### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 06- 20867

W IL L IA M D . S U L L IV A N , P l a i n ti ff

–A p p ell a n t , v. L E O R E N E R G YL L C ; L E O R E N E R G YL P , D efen da n t s–A pp el l ees .

A pp ealf

rom t h e U n i t ed S t ates D i st ri ctC ou rt f or t h e Sou t h ern D i st ri ctof T exas
B ef ore D AV IS, ST E W A R T , an d O W E N , C i rcui tJu dg es . P R ISC ILL AR
. O W E N , C i rcui tJu dg e: W i l l i am Sul l i van appeal s t he di st r i c tc our t ’ s di sm i ssalof hi s st at e l aw cl ai m s agai n stL eor E n ergy, L L C an d L eor E n ergy L P ( col l ect i ve ly L eor)

. For t h e f o l l o w i n gr e a s o n s , w e a f f i r m. I T h i s c ase ari ses ou tof a contr actdi spu t e betw een Su l l iva n a n d L eor. Su l l i va n ’ s Fi r stA m ended Com pl ai nt pr es ent s t he fac t s as f ol l ow s. Leori s an en ergy com pa n y w i t h ri gh t s t o cer t ai n oi lan d ga s prop e rties i n R obert son C ount y, Texas
. Su l l i van w as i nt r oduc ed t o Leor as a pos sibl e c andi dat e t o s er ve a s i t s C h i e f

E x e c u t i v e o f

f i c e r . Nu me r o u s d i s c us s i o n s e n s u e d f o rt h e n e x tt wo
m o nt hs , a nd t he pa r t i e s “t ent at i ve l y ag r e e d” t hatSul l i va n woul d b e c o m e t he United States Court of App eals

Fifth Circuit 

### F I L E D Ma rc h 15, 2010 Cha rl es R. F ulb ru g e II I Clerk Case: 06-20867 Document: 00511052141 Page: 1 Date Filed: 03/15/2010N o. 06- 20867

2 C h ie f E x e c u tiv e O ffic e ra n d P r e s id e n t o f L e o r , S u lliv a n w o u ld co m m it 3 0 % o f h is t i m e t o Le o r ’ s b us i ne s s , a nd woul d r e c e i ve a s al ar y, a ddi t i on alc o m pe ns at i o n, an d equ i t y i n an enti t y t h at w as to hol d the R obert son C ou n t y properti es. A t t orneys f

or Leor prepa red draft s of an em pl oym en tagreem en t , non e of w h i ch
e ith e r p a rty sig n e d

. L e o r a tta ch e d to i ts a n sw e r to S u ll iva n ’ s C o m p la in t a d ra ft of an em pl oym en tagreem en t , w h ich L eor s ays w as t h e l ast t h at t h e parti es di s c us s e d. I ti s l e ngt hy and de t ai l e d. T h e com pe ns at i o n pr o vi s i o ns contem pl at e d ab as e s al ary of $18 0, 000 per year, a potenti aldi scr et i on ary bon u s, and a pot ent i aleq ui t y i n teres ti n an ent i t y t hat w as t o b e f or m ed. Sul l i van al l eges t h at Leor prom i sed t o si gn an agreem en tan d that Su l l i van th e refor e bega n w or ki ng f

ort he c om pany. Leorr epr es ent ed t o po t ent i ali nves t ors t hat Sul l i va n was i t s Pr e s i de nta nd CEO , a nd Su l l i va n s uc c e e de d i n s e c ur i ng f i n an ci n g f

or Leor t h at w ou l d en able i tt o com m en ce expl orat i on of t h e R obert son C ou n t y properti es. Sh ortly aft er t h at t ran sact i on w as consu m m ated, L eor t e r m i nat e d Sul l i va n’ s e m pl o ym e ntw i t ho utc aus e . A w r i t t e n e m pl o ym e nt ag r e e m e ntha d ne ve rb e e n e xe c ut e d. Su l l i van s ued L eo ri n st at e co urt , ass er t i ng c l ai m s under T exas st at e l aw f o rb r e ac h o f

co nt r ac t , quant um m e r ui t , unj us te nr i c hm e nt , f r aud , e qui t ab l e a nd p rom i ssor y e st oppel , and “ det r i m ent alr el i ance . ” Leorr em ove d t he s ui tto fed e ra l dis trict co u rt b a se d on d ive rs ityj u risd iction

. T h e d istr ict cou rtdi sm i ssed S u l l i van ’ s am en ded com pl ai n tf or fai l u re t o stat e a cl ai m . S u l l i van n ow app eal s. H e c o nt e nds t hatt he di s t r i c tc o ur te r r e d i n c o nc l udi ng t hat t he s t at ut e o f f r aud s b a rs en forcem en t of the com p en sa ti o n pr ov i sion s i n the u n sign ed con tract. A lt erna t i vel y, Su l l i van argu es t h at he fal l s w i t h i n t h e parti al

- perf orm an ce e xc e pt i o n t o t he s t at ut e o f f r aud s . H e a l s o a r gue s t hatif t he s t at ut e o f

f r aud s
w oul d ot her w i se appl y, t he di st r i c tc our ter r ed i n di sm i ss i ng hi s c ont ent i on t hat eit h er p rom i sso ry e stop p el or eq u i tab l e estop p el b a rs a p p l i ca ti on of th e sta tu te
o f fr a u d s . H e fu r th e ra s s e r ts th a t t h e d is tr ic t c o u r t e r r e d in d is m is s in gh is Case: 06-20867 Document: 00511052141 Page: 2 Date Filed: 03/15/2010N o. 06- 20867

Gonzalez v. Kay , 5 7 7F .3 d 6 0 0 , 6 0 3( 5 thC ir

. 2 0 0 9). 1 Ashcroft v. I

qbal , 1 2 9S

. C t. 1 9 3 7 , 1 9 4 9(2 0 0 9). 2 Bel l At l. C

or p. v . Tw om b ly , 5 5 0U .S

. 5 4 4 , 5 5 5(2 0 0 7) (inte rn al citation s o mitt ed); see 3 Iq bal , 1 2 9S

. C t. at 1 9 4 9
. Sca n la nv . Texas A&M U n iv
. , 3 4 3F .3 d 5 3 3 , 5 3 6( 5 thC ir

. 2 0 0 3). 4 Id

. 5 T EX . B US . & C OM . C O D E ANN . § 2 6.01
. 6 3 cl a i m s f

or q u a n tu m m eru i t, u nj u st en ri ch m en t, an d f ra u d , an d ab u sed i ts d is c r e tio n in d is m i s s in gh is cla im s w ith o u t g r a n tin gh im le a v e to a m e n d h is
com p l a i n t. II W e re v iew d e n o v o a d is t r ic t c o u rt’s d ism iss a l u n d e r R u le 1 2 (b )(6), accepti n g al lw el l

- pl ead ed fact s as t rue an d vi ew i n g t h ose fact s i n t h e l i gh tm ost favorab l e t o t h e pl ai n t i f f

. “ T o surv ive a m o tion t o di sm i ss, a com pl ai n tm u st 1
c ont ai n suf

f i c i ent fac t ualm at t er , ac c ept ed as t r ue, t o s t at e a c l ai m t o r el i ef t hat i s pl au sibl e on i t s face. ” “ W h i l e a com pl ai n tatt acked by a R u l e 12(b) ( 6) m ot i on 2 to d i sm i ss d oe s n ot n ee d de tail ed fa c tu a lall eg a ti on s, a p l a i n ti ff ’ s ob l i ga ti on to pr o vi de t he ‘ gr o unds ’o f hi s ‘ e nt i t l e [ m e nt ] t o re l i e f ’re qui r e s m o r e t han l ab e l s a nd
c o n c lu s io n s , a n d a fo r m u la ic r e c ita tio n o f th e e le m e n ts o f a ca u s e o f a c tio n w ill
n otdo. ” In rul i n g on a m ot i on t o di sm i ss, t h e di st ri ctcourtgen eral l y “ m u stnot

3 go ou t si de the pl ead i n gs. ” H ow ever, t h e courtm ayc o ns i de rdo c um en t s at t ach ed 4 t o a m ot i on to d i sm i ss that “are referred to i n the p l ai n t i f f ’ s c om pl ai n tan d are
c e n tr a l to th e p la in tiff ’ s cla im .” 5 III S u l l i van f

i rstargu es t h at t h e di st ri ctcourt erred i n f i n di n g t h at hi s breach
o f c o nt r a c t c l a i m i s b a r r e d b y t he Te x a s s t a t ut e o f f r a ud s . H e m a i nt ai ns t hat

6 Case: 06-20867 Document: 00511052141 Page: 3 Date Filed: 03/15/2010N o. 06- 20867

Id

. 7 See Gilliam v. Kou chou cos , 1 6 1 T ex . 2 9 9 , 3 0 2 , 3 4 0S .W .2 d 2 7 , 2 9( 1 9 6 0). 816 1 T ex . at30 2, 3 40 S.W.2d at 29. 9 4 h is a g r e e m e n t w ith L e o ris e n fo r c e a b le b e c a u s e i t is a n a t-w ill co n tr a c t t h a t is p e r fo r m a b le w ith in o n e y e a r . Th e s t at ue o f

f r auds ba r s enf

or c em en t of co nt r ac t s t hat c annot be pe r f o r m e d wi t hi n o ne y e arunl e s s t he c o nt r ac ti s i n wri t i n g an d s i gne d b y t he p a rty to b e ch a rg e d w ith th e p ro m ise

. S u ll iv a n a ss e rts th a t th e d ra ft 7
em p l oy m en t con tract refl ects th e es sen ti a lelem en ts of th e pa rti es’ ag ree m en t. T h at draf

tst ates t h at Leor E n ergy L L C agrees t o em pl oy S u ll iva n f or a f i xed term of a p p rox i m a tel y tw o a n d a h a l f ye a rs. T h e d ra ft con tract p roh i b i ts S u l l i van f

rom com peti n g w i t h L eor L L C f or t w el ve m on t h s af

t er t erm i n ati on of Sul l i va n’ s e m pl o ym e nt
. I ta l so p rovi de s t hate i t he rpa r t y m ayt e r m i nat e t he agreem en t , w i t h or w ith o u t c a u se, an d speci f i es r em edi es i n t h e even tof t e r m i nat i o n. Le o rw as e nt i t l e d t o t e r m i nat e upo n g i vi ng w r i t t e n no t i c e , a nd S u lliv a n w a s e n tit le d to te r m in a te u p o n g iv in g3 0 d a y s w r itt e n n o tic e . S u l l i van contends that because th e contr actprovi des f or t erm i n ati on
w i th ou t cau se, i t crea tes a n em p lo y m e n t- a t- w i l lrelati on sh i p of a n i n d efi n i te term , w h i ch w ou l d be p erform a b l e i n o n e ye a r a n d th u s n ot b a rred b y th e sta tu te of f r auds. H ow eve r , und er Texas l aw , a c ont r ac t f or a st at ed t er m l ongert han
on e y ea r i s n ot tak en ou t of th e st a tu te of f ra u d s w h en the re is a m ere po ssibil i ty of t erm i n a ti on w i th i n o n e ye a r d u e to c on ti n ge n t ev en ts se t forth in the con tract, i nc l udi ng t e r m i nat i o n b y a pa r t y. I n G i l l i am v. K ou chou cos , t h e Su prem e C ou rt 8 of Texas hel d t hat t he pos sibi l i t y t hat a par t y t o a c ont r ac t m i ght di e l es s t han a year aft er a c on t ractw i t h a t erm of m ore t h an on e year w as consu m m ated does nott ake t he agr ee m entoutof t he s t at ut e o f

f r auds. As a c or ol l ar y, t he Texas

9
c o ur t r e c o gni zed i n d icta t h at t h e sam e reasoni n g ap pl i es w h en a contr act Case: 06-20867 Document: 00511052141 Page: 4 Date Filed: 03/15/2010N o. 06- 20867

Id

. 10 Id

. 11 9 WI L L I S T ON ON C ON T RA CT S § 2 4 :9( 4the d. 2 0 0 9). 12 5 ex p ress l y g ra n ts ei th er p a rty th e righ t to term i n a te a t a n y ti m e a co n tract w i th a st ated t erm of

m ore t h an one yea r: Cont r a c t s f o r s e r v i c e f o r m o r e t han a ye ar. . . [ t e r m i nab l e ] at t he e l e c t i o n o f a pa r t y upo n t he h a p p e n in gof so m e ev e n t, o r ev e n a t th e m e re w il l of a pa r t y, ha ve g en e r al l y be e n he l d t o b e w i t hi n t he s t at ut e . The c o nt e m pl at e d p e r f o r m anc e w o ul d o c c upy m ore t h an a year. I f

t h e contr actshou l d be ter m i n ated w i t hi n t he ye ar , t he r es ul tw oul d notbe an al t er nat i ve f orm of perf orm an ce, bu texcusab l e non perf orm an ce. 10 I n G i l l i am , th e T e x a s c o u r t cit e d W illis to n o n C o n tr a c ts a s s u p p o r t fo rth is
c onc l usi on. Sec t i on 24: 9 o f W i l l i st on e xpr es se s t he vi ew t hat 11 [ o] ralagreem en t s w h i ch are sub j ectt o a ri gh tof c anc e l l at i o n o rde fe as anc e , no tb y o pe r at i o n of l aw but by the exp ress t erm s of the con t ract , w i t h i n t h e peri od of a year – such as a contractf or s everalyears’ser vi ce contai n i n g a provi si on pe r m i t t i n g t erm i n ati on by ei t h er p a r ty o n a w e e k ’ s o r a m o n th ’ s n o tic e
– a r e g e n e r a l ly h el d to be w i t h i n t h e Statute. 12 T h e T e x a s co u r ts o f a p p e a ls h a v e co n tin u e d to fo llo w th e ru le a n n o u n c e d in G i l l i am : [ I ] f

a n ag r e e m e nt c o ul d be f ul l y “ pe r f

o r m e d” w i t hi n o ne year of i t s m aki ng, s ec t i on 26. 01(b) ( 6) doe s notappl y. B u t i f th e occ u rren ce of som e oth er co n ti n ge n t eve n t, e v e n if e x p r e s s ly co n te m p la te d in th e a g r e e m e n t, w o u ld s i m pl y t e r m i nat e t he a gr e e m e ntbe f o r e t he a gr e e m e nt had bee n f

ul l y pe r f

or m ed, t hen t he pos sibi l i t y o f t hat t e r m i nat i ng e ve nto c c ur r i ng w i t h i n o ne y e aro f t he Case: 06-20867 Document: 00511052141 Page: 5 Date Filed: 03/15/2010N o. 06- 20867

You ng v. W ard , 91 7 S .W.2d 506 , 51 1 (T ex . App.–Waco 199 6, no writ) (intern al 13 citation s o mitt ed); see a lso Collins v. Allied P harmacy Mgmt ., I

nc. , 871 S. W.2 d 929, 934 (Tex. App.–Houston[14th Dist.] 19 94, no writ) (“Whe n a contract is fo r ater m lo nger thanon e year, the mere possibilityof termin atio n withina ye ar because of death or anoth er c ontingent event do esnotth enin sulateit fromth e st atuteo f fr au ds .”).

See R ESTATEM ENT (S E C OND ) OF C ON T RA CT S § 1 30, cmt. b, illus. 6
. 14 See34 0S.W .2 d at2 9 ; see a lso 9 WI L L I S T ON ON C ON T RA CT S § 2 4:9 (“Inac cord with the 15 majorityview, it h as b eensai d, ‘most cases . . . hol d a contract to r ende r service for mo re than a year to b e within the inte ntio n and force of th e statute , no twithstandin g oneor bothof the parti es mayh ave th e o ptionof endingitby notice in a ye ar, because fullperformance c annot b e re n de re d inayear co n si st entlywith th e u n de rs tan din g of th e partie s.’”) ; id . (“A

ca se cl early illustrative of th e ma

jo rityrule that an oralpro mise subj ect to an express de feasance within the perio d of a yeari s n everth eless une nforc eab le, involved an oralagreement u nder which defen dantagreed to purch ase the entire output of buttermilk for a period in excess of oneyear, buteitherparty had the optio n of cancellin g the agreement u nder certain circu mstance s. The court h eld that the option al cancell atio n provisionw as a defeasance clau se and the agreement wa s withinth e St atu e. ”)

. 16 1 T ex . at30 3, 3 40 S.W.2d at 29. 16 6 ag r e e m e nt ’ s m ak i ng i s i ns uf f i c i e ntt o t ak e t he a g re e m e n t ou tsid e of se ctio n 2 6 .01 (b )(6). 13 A l t h ou gh t h e R est atem en t( S econd ) of C on t ract s ap p e ars t o t ak e a c o nt r ar y po s i t i o n, Te xa s l aw i s c o ns i s t e n t w i t h what t he c o ur ti n G i l l i am 14 deem ed to be the m aj ori t y vi ew on th is iss u e . Th e G i l l i am c our tnot ed t hat 15 th e r e w a s “r e s p e c ta b le a u th o r ity to th e co n tr a r y ,” b u t t h a t it w a s “d e fin ite ly
com m i t t ed” t o i t s app roach. A ccor din g ly, as t h e al l eged agreem en ti s f or a 16
s t at e d t e r m o f m o r e t han a ye ar , a nd Le o rdi d no ts i gn anydo c um e ntr e f l e c t i ng th e p a rti es’ ag ree m en t, en forcem en t is b a rred b y th e statu te o f f ra u d s. W e n ote t hat w e e xpr es s no o pi ni on as t o w het herthe d ra ft a gree m entw as one f or“ at
w i l l ” em pl oym en t
. W h et h er t h e e m p loym en tagreem en tw as “ at w i l l ” i s not determ i n ati ve of

w h et h er i tcom es w i t h i n t h e T exas st atute of f rau ds. I V S u l l i van contends that he fal l s w i t h i n t h e parti al

- perf orm an ce except i on t o t h e st atute of

f rau ds. “ P art i alperf

orm an ce r em oves an oralagreem en tf rom Case: 06-20867 Document: 00511052141 Page: 6 Date Filed: 03/15/2010N o. 06- 20867

B i k o v . S i e mens Cor

p. , 246 S.W.3d 148 , 16 1 (T ex . App.–Dall as 2 007 , pet. deni ed) 17 (c itin g Ch evalier v. Lane’s In c. , 1 4 7T ex . 1 0 6 , 2 1 3S .W .2 d 5 3 0( 1 9 4 8))

.

Wiley v. Bertelsen , 7 7 0S .W .2 d 8 7 8 , 8 8 2 (T ex . App .–T ex ark a n a1 9 8 9 , n o writ)

. 18 Exxon Cor

p. v. Breezevale Lt d. , 82S.W.3 d 42 9, 4 39 (Tex

. Ap p.–Dall as 2 002 , pet. 19 de nie d)

. See id. at44 1.

20 7 t he s t at ut e o f

f r aud s o nl y i f

t he pe r f

o r m anc e i s une quivo c al l y referabl e t o t he agr ee m entan d cor r obo r at i ve of the fac tthatt he c ont r ac tw as m ade. ” Sul l i van 17 po i nt s t o t h e fa c t t h a t h e p e r f o r m e d v a l u a b l e s e r v i c e s f o r Le o r a n d wa s p a i d a sal ary f or t h at peri od of

t i m e. H ow ever, pay m en tof a sa l ary f

or s ervi ces rend ered “ i s i n suff

i cie n t to t ak e t h e al l eged agreem en tout of t h e st atute of f r aud s b e c aus e t he s e r vi c e s w e r e f ul l y e xp l ai ne d b y t h e s al ar y w i t ho uts upp o s i ng a n y a d d itio n a l co n s id e r a tio n .” 18 Fur t he r m o r e , t hi s par t i al

- pe r f o r m anc e ex c e pt i o n t o t he st at ut e of f r aud s ap pl i es onl y “ i f

den i al of perf

orm an ce w ou l d am ou n tt o a vi rt u alf rau d, ” w h i ch req u i res “stron g e vid en ce e s ta b l i sh i n g th e ex i sten ce of an ag ree m en t an d i ts t e r m s , [ t hat ] t he pa r t y ac t i ng i n r e l i anc e o n t he con t rac tha s s uf fe r e d a subs t ant i aldet r i m entf orw hi c h he has no ade quat e r em edy , a nd t he o t herpar t y, i f per m i t t ed t o pl ead t he s t at ut e, w oul d r eap a n un ear ned be nef i t
. ” Sul l i van 19 has no tde m o ns t r at e d t hathe ha s “ s uf fe r e d a s ubs t ant i alde t r i m e ntf o rw hi c h he has no adeq uat e r em edy. ” N orhas he al l ege d fac t s sho w i ng t hat Leorw i l l“ r eap an un earn ed ben ef

i t ” i f t h e st atue of f

rau ds i s ap pl i ed. M ore i m portantl y, even if S u lliv a n c o u ld p r o v e th a t t h e p a r tia l-p e r fo r m a n c e e x c e p tio n a p p lie s , h e w o u ld be en t i t l ed on l y t o rel i an ce da m ages, an d n ott h e contr actdam ages h e seeks. 20 V Sul l i v a n a r g u e s t h a t p r o m i s s o r y e s t o p p e l , e q u i t a b l e e s t o p p e l , a nd

“ de t r i m e nt alr e l i anc e ” b arL e o rf r o m i nvo ki ng t he s t at ut e o f f r aud s . “ I f

t he el em ent s of

pr om i ss or y o req ui t abl e e st oppelar e m et , t hen a p rom i se e m ay Case: 06-20867 Document: 00511052141 Page: 7 Date Filed: 03/15/2010N o. 06- 20867

Trans con. Realt

y In vestors, In c. v. Jo hn T. L upton Trus t , 286 S. W.3 d 635, 648 (Tex. 21 App .–Dall a s 2 0 0 9 , n o pe t. ).

Breezevale L td

. , 8 2 S .W .3 d at 4 3 8
. 22 See Loose v. Offshore Navigatio n, I nc. , 67 0 F .2d 4 93, 498(5th Cir. 1 982 ) (no ting th at 23 a nadm is sioninap re trial or de r “i s u su allyawaivero f th e a sse rtio no f ac ontr aryp os itio n”)

.

Kelly v. RioGrande C omputerland

Grou p , 1 2 8S .W .3 d 75 9 , 76 9(T ex . App .– E l P a so 24 2 0 0 4 , n o pe t. ); see, e. g. , Watson v. Nortex W holes ale Nu rsery, In c. , 830 S. W.2 d 747, 751 (Tex. App .–Tyler 1 9 9 2 , writ de nie d) ; Cro wder v. Tr i

- C Res., In c. , 821 S. W.2 d 393, 397 (Tex. App .–Ho u st on[ 1 stDi st .] 1 9 9 1 , n o writ)

. 8 en f orce an ot h erw i se un en f orceabl e c o n t ract
. ” U n der T exas l aw , prom i ssor y 21 est opp elrequi res t h at “ t h e agreem en tt h at i s t h e subj ect o f th e prom i se m u st
c om pl y w i t h t he st at ut e of f r auds. Th at i s, t he agr ee m ent m ust be i n w r i t i ng at th e tim e o f th e o r a l p r o m is e to s ig n it.” 22 The di s t r i c tc o ur tc o nc l ude d t hatSul l i van ha d fai l e d t o a l l e ge a l lt he el em en t s necessary t o bri n g h i s cl ai m w i t h i n t h e doctr i n e of prom i ssor y est opp el W e a s s u m e w ith o u t d e c id in gth a t S u lliv a n ’ s a m e n d e d co m p la in t a r g u a b ly al l eged t h at Leor agreed to s ign a sp eci f i c w ri t t en agreem en t
. H i s prom i ssor y e s to p p e l cla im n e v e r th e le s s fa ils b e c a u s e h e a ffir m a tiv e ly a s s e r te d in h is
r e s po ns e t o Le o r ’ s m o t i o n t o d i sm i s s t hatno w r i t t e n do c um e ntw as f i nal i z e d,
r ender i ng hi m unabl e t o s at i sf y t he e l em ent s of

pr om i ss or y e st oppel

. Sul l i van c ann ot n ow c hange hi s pos i t i on. Thi s adm i ss i on bar s Su l l i van f r om t aki ng a c o n tr a r y p o s itio n o n a p p e a l. 23 W i th re g a r d to e q u i tab l e es top p el, som e T ex a s cou rts h a ve “ref u s[ed ] to recogni ze [ equ i t able est opp el ] as a di st i n ctcause of act i on separate f

rom p rom i sso ry estop p el or f ra u d

. ” It i s a l so fa r from cl ea r th a t T ex a s co u rts

24
r ec ogni ze “ det r i m ent al r el i ance ” as a di st i nct c ause of ac t i on. W e do notr es ol ve ei t h er of

t h ese i ssues here b e cau se Su l l i van ha s fai l ed to al l ege rel i an ce da m ages. R ecovery un der an est opp elor rel i an ce t h eory i s “ l i m i t ed to rel i an ce Case: 06-20867 Document: 00511052141 Page: 8 Date Filed: 03/15/2010N o. 06- 20867

T ra ns c o n . Re a l t

yI n v est ors , 286S.W. 3d at 648 (c itin g Fretz C onst r. C o. v. So. Nat’

l 25 Bank of Hous to n , 6 2 6 S. W. 2 d 4 7 8 , 4 8 3 (T ex . 1 9 8 1 )) ; seeals o Whee le r v. White , 39 8 S .W.2d 93, 9 7(T ex . 1 9 6 5).

Whee ler , 39 8 S .W.2d at 97. 26 He lde nfe lsBros. , Inc. v. City of CorpusChris ti , 8 3 2 S .W .3 d 3 9 , 4 1 (T ex . 1 9 9 2 ). 27 Vort t Exp lorat ion Co., In c. v. Ch evronUS A, I nc. , 7 8 7S .W .2 d 9 4 2 , 9 4 4(T ex . 1 9 9 0). 28 I d

. 29 Joh nston v. Kruse , 2 6 1 S .W .3 d 8 9 5 , 9 0 2 (T ex . App .–Dall a s 2 0 0 8 , n o pe t. ). 30 9 dam ages , ” w hi c h “ put t he pr om i se e i n t he pos i t i on he w oul d h ave bee n i n had

25 h e not act ed i n rel i an ce upon t h e prom i se. ” Su l l i van ha s not al l eged rel i an ce 26 da m ag e s , a nd i ns t e ad i s s e e ki ng da m ag e s ba s e d o n t he c o m pe ns at i o n pr o vi s i o ns i n a draft contract
. S u l l i van al so does n ot di spu t e t h at h e w as pa i d a sal ary f or hi s se r vi c es . Sul l i van has nots t at ed a c l ai m bas ed o n an es t oppelt heor y. VI S u lliv a n fu r th e ra s s e r ts th a t t h e d is tr i c t c o u r t e r r e d in d is m is s in gh is q u a s i

- c o n t r a c tc l a i ms f o rq u a n t u m me r u i ta n d u nj u s te n r i c h me n t
. H e ackn ow l edg es t h at h e received a sal ary f rom L eor but c on t en ds t h at t h i s does not precl u de h i m fr om recoveri n g u n der a qu an t u m m erui tt h eory si n ce he w as not

“ f u l l y com pen sated” by L eor. Q u an t u m m erui ti s an equit able cl ai m w h ereby on e w h o provi des servi ces to anot herm ay r ec ove r“bas ed o n an i m pl i ed ag r ee m entt o payf orbe nef

i ts
r e c e iv e d .” Q u a n tu m m e r u it “ d o e s n o t a r is e o u t o f a co n tr a c t, b u t is

27 i n dep en den tof

i t
. ” R ecovery sh o u ld be al l ow ed u n der t h i s t h eory w h en “ n on 28 pa ym e ntf

o rt he s e r vi c e s r e nde r e d w o ul d r e s ul t i n a n unj us te nr i c hm e ntt o t he p a r ty b e n e fite d b y th e w o r k .” T h e m e a s u r e o f d a m a g e s in q u a n tu m m e r u it is 29 th e “r e a s o n a b le v a lu e o f th e w o r k p e r fo r m e d .” 30 Sul l i va n ha s fai l e d t o s t at e a c l ai m i n t hi s r e gard. A s di s c us s e d, he
c onc ede s t hat Leorpai d hi m a sa l ar y, and he has al l ege d no fac t s sugge st i ng t hat Case: 06-20867 Document: 00511052141 Page: 9 Date Filed: 03/15/2010N o. 06- 20867

He lden fe ls , 83 2 S .W.3d at 41. 31 Ar g yle I n dep . Sch

. Dis t
. v. W

ol f , 234 S.W.3d 229 , 246 (Tex

. App.–Fort Wor t h 200 7, 32 n o pe t. ) (inte rn al qu ot ationmark s an d citationo mitt ed).

Do rs eyv . P

or t fo li o Eq u it ies, I

n c. , 5 4 0F .3 d 3 3 3 , 3 3 8 -3 9( 5 thC ir

. 2 0 0 8). 33 10 th e s a la r y w a s u n r e a s o n a b le

. A s th e d is tr ic t c o u r t n o te d , S u lliv a n is e s s e n tia lly argu i n g t h at he w as not “ f u l l y com pen sated” si n ce he di d n ot receive t h e sal ary andthe ad d i ti on a lcom p en sa ti on set forth i n th e u n sign ed em p l oy m en t con tract. B u t q u a n tu m m e ru it ca n n o t b e u se d t o e n for ce th e ter m s o f an u n sig n e d d ra ft of a contract , an d Su l l i van h as al l eged n o fact s show i n g t h at t h e sal ary w as not t h e “reasonab l e val u e” f or t h e ser vi ces h e rendered

. A ccor di n gl y, t h e di st ri ct
c o u r t c o r r e c tly d is m is s e d S u lliv a n ’ s cla im fo rq u a n tu m m e r u it. Su l l i van’ s unj ustenr i c hm entc l ai m i s si m i l ar l y m er i t l es s. A pl ai nt i f f m ay
r e c o ve rund e ra n unj us te nr i c hm e ntt he o r y “ w he n o ne pe r s o n ha s o bt ai ne d a b e n e fit fr o m a n o th e rb y fr a u d , d u r e s s , o r th e ta k in go f a n u n d u e a d v a n ta g e .” 31 U nj u stenri chm en t“ cha ra cte ri zes t h e res u l tof a fai l u re t o m ak e res t i t u t i on of benef i t s ei t herw r ongf

ul l y o r pass i vel y r ec ei ved und er c i r c um st ance s t hat gi ve ri se to a n i m pl i e d o rq uas i

- c o nt r ac t ualo bl i ga t i o n t o pa y. ” As di s c us s e d, 32 S u l l i van ha s al l eged no fact s s u ggesti n g t h at Leor w as unj u st l y en ri ched w h en it p a id S u lliv a n o n ly a s a la r y fo rh is s e r v ic e s . A c c o r d in g ly , th e d is tr ic t c o u r t d id
n o te r ri n d i s mi s s i n gt h i s c l a i m. V II S u lliv a n n e x t c h a lle n g e s th e d is tr ic t c o u r t’s d is m is s a l o f h is fr a u d cla im s f o rfai l ur e t o c o m pl y w i t h F e de r alR ul e of Ci vi lPr o c e dur e 9 (b)

. St at e l aw f r aud
c l a i m s a r e s ubj ec t to t he h e i g ht e ne d p l e a d i ngr e q ui r e m e nt s o f Rul e 9 (b )

. To

33 p l ea d f ra u d ad eq u a tel y, t h e plaintif f m u st “sp ecif

y th e sta tem en ts con ten d ed to Case: 06-20867 Document: 00511052141 Page: 10 Date Filed: 03/15/2010N o. 06- 20867

ABC Arb itrage v. Tchu ruk , 29 1 F .3d 3 36, 350 (5th Cir. 2 002 ) (intern al quo tation 34 mark s an d citationo mitt ed).

Clu b Ret ro, LLC

v. Hilton , 5 6 8F .3 d 1 8 1 , 2 1 5n .3 4( 5 thC ir

. 2 0 0 9). 35 Fah im v. Marrio ttHotel Servs., I nc. , 5 5 1 F .3 d 3 4 4 , 3 4 8( 5 thC ir

. 2 0 0 8). 36 F ED . R. C IV . P
. 1 6 (b). 37 11 be f rau du l en t , i den t i f

y t h e speak er, st ate w h en an d w h ere t h e st atem en t s w ere
m a d e , a n d e x p la in w h y th e s ta te m e n ts w e r e fr a u d u le n t.” 34 S u l l ivan al l eges t h a t “L e o r fa lse ly a n d re ck les sly or k n o w in g ly r epresented t o Sul l i va n t hati tw o ul d e m pl o y hi m a nd c o m pe ns at e hi m as i t s CE O a c c o r di ng t o t h e parti es’neg ot i ated term s of em pl oym en t ” an d that “ L eor . . . represented to S u l l iva n tha t t h e p a rti es h a dan ag ree m e n t r e g a r d in gS u lliv a n ’ s e m p lo y m e n t.” B u the d oes not al l ege w h o at t h e com pa n y m a d e th e st atem en t s orw h en or
w h ere t h ey occurred. S u l l i van h as fai l ed t o al l ege f rau d w i t h pa rt i cul ari t y u n der R u le 9 (b ). V III L a s tly , S u lliv a n ch a l l e n g e s th e d is tr ic t c o u r t’s d e c is io n to d is m is s h is
com p l a i n t w i th pr ejud i ce. W e rev i ew the distri ct cou rt’ s d ecisi on t o g r a n t a
m o t i o n t o di s m i s s w i t h o rw i t ho utpr ej udi c e f o ra bus e o f

di s c r e t i o n. 35 S u l l i va n arg u es th a t t h e d is tr ic t co u rt sh ou l d h a ve all ow ed h i m l ea ve to
a m en d h i s p l ea d i n gs si n ce, u n d er F ed era lR u l e of C i vilP roce d u re 1 5 (a), l ea ve to
am end s hou l d b e “f

r ee l y” gi ven w hen j ust i c e r equi r es . H ow eve r , R ul e 1 6(b) go ve r ns t he a m e ndm e nto f pl e ad i ngs a f

t e rt he de ad l i ne f

o ram e ndm e nt s i n t he court’ s s ched u l i n g order expi res, as i tha d i n t h i s c ase. R u l e 16(b) provi des 36 t hat a s c he dul i ng o r de r “ m ay be m o di f i e d o nl y f

o r go o d c aus e and w i t h t he ju d g e ’ s co n s e n t.” 37 L eor m oved t o di sm i ss S u ll ivan ’ s or i gi n alcom pl ai n t , an d S u l l i van , on
n ot i ce of

possibl e pl ead i n g defi ci en ci es, t h ereaf t er f i l ed a fi rstam en ded Case: 06-20867 Document: 00511052141 Page: 11 Date Filed: 03/15/2010N o. 06- 20867

SeeA d ri anv . Re

gen ts of U n iv
. of C al if

. , 36 3 F .3d 398 , 40 4 (5 th Cir. 2 004) (conclu ding 38 that th e di strict court did not abuseit s discre tionindenyingle ave toame nd when it had give n plaint iff one opportunityto amen d an d plaintiff ha d failed to show what a dditio nalfacts he co uldp le a d tosati sf

yth e fr au d pl ea din gr equir em ents); Goldstein v. MCI Wo rldC om , 34 0 F .3d 23 8, 255 (5thC ir. 2 003) (fin ding no abuseof discretion when plaintiff did not offer aseco nd amen ded c omplaint to the district court an d did not sugge st what a dditio nalfacts woul d cure th e pl ea din gd ef

icie ncy). 12 com p l a i n t. W h en L eo r f i l ed i ts m o tio n to dism i ss th e a m en d ed com p l a i n t, S u l l i van asser t ed i n hi s opposi t i on t h at i f n ecess ary, h e w ou l d r epl ead w i t h even
m ore pa rti cu l a ri ty. Y et i n th e n i n e m on th s be tw ee n the f i l i n g o f th e m oti on to d is m is s a n d th e co u r t’s ru lin g , S u lliv a n m a d e n o e ffo r t t o fu r th e ra m e n d h is
c o m pl ai nt , e ve n t ho ugh he w as o n no t i c e o f t he a l l e ge d d e f

i c i e nc i e s i n t he
a m en d ed com p l a i n t. In a d d i ti on , S u l l i va n h a s n ot as se r t ed w h a t ad d i ti on a lfa cts h e cou l d p l ea d to corre ct th e d efi ci en ci es. T h u s, the distri ct cou rt w a s w i th i n i ts d i scre ti on i n dis m is s in g th e ca se w i th pr ejud i ce w i th ou t gra n ti n g lea ve to
am e nd. 38 * * * T h e r e for e , fo rth e r e a s o n s d is c u s s e d a b o v e , w e A F F I R M th e d is t r ic tc o u r t ’s j u d gm en t. Case: 06-20867 Document: 00511052141 Page: 12 Date Filed: 03/15/2010