Court Opinion

ID: 65540
Source: CourtListenerOpinion
Date Created: 2010-04-26 05:59:56+00
Date Added: 2024-06-11T17:20:39.071753
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                            April 22, 2009

                                     No. 08-10856                      Charles R. Fulbruge III
                                   Summary Calendar                            Clerk

LEE PURSELLEY

                                                   Plaintiff - Appellant
v.

LOCKHEED MARTIN CORPORATION

                                                   Defendant - Appellee

                   Appeal from the United States District Court
                        for the Northern District of Texas
                                 No. 4:07-CV-372

Before DAVIS, GARZA, and PRADO, Circuit Judges.
PER CURIAM:*
       Lee Purselley appeals the district court’s grant of summary judgment in
favor of Lockheed Martin Corporation (“Lockheed”). Because no material fact
issues remain, we find summary judgment proper and affirm.
       Lockheed ’s Weight Incentive Program (“WIP”) offered monetary awards
to spur employees’ weight-reduction suggestions for the F-35 aircraft under
development for the government. Purselley states in late 2003 or early 2004 he

       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
                                       No. 08-10856

submitted his idea to eliminate a piece of equipment to reduce weight and cost
and the company began studying how to implement the idea. Lockheed states
that the idea immediately became its property because when he was hired,
Purselley signed an agreement assigning any employee inventions to the
company.
       In April 2004, Lockheed planned Weight Stand Down Day (“WSDD”), a
half-day project to focus on F-35 weight-savings ideas, and contemplated
monetary awards for WSDD ideas implemented into the project. The company
also considered awards with different scales of payment for two cost-savings
components based on indirect weight savings—system development and design
(“SDD”) and unit recurring flyaway (“URF”) components. Ultimately, Lockheed
opted not to offer cost-savings awards.              It notified participants, including
Purselley, before WSDD began that cost-savings awards were “off the table.”
However, Purselley relies on preliminary documents posted before this decision,
contemplating awards for SDD and URF cost-savings.1
       During WSDD, Purselley resubmitted the earlier-submitted suggestion.
Lockheed initially rated his WSDD suggestion as “not recommended.” But
Purselley still argued for a weight-savings award, and a year later he received
$7500. In this suit, he initially sought hundreds of millions of dollars in a Texas
state court on breach of contract and quantum meruit claims, arguing he also
was due an SDD cost-savings award. He now claims Lockheed owes him an
URF cost-savings award.

       1
         An earlier version of a document posted in contemplation of awards for WSDD
suggestions twice listed SDD costs, rather than one entry for SDD costs and one entry for URF
costs. The typographical error was corrected on a later version of the list of potential awards,
with entries for both SDD and URF cost savings. Both parties address the error in their
briefs, but the error does not seem to be of consequence given the overall balance of facts
supporting Lockheed’s position that there was no offer of cost-savings awards. Lockheed
further argues Purselley could not have expected payment for URF cost savings when URF
was omitted from the earlier version of the possible awards.

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                                   No. 08-10856

      Lockheed removed the action to federal district court. The district court
granted Lockheed’s motion for summary judgment. This appeal followed.
      “We review a district court’s grant of summary judgment de novo.
Summary judgment is appropriate when the record indicates no genuine issue
of material fact, and that the moving party is entitled to judgment as a matter
of law.” Cont’l Airlines, Inc. v. Air Line Pilots Ass’n Int’l, 555 F.3d 399, 405 (5th
Cir. 2009) (quoting Am. Eagle Airlines, Inc. v. Air Line Pilots Ass’n Int’l, 343 F.3d
401, 405 (5th Cir. 2003)) (internal quotation marks omitted). Defeating a motion
for   summary     judgment    requires    more    than   “conclusory    allegations,
unsubstantiated assertions, or only a scintilla of evidence.” Delta & Pine Land
Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008)
(internal quotation marks omitted). The parties agree Texas law controls this
diversity case.
      Purselley first argues there is a fact issue as to whether he gave
consideration to support a unilateral contract. Specifically, Purselley asserts
there was no requirement that WSDD suggestions be original and unique and
that by his performance—expending time and effort to resubmit an idea—he
accepted Lockheed’s offer to compensate employees for ideas suggested during
WSDD. Lockheed argues that providing already-disclosed information is past
consideration and, thus, no consideration.       Granting Lockheed’s motion for
summary judgment, the district court found “[t]o whatever extent [Purselley]
claims a breach of contract,” he gave no new consideration to Lockheed.
Lockheed received nothing new from Purselley upon which it could act.
      In Texas, “[c]onsideration is a present exchange bargained for in return for
a promise.” Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 496 (Tex.
1991).   The formation of a unilateral contract in the employment context
requires that “(1) the performance must be bargained-for so that it is not
rendered past consideration . . . and (2) acceptance must be by performance”

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                                       No. 08-10856

(citations omitted). Light v. Centel Cellular Co., 883 S.W.2d 642, 645 n.6 (Tex.
1994).     Light dealt with an employee’s covenant not to compete with an
employer, an issue the Texas Supreme Court has revisited, emphasizing new
consideration is required to support an employee’s noncompete promise. Alex
Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 651 (Tex. 2006). The
court viewed such a covenant as a bilateral contract but agreed with Light’s
recitation of basic contract law in footnote 6. Id. at 650. “‘[P]ast consideration
is not consideration.” Id. at 659 (Jefferson, C.J., concurring).
       We agree with the district court.            No fact issue as to consideration
remains. The evidence showed the company indeed was looking for new ideas,
not ideas previously submitted. 2 While the company still sought ideas despite
notifying WSDD participants it was forgoing cost-savings awards, Purselley’s
resubmission of the earlier suggestion was past consideration; the parties do not
dispute that the company already owned the idea and had acted upon it when
Purselley resubmitted it for WSDD. Therefore, the WSDD submission was not
new consideration and was unable to support any new promise Lockheed made,
as Purselley claims, to pay cost-savings awards under a unilateral contract.
       Purselley next argues that fact issues exist as to whether Lockheed owes
him damages in quantum meruit for Lockheed’s unjust enrichment. He asserts
that a jury should weigh an executive’s e-mail lauding Purselley as the
originator of the idea and should decide whether Purselley’s WSDD suggestion
fell within his ordinary job duties. Purselley admits he did not expect extra pay
the first time he submitted the idea, but he argues the expectation arose because

       2
          Lockheed refers to: (1) an announcement calling for “changes” to reduce weight; (2)
an e-mail stating the company wished for no stone to be left unturned in seeking weight-
reduction ideas; (3) Purselley’s own acknowledgment that he was told to “come up with” ideas;
and (4) instructions for submitting suggestions stating: “1. Come up with an idea. 2.
Interrogate WIP database to see if idea is already submitted. 3. If idea is not yet submitted,
fill out WIP form.”

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                                  No. 08-10856

of the value of his idea to Lockheed and Lockheed’s past awards for suggestions.
Lockheed argues Purselley is not entitled to damages in quantum meruit
because they are available only for services rendered under implied contracts.
The company also contends two express contracts—the inventions agreement
and at-will employment agreement—covered Purselley’s suggestion, precluding
quantum meruit. Rejecting Purselley’s claim, the district court found Lockheed
“did not experience any enrichment by reason of [Purselley’s] WSDD submittal.”
      In Texas, quantum meruit “is founded [on] the principle of unjust
enrichment.” Bashara v. Baptist Mem’l Hosp. Sys., 685 S.W.2d 307, 310 (Tex.
1985). Unjust enrichment is an implied-contract theory stating one should make
restitution when it would be unjust to retain benefits received. Walker v. Cotter
Properties, Inc., 181 S.W.3d 895, 900 (Tex. App.—Dallas 2006, no pet.). Unjust
enrichment allows recovery “when one person has obtained a benefit by another
by fraud, duress, or the taking of an undue advantage.” Heldenfels Bros., Inc.
v. Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). In turn, quantum meruit allows
for an equitable recovery “based upon the promise implied by law to pay for
beneficial services rendered and knowingly accepted.” In re Kellogg Brown &
Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005) (emphasis added) (internal quotation
marks omitted). If a valid contract covers the services provided, the party
generally cannot recover under a quantum meruit theory. Id.
      Recovery requires that: “(1) valuable services and/or materials were
furnished, (2) to the party sought to be charged, (3) which were accepted by the
party sought to be charged, and (4) under such circumstances as reasonably
notified the recipient that the plaintiff, in performing, expected to be paid by the
recipient.” Heldenfels Bros., 832 S.W.2d at 41. The Texas Supreme Court has
enumerated a few instances where damages in quantum meruit might be
available for breach of an express contract. Truly v. Austin, 744 S.W.2d 934,
936–37 (Tex. 1988). These exceptions are: (1) where a plaintiff had partially

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                                  No. 08-10856

performed but the defendant’s breach kept the plaintiff from completing
performance; (2) when a plaintiff only partially performed a unilateral contract
that imposed no legal obligations on the plaintiff and, thus, the plaintiff did not
breach; and (3) when breaching plaintiffs “have been allowed to recover the
reasonable value of services less any damages suffered by the defendant.” Id.
      We agree with the district court that Lockheed does not owe quantum
meruit damages to Purselley. Purselley did not furnish Lockheed valuable
services because his WSDD submission did not enrich Lockheed, which already
owned the idea and had acted upon it. And because Lockheed did not end up
offering WSDD cost-savings awards, it could not have had reasonable notice that
Purselley expected to be paid. Purselley did not argue that Lockheed obtained
his idea by fraud or duress or by taking undue advantage of him. Lastly, even
if there was an express contract for WSDD cost-savings awards, none of the
exceptions allowing recovery apply.
      Finally, Purselley argues, for the first time on appeal, that Lockheed is
quasi-estopped from denying him a cost-savings payment because employees are
entitled to rely on Lockheed’s long-standing extra payments for employees’ ideas.
However, “[a]rguments not raised in the district court are waived.” Jethroe v.
Omnova Solutions, Inc., 412 F.3d 598, 601 (5th Cir. 2005); see also Keelan v.
Majesco Software, Inc., 407 F.3d 332, 339 (5th Cir. 2005) (stating this Circuit’s
“well settled” law limiting summary judgment review “to matters presented to
the district court”). Because Purselley failed to make his quasi-estoppel
argument adequately to the district court, he waived the issue and we do not
reach it.
      For the foregoing reasons, we AFFIRM the district court’s order granting
summary judgment.

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