1 While many of the facts in this case are hotly disputed, the court will do

its best to summarize and present the pertinent facts in a manner whereby it is clear

which facts are contested.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

ROBERT E. BERG,

Plaintiff,

VS.

SAGE ENVIRONMENTAL

CONSULTING OF AUSTIN, INC.,

Defendant.

)

)

)

) CIVIL ACTION NO.

)

) 3:05-CV-1215-G

)

) ECF

)

)

MEMORANDUM OPINION AND ORDER

Before the court are cross-motions for partial summary judgment by the

plaintiff Robert E. Berg (“Berg”) and the defendant Sage Environmental Consulting

of Austin, Inc., (“Sage”). For the reasons stated below, the motions are granted in

part and denied in part.

I. BACKGROUND

This dispute arises from an employment relationship gone awry.1 In 2003,

Berg worked for Environmental Resources Management-Southwest, Inc. (“ERM”) as

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 1 of 48 PageID 1673
- 2 -

an environmental engineer and client service manager. Memorandum in Support of

Motion for Partial Summary Judgment to Determine Applicable State Law and

Dismiss Defendant’s Counterclaim (“Berg Motion”) at 7. After a significant period of

employment, Berg became dissatisfied with ERM and began exploring other

opportunities. Id. at 8-9.

In early 2003, a Sage employee contacted Berg at a professional meeting in San

Diego, California. Berg Motion at 11. Through the process of conference meetings,

telephone conversations initiated in Texas to Berg in Louisiana, and emails between

the parties, Sage and Berg negotiated the terms of a possible employment relationship

-- the ultimate goal being the opening of a Sage branch in Baton Rouge, Louisiana. 

See Berg Motion at 11-19; Defendant Sage Environmental Consulting of Austin,

Inc.’s Response to Plaintiff’s Motion for Partial Summary Judgment (“Sage

Response”) at 3. A Sage representative, Chris Swanberg (“Swanberg”), traveled to

Louisiana multiple times to negotiate with Berg. Berg Motion at 13-14. On June 19,

2003, Swanberg emailed an offer of employment to Sage. Id. at 14; Sage Response at

3.

The facts thereafter are in dispute. In early July, Berg traveled to Houston to

meet with Scott Muller (“Muller”), President of Sage, and Steve Probst (“Probst”),

CEO of Sage. Berg Motion at 14. Sage maintains that this meeting was necessary

because -- as Berg had yet to accept -- the original June 19 offer letter had expired. 

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 2 of 48 PageID 1674
- 3 -

Sage Response at 4. Swanberg prepared a revised offer letter after this meeting in

which an additional provision was added: “Sage is also offering a bonus of $30,000

dollars for your acceptance of this employment offer, paid on the first payroll date

after your date of hire, but contingent upon completion of one year of service.” Berg

Motion at 14. Berg contends that he had already accepted the June 19 offer letter,

id., while Sage argues that Berg accepted the offer of employment during the meeting

in Texas, and the revised offer letter merely reflected the parties’ new agreement. 

Sage Response at 4-5.

During the weekend of July 4, 2003, Swanberg traveled to Louisiana to deliver

the revised offer letter to Berg. Berg Motion at 14-15. The revised letter given to

Berg was backdated to June 19, 2003. Id. at 15. Swanberg handed Berg the offer

letter, Berg immediately placed it in his file without reading it, and Berg delivered to

Swanberg his acceptance letter -- already signed -- dated July 3, 2003. Id. Swanberg

then signed this letter and the deal was complete. Id. What was not contained

within the offer letter and acceptance, however, is also in dispute between the parties. 

Berg contends that Probst promised to indemnify Berg from any possible litigation

resulting from his defection from ERM to Sage. Id. at 22. Probst also agreed to

award Berg a $150,000 signing bonus, and then proposed to structure it for tax

purposes as a real estate transaction. Id. This transaction would involve Sage

purchasing Berg’s property in Louisiana: Berg would remain caretaker and would then

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 3 of 48 PageID 1675
- 4 -

have the option to buy the property back at a price guaranteeing him $150,000 net

cash retained. Id. This transaction never occurred, however, and both the promises

of indemnity and $150,000 bonus remained unwritten.

Effective July 7, 2003, Berg resigned from his position at ERM to accept his

position at Sage. Berg Motion at 7. On the same day, fellow ERM employees Omer

Wolff and Sharon Hampton resigned their positions to accept offers with Sage. Id. at

19. On July 14, Randi Wyatt, Veronica Rome, Patrick Passantino, Brady Fontenot,

and Brandon Bencaz also left ERM to join Sage. Id. at 19-20. Shortly after Berg’s

resignation, ERM filed suit against Berg alleging multiple breaches of duty. Sage

Response at 6. Berg also filed two declaratory judgment suits against ERM. 

Plaintiff’s Opposition to Defendant’s Motion for Partial Summary Judgment (“Berg

Response”) at 9. After some time, ERM’s suit was settled in a manner whereby

neither party received money. Sage Response at 6. Sage, however, contends that

Berg received compensation in this settlement: permission to sell approximately

$400,000 worth of ERM stock he owned. Id. at 6 n.28.

The new employment relationship, however, quickly deteriorated. In early

2004, Sage reduced Berg’s compensation via a “revised offer letter.” Sage Response

at 6; Berg Motion at 21. Berg’s salary was reduced from $175,000 to $150,000 and

Sage terminated Berg’s deferred compensation of $75,000 so that he would only

receive $20,540.66. Sage Response at 6; Berg Motion at 20.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 4 of 48 PageID 1676
- 5 -

On June 18, 2004, Berg voluntarily resigned from his position at Sage. Berg

Motion at 2. On December 15, 2004, he filed suit in the United States District

Court for the Middle District of Louisiana, seeking compensation, indemnification for

litigation involving ERM, penalty wages, and attorneys’ fees based on the demise of

his relationship with Sage. Docket Sheet; Complaint. In early 2005, Sage filed a

motion to transfer venue, pursuant to 28 U.S.C. 1404(a), “for the convenience of the

parties and witnesses, and the interest of justice.” Docket Sheet; Defendant Sage

Environmental Consulting of Austin, Inc.’s Memorandum in Support of its Motion to

Transfer Venue at 2. This motion was granted on June 8, 2005, and the case was

transferred to this court. Docket Sheet; June 8, 2005 Ruling on Motion to Transfer

Venue. On July 25, 2005, Sage counterclaimed for the $30,000.00 signing bonus

delivered to Berg, but not repaid after his resignation. Docket Sheet; Defendant Sage

Environmental Consulting of Austin, Inc.’s First Amended Answer and Counterclaim. 

In early 2006, both parties filed motions for partial summary judgment. Docket

Sheet. These motions are now ripe for decision.

II. ANALYSIS

A. Applicable Law

As a preliminary matter, and as a requested issue in Berg’s motion for partial

summary judgment, the court must determine whether Louisiana law governs Sage’s

counterclaims. Berg argues that Louisiana choice-of-law rules should apply and would

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 5 of 48 PageID 1677
2 The court notes that although Berg states in his motion for partial

summary judgment that he is requesting a determination that Louisiana law applies

to all claims in this suit, Berg Motion at 1 (“partial summary judgment is therefore

appropriate to determinate [sic] that the laws of the State of Louisiana, as opposed to

the laws of the state of Texas must be applied in determining the outcome of Berg’s

claims arising under his employment agreement”), he later states that his “motion for

partial summary judgment is directed at the Sage counterclaims.” Id. at 26. Because

Berg then proceeds to analyze only Sage’s counterclaims under different conflict-oflaws methodologies, the court will assume that Berg did not move for partial

summary judgment on the applicability of Louisiana law to his own claims against

Sage. This conclusion, therefore, disposes of Sage’s argument that the court would be

rendering an advisory opinion if it engaged in a choice-of-law analysis for each and

every claim against Sage. See Sage Response at 8 (arguing that the court’s ruling that

Louisiana law applies to Berg’s claims “would, in essence, constitute a ruling in a

vacuum and be nothing more than an advisory opinion”).

- 6 -

subsequently result in a conclusion that Louisiana law governs Sage’s claims brought

against Berg.2 Berg Motion at 26-31. Sage counters with an argument that the

choice-of-law analysis would be futile -- both Louisiana and Texas substantive law

result in the same conclusions, so the court does not need to engage in a choice-of-law

analysis. Sage Response at 9-10. In addition, Sage argues that engaging in such an

analysis would deprive the parties of a trial on the merits; because there are genuine

issues of material fact involved in the choice-of-law analysis, resolving this issue would

consequentially dispose of the case. Id. at 11-16.

This case was transferred to this court from the United States District Court

for the Middle District of Louisiana under the provisions of 28 U.S.C. § 1404(a). 

When the defendant in a diversity suit successfully moves for transfer of venue under

§ 1404(a), the transferee court must apply the law and policy of the transferor state. 

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 6 of 48 PageID 1678
3 Article 3537, concerning conventional obligations (contracts) provides:

[A]n issue of conventional obligations is

governed by the law of the state whose

policies would be most seriously impaired if

its law were not applied to that issue. 

(continued...)

- 7 -

Industrial Indemnity Company v. Chapman and Cutler, 22 F.3d 1346, 1350 (5th Cir.

1994); Cowan v. Ford Motor Company, 713 F.2d 100, 104 n.6 (5th Cir. 1983) (citing

Van Dusen v. Barrack, 376 U.S. 612 (1964)). Accordingly, this court must apply

Louisiana choice-of-law rules in determining which jurisdiction’s law will apply to this

action.

Under Louisiana’s general residual conflict-of-law rule, the court should apply

“the law of the state whose policies would be most seriously impaired if its law were

not applied to that issue.” LA. CIV. CODE ART. 3515. To perform this analysis, the

court must evaluate “(1) the relationship of each state to the parties and the dispute;

and (2) the policies and needs of the interstate and international systems, including

the policies of upholding the justified expectations of parties and of minimizing the

adverse consequences that might follow from subjecting a party to the law of more

than one state.” Id. The specific provisions governing choice of law for conventional

obligations and for delictual and quasi-delictual obligations focus on similar concerns,

requiring the court to consider the relation of the state to the parties and to the

events giving rise to the dispute. See LA. CIV. CODE ARTS. 35373

 & 35424; 

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 7 of 48 PageID 1679
3

(...continued)

That state is determined by evaluating the

strength and pertinence of the relevant

policies of the involved states in the light of:

 (1) the pertinent contacts of each state to the

parties and the transaction, including the

place of negotiation, formation, and

performance of the contract, the location of

the object of the contract, and the place of

domicile, habitual residence, or business of

the parties; (2) the nature, type, and purpose

of the contract; and (3) the policies referred

to in Article 3515, as well as the policies of

facilitating the orderly planning of

transactions, of promoting multistate

commercial intercourse, and of protecting one

party from undue imposition by the other.

LA CIV. CODE ART. 3537.

4 Article 3542, the provision concerning delictual (tort) or quasi-delictual

obligations, provides: 

[A]n issue of delictual or quasi-delictual

obligations is governed by the law of the state

whose policies would be most seriously

impaired if its law were not applied to that

issue.

That state is determined by evaluating the

strength and pertinence of the relevant

policies of the involved states in the light of:

(1) the pertinent contacts of each state to the

parties and the events giving rise to the

dispute, including the place of conduct and

injury, the domicile, habitual residence, or

place of business of the parties, and the state

in which the relationship, if any, between the

(continued...)

- 8 -

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 8 of 48 PageID 1680
4

(...continued)

parties was centered; and (2) the policies

referred to in Article 3515, as well as the

policies of deterring wrongful conduct and of

repairing the consequences of injurious acts.

LA CIV. CODE ART. 3542.

- 9 -

see also West Coast Liquidators, Inc. v. Commerce & Industry Insurance Company, Nos. 98-

2200S/W, 97-803, 97-775, 1999 WL 52150, at *4 (E.D. La. Feb. 1, 1999). 

However, the Fifth Circuit has observed that “[i]f the laws of the states do not

conflict, then no choice-of-law analysis is necessary.” Schneider National Transport v.

Ford Motor Company, 280 F.3d 532, 536 (5th Cir. 2002) (quoting W.R. Grace &

Company v. Continental Casualty Company, 896 F.2d 865, 874 (5th Cir. 1990);

National Union Fire Insurance v. CNA Insurance Companies, 28 F.3d 29, 32 n.3 (5th Cir.

1994)). Instead, the law of the forum state applies if the court finds that there are no

conflicts between the laws of the applicable states. See id.

Without consideration of any disputed facts, it appears that Louisiana law

should govern this dispute. Although the court is directed to engage in a separate

choice-of-law analysis for each issue, Favaroth v. Appleyard, 785 So. 2d 262, 265 (La.

App. 4 Cir.) (“Under Louisiana’s choice of law rules, a sweeping determination that

the law of one state applies to the case, as opposed to an issue in a case, constitutes a

derogation of the appropriate analysis. When a conflict exists with regard to more

than one issue, each issue should be analyzed separately.”), writ denied, 801 So. 2d

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 9 of 48 PageID 1681
5 Under Texas law, the elements of a fraud claim are: (1) that a material

representation was made; (2) the representation was false; (3) when the

representation was made, the speaker knew it was false or made it recklessly without

any knowledge of the truth and as a positive assertion; (4) the speaker made the

representation with the intent that the other party should act upon it; (5) the party

acted in reliance on the representation; and (6) the party thereby suffered injury. In

re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001); Trenholm v. Ratcliff, 646

S.W.2d 927, 930 (Tex. 1983). Under Louisiana law, two elements are required:

“(1) an intent to defraud and (2) actual or potential loss or damage” as well as

another element, whether it be “labeled reliance, inducement, or causation.” Sun

Drilling Products Corporation v. Rayborn, 798 So. 2d 1141, 1152-53 (La. App. 4 Cir.

2001), writ denied, 807 So. 2d 840 (2002).

6 The claim for money had and received does not differ significantly

between Louisiana and Texas substantive law. See Nebraska Beef, Ltd. v. KBK

Financial, Inc., No. 4:03-CV-1486, 2006 WL 538790, at *6 n.9 (N.D. Tex. Mar. 3,

2006) (“If a defendant is found to hold money that rightfully belongs to the plaintiff,

a contract will be implied by law under which the defendant is obligated to return the

money to the plaintiff. Therefore, the sole inquiry for a court deciding a money had

and received claim is whether the defendant holds money that, in equity and good

conscience, belongs to the plaintiff.” (citing Amoco Production Company v. Smith, 946

S.W.2d 162, 164 (Tex. App. -- El Paso 1997, no writ)); Kramer v. Freeman, 198 La.

244, 254-55 (La. 1941) (describing an action in which “the defendants had sold or

otherwise disposed of [the plaintiff’s] property, [then the plaintiff] could have prayed

only for judgment against [the defendants] for the price they received for it” as one

being for money had and received, authorized under LA CIV. CODE ART. 2313, revised

as LA CIV. CODE ART. 2305 (“A person who in good faith alienated a thing not owed

to him is only bound to restore whatever he obtained from the alienation. If he

received the thing in bad faith, he owes, in addition, damages to the person to whom

restoration is due.”)).

- 10 -

375 (2001), the court has no need to -- the substantive law for Sage’s counterclaims

is the same for both states. See generally Sage Response at 10 n.39 (comparing the

elements of breach of contract, fraud,5

 money had and received,6 and unjust

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 10 of 48 PageID 1682
7 Similarly, there is no difference in the substantive law between

Louisiana and Texas for the claim of unjust enrichment. See Burlington Northern

Railroad Company v. Southwestern Electric Power Company, 925 S.W.2d 92, 96 (Tex.

App. -- Texarkana 1996) (stating that “[w]hen a defendant has been unjustly

enriched by the receipt of benefits in a manner not governed by contract, the law

implies a contractual obligation upon the defendant to restore the benefits to the

plaintiff”), aff’d, 966 S.W.2d 467 (Tex. 1998); Gulfstream Services, Inc. v. Hot Energy

Services, Inc., 907 So. 2d 96, 101 (La. App. 1 Cir.) (“To prove a case of enrichment

without cause, the plaintiff must demonstrate: (1) an enrichment; (2) an

impoverishment; (3) a connection between the enrichment and impoverishment;

(4) the absence of justification or cause for the enrichment and impoverishment; and,

(5) the lack of any other remedy at law”), writ denied, 904 So. 2d 706 (2005).

- 11 -

enrichment7

 for Texas and Louisiana and finding no difference between the two). 

Sage argues that, because a choice-of-law determination is unnecessary, Berg’s motion

to apply Louisiana law to Sage’s counterclaims should be denied. Id. at 9-10. Sage

cannot have it both ways, though; because the states’ laws do not differ, the law of

the forum state should apply. See Schneider, 280 F.3d at 536. Accordingly, Louisiana

law -- the law of the forum state from which the case was transferred to this court

under § 1404(a) -- will be applied to Sage’s counterclaims.

B. Evidentiary Burdens on Motion for Summary Judgment

Summary judgment is proper when the pleadings and evidence before the court

show that no genuine issue exists as to any material fact and that the moving party is

entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); see also Celotex

Corporation v. Catrett, 477 U.S. 317, 323 (1986). The disposition of a case through

summary judgment “reinforces the purpose of the Rules, to achieve the just, speedy,

and inexpensive determination of actions, and, when appropriate, affords a merciful

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 11 of 48 PageID 1683
- 12 -

end to litigation that would otherwise be lengthy and expensive.” Fontenot v. Upjohn

Company, 780 F.2d 1190, 1197 (5th Cir. 1986). Nonetheless, summary judgment is

a drastic remedy that should be used cautiously. Murrell v. Bennett, 615 F.2d 306,

309 (5th Cir. 1980).

While all of the evidence must be viewed in a light most favorable to the

nonmovant, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v.

S.H. Kress & Company, 398 U.S. 144, 158-59 (1970)), neither conclusory allegations

nor unsubstantiated assertions will satisfy the nonmovant’s summary judgment

burden. Calbillo v. Cavender Oldsmobile, Inc., 288 F.3d 721, 725 (5th Cir. 2002)

(citing Little v. Liquid Air Corporation, 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)). 

A genuine issue of material fact exists “if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The

movant makes such a showing by informing the court of the basis of its motion and

by identifying the portions of the record which reveal there are no genuine material

fact issues. Celotex, 477 U.S. at 323; Lindsey v. Sears Roebuck and Company, 16 F.3d

616, 618 (5th Cir. 1994) (“When seeking summary judgment, the movant bears the

initial responsibility of demonstrating the absence of an issue of material fact with

respect to those issues on which the movant bears the burden of proof at trial.”);

Fontenot, 780 F.2d at 1194 (“[I]f the movant bears the burden of proof on an issue,

either because he is the plaintiff or as a defendant he is asserting an affirmative

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 12 of 48 PageID 1684
8 Berg, as the movant for partial summary judgment, is also the party with

the burden of proof at trial. His burden on his motion for partial summary judgment,

therefore, consists of more than simply pointing out deficiencies in his opponent’s

case; instead, he must establish his right to relief as a matter of law. Similarly,

because Sage bears the burden of proving its counterclaims against Berg, Sage must

establish its right to relief on those claims.

- 13 -

defense, he must establish beyond peradventure all of the essential elements of the

claim or defense to warrant judgment in his favor.”) (emphasis in original).8

 The

pleadings, depositions, admissions, and affidavits, if any, must demonstrate that no

genuine issue of material fact exists. FED. R. CIV. P. 56(c).

If the movant makes the showing, the nonmovant must then direct the court’s

attention to evidence in the record sufficient to establish that there is a genuine issue

of material fact for trial. Celotex, 477 U.S. at 323-24. To carry this burden, the

“opponent must do more than simply show . . . some metaphysical doubt as to the

material facts.” Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475

U.S. 574, 586 (1986). Instead, the nonmovant must show that the evidence is

sufficient to support a resolution of the factual issue in its favor. Anderson, 477 U.S.

at 249. The nonmovant cannot survive a motion for summary judgment by merely

resting on the allegations in its pleadings. Isquith for and on behalf of Isquith v. Middle

South Utilities, Inc., 847 F.2d 186, 199 (5th Cir.), cert. denied, 488 U.S. 926 (1988);

see also Celotex, 477 U.S. at 324.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 13 of 48 PageID 1685
- 14 -

C. Berg’s and Sage’s Cross-Motions for Partial Summary Judgment

1. Berg’s Claims Against Sage

Sage has moved for summary judgment on all claims against it. Defendant

Sage Environmental Consulting of Austin, Inc.’s Brief in Support of Motion for

Partial Summary Judgment (“Sage Motion”) at 1.

a. $150,000 Signing Bonus

One of the first claims against Sage involves the $150,000 unpaid signing

bonus orally promised to Berg, the circumstances of which differ depending on which

party is describing the agreement. First Amended Complaint ¶ 5. Without

stipulating to the truth of the assertion, Sage assumes in its motion for summary

judgment that Probst orally promised Berg that he would receive $150,000 “strictly

for agreeing to leave the partnership at ERM and to come and work for Sage,” but

that these monies would be structured as a real estate transaction. Sage Motion at 2

and n.2. Based on this unwritten agreement, Sage requests summary judgment -- on

multiple grounds -- on this claim. See generally id. at 1-16.

i. Statute of Frauds

Sage first argues that such an unwritten agreement structured around the

transfer of real estate automatically triggers the Statute of Frauds and, because Berg

cannot point to any written document referencing this deal, Berg’s claim for this

money is barred. Sage Motion at 5.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 14 of 48 PageID 1686
9 The court notes two cases cited by Sage to support its argument that

“the underlying purpose of the compensation is irrelevant for the application of the

Statute of Frauds; rather the only relevant inquiry is whether the transaction involves

a transfer of real estate.” Defendant Sage Environmental Consulting of Austin, Inc.’s

Reply to Plaintiff’s Response to Sage’s Motion for Partial Summary Judgment (“Sage

Reply”) at 5 (citing Miller v. Graves, 185 S.W.2d 745, 748 (Tex. Civ. App. 1945, writ

ref’d); Scott v. Ducasse, 622 So. 2d 724 (La. App. 5 Cir. 1993)). The court has read

(continued...)

- 15 -

Under either Texas or Louisiana law, contracts involving real estate must be in

writing. Palmer v. Fuqua, 641 F.2d 1146, 1158 (5th Cir. 1981) (applying Texas law);

Salem v. Maise, 449 So. 2d 121, 124 (La. App. 4 Cir. 1984); see also Scott v. Ducasse,

622 So. 2d 724, 726 (La. App. 5 Cir. 1993) (citing LA CIV. CODE ART. 2440 for the

proposition that the sale of immovable property must be in writing). Assuming -- as

Sage in fact does -- that Probst made an oral promise to Berg that he would receive

$150,000 structured as a real estate transaction and this transaction remained

intentionally unwritten, it appears to the court that such an agreement would in fact

be barred by the Statute of Frauds. However, Berg makes the argument that the oral

promise made to him was that he would receive $150,000; the form of the

compensation was a separate issue for the purpose of tax advantages. Berg Response

at 2. If true, this would take the promise to deliver $150,000 out of the Statute of

Frauds provision dealing with real estate; the promise to structure the receipt of funds

through a real estate transaction would be unenforceable as there is no writing

referencing such agreement, but the oral promise to give Berg a “signing bonus”

would possibly be enforceable.9

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 15 of 48 PageID 1687
9

(...continued)

these cases and determines that, although each case held that oral agreements

creating interests in land remain within the purview of the Statute of Frauds, they are

distinguishable from this case. As stated above, the structured transaction may be

covered by the statute of frauds, but the oral promise for a signing bonus consisting of

$150,000 is arguably a separate agreement.

10 Article 1846, the provision regarding proof of obligations, provides:

When a writing is not required by law, a

contract not reduced to writing, for a price or,

in the absence of a price, for a value not in

excess of five hundred dollars may be proved

by competent evidence.

If the price or value is in excess of five

hundred dollars, the contract must be proved

by at least one witness and other

corroborating circumstances.

LA. CIV. CODE ART. 1846.

- 16 -

This leads to the next issue: whether another provision of the Louisiana Statute

of Frauds would bar Berg’s recovery of $150,000. Louisiana law requires that, in

order to recover on an oral promise worth over $500, a claimant must prove the

contract by at least one witness -- who may be the plaintiff -- and other corroborating

circumstances.10 See Peter Vicari General Contractor, Inc. v. St. Pierre, 831 So. 2d 296,

301 (La. App. 5 Cir. 2002) (noting that only general corroboration is required and

“[i]t is not necessary that plaintiff offer independent proof of every detail.”). As

articulated in his response, Berg meets this criteria: he relies upon the testimony of

three witnesses and other corroborating circumstances. See Berg Response at 2, 3-9

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 16 of 48 PageID 1688
11 For ease of reference, the court will refer to all citations from this

appendix by its exhibit number and page number therein (e.g., “Exhibit B-15 at 1”).

12 The court notes another reason for denying summary judgment on

Statute of Frauds grounds: there still exits a genuine issue of material fact regarding

the actual promise made to Berg. Berg contends that it was specifically a promise of

$150,000 for leaving ERM and accepting a position at Sage, while it appears to the

court that Sage is arguing that the promise was solely to transfer $150,000 via a real

estate transaction. The substance of the promise affects Berg’s ability to recover.

In addition, although contained within its discussion of detrimental

reliance, Sage contends that because Berg has not made a claim for out-of-pocket

damages as a result of his reliance on Sage’s promises, Berg’s claim for his $150,000

signing bonus is barred. Sage Motion at 13. Arguing under Texas law, Sage asserts

that “the Statute of Frauds bars a fraud claim to the extent the plaintiff seeks to

recover as damages the benefit of a bargain that cannot otherwise be enforced because

it fails to comply with the Statute of Frauds.” Id. at 14 (quoting Haase v. Glazner, 62

S.W.3d 795, 799 (Tex. 2001)). As stated above, though, the agreement as described

by Berg does not fall within the Statute of Frauds. Accordingly, this argument is

inapplicable.

- 17 -

(discussing Berg’s version of the negotiations and oral promises regarding his

$150,000 signing bonus). Considering Berg’s version of the facts, Sage’s offer letter

stating that “Sage will also assist with the acquisition or provision of facilities for

client entertainment and business retreats” takes on special significance. Exhibit B-15

at 1, attached to Defendant’s Appendix of Evidence in Support of its Motion for

Partial Summary Judgment at 385-86.11 Consequently, Sage’s motion for summary,

on the ground that the $150,000 signing bonus claim is barred by the Statute of

Frauds, must be denied.12

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 17 of 48 PageID 1689
- 18 -

ii. Detrimental Reliance

Sage next argues that Berg’s reliance on detrimental reliance or promissory

estoppel is faulty because such doctrines are not applicable to any aspect of the

lawsuit. Sage Motion at 11. Citing a recent Louisiana decision, Sage argues that it

was held “unreasonable as a matter of law to rely on an offer of at-will employment.” 

Id. at 12 (citing May v. Harris Management Corporation, 928 So. 2d 140 (La. App. 1

Cir. 2005)). Berg, on the other hand, contends that his claims for detrimental

reliance are not based on promises of permanent employment; rather, he argues that

he reasonably relied on promises regarding his $150,000 signing bonus. Berg

Response at 10.

To recover under a theory of detrimental reliance, a plaintiff must show the

existence of (1) a representation or promise; (2) justifiable reliance on the

representation or promise; and (3) a change in position to the detriment of the

plaintiff because of the reliance. Hughes v. Muckelroy, 700 So. 2d 995, 1001 (La. App.

1 Cir. 1997); English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). In addition, under

Louisiana law, “[e]stoppel, because it bars the normal assertion of rights, is not

favored . . . and is used sparingly.” Leger v. Tyson Foods, Inc., 670 So. 2d 397, 402 (La.

App. 3 Cir.) (quoting Thebner v. Xerox Corporation, 480 So. 2d 454 (La. App. 3 Cir.

1985), writ denied, 484 So. 2d 139 (La. 1986)), writ denied, 671 So. 2d 920 (La.

1996).

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 18 of 48 PageID 1690
13 Given the dearth of law on the subject in the relevant jurisdictions, the

(continued...)

- 19 -

On the sole issue of whether summary judgment should be granted to Sage on

Berg’s claim that he detrimentally relied on Sage’s promise of a $150,000 signing

bonus, summary judgment is denied. Sage has conceded, for the purpose of its

summary judgment motion, that Probst made a promise of $150,000 to Berg, so the

first element of detrimental reliance is met. For the second element, the court cannot

say, as a matter of law, that Berg’s reliance on Sage’s promise was unreasonable;

assuming Berg’s version of the events -- as the court must do on a motion for

summary judgment -- Berg was relying on a promise of $150,000 to resign from ERM

and accept with Sage, rather than relying on Sage’s offer of employment for any

length of time. Berg was not relying on any at-will employment with Sage at all -- he

was simply leaving his former employer for the promise of $150,000. See, e.g., Arby’s

Inc. v. Cooper, 444 S.E.2d 374, 375 (Ga. App. 1994) (holding that a terminable at-will

employee may recover unpaid bonuses which are based on oral promises), rev’d on

other grounds, 454 S.E.2d 488 (1995) (reversing appellate court decision because the

oral contract did not definitively and objectively calculate the amount of annual

bonus); Livernois v. Medical Disposables, Inc., 837 F.2d 1018, 1022-23 (11th Cir. 1988)

(applying Georgia law, noting that at-will employee was not claiming damages for

wrongful termination, but for breach of contract because the employer had failed to

compensate him with benefits accrued prior to his discharge);13 Daisley v. Riggs Bank,

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 19 of 48 PageID 1691
13(...continued)

court has been forced to look to other jurisdictions for guidance. Finding the Georgia

courts’ rationale convincing, the court adopts it in this memorandum opinion and

order. Moreover, the court notes that May, 928 So. 2d 140, is distinguishable from

the instant case. Not only did that court specifically note that the defendant did not

give additional consideration for the plaintiff’s resignation and acceptance of its offer,

May, 928 So. 2d at 146, but the plaintiff never began employment at the defendant’s

place of business. Here, Sage promised $150,000 for Berg’s resignation and

acceptance and Berg completed almost one year of employment. May decided the

reasonability of a mere offer of at-will employment, with no additional consideration,

not the issue of an oral promise to pay a signing bonus to leave a current employer.

- 20 -

N.A., 372 F. Supp. 2d 61, 70 (D.D.C. 2005) (“Notwithstanding an at-will

employment agreement, an employee and employer may still contract regarding other

terms, such as bonuses or stock options.”). The $150,000 bonus -- the amount

definitively stated -- was earned by Berg through his resignation from ERM and

subsequent acceptance with Sage. As for the third and final element of detrimental

reliance -- a change in position to the detriment of Berg -- genuine issues of material

fact abound. Sage asserts, based on Berg’s 2003 mediation statement, that Berg

would have left ERM anyway, Sage Motion at 16-18, while Berg maintains that it

was Sage’s representations regarding compensation and indemnity that induced him

to resign and accept with Sage. Id. at 18 (citing Berg’s deposition testimony in which

he stated he “would not have gone to work for Sage if they had attached strings

similar to what [other employers] attached”). Such damage is a required element of

detrimental reliance; without pointing out a lack of evidence on the part of Berg,

Sage’s motion for summary judgment on this claim must be denied.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 20 of 48 PageID 1692
- 21 -

Sage submits another argument supporting summary judgment on Berg’s

detrimental reliance claim. Specifically, arguing under both Texas and Louisiana law,

Sage contends that “when a plaintiff asserts a cause of action for promissory estoppel,

it is limited to only its out-of-pocket reliance damages.” Sage Motion at 15 (citing

Sun Oil Company (Delaware) v. Madeley, 626 S.W.2d 726, 734 (Tex. 1981); LA. CIV.

CODE ART. 1967). Berg responds, saying that “[t]he $150,000.00 signing bonus

promised is Berg’s measure of damages, not the value of an employment at will

relationship.” Berg Response at 13.

Louisiana law provides that “[a] party may be obligated by a promise when he

knew or should have known that the promise would induce the other party to rely on

it to his detriment and the other party was reasonable in so relying. Recovery may be

limited to the expenses incurred or the damages suffered as a result of the promisee’s

reliance on the promise.” LA. CIV. CODE ART. 1967 (emphasis added). This statute

expressly states that damages may be limited; it does not, however, state that only

out-of-pocket damages are recoverable, and if not pled, summary judgment is

required. See LA CIV. CODE ART. 1967, comment (e) (“the court may grant damages,

rather than specific performance, to the disappointed promisee” (emphasis added));

18 Louisiana Civil Law Treatise, Civil Jury Instructions § 19.08 (2d ed.) (“Louisiana

law permits a plaintiff to recover damages which result from his change of position,

which damages may be limited to the expenses that he incurred or the damages which

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 21 of 48 PageID 1693
14 Here, the difference between Louisiana and Texas law enters into the

discussion. As mentioned above, Louisiana allows the court to award only reliance

damages rather than benefit-of-the-bargain damages; this, however, is not required. 

In fact, in other jurisdictions, the consideration itself is recoverable. See generally 4

AMERICAN JURISPRUDENCE PROOF OF FACTS 2D 641: Detrimental Reliance on

Promise § 8 (“Some courts have adopted [that] the measure of damages . . . should be

such as to place the promisee so far as possible, in as good a position as that which he

would have occupied had the promisor performed . . .”). Under Texas law, damages

for promissory estoppel/detrimental reliance are “limited to the amount necessary to

compensate that party for a loss already suffered.” Sun Oil Company, 626 S.W.2d at

734. Without deciding the applicable law, summary judgment must nevertheless be

denied. Assuming Berg proves a sufficient case of detrimental reliance, the choice-oflaw issue can be settled at that time for a determination of the amount of recoverable

damages.

- 22 -

he suffered as a result of his reliance.”). Berg has stated that he suffered damage --

assuming a jury finds in his favor, he must then show the amount of damages

suffered. Rather than necessitating summary judgment, such an issue is available for

determination if/when damages are calculated.14

Because there exist material facts for trial and Berg may have a claim for

detrimental reliance, summary judgment is denied on this claim.

b. Indemnification for Legal Fees Incurred in ERM Litigation

Sage’s next argument is that summary judgment should be granted on Berg’s

claim for indemnity. See generally Sage Motion at 19-36. Berg responds that his

“primary claim” is “based upon the oral agreement reached between Berg and Sage

wherein Sage contractually agreed to indemnify Berg” and since Sage “fails entirely to

address [this] claim,” summary judgment should be denied. Berg Response at 13. 

i. Indemnification Under the Texas Business Corporation Act

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 22 of 48 PageID 1694
- 23 -

Article 9 of Sage’s articles of incorporation read as follows:

Any office [sic], director, or employee who is entitled to indemnification

from the Corporation may make a written demand to the Board of

Directors by serving the written demand on the President or the

Secretary . . .. If the Board of Directors does not, within fifteen (15)

days after service of the written demand, determine that the officer,

director, or employee is entitled to indemnification, the officer, director,

or employee may, withing [sic] sixty (60) days following the date of

service of the demand, apply to a court of general jurisdiction in the

county where the Corporation maintains its principle [sic] office to

consider whether or not the officer, director, or employee has met the

standards set forth in the Bylaws of the Corporation as to the

permissibility of indemnification.

Exhibit B-21 at 2.

Because Sage is a Texas corporation, indemnity claimed through its articles of

incorporation is governed by the Texas Business Corporation Act (“TBCA”). Sage

bases most of its arguments on this statutory scheme. According to the TBCA, “[a]

corporation may indemnify and advance expenses to persons who are not or were not

officers . . . to the same extent that it may indemnify and advance expenses to

directors under this article.” TEX. BUS. CORP. ACT, Art 2.02-1, sec. P. Starting from

this statute, Sage analyzes its own Articles of Incorporation and determines that

Berg’s demand for indemnification was inadequate. Sage Motion at 20-23.

Berg has failed to point to any reason why summary judgment should not be

granted in Sage’s favor on this claim; rather, Berg simply argues that Sage did not

address his “primary claim” of contractual indemnification. Berg Response at 13. 

Merely “resting on the allegations in his pleadings,” Berg has failed to withstand his

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 23 of 48 PageID 1695
- 24 -

burden of pointing to genuine issues of material fact or that he may succeed on this

claim. Accordingly, summary judgment is granted to Sage on Berg’s claim for

indemnification under the TBCA.

ii. Indemnification via Detrimental Reliance

As another basis for indemnification, Berg utilizes the same argument as above

regarding his $150,000 bonus: viz., that Sage orally promised to indemnify him if he

were sued by ERM for defecting and joining Sage. Berg Response at 14 (noting that

the two corroborating witnesses are Berg and his attorney, Timothy Gunn). 

Addressing this argument, Sage replies that Berg’s “only requests for indemnity were

both made pursuant to the Articles of Incorporation.” Berg, however, made a claim

for indemnity in his complaint pursuant to an agreement with Sage and, alternatively,

detrimental reliance. See First Amended Complaint ¶ 15 (“Pursuant to the agreement

reached with Sage relative to his employment, Berg is entitled to recover his

attorneys’ fees and defense costs incurred in the defense of the lawsuit filed by ERM.

. . . Alternatively, Berg is entitled to recover such attorneys’ fees and litigation

expenses on the basis of his detrimental reliance and/or promissory estoppel upon

Sage’s representations, promises and agreements in terminating his employment with

ERM and acceptance of employment with Sage.”). Sage responds that not only does

Berg’s claim fail because he cannot detrimentally rely on at-will employment, Sage

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 24 of 48 PageID 1696
- 25 -

Motion at 10, but also because such an oral promise cannot exist as an independent

claim. Id. at 10-11.

An agreement to indemnify is enforceable as independent from a statutory

indemnification claim. See American Hallmark Insurance Company of Texas v. Lyde, No.

05-97-01611-CV, 2000 WL 1702597, at *2-6 (Tex. App.--Dallas Nov. 15, 2000, pet.

denied) (not designated for publication) (analyzing and enforcing contractual

obligation to indemnify separate from indemnification claim under the TBCA). As an

equitable doctrine, “[i]ndemnity . . . may be recovered if the evidence establishes an

implied contract or if one party is exposed to liability by the action of another party

who, in law or in equity, should make good on the loss of the other.” Grinnell Mutual

Reinsurance Company v. Center Mutual Insurance Company, 658 N.W.2d 363, 378 (N.D.

2003). According to Berg, Probst promised that Sage would indemnify Berg for any

litigation expenses incurred from Berg’s departure from ERM and joining Sage. Berg

Response at 13-14. Because of Probst’s statement, Berg detrimentally relied on his

promise and subsequently resigned from ERM, thereby exposing him to possible

litigation. Id. at 15 (“What person in their right senses would commit himself to

incur attorney fees to benefit a prospective employer (in which the employee owned

no equity stake), without an agreement from the employer to reimburse the legal

expenses?”). Similar to the analysis above regarding his bonus, fact issues permeate

this claim; if Berg is able to prove the agreement using witnesses and corroborating

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 25 of 48 PageID 1697
- 26 -

circumstances, Sage may be obligated to indemnify him. Additionally, for the same

reasons that Sage’s promise to pay Berg the $150,000 bonus is arguably separate

from a promise for at-will employment, so is Sage’s promise to indemnify Berg for

ERM litigation arguably independent of Sage’s promise of at-will employment. 

Moreover, even if the court were to hold that Sage’s promise had to come

within the provisions of the TBCA to be enforced -- independent of whether Berg

properly demanded indemnity under the statute -- genuine issues of material fact

preclude granting summary judgment. It cannot be said with certainty whether Berg

acted in bad faith when departing ERM and joining Sage; if he did, Sage’s promise to

Berg would be barred by the provisions of the TBCA which preclude indemnification

if the employee’s wrongful conduct was not undertaken for the corporation’s best

interests. In addition, although Sage argues that Berg was sued in his own capacity,

rather than “by reason of the fact” that he was an employee of Sage, the fact remains

that ERM’s suit against Berg avers that “Berg used or disclosed confidential and

proprietary information of ERM on behalf of his new employer.” Exhibit B-11 at 5. 

It is by virtue of Berg’s employment with Sage that Berg allegedly disclosed

“information useful to Sage in recruiting employees of ERM to leave ERM’s

employment and join Sage.” Id. Although Sage argues that the suit was based solely

on Berg’s pre-resignation conduct, the fact remains that several ERM employees left

that company to join Sage after Berg was hired. Berg Motion at 19-20 (noting that

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 26 of 48 PageID 1698
15 The court notes that Sage wishes to deny Berg attorneys’ fees for two

declaratory judgment actions filed in Louisiana. Sage argues that because Berg was a

named plaintiff rather than a named defendant, neither Sage’s Articles of

Incorporation nor the TBCA provide for indemnification. Sage Motion at 36. 

Independent of whether these provisions permit indemnification in these

(continued...)

- 27 -

two employees resigned their positions at ERM to accept positions at Sage the same

day as Berg, while another five ERM employees resigned a week later to join Sage). 

Sage makes much of the case In re Miller, 290 F.3d 263 (5th Cir. 2002), in which the

court held that the new employer did not need to indemnify the new employee

because was not sued “by reason of the fact” that he was an officer and employee of

new employer. Sage Motion at 23-32. This case is distinguishable, though. Not only

was the Fifth Circuit interpreting articles of incorporation under Delaware law which

required the corporation -- via different language -- to indemnify its officers for official

activity, but it was upholding a decision in which the defecting employee stole boxes

of confidential documents in order to persuade the new employer of the benefits of

hiring him and competing in Texas. In re Miller, 290 F.3d at 266-69. Here, Sage’s

arguments regarding its care in protecting itself from Berg’s allegedly wrongful

conduct fall flat -- Sage actually hired those employees following Berg after his

departure from ERM and was therefore benefitted by such conduct. It remains for a

jury to determine whether Berg’s activities fall within the TBCA and are therefore

subject to indemnification or were part of a reliable promise of Probst to Berg. 

Summary judgment is denied.15

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 27 of 48 PageID 1699
15(...continued)

circumstances (rather than specifically mentioning such instances), if Sage’s promise

to Berg was that he would be indemnified in any litigation involving ERM, such an

agreement could be enforced. Moreover, since Sage was a named plaintiff in one of

the actions, see Exhibit B-28, Sage cannot now claim to have no part in this action

despite being an obviously interested party.

- 28 -

c. $75,000 Deferred Compensation

Sage also requests summary judgment on Berg’s claim for $75,000 of deferred

compensation. See generally Sage Motion at 40-43. Basing its argument on Berg’s atwill employment status, Sage argues that Sage had the unilateral right to change,

modify, or reduce Berg’s compensation at any time for any reason. Id. at 40. Because

Berg continued working after this reduction, “he has accepted the changes as a matter

of law.” Id. (quoting In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002)). 

Additionally, Sage contends that because Berg voluntarily resigned, Louisiana law

makes clear that he cannot recover any portion of deferred compensation. Id. at 41-

42 (citing and quoting Morse v. J. Ray McDermott & Company, 344 So. 2d 1353 (La.

1977)). Finally, Sage states that Berg’s deferred compensation was reduced in

accordance with the explicit terms of Sage’s 401(k) Profit Sharing Plan. Id. at 42-43.

Berg responds, stating that his deferred compensation was independent of

Sage’s 401(k) Plan. Berg Response at 25. In addition, Sage “retroactively denied

Berg deferred compensation clearly accrued to him through the date the change in his

compensation was effected.” Id.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 28 of 48 PageID 1700
- 29 -

Genuine issues of material fact preclude summary judgment on this issue. The

specific language of the offer letter (either version) states:

Additionally, deferred compensation will be accrued at the

annual rate of $75,000.00. You will also be eligible for

corporate profit sharing and other bonus compensation. As a

full-time employee, you are eligible to participate in the

following: . . . A range of other company benefit options

. . ., including a group health plan and 401(k) program

(with 50% matching of the first 10% contribution).

Exhibit B-15 at 1(emphasis added). By virtue of Sage’s self-chosen title for the plan

(“Sage Environmental Consulting, Inc. 401(k) Profit Sharing Plan” (emphasis added)),

Exhibit B-31, it appears that the offer letter’s promise of additional eligibility in the

plan is separate from the promise of $75,000 deferred compensation. This language,

in combination with Probst’s deposition, makes it unclear whether the $75,000

deferred compensation was to be included within the 401(k) Plan. If within the plan,

voluntary resignation may preclude vesting; if outside the plan, employment as of the

end of the year has no bearing. See Morse, 344 So. 2d at 1369-71 (upholding

retirement plan’s non-vesting clause because the specific terms of the plan inform the

employee precisely that he has not “earned” anything prior to his vesting date). If

not within the plan, a jury must determine the substance of the agreement regarding

the $75,000 deferred compensation offered by Sage in Berg’s letter (e.g., any possible

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 29 of 48 PageID 1701
16 The court will not determine the legality of the profit sharing plan at

this time. If the $75,000 is found to be within the plan’s purview, the court will look

to whether the plan is lawful under the Louisiana provisions against wage forfeiture. 

See Section II.C.1.d.-f., infra.

17 The relevant provision of 23:631(A)(1)(b) provides:

(continued...)

- 30 -

vesting dates, right to reduce compensation, rights to pro rata compensation, etc.). 

Summary judgment is denied.16

d. Vacation Pay, Sick Pay, and Holiday Pay

Sage next argues that summary judgment should be granted on Berg’s claim for

unused vacation, sick, and holiday pay. See generally Sage Motion at 36-40. First,

Sage argues that its policy provides for payout of unused vacation time for employees

with one year of employment. Because Berg voluntarily resigned prior to his one-year

anniversary, Sage maintains, he is not entitled to his vacation pay. Id. at 36-38. 

Next, Sage contends that because its uniform policy is not to pay unused sick time for

any employee upon termination of employment, Sage does not owe Berg any sick

pay. Id. at 38-39. Finally, because holiday pay is not a “wage” under Louisiana

statutes, Sage argues, summary judgment should be granted on this claim. Id. at 39-

40.

To “compel prompt payment of wages upon an employee’s discharge or

resignation,” Boudreaux v. Hamilton Medical Group, Inc., 644 So. 2d 619, 621 (La.

1994) (emphasis in original), Louisiana enacted statutes 23:631,17 23:632,18 and

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 30 of 48 PageID 1702
17(...continued)

Upon the resignation of any laborer or other

employee of any kind whatever, it shall be the

duty of the person employing such laborer or

other employee to pay the amount then due

under the terms of employment, whether the

employment is by the hour, day, week, or

month, on or before the next regular payday

for the pay cycle during which the employee

was working at the time of separation or no

later than fifteen days following the date of

resignation, whichever occurs first.

LA. REV. STAT. 23:631(A)(1)(b).

18 23:632 provides:

Any employer who fails or refuses to comply

with the provisions of R.S. 23:631 shall be

liable to the employee either for ninety days

wages at the employee's daily rate of pay, or

else for full wages from the time the

employee’s demand for payment is made until

the employer shall pay or tender the amount

of unpaid wages due to such employee,

whichever is the lesser amount of penalty

wages. Reasonable attorney fees shall be

allowed the laborer or employee by the court

which shall be taxed as costs to be paid by the

employer, in the event a well-founded suit for

any unpaid wages whatsoever be filed by the

laborer or employee after three days shall

have elapsed from time of making the first

demand following discharge or resignation.

LA. REV. STAT. 23:632.

- 31 -

23:634.19 These statutes provide the general policy that, upon termination of

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 31 of 48 PageID 1703
19 Finally, the provision making forfeiture of wages unlawful states:

A. No person, acting either for

himself or as agent or otherwise,

shall require any of his

employees to sign contracts by

which the employees shall forfeit

their wages if discharged before

the contract is completed or if

the employees resign their

employment before the contract

is completed; but in all such

cases the employees shall be

entitled to the wages actually

earned up to the time of their

discharge or resignation.

LA. REV. STAT. 23:634(A).

- 32 -

employment, an employer will pay any accrued wages due to the employee. It is not

contested that vacation time constitutes “wages” under the Louisiana statutes. Sage

Reply at 13. Berg argues that not only is Sage’s policy an unlawful forfeiture of his

accrued vacation pay, Berg Response at 22, but also that Sage’s written policy was not

uniformly applied. Id. at 24.

Louisiana law holds that a vacation policy which forces the employee to forfeit

vacation pay upon leaving the employer is unlawful. See Beard v. Summit Institute of

Pulmonary Medicine and Rehabilitation, Inc., 707 So. 2d 1233, 1236 (La. 1998). Sage’s

employee handbook provides, “[u]pon termination of employment for any reason, an

employee who has completed one year of service will be paid for any vacation accrued

but not taken, unless special arrangements are made.” Exhibit B-14 at 4-1. This

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 32 of 48 PageID 1704
- 33 -

provision goes on to state, “[a]fter one (1) year of eligible service the employee will

accrue up to ten (10) vacation days per year, accrued weekly at the rate of 1.60 hours

for each full week of service completed.” Id. Berg’s offer letter, however, provides

that he will receive “[t]wenty (20) vacation days per year (prorated from your date of

hire).” Exhibit B-15 at 1. The employee handbook is very specific: after one year of

service, vacation days are accrued weekly. It is uncontested that Berg did not

complete one year of service.

A complication arises, though, because Berg argues that Sage’s policy was not

consistently applied. Berg Response at 24. Without providing specific citations to

the record, Berg avers that “at least two who were terminated prior to the completion

of one year of service were paid their accrued vacation leave at the time of

termination of employment.” Id. Despite much effort, the court has been unable to

locate these instances. The only discussion pertaining to vacation time payouts

involved Muller stating that only two employees received vacation pay, and these

employees worked longer than one year. See Exhibit B-5 at 225 (noting that “both

Randi [Wyatt] and Omer [Wolff] worked more than a year and were paid their

vacation”). These statements clearly do not support Berg’s assertion. Berg advances

additional arguments, though: he took vacation time during his first year of

employment, Muller stated in his deposition that Berg’s vacation days accrued

ratably, and Sage’s employment records detail the amount of Berg’s vacation time

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 33 of 48 PageID 1705
- 34 -

accrued, used, and remaining. Berg Response at 22 (citing Muller Deposition at 53,

55-56, attached to Plaintiff’s Appendix to Memorandum in Opposition to Motion for

Partial Summary Judgment Filed by Defendant (“Berg Response Appendix”)

(Appendix page 224, 225-26); Probst Exhibit 15, attached to Berg Response Appendix

at 215). Although Sage’s employee handbook says nothing about employees being

prohibited from using vacation during their first year of employment, these

arguments clearly indicate an accrual of vacation time during the first year. In

addition, Berg’s offer letter evidences an exception to the rule: he would receive 20

vacation days per year, starting from the date of hire. The question then becomes

whether Sage’s policy -- and possibly inconsistent application -- is an unlawful

forfeiture of vacation pay.

As stated above, Louisiana law generally provides that accrued vacation pay is

wages under LA. REV. STAT. 23:631. Beard, 707 So. 2d at 1235. Because Louisiana

law does not permit an employer to require an employee to forfeit wages, see LA. REV.

STAT. 23:634, an “employment policy that requires the forfeiture of accrued but

unused vacation time is illegal.” Aguillard v. Crowley Garment Manufacturing Company,

824 So. 2d 347, 351 (La. App. 3 Cir.) (citing Beard, 707 So. 2d at 1235), writ denied,

823 So. 2d 955 (2002). “Accrued” means “vested.” Id. (quoting Winkle v. Advance

Products and Systems, 721 So. 2d 983, 986 (La. App. 3 Cir. 1998). “A vested right is

defined as that case when ‘the right to enjoyment, present or prospective, has become

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 34 of 48 PageID 1706
20 The employee policy in Macrellis stated that annual leave is accumulated

(continued...)

- 35 -

the property of some particular person or persons as a present interest. The right

must be absolute, complete and unconditional, independent of a contingency, and a

mere expectancy of future benefit . . . does not constitute a vested right.” Id. at 351-

52 (quoting Berteau v. Wiener Corporation, 362 So. 2d 806, 808-09 (La. App. 4 Cir.),

writ denied, 365 So. 2d 242 (La. 1978)).

Here, Sage’s employee handbook states, “[u]pon termination of employment

for any reason, an employee who has completed one year of service will be paid for

any vacation accrued but not taken, unless special arrangements are made.” Exhibit

B-14 at 4-1. As evidenced by Berg’s use of 76 hours of vacation time, the right to

vacation was not prospective -- he could use accrued time during the first year of

employment. Moreover, even if his vacation time were considered prospective, this

fact alone has not defeated recovery of vacation pay. See Macrellis v. Southwest

Louisiana Independence Center, 657 So. 2d 135, 137 (La. App. 3 Cir. 1995) (permitting

recovery to employees terminated prior to one year of employment although the

policy allowed for vacation time only after probation period of one year: “Although

the right to enjoy the annual leave was prospective, it became the property of the

employee as it was earned during the first year of employment. Thus the earned

annual leave was an ‘amount then due’ under La. R.S. 23:631(A).” (emphasis

removed));20 Evans v. Manville Products Corporation, 505 So. 2d 924, 927 (La. App. 2

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 35 of 48 PageID 1707
20(...continued)

based on the number of years worked (e.g., employed 1-5 years = 10 working

days/year) and “[e]mployees on probationary status who are subsequently offered

regular full time employment will be credited with annual leave benefits earned

during their probationary period.” Marcellis, 657 So. 2d at 136-37. Based on this

language, the court found that “annual leave was accumulated on the basis of years of

employment and was earned even during the probationary period.” Id. at 137

(emphasis in original).

21 The vacation provision applicable in Evans stated, “All employees who

on January 1 of any year have been continuously employed for one (1) or more years

shall be entitled to vacation with pay subject to the provisions set for this in this

Article.” 505 So. 2d at 926. Therefore, if an employee was discharged in August, he

did not have one year’s continuous employment on January 1 when vacation wages

would otherwise accrue. Id. Based on this language, the court found the policy

illegally required employees to forfeit earned vacation time.

- 36 -

Cir.), writ denied, 508 So. 2d 824 (La. 1987), cert. denied, 484 U.S. 1004 (1988);21

Picard v. Vermilion Parish School Board, 742 So. 2d 589, 595-96 (La. App. 3 Cir.) (“We

now hold that in the absence of a clear, written policy establishing that vacation time

granted by an employer to an employee is nothing more than a mere gratuity and not

to be considered an amount due or a wage, accrued but unused vacation time is a

vested right for which an employee must be compensated upon discharge or

resignation.”), writ denied, 749 So. 2d 675 (1999); Aguillard, 824 So. 2d at 353

(finding that since the policy provides that vacation is earned based on the

employee’s length of service and is tied to the employee’s performance at work,

employees are entitled to compensation); cf. Huddleston v. Dillard Department Stores,

Inc., 638 So. 2d 383, 384 (La. App. 5 Cir. 1994) (holding that vacation time was not

a vested right because the employee handbook stated specifically “Vacation is a

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 36 of 48 PageID 1708
- 37 -

benefit and not an earned wage. ‘Accrued Vacation’ is only considered an earned

benefit, and payable upon termination, if the employee terminates due to death,

retirement, or voluntarily terminates employment.”). Given Louisiana’s strong policy

against forfeiture of wages, Morse, 344 So. 2d at 1359 n.10, the court cannot say that

Sage’s policy is lawful. Sage’s application of the policy to Berg -- and possibly other

employees as well -- indicates that his vacation time could be used during the first

year of employment. Despite the specific language of the employee handbook, Sage’s

records detailed ratably accrued and used vacation time during his first year. This

suggests that Berg had a vested right in his vacation time; therefore Sage’s policy of

refusing to pay out such accrued time if an employee did not work an entire year

would be considered a forfeiture of wages and thus unlawful under LA. REV. STAT.

23:634.

Summary judgment on this claim must be denied on another basis as well. 

Despite the employee handbook’s language, Sage’s vacation records credit Berg with

accrued vacation time during his first year of employment. He had already used 76

hours of vacation and received a written exception in his offer letter regarding the

amount of vacation permitted by the handbook. If he was outside the employment

handbook in that instance, there is a possibility that there were also “special

arrangements” made regarding accrued vacation time. Genuine issues of material fact

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 37 of 48 PageID 1709
- 38 -

exist -- both regarding uniform application of the company policy and the policy itself

-- so summary judgment must be denied.

Regarding his claim for sick pay and holiday time, Berg devotes very little space

to the argument, see Berg Response at 25 (“Sage is not entitled to summary judgment

on Berg’s claim for accrued holiday pay given that the June 19, 2003 Offer Letter

(both versions), provided that Berg would have ‘seven (7) holidays per year (holidays

of your choice) prorated from the date of hire,’ and Sage’s own records accrued

holiday leave available to him as of the date of his resignation.”). However, the court

will look to the merits of the claim itself to determine whether summary judgment

should be granted.

Regarding holiday pay, the Sage employee handbook states that “[e]ligible

employees will accrue holiday pay benefits at the rate of 1.08 hours per each full week

of service.” Exhibit B-14 at 4-3. Nowhere does the handbook provide for payment

upon termination. The court has been unable to find Louisiana case law deciding

whether “holiday pay” is considered “wages” under the state wage statutes. However,

given Louisiana’s strong policy against forfeiture of wages and the Beard case in which

the Louisiana Supreme Court found vacation pay to constitute “wages” under the

state statutes, the court finds no reason why such a holding should not be extended to

holiday pay. See Picard, 742 So. 2d at 593 (“If anything, [passage of R.S. 23:640]

indicates that the legislature does consider fringe benefits wages within the meaning

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 38 of 48 PageID 1710
- 39 -

of La. R.S. 23:634.” (emphasis removed) (quoting Morse, 344 So. 2d at 1359 n.10)). 

Because the policy states that holiday pay is accrued through weeks of service to the

company and the policy is silent as to how holiday pay will be handled upon

termination, the court cannot conclude that Berg’s holiday pay is a mere gratuity

rather than wages. See Aguillard, 824 So. 2d at 353 (finding that since the employer’s

vacation policy was silent regarding vacation payout after termination, the court

could not conclude that vacation benefits were a mere gratuity rather than wages). 

Berg has a vested right in his holiday pay as it was earned through his service to Sage. 

See Picard, 742 So. 2d at 595 (“[W]here an employment policy provides for the

accrual of vacation time upon the completion of a specified amount of work, the

policies against forfeiture of wages dictate than an employee’s rights vest once the

condition precedent, the allotment of work, is completed.”). Accordingly, summary

judgment is denied on this claim as well.

Sage’s policy for sick leave provides that “[u]nusued sick leave benefits will not

be paid to employees upon termination of employment.” Exhibit B-14 at 4-3. The

policy also provides that “[e]ligible employees will accrue sick leave benefits at the

rate of .8 hours per each full week of service,” id. at 4-2, and “[s]ick leave benefits are

intended solely to provide income protection in the event of illness or injury, and may

not be used for any other absence.” Id. at 4-3. Given the language of the policy, it is

clear that sick time accrues as weeks of service are rendered to the employer and if used

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 39 of 48 PageID 1711
- 40 -

in the event of illness or injury. Therefore, because Berg has not shown that he was ill or

injured, such sick pay has not accrued and -- without deciding whether sick pay

constitutes a wage under Louisiana law -- Sage does not owe Berg payment upon his

resignation. See Tran v. Petroleum Helicopters, 771 So. 2d 673, 677 (La. App. 3 Cir.)

(refusing to address whether sick leave was considered a wage for the purposes of

Louisiana wage statutes and denying payment of accrued sick leave on another

ground), writ denied, 776 So. 2d 463 (2000); Jackson v. Housing Authority for Parish of

St. James, 926 So. 2d 606, 612 (La. App. 5 Cir. 2006) (“Although the amount of

unused sick leave time is accrued from year to year, the employee is not entitled to

payment for unused sick leave time when the employee terminates employment . . .. 

There was no evidence that [the plaintiff] had not been paid for any sick days that

she used due to illness.”); but see Keiser v. Catholic Diocese of Shreveport, Inc., 880

So. 2d 230, 234 (La. App. 2 Cir. 2004) (because “[t]he only evidence in this sparse

record on the issue of sick leave is the teacher’s contract, which states that all fulltime staff members are entitled to ten days of sick leave with pay per year,” the

employee was entitled to a pro-rated portion of sick leave under LA. REV. STAT.

23:631, 632, and 634). Because Berg has not proven that he has a vested right in

this benefit, summary judgment is granted.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 40 of 48 PageID 1712
- 41 -

e. Penalty Wages

The last of Berg’s claims involve a request for penalty wages under the

Louisiana wage statutes. Sage moves for summary judgment because it had -- and

still has -- a good faith belief that the amount owed Berg is disputed. See generally

Sage Motion at 43-45.

To recover penalty wages, the claimant must show that (1) wages were due and

owing, (2) demand for payment thereof was made where the employee was

customarily paid, and (3) the employer did not pay upon demand. Winkle, 721

So. 2d at 990. Such a penalty upon employers “must be strictly construed and may

yield to equitable defenses.” Beard, 707 So. 2d at 1236. Therefore if there is “a

good-faith non-arbitrary defense to liability for unpaid wages, i.e., a reasonable basis

for resisting liability,” the employer may not be subject to paying penalty wages under

LA. REV. STAT. 23:632. Id. The Louisiana Supreme Court has held, however, that

“[r]eliance on an unlawful company policy does not constitute a good faith nonarbitrary defense to liability for unpaid wages.” Id. at 1237. The issue of an

employer’s bad faith is an issue of fact. Winkle, 721 So. 2d at 991.

Here, it is not contested that Berg has met the prerequisites for obtaining

penalty wages; instead, Sage argues that there is a bona fide dispute as to the wages

owed and that Berg has proffered no evidence that Sage acted in bad faith. Sage

Motion at 44-45. Berg responds that Sage’s allegedly inconsistent practice regarding

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 41 of 48 PageID 1713
22 Because these claims are closely related, they will be discussed together.

- 42 -

payout of wages and benefits under its (unlawful) policy is indicative of Sage’s bad

faith. Berg Response at 26. For the same reasons stated above, summary judgment is

precluded: genuine issues of material fact exist regarding Sage’s application of the

policy and possible bad faith. Sage’s motion is denied on this claim as well.

2. Sage’s Counterclaims Against Berg

Unlike the previous section wherein only Sage moved for summary judgment

on Berg’s claims, both parties move for summary judgment on Sage’s counterclaims. 

As stated above, these claims are governed by Louisiana law and deal largely with

Berg’s receipt of $30,000. In addition, because Sage would bear the burden of proof

at trial, if it is to succeed on these claims on summary judgment, it must prove these

claims beyond peradventure.

a. Breach of Contract, Money Had and Received, Unjust Enrichment22

Sage advances two main arguments regarding its counterclaims for the $30,000

given to Berg. See generally Sage Motion at 45-49. First, because the money was

contingent on Berg’s completion of one year of employment -- and Berg admittedly

resigned voluntarily prior to his one-year anniversary date -- Berg owes Sage the

$30,000 in toto, rather than a pro rata portion of the full amount. Id. Sage argues

that Berg had three separate documents detailing the one-year contingency, so Berg

had constructive knowledge of this requirement, despite any possible arguments he

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 42 of 48 PageID 1714
23 Although Berg claims that the contested $30,000 was a “down

payment” on legal fees for imminent ERM litigation, Berg Motion at 4, he never

develops this argument. The court will therefore not address it. Moreover, even if

Berg were to properly assert this contention with legal support, it must be rejected --

the only evidence of the agreement is that contained in Sage’s offer letters, neither of

which mentions its use as a “down payment.” See Exhibits B-15, B-16. Such parol

evidence will not be considered. See LA. CIV. CODE ART. 1848.

- 43 -

may make to the contrary. Id. at 46. In addition, Sage maintains, the full amount is

owed; Louisiana law provides that if an employee voluntarily resigns or is discharged

for good cause prior to his bonus date, then the full amount of the bonus is not

earned. Id. at 49. Berg contends in his summary of relevant facts that he signed his

acceptance letter without knowing that the offer letter delivered to him on July 4,

2003 was revised from the original June 19, 2003 letter. Berg Motion at 16. Berg

contends, however, that even if the bonus is assumed to have been contingent on

completion of one year’s service, summary judgment should be granted in his favor. 

Arguing that there was an implied condition in the contract for $30,000 that Sage

would not reduce his compensation, Berg contends that he was constructively

discharged prior to his anniversary date and therefore could not fulfill his condition of

the contract through Sage’s misdealings.23 Id. at 38-39.

It is undisputed that Berg was employed for less than one year, Exhibit B-1 at

287, and three documents produced by Berg unambiguously include the one-year

contingency provision. See Sage Motion at 46 (noting that the revised offer letter

(“Sage is also offering a bonus of $30,000 dollars for your acceptance of this

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 43 of 48 PageID 1715
- 44 -

employment offer, paid on the first payroll date after your date of hire, but

contingent upon completion of one year of service.”), the check for the $30,000 itself

(“Signing bonus for one year of service”), and the check’s pay stub (“Bonuses: signing

bonus for one year of service”) all note the contingency provision). Disputes exist

regarding the content of the agreement: Berg contends he accepted the offer as

contained in the June 19 offer letter (without the one-year provision) while Sage

maintains that Berg accepted a newly-negotiated offer in Houston and the July 3 offer

letter memorialized the terms of this new agreement. Ultimately, though, this

dispute does not affect the outcome. Even if it is assumed that Berg did not initially

accept the term of the second offer letter with the one-year contingency, by cashing

the check with this provision on it and then producing all three documents stating

that term of the contract, he assented to this condition. Ceco Corporation v. Mid-Gulf

Construction, Inc., 396 So. 2d 474, 478 (La. App. 4 Cir. 1981) (citing LA. CIV. CODE

ARTS. 1811, 1816, 1817 and noting that a contract may be assented to impliedly

through actions, or by silence or by inaction); Dugas v. Modular Quarters, Inc., 561

So. 2d 192, 199 (La. App. 3 Cir. 1990) (“The law does not compel people to read or

to inform themselves of the contents of instruments which they may choose to sign,

but it holds them to the consequences.”). By signing the check containing the

one-year provision and subsequently producing these documents in litigation, Berg is

presumed to have consented to the contents of the offer/modification and therefore

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 44 of 48 PageID 1716
- 45 -

must be held to that condition before he can retain the $30,000 signing bonus. 

Dugas, 561 So. 2d at 199 (holding that, “the plaintiffs are presumed to have

consented to [the sale document’s] contents and to be bound by the provisions of the

instrument since they signed it”).

Regarding Berg’s contention of an “implied condition,” Louisiana law is clear

that employers have the unilateral right to change, modify, or reduce an at-will

employee’s compensation at any time for any reason. Trigg v. Pennington Oil Company,

835 So. 2d 845, 848 (La. App. 1 Cir. 2002) (holding that, because employment was

at-will, employer was free to modify terms of employment at any time); LA. CIV.

CODE ART. 2747 (“A man is at liberty to dismiss a hired servant attached to his

person or family, without assigning any reason for so doing. The servant is also free

to depart without assigning any cause.”). Berg was an at-will employee of Sage, see

Exhibit B-1 at 184, 190 (Berg stating that he was an at-will employee and “Sage had

the ability to cut [his] compensation”), and Berg’s own deposition testimony states

that he voluntarily resigned and was not claiming he was constructively discharged. 

Exhibit B-1 at 324-25. Berg cannot claim now that Sage forced him from his

employment and therefore he should be released from his obligation to repay the

$30,000 contingent upon his completion of one year of employment. Berg bore these

risks of reduced compensation when he accepted employment with Sage after

resigning from ERM; it is unfortunate that he did not secure any protection for

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 45 of 48 PageID 1717
- 46 -

himself through an employment contract or other means. Berg did not fulfill the

conditions on which his signing bonus was contingent. Accordingly, summary

judgment on Sage’s claims of contract and quasi-contract is granted. 

Berg also contends that -- if he owes any of the $30,000 to Sage -- such

recovery would be limited to the pro rata portion of the bonus. Berg Motion at 46

(“the claim is limited to 21/365 of $30,000”). The court disagrees. Berg was found

not to fulfill the conditions of his bonus, so he has no right to the monies -- it must

be paid back in its entirety. See Hinton v. Owensby & Kritikos, Inc., 425 So. 2d 926,

929 (La. App. 4 Cir. 1986) (citing Pender v. Power Structures, Inc., 359 So. 2d 1321

(La. App. 4 Cir. 1978), and noting that because the employee was terminated before

incentive payments had accrued, the employee was not owed any portion of the

bonus); Morse, 344 So. 2d at 1369 (holding that the employee was not owed any

monies from his retirement plan -- the employee was not employed as of the vesting

date, so the conditions by which to accrue benefits had not been met). Accordingly,

summary judgment is denied to Berg on this claim.

b. Fraud

Unlike all other counterclaims against Berg, Sage does not move for summary

judgment on its fraud claim. Sage Motion at 1 n.1. Berg, however, does request

summary judgment on this counterclaim. Berg Motion at 41.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 46 of 48 PageID 1718
- 47 -

Under Louisiana law, fraud can only be proven when there is both an intent to

defraud and actual or potential loss or damage. Sun Drilling Products, 798 So. 2d

1141, 1152. In addition, another element, whether it be “labeled reliance,

inducement, or causation” is required. Id. at 1153. Only a preponderance of the

evidence is required to prevail on this cause of action and circumstantial evidence

may be considered. Id.

Despite Berg’s assertions, both the United States Supreme Court and

Louisiana jurisprudence instruct that claims involving determination of intent are

“not generally amenable for summary judgment disposition because [they] ‘frequently

turn on credibility assessments.’” Kadlec Medical Center v. Lakeview Anesthesia

Associates, No. 04-0997, 2005 WL 1309153, at *11 ( E.D. La. May 19, 2005)

(quoting Crawford-El v. Britton, 523 U.S. 574, 599 (1998); citing Coates v. Anco

Insulations, Inc., 786 So. 2d 749, 754 (La. App. 4 Cir. 2001)). Without the benefit of

hearing Berg’s testimony, the court is unable to determine his intent when he

accepted his $30,000 signing bonus and offer of employment with Sage. In addition,

Sage has pointed to other circumstantial evidence that -- in conjunction with Berg’s

failure to perform under the contract despite retaining the $30,000 -- supports Sage’s

claim for fraud. See Sage Response at 24 (noting that Berg currently denies the

contingent nature of the signing bonus and that Berg resigned his position with Sage

two days following the settlement of a lawsuit with his former employer, indicating

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 47 of 48 PageID 1719
- 48 -

Berg’s intent to accept a position with Sage “to obtain leverage over ERM in order to

maximize the value of his ERM shares of stock”). Berg has not sustained his burden

in moving for summary judgment on this counterclaim. Accordingly, Berg’s motion

on Sage’s fraud counterclaim is denied.

III. CONCLUSION

For the reasons stated above, the motions are GRANTED in part and

DENIED in part. Summary judgment is GRANTED to Sage on Berg’s claim for

indemnification under the TBCA and Berg’s claim for sick leave. Summary judgment

is also GRANTED to Sage on its counterclaims of contract and quasi-contract. 

Summary judgment is DENIED on all remaining claims.

SO ORDERED.

August 16, 2006.

 

 Case 3:05-cv-01215-G Document 108 Filed 08/16/06 Page 48 of 48 PageID 1720