Haynes v. Crescent Real Estate Equities, LLC
Filing
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ORDER DENYING 24 MOTION for Summary Judgment as to Defendant and Counter-Plaintiff's Counterclaims, GRANTING 23 Defendant's MOTION for Summary Judgment. Crescent Real Estate Equities, LLC terminated.(Signed by Judge Gray H. Miller) Parties notified.(rkonieczny)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PEGGY HAYNES,
Plaintiff,
v.
CRESCENT REAL ESTATE EQUITIES, LLC,
Defendant.
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CIVIL ACTION H-11-2201
O RDER
Pending before the court is defendant Crescent Real Estate Equities, LLC’s (“Crescent”)
motion for summary judgment (Dkt. 23) and plaintiff Peggy Haynes’s motion for summary judgment
as to Crescent’s counterclaims (Dkt. 24). After considering the motions, related filings, and
applicable law, the court is of the opinion that Crescent’s motion for summary judgment (Dkt. 23)
should be GRANTED and Haynes’ motion for summary judgment as to Crescent’s counterclaims
(Dkt. 24) should be DENIED.
I. B ACKGROUND
This is a Fair Labor Standards Act (“FLSA”) retaliation action in which Haynes claims that
Crescent terminated her employment because she complained about Crescent’s alleged violations
of the FLSA. See Dkt. 10. Haynes, who worked for Crescent as Vice President of Human Resources
prior to her termination, contends that she informed Crescent’s managing directors in 2008 and 2009
that Crescent’s discretionary bonus program was, in reality, nondiscretionary and that the nonexempt
employees subject to the bonuses were not being paid in accordance with the FLSA. Id. Haynes
claims that she altered a bonus spreadsheet to include employee overtime hours, rates, and earnings,
and that she used this spreadsheet to demonstrate Crescent’s FLSA violations. Dkt. 23, Ex. B.
Haynes claims she made four complaints: the first in January 2008 to Suzanne Stevens, Haynes’
supervisor and managing director at Crescent; the second in February 2008 to a Vice President of
Human Resources at Morgan Stanley, although Haynes cannot remember her name; the third in
January 2009 to Stevens and Paul Smith, another managing director at Crescent; and the fourth in
March or April 2009 to Stevens and Carolyn Labus, an employee in the Human Resources
department. Dkt. 23, Ex. B. The last complaint, which Haynes made to Stevens in March or April
2009 on the telephone, is the only complaint about which she claims to have received a negative
response: Stevens allegedly told Haynes to “drop it” and “don’t bring it up again” before hanging
up the phone. Id.
Crescent promoted Haynes to Vice President of Human Resources in October 2007, a
position which required her to move from Houston to Fort Worth. Dkts. 23, 24. Crescent offered
Haynes a relocation package, the details of which are debated by the parties. Id. Haynes alleges
Crescent offered to pay for any loss in the sale of Haynes’ Houston home, but Crescent denies this
allegation. Dkts. 24, 26. Haynes had difficulty selling her home in Houston, and Haynes claims
Crescent suggested she commute. Dkt. 24. Crescent denies this and contends Haynes proposed
commuting on her own. Dkt. 26. Regardless, Haynes and Crescent began negotiations regarding
Haynes’ commuting expenses, which Haynes estimated would be $30,000 for one year:
approximately $18,000 for housing, $9,744 for mileage, and $3,600 for food. Dkt. 26, Ex. B–4.
Haynes states that this was a “very conservative” estimate, while Crescent believes it was “high.”
Dkts. 24, 26. The parties reached a verbal agreement (the “Commuting Agreement”), the terms of
which are in dispute. Id.
Haynes sent Stevens an email on April 9, 2009, setting forth some of the details of the
Commuting Agreement. The email states:
2
I have tried to recap the agreement and if I have anything incorrect,
please feel free to change. For my expenses going forward Crescent
will pay me $30,000 in a years time for my travel, housing, and
meals. This will be on a yearly basis and we will re-visit next April.
Brooke Lowther will collect my actual expenses to compare to payout
for tax purposes at year end.
The following is how the expenses will be paid out:
$5000 initial pay out.
Remaining $25,000 to be divided by 26 payroll (payrolls in a
yearly bi-weekly cycle) and added to my regular bi-weekly pay... . .
$961.53 per pay check.
If you are in agreement, please email your approval to Maureen and
she will start the bi-weekly expense payout on May 2, 2008.
Dkt. 24, Ex. 4. After Stevens’ response agreeing to those terms, Haynes sent another email stating:
“Brooke is tracking all of my expenses. She is going to keep a running spreadsheet so we will have
everything tracked, backup support and then be able to compare against my tax obligation, etc.” Id.
The parties do not dispute the stated figures; instead, they dispute whether the living
allowance was income to Haynes for tax purposes, whether Haynes was required to submit any
documentation to Crescent regarding her expenses, and whether Crescent would have paid her more
than $30,000 had Haynes incurred greater expenses. Dkts. 24, 26. The parties also disagree whether
Haynes actually used the entire $30,000 provided to her. Id.
In June 2008, Stevens received an email sent from Haynes’ account with a lease attached.
Dkt. 23, Ex. B–2. The lease indicates that Haynes entered into an agreement as a tenant with Jay
Lange to rent a house at 7509 Shore Court in Fort Worth for $1500 per month. Id. On April 28,
2009, Crescent received an anonymous complaint on its whistleblower hotline that Haynes falsified
this housing lease, among other things.1 Dkt. 23, Ex. A–8. Crescent began an investigation into the
1
The caller made three other allegations which proved to be false. Dkt. 28.
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complaint and found that the lease was invalid and that 7509 Shore Court does not exist. Dkt. 23,
Ex A. During the investigation, Crescent asked Haynes to provide documentation of her living
expenses, and Haynes produced receipts totaling $1,200. Dkt. 23, Ex. B. Haynes claimed she could
not find her other receipts. Id. In an interview with the investigator, Haynes stated that she should
not have provided the lease to Crescent. Id. However, in her deposition, Haynes denied that she sent
Crescent the lease, denied that she knew Jay Lange, and denied that she saw the lease before being
presented with it in June 2009. Id. Rather, Haynes alleges that the lease was falsified and sent by
someone else, and that Haynes was staying with her niece, Jessica Mays, and a co-worker, Carolyn
Labus. Id. Haynes allegedly paid Mays $400 per week for rent during the few weeks she was there,
and $400 a week to Labus, paid in cash and food. Id.
On June 12, 2009, Crescent terminated Haynes’s employment. See Dkt 10. Crescent claims
that it terminated Haynes’ employment because she provided Crescent with a falsified lease,
concealed the fact that she was living in a house with her niece, and lied about: (1) the amount of her
living expenses, (2) living in a duplex, (3) the rent she was paying her niece, (4) the reason she
moved into her niece’s house, and (5) needing $5,000 of the Commuting Agreement payment up
front to pay for deposits on her residence in Fort Worth. Dkt. 31. Haynes contends that each of
these reasons is false and that Crescent instead terminated her employment to retaliate against her
for raising complaints about its alleged FLSA violations. Id.
Haynes filed her original complaint against Crescent on June 10, 2011 (Dkt. 1), and her first
amended complaint on September 26, 2011 (Dkt. 10). Crescent filed its answer on November 28,
2011 (Dkt. 17), and included five counterclaims against Haynes: (1) breach of contract, (2) money
had and received, (3) breach of fiduciary duty, (4) fraud and fraudulent inducement, and (5) fraud
by nondisclosure. Dkt. 17. Crescent then filed a motion for summary judgment on May 10, 2012
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(Dkt. 23). On the same day, Haynes filed her motion for summary judgment as to each of Crescent’s
counterclaims (Dkt. 24).
II. LEGAL STANDARD
Summary judgment is proper if “the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(a); see
also Carrizales v. State Farm Lloyds, 518 F.3d 343, 345 (5th Cir. 2008). The mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly supported
motion for summary judgment; there must be an absence of any genuine issue of material fact.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S. Ct. 2505 (1986). An issue is
“material” if its resolution could affect the outcome of the action. Burrell v. Dr. Pepper/Seven Up
Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007). “[A]nd a fact is genuinely in dispute only if
a reasonable jury could return a verdict for the non-moving party.” Fordoche, Inc. v. Texaco, Inc.,
463 F.3d 388, 392 (5th Cir. 2006).
The moving party bears the initial burden of informing the court of all evidence
demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323, 106 S. Ct. 2548 (1986). Only when the moving party has discharged this initial burden
does the burden shift to the non-moving party to demonstrate that there is a genuine issue of material
fact. Id. at 322. If the moving party fails to meet this burden, then it is not entitled to a summary
judgment, and no defense to the motion is required. Id . “For any matter on which the non-movant
would bear the burden of proof at trial . . . , the movant may merely point to the absence of evidence
and thereby shift to the non-movant the burden of demonstrating by competent summary judgment
proof that there is an issue of material fact warranting trial.” Transamerica Ins. Co. v. Avenell,
66 F.3d 715, 718–19 (5th Cir. 1995); see also Celotex, 477 U.S. at 323–25. To prevent summary
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judgment, “the non-moving party must come forward with ‘specific facts showing that there is a
genuine issue for trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587,
106 S. Ct. 1348 (1986) (quoting former FED . R. CIV . P. 56(e)).
When considering a motion for summary judgment, the court must view the evidence in the
light most favorable to the non-movant and draw all justifiable inferences in favor of the nonmovant. Envtl. Conservation Org. v. City of Dallas, Tex., 529 F.3d 519, 524 (5th Cir. 2008). The
court must review all of the evidence in the record, but make no credibility determinations or weigh
any evidence; disregard all evidence favorable to the moving party that the jury is not required to
believe; and give credence to the evidence favoring the non-moving party as well as to the evidence
supporting the moving party that is uncontradicted and unimpeached. Moore v. Willis Indep. Sch.
Dist., 233 F.3d 871, 874 (5th Cir. 2000). However, the non-movant cannot avoid summary judgment
simply by presenting “conclusory allegations and denials, speculation, improbable inferences,
unsubstantiated assertions, and legalistic argumentation.” TIG Ins. Co. v. Sedgwick James of Wash.,
276 F.3d 754, 759 (5th Cir. 2002); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)
(en banc). By the same token, the moving party will not meet its burden of proof based on
conclusory “bald assertions of ultimate facts.” Gossett v. Du-Ra-Kel Corp., 569 F.2d 869, 872
(5th Cir. 1978); see also Galindo v. Precision Am. Corp., 754 F.2d 1212, 1221 (5th Cir. 1985).
III. CRESCENT’S MOTION FOR SUMMARY JUDGMENT
Crescent moves for summary judgment on Haynes’ retaliation claim and argues that Haynes
did not engage in protected conduct under the FLSA because (1) she did not step outside of her job
duties as Vice President of Human Resources (“HR”) to make a complaint, and (2) she did not have
a good faith belief that Crescent was violating the FLSA. Dkt. 23. Crescent also asserts that it had
several legitimate, non-discriminatory reasons for terminating Haynes’ employment, and that Haynes
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cannot prove these reasons are pretexual. Id. Thus, Crescent urges the court to find that Haynes has
failed to raise a genuine issue of material fact regarding her retaliation claim. Id.
The McDonnell Douglas framework, which applies to cases brought under the FLSA,
requires that the plaintiff demonstrate a prima facie case of: "(1) participation in a protected activity
under the FLSA; (2) an adverse employment action; and (3) a causal link between the activity and
the adverse action." Hagan v. Echostar Satellite L.L.C., 529 F.3d 617, 624 (5th Cir. 2008). Once
the plaintiff meets this burden, the burden of production shifts to the defendant to articulate a
legitimate, non-discriminatory reason for its decision. Id. If the defendant does so, the burden then
shifts back to the plaintiff to demonstrate that the proffered reason is a pretext for discrimination. Id.
A plaintiff engages in protected activity under the FLSA if she (1) files a complaint,
(2) institutes or causes to be instituted any proceeding under the FLSA, (3) testifies or prepares to
testify in any such proceeding, or (4) serves or prepares to serve on an industry committee.
29 U.S.C. § 215(a)(3) (2006). The parties are in agreement that the only protected activity Haynes
allegedly engaged in is filing a complaint under Section 215(a)(3). Dkts. 23, 28. “An employee does
not file a complaint under Section 215(a)(3) unless that employee somehow steps outside his normal
job role. . . . ‘by either filing (or threatening to file) an action adverse to the employer, . . . or by
otherwise engaging in activities that reasonably could be perceived as directed towards the assertion
of rights protected by the FLSA.’” Hagan 529 F.3d at 627-28 (quoting and adopting the Tenth
Circuit's reasoning in McKenzie v. Renberg's Inc., 94 F.3d 1478, 1486-87 (10th Cir. 1996)).
A.
Stepping Outside Job Duties
Crescent claims that Haynes did not step outside her job duties to make a complaint because
her job duties included ensuring that employees were properly paid and that Crescent complied with
the FLSA. Dkt. 23. Crescent relies on Suzanne Stevens’ statement in her affidavit that Haynes’
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duties involved, inter alia, “ensuring that Crescent complied with employment-related laws such as
the [FLSA],” and that Stevens “relied on Haynes to ensure that Crescent complied with [these]
laws.” Dkt. 23, Ex. C. Haynes argues that she did step outside her job duties when she created the
spreadsheet documenting the monies that should have been paid out under the FLSA and when she
complained to her supervisor in 2008 and 2009. Dkt. 28. Haynes asserts that her normal role did
not involve ensuring compliance with the FLSA, rather it involved “facilitat[ing] or mak[ing] sure
the policies and procedures that the company decided upon were carried out.” Id.; Dkt. 23, Ex. B.
In her deposition, Haynes acknowledged that “one of [her] duties was to help ensure that
employees were paid correctly.” Dkt. 23, Ex. B (emphasis added). Crescent interprets “correctly”
as lawfully, and relies on this statement as Haynes’ admission that she did not step outside her job
duties when filing her complaint. Dkt. 23. However, Haynes interprets “correctly” as accurately,
and maintains that her “department was responsible for making sure that the pay amount was [put]
into [the] payroll system so [employees] were paid accurately,” and that it was not her duty to advise
Crescent or her supervisor about Crescent’s bonus and overtime payment practices. Dkt. 23, Ex. B;
Dkt. 28. Specifically, Haynes alleges it is the role of Crescent’s attorneys’ to “ensure that the
employees are paid lawfully.” Id. After considering the motions, evidence, and the applicable law,
the court finds that the scope of Haynes’ job duties at Crescent presents a genuine issue of material
fact because a reasonable juror could find that Haynes stepped outside her role as Vice President of
HR in filing her complaints. Therefore, for the purposes of these motions, the court will assume that
Haynes did step outside her role of Vice President of HR in filing her complaints.
B.
Good Faith Belief
Crescent next argues that the court should grant summary judgment in its favor because
Haynes did not have a good faith belief that Crescent was violating the FLSA. Dkt. 23. The Fifth
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Circuit has not yet decided whether a good faith belief is required for an FLSA complaint.
See Hagan, 529 F.3d at 630 (declining to address whether an employee’s good faith belief may give
rise to protected activity, even when there is no actual FLSA violation). The Seventh Circuit,
however, has addressed the issue. Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir. 1999). In
Sapperstein, the Seventh Circuit reversed the district court’s dismissal of an employee’s FLSA
retaliation claim because the employee “had a good–faith belief that [the FLSA] might be violated,”
even though there was no actual violation. Sapperstein, 188 F.3d at 857. Crescent interprets
Sapperstein as requiring a good faith belief that the FLSA has been violated and argues that Haynes
did not have a good faith belief because she did no independent research on proper overtime/bonus
payment under the FLSA, she consulted no books, HR materials, or attorneys on the issue, and she
did not she seek anyone else’s opinion about the legality of Crescent’s pay practice. Dkt. 23.
However, the Seventh Circuit explicitly rejects a requirement of such outside research to support a
good finding belief, stating that:
Congress might have put the risk on the employee to do his or her
homework and make sure that there was actually a violation before
going to the authorities, but it instead protected the employee
regardless. . . . Congress instead wanted to encourage reporting of
suspected violations by extending protections to employees who filed
complaints, . . . . There is no requirement that those laws must
actually be violated. It is sufficient that the plaintiff had a good-faith
belief that they might be violated. No further requirements are
implied by the law.
Sapperstein, 188 F.3d at 857. Thus, Haynes was not required to do her “homework” to ensure the
violations in order to have a good faith belief that Crescent violated the FLSA.
Assuming, arguendo, that a good faith belief is required, Haynes presents evidence that she
formed her belief that Crescent was not properly paying bonuses after she spoke with two former
Crescent employees. Dkt. 23, Ex. B. This evidence creates an issue of material fact because a
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reasonable juror could find that Haynes had a good faith belief that Crescent violated the FLSA
through its allegedly non-compliant pay practices. Therefore, for the purposes of these motions, the
court will assume that Haynes had a good faith belief that Crescent was violating the FLSA, and,
since Haynes was terminated, she suffered an adverse employment action. She has therefore met her
burden to show a prima facie case. The burden of production then shifts to Crescent to show a
legitimate, non-discriminatory reason for her termination.
C.
Legitimate Reasons for Termination and Pretext
Crescent also asserts that it had legitimate, non-discriminatory reasons for terminating
Haynes’ employment. Dkt. 23. Specifically, Crescent alleges that it honestly believed Haynes
falsified a lease and repeatedly lied about a number of issues.2 Id. Haynes claims that these reasons
are merely pretext, and that Crescent actually terminated her employment because she filed multiple
complaints. Dkt. 28.
Crescent argues that it had a good faith belief at the time of Haynes’ employment termination
that she falsified a lease. Dkt. 31. Haynes alleges that Crescent did not believe, in good faith, that
she falsified the lease because Crescent based its investigation upon allegations made by an
unreliable, anonymous caller. Dkt. 28. Haynes thus claims that Crescent’s reasons for her
termination are false and that the real reason is because she filed multiple complaints regarding
Crescent’s alleged FLSA violation. Id. Crescent contends that even if the caller was unreliable, they
had ten other reasons to support a good faith belief that Haynes falsified her lease, including the tip
on Crescent’s hotline which initiated the investigation into Haynes’ lease, Haynes’ signature on the
lease, Haynes’ email to a co-worker attaching a copy of the lease, the temporal proximity between
2
Crescent also argues that temporal proximity is not sufficient to prove pretext. Dkt. 23. Haynes does not
assert this argument in its response, so the court need not address it. Dkt. 28
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the Commuting Agreement and the date on the lease, an original version of the lease with Haynes’
signature in Crescent’s possession, the amount of monthly rent listed on the lease, and Haynes’
statement that she should not have provided the lease and that she “screwed up” in doing so.
Dkt. 31. The court finds that Crescent has submitted “ample evidence” of its good faith belief that
Haynes falsified the lease, and that Haynes failed to produce evidence creating a genuine issue of
material of fact of pretext. See Cantu v. Vitol, Inc., CIV.A. No. H-09-0576, 2011 WL 486289 at *12
(S.D. Tex. Feb. 7, 2011) (finding that the plaintiff failed to show evidence of pretext and that the
defendant produced substantial evidence consistent with other testimony.).
Crescent states that Haynes “submitted a fraudulent lease,” however, it does not contend that
it fired Haynes for acting fraudulently, i.e., for intentionally misrepresenting a fact to Crescent in
order to induce Crescent to pay under the Commuting Agreement. Dkt. 23. Haynes attempts to
prove Crescent’s reasons are pretext by focusing on an accusation of fraud. Dkt. 28. Haynes argues
that she could not have acted fraudulently because Crescent had already agreed to the Commuting
Agreement at the time it received the lease and because Haynes was not required to produce a lease
to receive the funds. Dkt. 28. Crescent, however, does not have to prove fraud. It just has to show
it had a legitimate, nondiscriminatory reason for terminating Haynes’ employment. Crescent’s good
faith belief that Haynes falsified the lease is a legitimate, non-discriminatory reason.
Crescent also alleges that it had a good faith belief at the time of Haynes’ termination that
she repeatedly lied to Crescent about: (1) the amount of her living expenses, (2) living in a duplex
in Fort Worth, (3) living with her niece, (4) the amount of rent was she paying to live with her niece,
(5) the reason she moved into her niece’s house, and (6) needing $5,000 of the Commuting
Agreement up front to pay for deposits on her residence in Fort Worth. Dkt. 31. Haynes argues that
she did not lie about the amount of expenses she incurred. Dkt. 28. Haynes does not present any
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evidence establishing pretext for the other five accusations. Because “[t]he plaintiff must put
forward evidence rebutting each of the [legitimate and] nondiscriminatory reasons the employer
articulates,” Haynes has failed to met her burden. Wallace v. Methodist Hosp. Sys., 271 F.3d 212,
220 (5th Cir. 2001) (affirming the district court’s judgement as a matter of law based on the
plaintiff’s failure to demonstrate pretext for each legitimate, nondiscriminatory reason).3
Although Haynes raised an issue of material fact whether she engaged in protected activity,
Crescent had legitimate, non-discriminatory reasons for terminating her employment, and Haynes
failed to raise an issue of material fact with regard to her claim of pretext on five of those reasons.
Accordingly, Crescent’s motion for summary judgment is GRANTED.
IV. HAYNES’ MOTION FOR SUMMARY JUDGMENT
In Haynes’ motion for summary judgment as to Crescent’s counterclaims, Haynes alleges that
Crescent has no evidence to establish a genuine issue of material fact regarding any of its
counterclaims. Dkt. 24. Crescent objects to the evidence Haynes’ submitted in support of her
motion, specifically certain paragraphs in her affidavit, and also contends that there is a genuine issue
of fact as to each element of the five counterclaims. Dkt. 26. Haynes did not respond to Crescent’s
evidentiary objections.
A.
Crescent's Objections to Plaintiff Haynes' Affidavit
Crescent objects to Haynes’ affidavit on three grounds: (1) Haynes is asserting facts which
are outside her personal knowledge, (2) Haynes’ affidavit is a “sham affidavit,” and (3) Paragraph
8 of Haynes’ affidavit and Exhibit 6 both constitute hearsay. Dkt. 26.
3
Although Wallace is a Title VII case, “the purpose of [the two statutes’] retaliation provisions is one and the
same.” Darveau v. Detecon, Inc., 515 F.3d 334, 342 (4th Cir. 2008). Accordingly, courts occasionally look to Title VII
claims in interpreting FLSA claims. See id. (adopting Title VII jurisprudence regarding protection for former
employees); see also Hagan, 529 F.3d at 624 (adopting the Title VII McDonnell Douglas framework).
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In order to serve as competent summary judgment evidence, an affidavit “must be made on
personal knowledge, set out facts that would be admissible in evidence and show that the affiant is
competent to testify on the matters stated.” FED . R. CIV . P. 56(e). First, Crescent objects to
statements from Haynes which are not based on her personal knowledge. Dkt. 26. Specifically,
Haynes stated in Paragraph 7: “[the $30,000] was not income to me. Rather, it was a living
allowance . . . .” Dkt. 24, Ex. A. Crescent claims that this statement is a legal conclusion which is
outside Haynes’ personal knowledge. Dkt. 26. Haynes also stated in Paragraph 8: “it was obvious
that I would incur at least [$30,000] by virtue of my regular travel . . . .” Dkt. 24, Ex. A. Crescent
argues that this is also outside Haynes’ personal knowledge, as she cannot contend something is
obvious to anyone besides herself. Dkt. 26. The court finds in both instances that Haynes is only
expressing her opinion, therefore Crescent’s objections as to personal knowledge are OVERRULED.
Crescent also objects to Haynes’ affidavit as a “sham affidavit” because it directly contradicts
her deposition testimony. Dkt. 26. It is well established in the Fifth Circuit that a “nonmovant
cannot defeat a motion for summary judgment by submitting an affidavit which directly contradicts,
without explanation, his previous testimony.” Albertson v. T.J. Stevenson & Co., Inc., 749 F.2d 223,
228 (5th Cir. 1984) (citing Kennett-Murray Corp. v. Bone, 622 F.2d 887, 894 (5th Cir. 1980)). In
Paragraph 9 of her affidavit, Hayes stated that she “used all the funds given to [her] as a living
allowance for commuting expenses.” Dkt. 24, Ex. A. Crescent claims that Haynes affirmed, in her
deposition, that she did not spend the entire amount. Dkt. 26 (citing Dkt. 26, Ex. B pp.
170:22–176:2; 183:1–21). However, a review of the testimony reveals that Haynes was referring
to “examples” and “averages,” and not her actual experience. Dkt. 26, Ex. B. The deposition
testimony and affidavit are not in conflict; thus Haynes’ affidavit is not a sham affidavit. Crescent’s
objection as to the sham affidavit is OVERRULED.
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Lastly, Crescent objects to a statement in Paragraph 8 of Haynes’ affidavit and to Exhibit 6
as hearsay. Dkt. 26; See FED . R. EVID . 801-807. Paragraph 8 states that Haynes and Crescent met
with an accounting firm and notes what the consultant at the accounting firm said. Dkt. 24, Ex. 1.
Exhibit 6 is an “anonymous” letter to Crescent that supports Haynes’ contentions in this case.
Dkt. 24, Ex. 6. Both items clearly constitute hearsay. Crescent’s objections to Paragraph 8 of
Haynes’ affidavit and Exhibit 6 are SUSTAINED. The court will not consider this evidence.
B.
Breach of Contract
In its first counterclaim, Crescent alleges Haynes materially breached the Commuting
Agreement by failing to provide Crescent with accurate documentation of her commuting expenses.
Dkt. 17. To succeed on a breach of contract claim, Crescent must establish the following elements:
(1) a valid enforceable contract existed; (2) Crescent performed or tendered performance; (3) Haynes
breached the contract; and (4) Haynes’ breach was the cause of Crescent’s injury. Doss v.
Homecomings Fin. Network, Inc., 210 S.W.3d 706, 713 (Tex. App.—Corpus Christi 2006,
pet. denied).
Haynes argues that Crescent cannot establish an issue of material fact regarding elements
three and four. Dkt. 24. Haynes claims that she did not breach the Commuting Agreement because
she was not required to provide any documentation, and that Crescent has acknowledged the lack
of such a requirement. Id. Haynes also asserts that she incurred the entire $30,000 in expenses and
that Crescent has not been damaged as a result of any alleged breach of the agreement. Id. Haynes
cites Stevens’ deposition for support of these claims, referring to Stevens’ testimony that Crescent’s
financial statements were not impacted. Dkt. 24, Ex. 2. Crescent argues that there is “abundant
evidence” that Haynes was required to provide documentation, and that she breached the contract
by providing receipts for only $1,200 of her commuting expenses. Dkt. 26. Further, Crescent
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presents evidence regarding Crescent’s injury, namely that it paid for housing expenses not actually
incurred by Haynes. Id. The court finds that the conflicting testimony creates a factual dispute that
is better suited for the jury. Therefore Haynes’ motion for summary judgment on Crescent’s breach
of contract claim is DENIED.
C.
Money Had and Received
Second, Crescent alleges Haynes did not incur expenses of $30,000, therefore she holds
money that belongs to Crescent in equity and in good conscience. Dkt. 17. “A cause of action for
money had and received is not based on wrongdoing but instead, ‘looks only to the justice of the case
and inquires whether the defendant has received money which rightfully belongs to another.’” Doss,
210 S.W.3d at 711 (quoting Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso
1997, no writ)). Since the court has found that there is a factual dispute regarding whether Haynes
incurred $30,000 in commuting expenses, the court cannot determine as a matter of law whether
Haynes received money which rightfully belongs to Crescent. Therefore, Haynes’ motion for
summary judgment on Crescent’s money had and received claim is DENIED.
D.
Breach of Fiduciary Duty
Third, Crescent claims Haynes had a fiduciary relationship with Crescent due to her
employment with Crescent, and that Haynes therefore owed Crescent a fiduciary duty. Dkt. 17.
Crescent contends Haynes intentionally breached her duty by misrepresenting her anticipated
housing expenses, presenting a fraudulent lease to Crescent, and seeking reimbursement for housing
expenses she did not actually incur. Id. “The elements of a breach of fiduciary duty claim are: (1)
a fiduciary relationship between the plaintiff and defendant, (2) the defendant must have breached
his fiduciary duty to the plaintiff, and (3) the defendant’s breach must result in injury to the plaintiff
or benefit to the defendant.” Jones v. Blume, 196 S.W.3d 440, 447 (Tex.App.—Dallas 2006, pet.
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denied). Haynes challenges the second and third elements of Crescent’s allegation, stating that
Haynes did not breach her fiduciary duty because she did incur the entire $30,000 in commuting
expenses and that Crescent did not incur any damages from the alleged breach. Dkt. 24. As
discussed in the prior claims, the court finds that Crescent has presented enough evidence to
demonstrate a genuine issue of material fact regarding Haynes incurred costs and Crescent’s
damages. Therefore, Haynes’ motion for summary judgment on Crescent’s breach of fiduciary duty
claim is DENIED.
E.
Fraud and Fraudulent Inducement
Fourth, Crescent alleges Haynes presented it with a falsified lease, falsely stated that she
would incur expenses of $1,500 per month, and falsely represented that she actually incurred these
expenses. Dkt. 17. Crescent claims Haynes knew these statements were false and that she intended
Crescent to act on them by providing her with the money under the Agreement and continuing to pay
the installments throughout the year. Id. Lastly, Crescent claims it relied on Haynes’ false
statements to its detriment when deciding how much to pay her, when making payments to her, and
when negotiating the terms of and entering into the Agreement. Id. Texas law requires proof of six
elements to establish a claim of fraud: (1) a material misrepresentation; (2) the representation is
false; (3) the speaker knew it was false or was reckless in making the statement; (4) the speaker
intended that the other party act upon the statement; (5) reasonable reliance; and (6) injury resulting
from the misrepresentation. Fagan Holdings, Inc. v. Thinkware, Inc., 750 F. Supp. 2d 820, 833
(S.D. Tex. 2010).
Haynes contends Crescent has no evidence regarding elements four, five, and six. Dkt. 24.
First, Haynes argues she could not have induced Crescent to act by presenting the falsified lease, and
Crescent could not have relied on the lease, because Crescent and Haynes entered into the
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Commuting Agreement before Crescent knew of the falsified lease. Id. Second, Haynes argues that
she used all of the money under the Agreement so Crescent has suffered no injury from the alleged
misrepresentation. Id. While the court agrees that Crescent was not induced to enter into the
Agreement by the falsified lease, Crescent does present an issue of material fact regarding whether
Haynes falsified the lease to induce Crescent to continue to make payments under the Agreement.
Further, whether Haynes incurred the entire amount and whether Crescent suffered any injuries are
matters for the jury to decide. Accordingly, Haynes’ motion for summary judgment regarding
Crescent’s claim of fraud and fraudulent inducement is DENIED.
F.
Fraud by Non-Disclosure
Crescent’s last counterclaim alleges that Haynes concealed, or failed to disclose, the fact that
she was not actually incurring the living expenses she represented to Crescent, and that she had a
duty to disclose the actual amount due to her fiduciary relationship with Crescent. Dkt. 17. Fraud
by non-disclosure occurs when:
[1] a party conceals or fails to disclose a material fact within the
knowledge of that party, [2] the party knows that the other party is
ignorant of the fact and does not have an equal opportunity to
discover the truth, [3] the party intends to induce the other party to
take some action by concealing or failing to disclose the fact, and
[4] the other party suffers injury as a result of acting without
knowledge of the undisclosed fact.
Bradford v. Vento, 48 S.W.3d 749, 754–755. Haynes argues that Crescent cannot establish any of
the elements because she did incur the living expenses she represented to Crescent, namely the
$30,000 under the Commuting Agreement, so she did not conceal or fail to disclose any information
from Crescent. Dkt. 24. Further, Haynes argues that Crescent has not suffered any injury. Id.
Similarly to Crescent’s other counterclaims, the court finds that the conflicting testimony regarding
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Haynes’ actual expenses is a determination for the jury. Haynes’ motion for summary judgment
regarding Crescent’s claim of fraud by non-disclosure is DENIED.
IV. CONCLUSION
After consideration of the motions, responses, and applicable law, Crescent’s motion for
summary judgment (Dkt. 23) is GRANTED and Haynes’ motion for summary judgment as to
Crescent’s counterclaims (Dkt. 24) is DENIED.
It is so ORDERED.
Signed at Houston, Texas on July 2, 2012.
___________________________________
Gray H. Miller
United States District Judge
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