McNeil v. BMC Software Inc.

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 15, 2009
No. 08-20290 Charles R. Fulbruge III
Summary Calendar Clerk
KAREN D. MCNEIL
Plaintiff-Appellant
v.
BMC SOFTWARE INC.
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:06-CV-2492
Before JOLLY, BENAVIDES, and HAYNES, Circuit Judges.
PER CURIAM:*
Appellant Karen D. McNeil challenges the district court’s failure to allow
her to proceed to a jury verdict on her claim for hostile work environment under
42 U.S.C. § 1981 (1991), and the court’s denial of her motion for attorney’s fees.
Appellee BMC Software re-urges its previously unsuccessful motion to dismiss
this appeal. Finding jurisdiction, we again deny BMC’s motion to dismiss, and
AFFIRM the judgment of the district court.
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. 08-20290
McNeil began working at BMC Software as the company’s Director of
Global Staffing in September 2004. Under a letter agreement setting forth the
terms of her employment, McNeil received an immediate sign-on bonus of
$35,000, and an additional $20,000 bonus was to be paid after one year of
employment. The contract obligated McNeil to reimburse BMC the entire bonus
if her employment was “terminated voluntarily or for cause within twelve
months,” and provided that she was entitled to the second installment if she left
BMC “for any reason outside of voluntary or for cause termination prior to the
first 12 months” of employment.
By late 2004 and early 2005, the working relationship between McNeil, an
African-American female, and BMC Senior Vice President of Administration
Jerome Adams (“Adams”), an African-American male, had degenerated. It is
undisputed that Adams was unhappy with McNeil’s job performance, and
McNeil felt intimidated, harassed, humiliated, and threatened by Adams’s
abusive conduct. McNeil concluded that the harsh treatment was due to her
race. Finally, after a heated meeting between McNeil and Adams on February
17, 2005, McNeil informed BMC that she was resigning. McNeil’s direct
supervisor, Todd Reeves, asked McNeil to reconsider her decision, and arranged
for her to remain at the company until March 31, 2005, so she would be eligible
for a quarterly bonus. At her March 17, 2005 exit interview, BMC presented
McNeil a separation agreement by which she would retain the $35,000 bonus
payment and relocation costs. McNeil refused to sign the agreement, and claims
to have orally demanded payment of the remaining sign-on bonus at that
meeting. Her resignation was effective March 31, 2005, and she filed suit on
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No. 08-20290
July 27, 2006, alleging violations of Title VII, 42 U.S.C. § 1981,1 and breach of
contract. BMC counter-sued for breach of the same letter agreement.
Following an oftentimes contentious period of discovery, the district court
granted summary judgment as to McNeil’s untimely Title VII claims and BMC’s
claim of breach of contract, and denied summary judgment on McNeil’s § 1981
claims and her breach of contract action. The court subsequently heard oral
argument on a motion to reconsider its denial of BMC’s motion for summary
judgment, and indicated that it was a “close question” as to whether summary
judgment was appropriate for McNeil’s constructive discharge claim. The
motion for summary judgment was again denied. After voir dire, but before the
trial began, BMC sought to clarify the issues in the case, since McNeil implied
that she had pled a claim for hostile work environment under § 1981. McNeil
urged that a hostile work environment claim was contained within the
complaint, and the district court stated, “I don’t want you mentioning that until
we’ve resolved that issue. I didn’t see it . . . . Don’t mention it in the opening
statements.”
Despite the district court’s belief that the hostile work environment claim
had not been sufficiently pled under Rule 8(a) of the Federal Rules of Civil
Procedure, the court did not formally grant dismissal of a hostile work
environment claim or otherwise strike references to that claim, other than by
directing the parties not to mention it in opening. McNeil has not argued that
the district court prevented her from setting forth all evidence to establish the
allegations in her complaint, and has pointed to no proffer of items that were
withheld from the jury. Before the district court delivered the jury charge, BMC
1
The parties disagree as to whether McNeil alleged both constructive discharge and
hostile work environment under § 1981. In her complaint, McNeil stated that Adams “became
more relentless in his agenda to create a hostile work environment,” which made conditions
so intolerable that McNeil was forced to resign “rather than subject herself to the hostile work
environment.”
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No. 08-20290
inquired, “at some time could we get an estimate on when we’ll decide what
causes of action are in this case?” McNeil argued that the jury should be
instructed on the elements of a hostile work environment claim, because it was
“almost like a lesser included offense” within her broader constructive discharge
case. The district court, already concerned that any hostile work environment
claim under § 1981 had not been properly pled, concluded that there was
insufficient evidence, as a matter of law, to establish a hostile work
environment. Accordingly, the district court denied McNeil’s request to include
an instruction and jury question about hostile work environment.
The jury returned a split verdict, finding BMC responsible for breaching
McNeil’s employment contract, but finding that there was no constructive
discharge. The district court considered BMC’s post-verdict motion for judgment
non obstante veredicto (“JNOV”) and motion for remittitur, and McNeil’s motion
for judgment as a matter of law. On January 22, 2008, the district court
granted, in part, BMC’s JNOV motion, granted remittitur to reduce the jury
award to $24,269.74, and denied McNeil’s motion for judgment as a matter of
law. BMC has not appealed these rulings.
On January 29, 2008, McNeil filed an application for attorney’s fees for
prevailing on her breach of contract action and defeating BMC’s cross-claim for
breach of contract. The court entered its initial final judgment on February 12,
2008, without ruling on attorney’s fees, but McNeil filed a motion to amend the
final judgment to include attorney’s fees on February 14, 2008. The district
court heard argument on March 6, 2008, and orally granted a motion to continue
the deadline for appeal by twenty days. The electronic docket sheet for that day
reflects the following minute entry: “Time to file a Notice of Appeal is extended
by 20 days.” The deadline was extended to April 15, 2008 by a subsequent
written order dated March 26, 2008, and the district court’s amended final
judgment was entered on April 3, 2008. McNeil filed a motion for
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No. 08-20290
reconsideration on April 14, 2008, and, on April 15, the court further extended
the appellate deadline thirty days from its disposal of the motion to reconsider.
The motion to reconsider was denied on May 2, 2008, and McNeil filed her notice
of appeal the same day.
A. Motion to Dismiss
BMC reurges its motion to dismiss this appeal, arguing that McNeil’s
notice of appeal was tardy for a number of reasons. This same panel previously
denied BMC’s motion to dismiss and awarded costs against BMC. Undeterred,
BMC continues to challenge our jurisdiction; we continue to find we have
jurisdiction and reaffirm our prior order denying BMC’s motion to dismiss. We
decline to award further costs to McNeil on this matter.
B. Hostile Work Environment Claim
McNeil argues that the district court erred by dismissing her hostile work
environment claim or, alternatively, by granting judgment as a matter of law
following the evidence adduced at trial. McNeil contends that this claim was
dismissed because the district court stated that she had not pled it. However,
there was no pre-trial ruling by the district court dismissing a claim2 or
preventing McNeil from presenting all relevant evidence pertaining to any
hostile work environment allegation. She points to no offer of proof of evidence
that would have been adduced at trial. Whether or not she properly pled the
claim under Rule 8(a) of the Federal Rules of Civil Procedure, the district court
determined “I haven’t seen hostile work environment in this case, I really
haven’t,” and denied her request for a jury instruction and question on the issue.
In any case, McNeil urges that evidence of a hostile workplace was a “lesser
2
McNeil’s record citation for the proposition that her claim was dismissed under Rule
12b(6) is to the court’s post-verdict memorandum and order stating that it “ruled that Plaintiff
could not continue with her claim for ‘hostile work environment’ on October 31, 2007,” which
is the date when she rested her case-in-chief at trial. McNeil’s contention is, at best,
disingenuous; at worst, it is deliberately misleading.
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No. 08-20290
included offense for constructive discharge,” so the jury necessarily heard all
evidence regarding that claim.3 We conclude that the district court did not
dismiss her claim under Rule 12(b)(6); thus, we view the district court’s action
in the same light as a grant of judgment as a matter of law under Federal Rule
of Civil Procedure 50(a).
We consider de novo the district court’s ruling on a Rule 50(a) motion for
judgment as a matter of law. Resolution Trust Corp. v. Cramer, 6 F.3d 1102,
1109 (5th Cir. 1993).
Under this standard, we view all of the evidence “in the light and
with all reasonable inferences most favorable to the party opposed
to the motion.” A district court may not grant a Rule 50(a) motion
“unless a party has been fully heard on an issue and there is no
legally sufficient evidentiary basis for a reasonable jury to find for
that party on that issue.”
Hagan v. Echostar Satellite, L.L.C., 529 F.3d 617, 622 (5th Cir. 2008) (citations
omitted); see also Rubenstein v. Adm’rs of the Tulane Educ. Fund, 218 F.3d 392,
401 (5th Cir. 2000) (“If the facts and inferences point so strongly and
overwhelmingly in favor of one party that the Court believes that reasonable
men could not arrive at a contrary verdict, granting [judgment as a matter of
law] is proper.”) (citations omitted).
Rule 10 of the Federal Rules of Appellate Procedure requires an appellant
urging that a finding or conclusion is unsupported by the evidence to “include in
the record a transcript of all evidence relevant to that finding or conclusion.”
FED. R. APP. P. 10(b)(2). This Court cannot conduct meaningful appellate review
of a district court’s decision to grant judgment as a matter of law without the
3
We have not held, as urged by McNeil, that a hostile work environment claim is “a
lesser included offense for constructive discharge.” Instead, we have explained that
constructive discharge “requires a ‘greater severity or pervasiveness of harassment than [is]
required to prove a hostile environment claim’”. Benningfield v. City of Houston, 157 F.3d 369,
378 (5th Cir. 1998) (quoting Landgraf v. USI Film Prods., 968 F.2d 427, 430 (5th Cir. 1992)).
6
No. 08-20290
testimony that would support or refute that determination. See Richardson v.
Henry, 902 F.2d 414, 415-16 (5th Cir. 1990) (dismissing a challenge to the
sufficiency of the evidence pursuant to Rule 10(b)(2)); Woods v. Thieret, 5 F.3d
244, 245 (7th Cir. 1993) (dismissing appeal of district court’s denial of a Rule
50(b) motion because plaintiff failed to include a trial transcript in the appellate
record). Here, McNeil was obligated to point to some trial testimony that would
provide a legally sufficient evidentiary basis to support her claims for hostile
work environment; however, she provides no citations whatsoever to any trial
testimony in the appellate record.4 Thus, her challenge is waived. Id.5
Whether or not the evidence McNeil presented at trial was sufficient to
survive a Rule 50(a) motion – a question we do not reach because of the state of
the appellate record – McNeil’s primary challenge appears instead to be that the
district court was inconsistent in granting Rule 50 judgment on her hostile work
environment claim while allowing the jury to consider her allegations of
constructive discharge. It is of no consequence that the district court permitted
the jury to consider a claim requiring evidence of more pervasive or severe
harassment than the claim that was barred. Under Rule 50, there either is a
legally sufficient basis for a reasonable jury to find for a party on a particular
issue, or there is not. See FED. R. CIV. P. 50(a). Here, McNeil has failed to show
4
The only “testimonial” quotations in McNeil’s appellate brief come from affidavits and
other evidence filed as part of the summary judgment motion process. McNeil had the burden
to come forward at trial with evidence to support her claim. Affidavits and depositions not
admitted at trial cannot provide the evidence lacking from the trial or substitute for a trial
transcript.
5
Even if we were to consider the pre-trial affidavits and depositions discussed in her
appellate brief as if they were contained in a trial transcript properly presented to us, which
we do not, McNeil’s claim would still fail. McNeil points to examples of boorish behavior by
Adams. However, among other failings, McNeil fails to point to any competent evidence that
Adams’s actions were motivated by race. See Ramsey v. Henderson, 286 F.3d 264, 269-70 (5th
Cir. 2002); see also Brown v. CSC Logic, Inc., 82 F.3d 651, 658 (5th Cir. 1996) (“The fact that
the actor involved in both employment decisions is also a member of the protected class only
enhances the inference” that age-based animus was not the motive behind poor treatment).
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No. 08-20290
such a basis. Although the district court could have granted judgment as to
McNeil’s constructive discharge claim, her hostile environment claim does not
thereby become valid. Accordingly, the district court’s grant of judgment as a
matter of law was not erroneous, and is therefore AFFIRMED.
C. Attorney’s Fees
McNeil also argues on appeal that, as the prevailing party in a breach of
contract suit, she was entitled to an award of attorney’s fees under Texas law.
The district court concluded that McNeil failed to demonstrate she was entitled
to her attorney’s fees. We review the district court’s award of attorney’s fees for
abuse of discretion, although conclusions of law underlying the award are
reviewed de novo. Volk v. Gonzalez, 262 F.3d 528, 534 (5th Cir. 2001).
Chapter 38 of the Texas Civil Practice and Remedies Code permits a
prevailing party to recover attorney’s fees and costs in a breach of contract case.
TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (Vernon 1997 & Supp. 2005). To
recover attorney’s fees under Chapter 38:
(1) the claimant must be represented by an attorney; (2) the
claimant must present the claim to the opposing party or to a duly
authorized agent of the opposing party; and (3) payment for the just
amount owed must not have been tendered before the expiration of
the 30th day after the claim is presented.”
TEX. CIV. PRAC. & REM. CODE ANN. § 38.002 (1985). The statute is to be “liberally
construed to promote its underlying purposes. TEX. CIV. PRAC. & REM. CODE
ANN. § 38.005 (1985); Jones v. Kelley, 614 S.W.2d 95, 100 (Tex. 1981).
There is no dispute that McNeil was represented by an attorney and that
BMC did not tender payment of the remainder of McNeil’s sign-on bonus. The
only issues presented on appeal are (1) whether McNeil presented her claim to
BMC and, (2) if not, whether she is still entitled to her attorney’s fees on the
basis of successfully defending against BMC’s contract counterclaim.
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No. 08-20290
1. Presentment
Under § 38.002, presentment is required to permit a party an opportunity
to pay the claim before incurring the obligation for attorney’s fees. Brainard v.
Trinity Universal Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006). No particular form
of presentment is required; even an informal presentment is sufficient. See
Jones, 614 S.W.2d at 100.
Here, McNeil asserts that she presented her claim on or about March 17,
2005, the day of her exit interview. According to McNeil’s sworn affidavit, she
demanded the remainder of her sign-on bonus during her meeting with Human
Resources Director Diana Root.6 She claims that while BMC did not state that
it would not pay the sign-on bonus, it did provide McNeil a letter stating its
position that McNeil had herself breached the sign-on bonus and relocation
agreement. McNeil contends that this exchange constitutes sufficient
presentment under Texas law.7
Under the plain language of § 38.002, McNeil could not have presented her
breach of contract claim on March 17, 2005, because at that time there was no
“just amount owed” by BMC. Accordingly, there was no “claim” to present. “A
breach of contract does not occur until ‘a party fails or refuses to do something
he has promised to do.’” Am. Int’l Specialty Lines Ins. Co. v. Res-Care Inc., 529
F.3d 649, 666 (5th Cir. 2008) (quoting Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex.
App.–Houston [1st Dist.] 2003, pet. denied)). The specific contractual claim for
which BMC has been held liable was nonpayment of the second installment of
McNeil’s sign-on bonus, an obligation which was not due any earlier than the
6
McNeil also alleges that she had discussions about her bonus after this date; however,
the citation she gives is to an e-mail filed as part of the pre-trial proceedings regarding a “Q4”
performance bonus, not the $20,000 “sign-on bonus.”
7
McNeil’s only evidence on this point is a post-trial affidavit in which she recounts the
March 17 conversation.
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No. 08-20290
date McNeil’s resignation was effective and BMC paid McNeil’s final paycheck
on March 31, 2005. Because McNeil simply asked that BMC meet its future
contractual obligation, there was on March 17 no claim for a just amount owed
and, therefore, no presentment under § 38.002. See Brainard, 216 S.W.3d at
818.
McNeil argues that BMC undoubtedly was aware of McNeil’s claim as a
result of the filing of this lawsuit, but still chose not to pay it. However, the
filing of a lawsuit does not establish presentment under Texas law. Jim Howe
Homes, Inc. v. Rogers, 818 S.W.2d 901, 904 n.3 (Tex. App.–Austin 1991, no writ).
McNeil failed to meet the Texas presentment requirement and, as a result, is not
entitled to her attorney’s fees incurred in the prosecution of her breach of
contract claim.
2. Successful Defense of Counterclaim
McNeil further argues that, independent of being entitled to attorney’s
fees for the successful prosecution of her contract claim, she is entitled to
attorney’s fees for the successful defense of BMC’s counterclaim. McNeil
concedes that a defendant is not entitled to attorney’s fees for a successful
defense of a breach of contract action, but she cites De La Rosa v. Kaples, 812
S.W.2d 432, 434 (Tex. App.–San Antonio 1991, writ denied), overruled on other
grounds, Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997), for an
exception to that general rule where the matters encompassed by a claim and a
counterclaim are indistinguishable. In De La Rosa, the Texas Court of Appeals
in San Antonio held:
Although Article 2226 and § 38.001 do not provide for attorney’s fees
for the pure defense of a claim, “there is an exception to the general
rule of law for cases in which the matters encompassed by the claim
and counterclaim are indistinguishable, where they arose from the
same transactions, where the same facts required to prosecute the
claim are required to defend against the counterclaim”; under these
circumstances, attorney’s fees are appropriate.
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No. 08-20290
812 S.W.2d at 434 (quoting Veale v. Rose, 657 S.W.2d 834, 841 (Tex.
App.–Corpus Christi 1983, writ ref’d n.r.e.).
The quote from De La Rosa addresses a different issue than that presented
here; that quote considers whether a successful party to a breach of contract case
is required to segregate his attorney’s fees incurred in the prosecution of his
claim from those incurred in defense of an intertwined counterclaim. See Veale,
657 S.W.2d at 841. In Veale, which was quoted by De La Rosa, plaintiffs and
defendants sued one another for breach of contract arising out of the same facts.
Veale, 657 S.W.2d at 836. The plaintiffs prevailed on their breach of contract
claim, and in proving attorney’s fees, did not segregate the fees related to
prosecution of their claim from the fees related to the defendants’ claim. Id. at
841. Defendants argued that awarding attorney’s fees was unlawful because a
party cannot recover attorney’s fees for the pure defense of a claim. Id. The
court of appeals set out the above-quoted language and concluded that because
the claim and counterclaim were interrelated, segregation was unnecessary and
the award of attorney’s fees for both prosecution of the claim and defense of the
counterclaim was proper. Id.; see also G.R.A.V.I.T.Y. Enters., Inc. v. Reece
Supply Co., 177 S.W.3d 537, 551 (Tex. App.–Dallas 2005, no pet.) (De La Rosa
“permits recovery of attorney’s fees for defense of a claim when (1) a party is
entitled to attorney’s fees for the prosecution of a claim and (2) the claim and
counterclaim are so interrelated that segregation of fees incurred in prosecution
of the claim and defense of the counterclaim is not necessary.”) As discussed
above, McNeil failed to show that she was entitled to attorney’s fees for
prosecution of her breach of contract claim, so the potential exception permitting
recovery of attorney’s fees for defense of an intertwined counterclaim does not
apply. See id.8
8
We note that, after these decisions, the Texas Supreme Court decided a case under
a different fee-shifting statute. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex.
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No. 08-20290
Accordingly, McNeil is not entitled to attorney’s fees, and the district
court’s order is AFFIRMED.
2006). The court held that segregation of fees between recoverable and unrecoverable claims
is required. Id. It explained that intertwined facts are not enough to avoid this requirement:
“it is only when discrete legal services advance both a recoverable and unrecoverable claim
that they are so intertwined that they need not be segregated.” Id. at 313-14. Because we
conclude that no fees are recoverable, we need not reach the issue of whether segregation
would have been required in this case between prosecution of the breach of contract claim and
defense of the breach of contract counterclaim.
12