UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-20092
ESTATE OF RICHARD J. MARTINEAU,
Plaintiff-Appellant,
VERSUS
ARCO CHEMICAL COMPANY; ET AL,
Defendants,
ARCO CHEMICAL COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
February 25, 2000
Before KING, Chief Judge, and DUHÉ and DeMOSS, Circuit Judges.
DUHÉ, Circuit Judge:
The Estate of Richard Martineau (“Martineau”) appeals the
grant of summary judgment in favor of ARCO Chemical Co. (“ARCO”) in
this discrimination and harassment case on several grounds.
Martineau also contends that the district court failed to remand
the case to the Texas state court. We affirm the district court's
grant of summary judgment and its decision not to remand.
I. FACTS
Martineau began working at ARCO in 1976, and by 1996 he served
as a lab supervisor in ARCO's Pasadena, Texas, chemical plant.
ARCO contends that in 1996 employees and supervisors complained
about Martineau's behavior which included cursing, yelling,
slamming doors, and creating an unpleasant work environment.
Martineau's supervisor, Eric Kolodziej (“Kolodziej”), counseled him
regarding this behavior, and ARCO arranged for Martineau to attend
an interpersonal skills class.
ARCO claims that complaints continued regarding Martineau's
behavior. In September 1996, Lisa Sweeney (“Sweeney”) filed a
harassment complaint with ARCO accusing Martineau of giving her
sexually suggestive poems, attempting to continually contact her at
home, and starring at her at work. In response to these
complaints, ARCO transferred Martineau to a non-supervisory role
and prohibited him from all non-work-related contact with Sweeney.
However, Martineau continued to call Sweeney at home, including one
call, which registered on Sweeney's caller identification at 11:48
p.m. She again complained to ARCO. Martineau gave excuses for the
calls, and ARCO gave Martineau the benefit of the doubt.
Nevertheless, he continued to call Sweeney and to visit her at
work.
By late 1996, ARCO terminated Martineau for violating company
policy and for violating ARCO's instructions not to contact
Sweeney. When Martineau appealed his termination to ARCO, he did
not claim he was fired because of his national origin; rather, he
2
accused ARCO of conspiring against him, and he accused the phone
company of falsifying Sweeney's telephone records.
Martineau claims that ARCO employees continually discriminated
against him because he is Canadian. Martineau suggests that in
1976 ARCO employees began making offensive comments regarding his
national origin, including calling him “dumb Canadian” and
“foreigner.” Although he filed numerous complaints with ARCO,
management ignored him. Martineau asserts the abuse became worse
when Kolodziej became his supervisor. Kolodziej apparently
demanded Martineau's green card and demanded to know why Martineau
had not become a U.S. citizen even though he had been in the United
States for 20 years. As for his relationship with Sweeney,
Martineau contends that she viewed him as a father figure who gave
her advice and provided loans to purchase a home. Sweeney then
conned Martineau out of this money. When Martineau demanded
reimbursement, Sweeney began to accuse him of harassment.
II. PROCEEDINGS AND REMOVAL
On June 11, 1997, Martineau sued ARCO and Sweeney in Texas
state court. He claimed ARCO discriminated against him because of
his Canadian national origin in violation of the Texas Commission
on Human Rights Act (“TCHRA”). He also alleged that Sweeney and
ARCO had defamed and intentionally inflicted emotional distress on
him. Both Martineau and Sweeney are Texas citizens. ARCO is a
Delaware Corporation with its principle place of business in
Pennsylvania. Thus complete diversity of citizenship did not exist
3
when Martineau initially filed the action.
28 U.S.C. § 1446 allows a defendant to remove a case to
federal court at any time, prior to the entry of judgment, when
complete diversity is found to exist pursuant to 28 U.S.C. § 1332.
28 U.S.C. § 1446(b), however, limits the right of removal - a
defendant cannot remove if more than a year has passed since the
commencement of the action.
In May 1998, almost a year after Martineau's June 11, 1997
filing of the action, he and Sweeney agreed to settle their
dispute. On May 11, 1998, Sweeney's counsel wrote Martineau's
counsel indicating that the “letter will memorialize our settlement
agreement” and instructing the attorney to sign and return the
letter “if it meets with your client's approval.” Martineau's
attorney signed and returned the letter and filed it with the court
on May 22, 1998. The letter listed specific terms of the
agreement, such as the exchange of money and property, and
suggested a manner and time of performance.
The May 11 letter provided that Martineau “will execute and
file with the court a Non-suit with prejudice as to all of his
claims” in reference to Sweeney. “In addition, Martineau will
exchange executed full and final releases of any and all claims
with Lisa Sweeney. This Non-suit with prejudice will be submitted
to the court for the Judge's signature on June 12, 1998.” Notably,
June 12, 1998 was one year and one day after the original action
was filed.
4
After the exchange and signature of the May 11 letter but
before that letter was filed with the court, Martineau's and
Sweeney's attorneys, on May 19, filed a different letter advising
the court only that they had reached a settlement “in principle.”
The second letter specified that the “settlement is being reduced
to writing for each party to review and sign.” The letter also
stated that “[o]nce the agreement is finalized and signed and the
exchanges made, [Martineau] will file a motion to non-suit Ms.
Sweeney with prejudice on or about June 12, 1998 at the earliest.”
Three days later, on May 22, Martineau's counsel filed the May
11 letter with the court. Learning of the filing, ARCO immediately
removed the case to federal district court. The district court
determined that it had subject matter jurisdiction. ARCO then
moved for summary judgment regarding Martineau's removed claims and
his supplemental slander claims. The district court concluded that
Martineau had failed to raise material fact issues concerning
essential elements of each of his claims. In granting ARCO's
summary judgment motion, the court concluded that (1) Martineau had
not raised factual issues as to a prima facie case of
discrimination; (2) his hostile environment claim was untimely; (3)
his intentional infliction of emotional distress claim had not
risen to a legally actionable level; and (4) he had raised no
issues of material fact as to the slander and defamation claims.
III. DISCUSSION
A. Removal
5
Martineau contends that because a legal settlement did not
exist between him and Sweeney removal was improper because complete
diversity did not exist among the parties. Martineau asks that we
remand the case because we lack subject matter jurisdiction. We
review a district court's determination of the propriety of removal
de novo. We impose upon the removing defendant, ARCO, the burden
of establishing the existence of subject matter jurisdiction.
Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 692 (5th
Cir. 1995).
Federal courts must look to state law to determine whether
removal is proper on the ground that the nondiverse defendant is no
longer effectively a party to the case. A case may be removed
based on any voluntary act of the plaintiff that eliminates that
nondiverse defendant from the case. Id. at 693. We must determine
(1) whether there was a binding settlement agreement between
Martineau and Sweeney on May 22, the date of removal, and (2) what
procedural safeguards must be taken in order for the agreement to
be enforceable and to “effectively eliminate” the nondiverse
defendant from the litigation.
Under Texas Rule of Civil Procedure 11, a settlement agreement
will be enforceable only if it is (1) in writing, (2) signed, and
(3) filed as part of the record. Tex. R. Civ. P. 11; Cherco
Properties, Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262,
265 (Tex. App. 1999). Texas case law further requires that, to be
enforceable, a settlement agreement must include all material terms
6
- even if performance is to be completed later. Padilla v.
LaFrance, 907 S.W.2d 454, 460 (Tex. 1995). Evidence of the
parties' intent to enter into a binding agreement is also required.
Premier Oil Refining Co. v. Bates, 367 S.W.2d 904, 907 (Tex. App.
1963).
The agreement between Sweeney and Martineau satisfies the
three elements of Texas Rule 11: (1) There was a writing - in the
form of two letters, one dated May 11 and the other dated May 19;
(2) both letters were signed by counsel for both parties; and (3)
both letters were filed with the court. The letters also contain
all material terms. The May 11 letter specifically described the
property Sweeney would return to Martineau; it mentioned and
provided sample copies of the letter of apology and the affidavit
she would provide; and specified the monetary settlement amount.
Martineau contends that these letters do not evidence the
parties intent to be bound by the agreement because necessary
conditions precedent had to occur before the agreement could become
final. Martineau argues that the agreement could only become final
when Sweeney provided the property and money to Martineau, and
wrote the letter of apology. Because these acts did not occur
within the one year period required by 28 U.S.C. § 1446(b), we
should remand this case to the Texas state court.
We find these arguments unpersuasive. First, merely because
an agreement contemplated future acts, such as the exchange of
property and money, does not make the agreement unenforceable.
7
Under Texas law, full performance is not required for an agreement
to be binding. Cherco Properties, Inc., 985 S.W.2d at 266 (noting
that time for performance is not a material term and its omission
does not render the agreement unenforceable); Padilla, 907 S.W.2d
at 460-61 (noting that alteration in mode of acceptance and
uncertainty regarding one term did not render agreement
unenforceable). In Cherco, a Texas Court of Appeals determined
that the settlement agreement was binding even though the agreement
contemplated even more future acts than the agreement in question
here. Cherco, 985 S.W.2d at 264.
Second, we see no evidence suggesting that the the parties did
not intend the May letters to be binding. Moreover, as a matter of
public policy, if the writing is clear and unambiguous, the court
should not look outside it. The purpose of the Texas Rule 11
writing requirement is to minimize disputes by allowing the court
to ascertain the terms of the agreement without resorting to oral
testimony. Id. at 265. Here the intent of the parties to be bound
by the agreement is obvious. The May 11 letter states that it
“memorialize[s] our settlement agreement” and that signature to the
letter would signify agreement to its terms. In addition, the
terms of the letter are specific, listing the particular items of
personal property, identifying the monetary amount, and providing
specimens of a letter of apology and an affidavit. The May 19
letter to the court, does not cast this intent in doubt, it only
serves to inform the court of the parties intent to settle.
8
Even though we have determined that the parties completed all
of the elements for a binding agreement, we must now determine
whether the agreement is still revokable and thus non-binding
absent a formal court order. In Vasquez, we determined that Texas
law permitted either party to unilaterally revoke consent to a
settlement agreement until the court has rendered judgment by
officially announcing its decision in open court or filing a
written order with the clerk. Vasquez, 56 F.3d at 693. Martineau
does not argue that he revoked consent. Martineau claims that
because the court did not render judgment within the one-year
period required by Section 1446(b), the parties never reached a
binding settlement agreement.
Texas law has changed on this question, and we are no longer
bound by Vasquez. FDIC v. Abraham, 137 F.3d 264, 269 (5th Cir.
1998) (noting an exception to strict stare decisis rule for a
subsequent state court decision which makes this court's decision
clearly wrong). The Texas Supreme Court in Padilla, 907 S.W.2d at
460, decided a few months after Vasquez,1 clarified that once a
settlement agreement containing all material terms is written and
signed both parties are bound by the agreement even if the court
has not yet ruled on it. Therefore, we determine that the
agreement is binding and enforceable.
1
Padilla was decided on May 25, 1995, but the decision was not
final until October 5, 1995, when rehearing was overruled. Vasquez
was decided on July 3, 1995.
9
Finally we must ask whether the settlement agreement
effectively eliminated Sweeney as a nondiverse defendant and
permitted removal. Under Vasquez, “a case may be removed based on
any voluntary act of the plaintiff that effectively eliminates the
nondiverse defendant from the case.” 56 F.3d at 693.
Martineau contends that he had no intention of abandoning the
lawsuit against Sweeney until the parties completed performance and
exchanged formal releases. However, we find it clear that the
drafting, signing, and filing of letters regarding settlement were
voluntary acts by Martineau. Moreover, even if he did not intend
to abandon the lawsuit against Sweeney, it is not clear what
further litigation Martineau could have prosecuted against Sweeney
given the fact that they had a binding and enforceable settlement
agreement. We hold that Martineau intended to abandon litigation
against Sweeney, and he effectively eliminated the nondiverse
defendant.
Martineau argues for the first time in rebuttal that we lack
subject matter jurisdiction because Sweeney's and ARCO's cross-
claims regarding indemnification destroy complete diversity. We
note, however, that this court has diversity jurisdiction over
Martineau's primary claim against ARCO, and we have ancillary
jurisdiction over the cross-claims. Zurn Indus., Inc. v. Acton
Constr. Co., Inc., 847 F.2d 234, 236-37 (5th Cir. 1988). We also
have diversity jurisdiction over these cross-claims because ARCO is
a corporate citizen of Delaware and Pennsylvania, while Sweeney is
10
a Texas citizen. Finally, because we hold that the settlement
agreement was enforceable and removal proper, we do not address
ARCO's fraudulent retention theory.
B. Summary Judgment
1. Standard of Review
Martineau contends that he has raised issues of material fact
and the district court erred in granting ARCO's motion for summary
judgment. We review a grant of summary judgment de novo, viewing
the facts and inferences in the light most favorable to the party
opposing the motion. See Hall v. Gillman, Inc., 81 F.3d 35, 36-37
(5th Cir. 1996). Summary judgment is appropriate if the record
discloses “that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c); accord Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986).
2. Discrimination Claim
Martineau sues ARCO for discrimination, based on national
origin, under the TCHRA. When applying the THCRA, we look to
analogous federal law contained in 42 U.S.C. § 2000e (“Title VII”).
Leatherwood v. Houston Post Co., 59 F.3d 533, 536 n.5 (5th Cir.
1995). To make a prima facie claim of discrimination under Title
VII, a plaintiff must be (1) a member of a protected class; (2)
qualified for the position he held; (3) discharged from that
position; and (4) replaced by a person who is not a member of that
protected class. If such a case is made, the defendant must
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articulate a non-discriminatory reason for its actions. If this is
done, the plaintiff must then prove (1) that the defendant's
proffered reasons were false, and (2) that the real reason for his
discharge was because he was a member of a protected class. St.
Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 506-8 (1993).
The district court held that Martineau made a prima facie case
of discrimination. It also correctly held that ARCO established a
legitimate, nondiscriminatory reason for Martineau's discharge,
specifically that despite warnings, counseling and many second
chances, Martineau continued to violate ARCO instructions regarding
his relationship with Sweeney. Martineau has offered no evidence
demonstrating fact questions concerning whether ARCO's proffered
reasons for his termination were false. Martineau contends that
ARCO discriminated against him and other employees, but he offers
no evidence to dispute the fact that he was fired for no reason
other than insubordination.
3. Hostile Work Environment Claim
Martineau argues that the district court erred in determining
that his hostile work environment claim was untimely. Title VII
(or, by inference, a TCHRA action) requires the plaintiff to file
an EEOC charge within 180 days after the alleged discriminatory
incident. 42 U.S.C. § 2000e-5(e)(1). As the district court noted,
A Title VII hostile work environment claim may be based on claims
that “could reasonably be expected to grow out of the initial
charges of discrimination.” Dollis v. Rubin, 77 F.3d 777, 781 (5th
12
Cir. 1995). Martineau cited his 1996 termination as falling within
the 180-day period. The district court, however, correctly noted
that his termination did not qualify as an act within the time
period because the termination related to disparate treatment not
harassing conduct.
Martineau claims that the district court erred because it
failed to consider the hostile work environment as a continuing
violation. We have noted that if the unlawful employment practice
manifests itself over a period of time the plaintiff is then
required to show a series of acts, one of which falls within the
300-day limitations period. Berry v. Board of Supervisors of
L.S.U., 715 F.2d 971, 979 (5th Cir. 1983).
First, Martineau apparently failed to raise the continuing
violation exception before the district court thereby waiving it on
appeal. Vaughner v. Pulito, 804 F.2d 873, 877 n.2 (5th Cir. 1986)
(noting that failure to assert a legal reason why summary judgment
should not be granted is waived if later raised on appeal). In
addition, the continuing violation theory requires the same type of
discriminatory acts to occur both inside and outside the
limitations period. Berry, 715 F.2d at 981 (holding that the
alleged acts must involve the same type of discrimination).
Martineau still does not offer a valid connection between the acts
suggesting a hostile work environment and his termination which
dealt with disparate treatment.
4. Intentional Infliction of Emotional Distress
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Martineau contends that the district court erred when
concluding that Martineau had not alleged facts sufficient to
sustain his summary judgment burden. In order to recover for
intentional infliction of emotional distress under Texas law, a
plaintiff must prove that (1) the defendant acted intentionally or
recklessly; (2) defendant's conduct was extreme and outrageous; (3)
the defendant's actions caused the plaintiff emotional distress;
and (4) the resulting emotional distress was severe. Hirras v.
National R.R. Passenger Corp., 95 F.3d 396, 400 (5th Cir. 1996).
Under Texas law ordinary employment disputes are not adequate for
intentional infliction claims. Johnson v. Merrell Dow
Pharmaceuticals, Inc., 965 F.2d 31, 33-34 (5th Cir. 1992). An
employer's conduct rises to the level of extreme and outrageous
conduct in only the most unusual cases. Prunty v. Arkansas
Freightways, Inc., 16 F.3d 649, 654 (5th Cir. 1994).
The district court determined that Martineau's allegations did
not rise to such extreme conduct, and Martineau provides no
evidence that ARCO's conduct was extreme and outrageous. In
addition, intentional infliction of emotional distress claims are
not covered by the Texas Survival Statute, Tex. Civ. Prac. & Rem.
Code Ann. § 71.021, and, therefore, the claim does not survive
Martineau's death. Plumley v. Landmark Chevrolet, Inc., 122 F.3d
308, 311 (5th Cir. 1997).
4. Defamation and Slander Claims
First Martineau contends that his supervisor, Kolodziej,
14
defamed him on four occasions. Martineau alleges that (1)
Kolodziej said that Martineau had “overreacted” to his performance
evaluation; (2) Kolodziej denied asking to see Martineau's green
card; (3) Kolodziej told Martineau that he was fired for sexual
harassment; and (4) Kolodziej said that Martineau was “insane,
delusional and irrational.” For the reasons discussed by the
district court, we hold that these allegations do not raise issues
of material fact to support these defamation claims. Absent these
underlying issues of material fact, Martineau is legally unable to
show that ARCO should be held liable for ratifying these statements
by Kolodziej.
Martineau also asserts that Kolodziej's statements to another
ARCO employee that Martineau was “insane, delusional and
irrational” amounted to slander per se. As the district court
noted, “[s]tatements are slanderous per se if they are so obviously
harmful to the person harmed that no proof of their injurious
effect is necessary to make them actionable. Matters characterized
as slanderous per se are statements that affect a person
injuriously in his office, profession, or occupation.” Simmons v.
Ware, 920 S.W.2d 438, 451 (Tex. App. 1996). We conclude that none
of the alleged statements fall within the category of per se
slander.
In the alternative, Martineau contends that ARCO is liable
under a theory of self-defamation because he had to repeat
Kolodziej's defamatory statements to prospective employers which
15
caused further injury. Martineau's self-defamation theory fails
for two reasons. First, the record is unclear as to whether
Martineau actually mentioned these statements to potential
employers.
Second, Martineau's legal reasoning is unsound. Although the
Texas Supreme Court has never adopted this theory, Martineau cites
two intermediate Texas appellate courts which held that an employer
may be liable for the employee's own publication of the employer's
defamatory statements under certain circumstances. First Bank of
Corpus Christi v. Ake, 606 S.W.2d 696, 701 (Tex. Civ. App. 1980);
Chasewood Constr. Co. v. Rico, 696 S.W.2d 439, 446 (Tex. App.
1985). Both cases rely comment m on Section 577 of the Restatement
(Second) of Torts. The Restatement requires the defamed person to
show that when he published the remark, (1) he was unaware of the
defamatory nature of the statement, and (2) circumstances indicated
that the communication to the third party would be likely.
Martineau contends that the district court erred in finding he
had not shown a lack of awareness of the defamatory statements
because neither Ake nor Rico relied on the first Restatement
requirement. Nevertheless the district court correctly notes that
the first requirement is essential because otherwise “the defamed
party is under no duty to mitigate its damages by refraining to
self-publish known defamatory statements.” Doe v. Smithkline
Beecham Corp., 855 S.W.2d 248, 259 (Tex. App. 1993), aff'd as
modified on other grounds, 903 S.W.2d 347, 356 (Tex. 1995).
16
For these reasons, we affirm.
AFFIRMED.
17