised for failure to disclose it. The court, therefore, moved sua sponte for
summary judgment on these grounds as to Plaintiff’s quantum meruit claim, which were briefed by
the parties (Docs. 93, 94).
Memorandum Opinion and Order – Page 4
Defendants summarized their response to the court’s sua sponte motion as follows:
Despite his misrepresentations causing this Court to waste judicial resources
and for Defendants to incur unnecessary fees and expenses, Le seeks equitable relief
through quantum meruit to collect a retention bonus and a severance. Defendants are
entitled to summary judgment on Le’s continued pursuit of his baseless claims as:
1.
Le cannot present competent evidence (and none exists) of the
purported retention bonus’ amount.
2.
Le provided no additional services to earn an alleged retention bonus.
3.
Le refused to sign the Severance and Non-Compete Agreement on
which he bases his severance damages calculation and, therefore,
Defendants were never on notice he expected a severance.
Additionally, Enzo Parent, LLC, is entitled to summary judgment as no
evidence is presented it was involved with either the alleged retention bonus or
severance.
Defs.’ Resp. 1 & n.1 (Doc. 93). Regarding the latter contention, Defendants further assert:
Le muddies the waters in his brief. Compare Doc. 30, p. 19, ¶ 35 (“it is
undisputed that Exeter failed to pay Le the Severance Component and the Retention
Bonus and Enzo failed to pay Le the Profits Interests Component …”) with id., p. 20,
¶ 38 (referring to “Defendants” as the parties owing the claimed compensation).
Regardless, no evidence supports finding Enzo responsible for any of these amounts.
Id. at 1 n.1. As this response by Defendants expanded slightly on the grounds articulated by the
court, it allowed Plaintiff to address the matters in Defendants’ response, and Defendants were
permitted to file a reply (Docs. 101, 103).
A.
Retention Bonus
With respect to his quantum meruit claim to recover a retention bonus and additional equity,2
Plaintiff argues that there is sufficient evidence to create a genuine dispute of material fact:
2
The court refers collectively to Plaintiff’s claim to recover a “retention bonus and additional equity” as
retention pay or retention bonus, as it is readily apparent that his quantum meruit claim based on a retention bonus
encompasses his contention that he was also promised additional equity in 2015.
Memorandum Opinion and Order – Page 5
6. Exeter’s promise of a retention bonus is also sufficient to state an
actionable claim for quantum meruit. Plaintiff has presented evidence that Exeter
induced Plaintiff to continue his employment with Exeter in January 2015 by offering
Plaintiff a retention bonus and additional equity (the “Retention Bonus”). P. App.
106-107 (Le 235:8-25, 236:18-237:1). At that time, the CEO communicated to
Plaintiff that he was part of a small group of critical talent that the CEO and Board
of Directors wanted to retain to help move the business forward. P. App. 120. Once
again, Plaintiff provided valuable services to Exeter based upon these
representations, and Exeter knew that he expected to be compensated for them. That
is sufficient evidence to survive summary judgment on Plaintiff’s claim of quantum
meruit.
Pl.’s Resp. 3 (Doc. 93). In the second round of briefing permitted by the court, Plaintiff continues
to maintain that the following evidence establishes that Defendants offered him a retention bonus:
[D]ocuments and testimony show that Le was offered a retention bonus by Tom
Anderson, Exeter’s former CEO. Anderson testified that he told Le that Le was part
of a group of executives that were going to be awarded a retention bonus and
additional equity. Supp. App. at 17 [Anderson Dep. 262:1-6]. After that conversation,
Le emailed Anderson, thanking Anderson for the retention bonus and providing a
document template for the retention bonus being given to the group of executives.
Supp. App[.] at 18-19 [Email]. Documents produced by Exeter confirm that the other
Exeter executives at Le’s level, meaning personnel who reported directly to the CEO,
received bonuses. Supp. App[.] at 20-39 [Retention Bonus Letters]. The above
evidence shows that Le was offered a retention bonus and that the offered bonus had
value. This is sufficient to raise a genuine issue of material fact at this stage.
Pl.’s Resp. 7 (Doc. 101). Plaintiff further asserts with respect to his quantum meruit claim based on
severance and retention pay that he “is not required to prove the exact value of services to survive
summary judgment, and there is more than sufficient evidence from which a reasonable jury could
reach a valuation [determination].” Pl.’s Resp. 3 (Doc. 93).
Le is correct that he is not required to prove the exact value of services performed to survive
summary judgment, as Texas law only requires evidence of the reasonable value of services or work
performed to recover based on a theory of quantum meruit. M.J. Sheridan & Son Co., Inc., 731
S.W.2d at 625. This argument, however, fails to address the issue raised by the court as to whether
Memorandum Opinion and Order – Page 6
Le can establish the reasonable value of any such work performed by him in light of Defendants’
prior summary judgment argument that he should be precluded from presenting any evidence of
damages regarding a retention bonus for failure to disclose such damages.
The court previously addressed this precise issue at length in the context of Le’s breach of
contract claim and determined that exclusion of all of Le’s evidence of damages, including his
expert’s testimony, with respect to his contract claim based on breach of a retention bonus agreement
was warranted. See Mem. Op. & Order 99-102 (Doc. 92). As before, Le offers no explanation for
his failure to disclose timely his damages calculations for his quantum meruit claim based on a
retention bonus, even though he was given two opportunities to do so—first, in response to the
court’s sua sponte motion, and again, after Defendants noted the lack of a response by Plaintiff to
this issue. See Defs.’ Resp. 2 (Doc. 94). The court, therefore, determines, as it did before, that Le’s
disregard for the court’s scheduling order and lengthy delay in disclosing his damages for this claim,
long after expiration of the disclosure and expert designation deadlines, and approximately one year
after Defendants moved for summary judgment, is inexcusable. See id. Accordingly, Le will not
be allowed to present any evidence of damages regarding his quantum meruit claim against
Defendants to recover a retention bonus. Absent evidence of the reasonable value of services or
work performed, Le cannot raise a genuine dispute of material fact regarding this element.
The court further determines that, in failing to respond to the issue raised by the court
regarding the disclosure of his retention bonus damages, Le has waived or abandoned the issue. See
Black v. Panola Sch. Dist., 461 F.3d 584, 588 n.1 (5th Cir. 2006) (concluding that the plaintiff
abandoned her retaliatory abandonment claim when she failed to the defend claim in response to a
motion to dismiss); Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1164 (5th Cir. 1983) (explaining
Memorandum Opinion and Order – Page 7
that a party, in “opposition to a motion for summary judgment cannot abandon an issue and then
. . . by drawing on the pleadings resurrect the abandoned issue”). Having failed to respond to
Defendants’ contention regarding Enzo’s nonliability for his quantum meruit claim to recover a
retention bonus by identifying evidence regarding Enzo’s involvement or legal authority under which
it can be held liable as Exeter’s parent company, Le has also waived or abandoned this issue. For
these reasons, Exeter and Enzo are both entitled to judgment on Le’s quantum meruit claim to
recover a retention bonus.
B.
Severance Pay
In response to the court’s motion, Plaintiff contends, for the following reasons, that there is
sufficient evidence to raise a genuine dispute as to every element of his quantum meruit claim to
recover unpaid severance:
4. First, there is evidence of element (a), that Plaintiff provided valuable
services to Defendants by acting as their CHRO for a period of more than eighteen
months after Defendants promised to provide him with a severance in a
negotiated amount of eighteen months’ salary. P. App. 86-87 (Le 76:22-77:12).
The Texas courts have recognized a wide variety of services as satisfying this
element of a claim for quantum meruit. See, e.g., Vortt Exploration Co., Inc. v.
Chevron USA, Inc., 787 S.W.2d 942, 945 (Tex. 1990) (seismic and surveying
services); Wilmer-Hutchins Indep. Sch. Dist. v. Smiley, 97 S.W.3d 702 (Tex. App.
– Dallas 2003); Killion v. Lanehart, 154 S.W.3d 183 (Tex. App. – Amarillo 2004,
pet. denied) (legal services); Tricon Tool & Supply Inc. v. Thumann, 226 S.W.3d 494
(Tex. App. – Houston [1st Dist.] 2006, pet. denied) (shipping and delivery services).
And the Courts have not required that the plaintiff prove the value of his services to
the jury by any particular method or measure (certainly not at the summary judgment
stage). C.f., Vortt, 787 S.W.2d at 945; Killion, 154 S.W. 3d at 188-90. Here, the
severance component of Plaintiff’s compensation was discussed at length prior
to Plaintiff’s employment. P. App. 86-87 (Le 76:22-77:12). Le told Floyd that
joining a private company contained a certain degree of “risk involved,” and
“asked to see if there could be some sort of protection provided should [his
employment with Exeter] not work out.” Id. (Le 76:22-77:12). Floyd responded
by stating that Exeter had a “standard 18-month severance” that Plaintiff
would be eligible for that would provide him protection should he be terminated
Memorandum Opinion and Order – Page 8
without cause. Id. (Le 76:22-77:12). Plaintiff understood that he was eligible for
this Severance Component upon hiring without the need for additional
documentation. P. App. 117. Thereafter, Plaintiff worked as Exeter’s CHRO for a
period of nearly eighteen months. That evidence to create a question of fact on the
first element of Plaintiff’s claim for quantum meruit. [sic] Plaintiff is not required to
prove the exact value of his services to survive summary judgment, and there is more
than sufficient evidence from which a reasonable jury could reach a valuation.
5. The same evidence creates at least a triable question of fact on the other
elements of the quantum meruit claim: (b) that the services [w]ere provided for the
Defendant: (b) the services or materials were provided for the defendant, (c) the
defendant accepted the services or materials, and (d) the defendant had reasonable
notice that the plaintiff expected compensation for the services. Here, the services
in question were as Defendant’s CHRO for a period of nearly eighteen months
pursuant to a promise to provide him with severance in an agreed-upon
amount. P. App. 86-87 (Le 76:22-77:12).
Pl.’s Resp. 2-3 (Doc. 93) (emphasis added). Le also asserts in a footnote:
The Court’s order noted concern that Plaintiff “appears [to be] seeking to hold
Defendants to an alleged promise to pay severance while avoiding, for example, a
reciprocal noncompetition duty . . .” Order at 115. In fact, Exeter required Plaintiff
to sign a non-competition agreement as a condition of his awarded equity, separately
from the proposed written severance agreement. See P. App. 55-73.
Id. at 2 n.3. In his recently-filed brief, Plaintiff contends that Defendants were on notice that he still
expected to recover severance pay even after declining to sign the Severance and Non-Compete
Agreement. He also contends that he was subject to some of the terms, restrictions, and conditions
in the Severance and Non-Compete Agreement, to the extent such terms, restrictions, and conditions
were discussed prior to his employment and agreed to him at the time he signed the “Offer Letter.”
Pl.’s Resp. 4 (Doc. 101). Plaintiff further asserts that Defendants should be estopped from now
arguing that there was no agreement to pay him severance because “[t]he recruiting firm’s report,
Le’s testimony, the July 18, 2013 email, and the Offer Letter show that severance was an important
Memorandum Opinion and Order – Page 9
part of the compensation package negotiated during the recruitment period. See, Dkt. No. 33-2 at 42,
50, and 86-87 [Le Dep. 76:22-77:15]; Supp. App. at 7.” Id. at 5-6 (Doc. 101).
As pertinent here, Defendants argue, in their reply (Doc. 103) to Plaintiff’s February 18, 2020
filing (Doc. 101), that Plaintiff’s new estoppel theory should be disregarded, as it exceeds
Defendants’ prior filing (Doc. 94) in contravention of the court’s order. Defendants further assert
that “Le continues to rely on misrepresentations evidencing his unclean hands in seeking equity.”
Defs.’ Reply 1 (Doc. 103). In addition, Defendants again contend that Le has not come forward with
any evidence to establish Enzo’s liability to pay him severance. The court agrees with Defendants.
Le relies on the deposition testimony below in support of his quantum meruit claim in an
attempt to establish his entitlement to severance pay and show that severance was a key aspect of the
negotiations regarding his compensation that occurred while he was being recruited by Exeter:
Q: Now, what was your understanding of your eligibility for the severance
package as a key employee at Exeter?
Le: I’m—I’m very clear on this. I shared with Mark Floyd that I had a
very secure situation at Lennox, and going into a organization that was private, that
would launch a PE firm, there was a lot of risk involved. And I asked to see if there
could be some sort of protection provided should this not work out.
Pl.’s Resp. 6 (Doc. 101) (citing Pl.’s Summ. J. Resp. App. 86-87 (Doc. 33-2), Le Dep. 76:22-77:15
(emphasis added). In his initial brief, Le cited this same deposition testimony five times. Pl.’s Resp.
2-3 (Doc. 93). In his recent brief, Le again relies on the same deposition testimony. Pl.’s Resp. 2
(Doc. 101).
According to this and other evidence, before Le joined Exeter, he used his employment at
Lennox and his Lennox benefit package as a negotiating tool and leverage to obtain a more generous
compensation package from Exeter that included, among other things, severance pay. He also led
Memorandum Opinion and Order – Page 10
Exeter to believe that his leaving Lennox to join Exeter was contingent upon Exeter agreeing to the
additional negotiated compensation. Unbeknownst to Exeter, Le’s employment with Lennox had
already been terminated for cause.
The issue regarding Le’s dishonesty in recruitment negotiations with Exeter and during the
proceedings in this case was first brought to the court’s attention when Defendants moved to exclude
Plaintiff’s expert testimony. Defendants argued that expert testimony regarding Le’s Category I or
Lennox damages should be excluded because Le had: (1) taken the position in this action that he was
fraudulently induced by Exeter to leave Lennox to join Exeter; (2) testified untruthfully under oath
in his deposition that he left Lennox because he was recruited by Exeter when, in actuality, he had
already been terminated for cause according to the deposition testimony of his former immediate
supervisor at Lennox, David Moon (“Moon”); and (3) verified his expert’s report and damages
calculation that included the Lennox damages that were based on his false allegations that he had
been fraudulently induced to leave Lennox to join Exeter.
Instead of attempting to refute this argument and evidence by Defendants, Le, without
explanation, responded that he was no longer seeking Category I or Lennox damages, and that his
expert’s report had been amended to remove these damages. Defendants, however, continued to
maintain that Le’s response and decision to abandon his request for Lennox damages ignored that
he had “lied in his pleadings and under oath regarding his entitlement to any Lennox compensation,”
and that his “position until he was caught (and in his summary judgment brief, in part) was
different.” Mem. Op. & Order 52-53 (Doc. 92) (quoting Defs.’ Reply to Mot. to Exclude 1-2).
Defendants further asserted that, “[a]fter causing Defendants to engage in discovery regarding the
‘Lennox money’ he [claimed to have] walked away from to join Exeter, Plaintiff was forced to
Memorandum Opinion and Order – Page 11
abandon the claim because Lennox had previously fired him for cause and he did not quit his job at
Lennox to go to work for Exeter” as he previously alleged and testified. Id.
In its prior opinion, the court noted Federal Rule of Civil Procedure 11(b)’s prohibition
against a party or attorney filing or making deliberately false pleadings or arguments to the court and
the consequences for violating Rule 11. Mem. Op. & Order 54-55. The court also noted that it was
particularly troubled by Plaintiff’s and his attorney’s decision to abandon his Lennox fraud damages
at this late stage of the case without attempting to respond to Defendants’ evidence that he
knowingly testified falsely and asserted factual contentions that he knew lacked evidentiary support,
and, as a result, unnecessarily delayed the proceedings in this case and needlessly increased the cost
of litigation. Id. at 55. The court, therefore, agreed with Defendants that Plaintiff’s withdrawal of
his fraudulent inducement claim and request for Lennox damages did not absolve him or his
attorney. Id. Because Defendants had not sought sanctions against Plaintiff or his attorney in the
form of attorney’s fees or other sanctions, the court simply determined that Plaintiff’s untimely
supplemental and amended expert reports in which the Lennox damages were omitted were
unauthorized, and it granted Defendants’ motion to exclude Plaintiff’s expert testimony regarding
Category I or Lennox damages without commenting further on whether sanctions were appropriate,
except to say that, at a minimum, the issue raised serious concerns. Id.
Notwithstanding the serious concerns previously expressed by the court, Plaintiff now takes
a similar position with respect to severance pay in support of his quantum meruit claim—that Exeter
agreed to pay him severance to offset or minimize his risk (and his concerns in this regard) in leaving
his secure position at Lennox to join Exeter by providing him with protection in the event his
employment with Exeter did not work out. Because “[r]ecovery in quantum meruit is based on
Memorandum Opinion and Order – Page 12
equity,” the “party seeking an equitable remedy must do equity and come to court with clean hands.”
Truly v. Austin, 744 S.W.2d at 938 (citations omitted); Breaux v. Allied Bank of Texas, 699 S.W.2d
599, 604 (Tex. App.—Houston [14th Dist.] 1985, writ ref’d n.r.e.) (“When seeking an equitable
remedy, a party must do equity and come to the court with clean hands.”). Under Texas law, “the
doctrine of unclean hands is an affirmative defense that applies to a party seeking equitable
remedies.” Bagby Elevator Co., Inc. v. Schindler Elevator Corp., 609 F.3d 768, 774 (5th Cir. 2010)
(quoting Dunnagan v. Watson, 204 S.W.3d 30, 41 (Tex. App.—Fort Worth 2006, pet. denied)).
“[T]he doctrine “should not be applied unless the party asserting [it] has been seriously harmed and
the wrong complained of cannot be corrected without the application of the doctrine.” Id. “The
determination of whether a party has come to court with unclean hands is left to the discretion of the
trial court.” Id.
Equity does not support the requested recovery in quantum meruit in this case. Le has taken
the position throughout this case that his compensation and benefits, including severance pay, were
agreed to by Exeter in July 2013 as a result of recruitment negotiations to alleviate potential
financial risks to him in leaving Lennox to join Exeter. Le, however, has yet to address or come
forward with evidence to refute the deposition testimony of his former supervisor at Lennox, who
testified that Le was fired by Lennox for cause before July 2013 and notified well before that time
that his employment with Lennox was being terminated. He also failed to address Defendants’
contention that “[d]espite his misrepresentations causing this Court to waste judicial resources and
for Defendants to incur unnecessary fees and expenses, Le seeks equitable relief through quantum
meruit to collect a retention bonus and a severance.” Defs.’ Resp. 1 (Doc. 93) (emphasis added).
Given Defendants’ evidence that Exeter was induced to hire and agree to pay Le severance under
Memorandum Opinion and Order – Page 13
false pretenses, the court further determines that Exeter has been seriously harmed, and the wrong
complained of cannot be corrected without the application of the clean hands doctrine, particularly
in light of Le’s conduct throughout this litigation of continuing to misrepresent the same material
facts in his pleadings, filings, and deposition testimony.
Unlike Le’s estoppel argument that was raised for the first time in his recent brief,3
Defendants: (1) pleaded the defense of unclean hands; (2) developed facts supporting the defense
through discovery regarding Le’s deceit about the status of his employment with Lennox during
recruitment negotiations and misrepresentations in his pleadings and deposition; (3) moved to
exclude Le’s expert testimony regarding Lennox damages based on these facts; and (4) argued again
in response to the court’s sua sponte motion that Le was continuing to rely on “misrepresentations”
(Doc. 94) in support of his request for equitable relief in the form of quantum meruit.4 In ruling on
Defendants’ summary judgment motion, the court also put Le on notice of its serious concerns
regarding his (and his attorney’s) conduct, (Mem. Op. & Order Doc. 92) and subsequently gave him
3
Le’s estoppel theory was raised for the first time during the second round of briefing in connection with the
court’s sua sponte motion for summary judgment on his quantum meruit claim. A claim or theory of relief that is not
raised in a party’s pleadings but, rather, is raised only in response to a motion for summary judgment is not properly
before the court. Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir.1990). Moreover, while the court
allowed Le to file a response to address arguments by Defendants that it believed were outside the scope of the its sua
sponte motion, it expressly ordered that “[a]ny response by Plaintiff shall be limited to the matters in Defendants’
submission (Doc. 94).” Order 1 (Doc. 99). Accordingly, the court will not consider Le’s new estoppel theory in ruling
on his quantum meruit claim, as this appears to be yet another attempt by him to “unnecessarily complicate, confuse, and
delay the proceedings in this case by creating a continually moving target.” Mem. Op. & Order 12 (Doc. 92).
4
Although Defendants did not use the term “unclean hands” in their response to the court’s sua sponte motion,
it is readily apparent from their contention regarding Le requesting equitable relief in the form of quantum meruit
“[d]espite his misrepresentations” (Doc. 94) that they are referring to the requirement that a party seeking equity must
come to court with clean hands. Defendants also led with this argument in the first sentence of their response. Thus,
while Plaintiff characterizes Defendants’ response as “Only Disput[ing] That They Were Not Reasonably Notified,”
he cannot reasonably claim he was unaware of the argument to avoid summary judgment on this ground. Pl.’s Resp. 1
(Doc. 101) (discussing and referring to Defendants’ Resp. (Doc. 94)).
Memorandum Opinion and Order – Page 14
an opportunity to address the issues raised in Defendants’ response (Doc. 94) that included
Defendants’ contention regarding Le’s misrepresentations. Order (Doc. 99).
Notwithstanding the foregoing, Le continues to assert in both of his recent submissions that
severance was a key component of his negotiated compensation with Exeter and cites his own
deposition testimony to show that protection in the form of severance pay was clearly sought by him
and agreed to by Exeter’s former CEO during his recruitment because he “shared with Mark Floyd
that [he] had a very secure situation at Lennox” and expressed that he needed severance pay in the
event his employment with Exeter did “not work out.” Pl.’s Resp. 2-3 (Doc. 93) (citing Pl.’s App.
86-87, Le dep. 76:22-77:15 (Doc. 33-2) (emphasis added)); Pl.’s Resp. 2, 6 (Doc. 101) (citing Pl.’s
App. 86-87, Le dep. 76:22-77:15 (Doc. 33-2) (emphasis added)). Other evidence relied on by Le in
response to the court’s sua sponte motion and Defendants’ summary judgment motion with respect
to severance pay similarly indicates that he was not forthright in his negotiations with Exeter
regarding severance pay and other compensation. See Pl.’s Supp. App. 7 (recruiter’s July 2013
summary of Le’s “Compensation Detail & Offer Framework,” indicating Le’s need for certain
incentives and guarantees from Exeter regarding compensation to offset financial losses he would
incur in leaving Lennox to join Exeter); Pl.’s Summ. J. Resp. App. 47-49 (July 2013 e-mail from Le
to Floyd comparing his compensation and benefits at Lennox with that offered by Exeter and setting
forth options to close the gap).
Le made a similar argument in response to Defendants’ summary judgment motion, even
after Defendants presented evidence that he had lied under oath in his deposition about the status of
his employment with Lennox and reasons for leaving Lennox, made misrepresentations in his
pleadings, and verified his expert’s damages report that was based on the same pleadings:
Memorandum Opinion and Order – Page 15
Severance Component – Defendants’ Oral Misrepresentations
5. The Severance Component of Plaintiff’s compensation was also discussed
at length prior to Plaintiff’s employment. P. App. 86-87 (Le 76:22-77:12). Le told
Floyd that he was leaving Lennox, a publicly traded company, and going to
Exeter, a private company, which inherently contains a certain degree of “risk
involved.” Id. (Le 76:22-77:12). As such, Le “asked to see if there could be some
sort of protection provided should [his employment with Exeter] not work out.”
Id. (Le 76:22-77:12). Floyd responded by stating that Exeter had a “standard
18-month severance” that Plaintiff would be eligible for that would provide him
protection should he be terminated without cause. Id. (Le 76:22-77:12). Plaintiff
understood that he was eligible for this Severance Component upon hiring without
the need for additional documentation. P. App. 117.
Pl.’s Summ. J. Resp. Br. 4 (Doc. 33-1). These arguments and evidence by Le, when viewed in the
context of Moon’s unrebutted deposition testimony, establish that Le, during the proceedings in this
case and in his negotiations with Exeter regarding severance pay and other compensation,
misrepresented his employment status at Lennox.
Moreover, as noted, Le has not attempted to explain his conduct or respond to Defendants’
contentions regarding the propriety of his seeking equitable relief in the form of quantum meruit
“[d]espite his misrepresentations.” Defs.’ Resp. 1 (Doc. 94). He also failed to address Defendants’
contention regarding Enzo’s nonliability for his quantum meruit claim to recover severance and,
thus, has waived or abandoned these issues. See Black, 461 F.3d at 588 n.1; Hargrave, 710 F.2d at
1164.
For all of these reasons, Exeter and Enzo are both entitled to judgment on Le’s quantum
meruit claim to recover severance payment based on: (1) their unclean hands defense and Le’s failure
to address the effect of his misrepresentations on the equitable relief sought; and (2) Le’s failure to
address the issue regarding Enzo’s involvement and liability for this claim.
Memorandum Opinion and Order – Page 16
III.
Conclusion
For the reasons herein explained, the court determines that Defendants are entitled, as a
matter of law, to judgment on their affirmative defense of unclean hands and Plaintiff’s remaining
quantum meruit claim based on severance pay and a retention bonus. Accordingly, Plaintiff’s
quantum meruit claim is dismissed with prejudice. Judgment will issue by separate document as
required by Federal Rule of Civil Procedure 58.
It is so ordered this 9th day of March, 2020.
_________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order – Page 17
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