Superior Offshore International, Inc v. Schaefer, Jr. et al

Filing 140

MEMORANDUM AND ORDER Schaefers Motion for Reconsideration [Doc. # 135] isGRANTED only to the extent that the Court corrects its prior Memorandum andOrder to reflect that Schaefers Release does not contain the exclusion for fraud andwillful misconduct claims, and DENIED in all other respects. It is furtherORDERED that Superiors Motion for Leave to File a Surreply [Doc. # 139]is GRANTED.(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
SUPERIOR OFFSHORE
INTERNATIONAL, INC.,
Plaintiff,
v.
LOUIS E. SCHAEFER, JR., et al.,
Defendants.

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CIVIL CASE NO. H-11-3130

MEMORANDUM AND ORDER
This case is before the Court on Defendant Louis E. Schaefer, Jr.’s Motion for
Reconsideration [Doc. # 135], seeking reconsideration of the Court’s denial of his
Motion for Summary Judgment on the Affirmative Defense of Release. Plaintiff
Superior Offshore International, Inc. (“Superior”) filed a Response [Doc. # 136], and
Schaefer filed a Reply [Doc. # 137]. Superior filed a Motion for Leave to File a
Surreply [Doc. # 139] with the proposed Surreply attached. Having reviewed the
record and applied governing legal authorities, the Motion for Leave to File a Surreply
is granted, and the Motion for Reconsideration is granted in part and denied in
part.
“A motion to alter or amend judgment must clearly establish either a manifest
error of law or fact or must present newly discovered evidence.” Ross v. Marshall,
426 F.3d 745, 763 (5th Cir. 2005) (internal quotations omitted). In the prior
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Memorandum and Order [Doc. # 134] entered December 11, 2012, the Court stated
correctly that Defendants Joshua Koch, Jr., Roger Burks, and Schaefer each entered
into an agreement with Superior that included a mutual release of claims existing as
of the date of the release. See Memorandum and Order, p. 10. The Court noted
further that the “Release language is quite broad, releasing any and all claims ‘of any
kind whatsoever, known or unknown, whether in law or equity and whether arising
under federal, state, or local law, which [the releasing parties] had, now have, or may
have or claim to have in the future . . ..’” Id. The Court then stated that the Releases
provided that they did not release “any claims arising out of the fraud or willful
misconduct.” Id. Schaefer correctly points out in his Motion for Reconsideration that,
unlike Burks’s and Koch’s Releases, his Release does not contain this “carve-out”
provision. To the extent the prior Memorandum and Order denied summary judgment
based on this exclusion, Schaefer’s Motion for Reconsideration is granted.
The Court’s prior denial of Schaefer’s Motion for Summary Judgment on
Affirmative Defense of Release was not, however, based exclusively on the exclusion
of “fraud and willful misconduct” claims from the Release. Instead, the Court noted
that there were genuine issues of material fact regarding whether the Releases,
including Schaefer’s, violated public policy. For example, there are genuine issues
of material fact regarding when Schaefer’s fiduciary duty to Superior may have ended.

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Additionally, there are genuine fact issues regarding the alleged conflict of interest
created by Schaefer’s counsel in the Initial Public Offering having represented
Superior in connection with negotiating Schaefer’s Release, and whether that alleged
conflict rendered the Release void as a matter of public policy. These material fact
disputes remain notwithstanding the absence of the “carve-out” provision in
Schaefer’s Release. As a result, it is hereby
ORDERED that Schaefer’s Motion for Reconsideration [Doc. # 135] is
GRANTED only to the extent that the Court corrects its prior Memorandum and
Order to reflect that Schaefer’s Release does not contain the exclusion for “fraud and
willful misconduct” claims, and DENIED in all other respects. It is further
ORDERED that Superior’s Motion for Leave to File a Surreply [Doc. # 139]
is GRANTED.
SIGNED at Houston, Texas, this 23rd day of January, 2013.

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