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Ackley v. Honeywell International Inc

United States District Court, W.D. Louisiana, Lake Charles Division

January 8, 2019





         Before the court are cross-motions for summary judgment filed by plaintiff Keith A. Ackley [doc. 72] and defendant Honeywell International, Inc. (“Honeywell”) [doc. 66]. This matter has been referred to the undersigned for review, report, and recommendation in accordance with the provisions of 28 U.S.C. § 636.



          This action arises from breach of contract and detrimental reliance claims brought by Ackley against his former employer, Honeywell, and relating to Honeywell's cancellation of stock options granted to Ackley. Doc. 1, att. 1.

         From 1993 to 2009, Ackley was employed at Honeywell's office in Lake Charles, Louisiana, as an account manager. Doc. 66, att. 3, pp. 4-8. In July 2001 Ackley expressed job-related frustrations to his manager, Guy Grumbles, in a phone call and mentioned to him that he was considering looking for work elsewhere. Id. at 13-15. According to Ackley, Grumbles reassured him and said he would see what he could do. Id. at 15-16. Grumbles followed up a couple of weeks later, again by phone, and told Ackley that Honeywell wanted to offer him stock options in the amount of 1, 000 shares in exchange for his continued employment. Id. at 16-21. Ackley accepted, though he admitted later that he had only a basic understanding of stock options and that he never consulted anyone to learn more about them. Id. at 18-23.

         Honeywell alleges that it then issued a document titled “Special Honeywell Stock Option Grant” (“Option Grant”) and an accompanying stock option agreement (“Option Agreement”), pursuant to a 1993 stock plan (“Stock Plan”) sponsored by Honeywell for its employees, to 2001 stock option recipients. See doc. 66, att. 7 (Option Grant); doc. 66, att. 8 (Option Agreement); doc. 66, att. 9 (Option Grant Process). The Option Grant provided that the option would vest in stages over the next three years. Doc. 66, att. 7. It pointed Ackley to investment firm Salomon Smith Barney for information on his stock options. Id. It also stated that, if Ackley left the company due to an involuntary termination, he must exercise any vested option by its normal expiration date or within three years of his separation, whichever was sooner. Id. Finally, the Option Grant instructed the recipient to read “[t]he enclosed Option Agreement” for “important information about your stock option grant, ” but specified that the recipient should keep the document for future reference and that a signed copy did not need to be returned. Id.

         The Option Agreement provided that the option must be exercised by July 15, 2011. Doc. 66, att. 8; see doc. 66, att. 2, p. 4, ¶ 17 & n. 18. Ackley, however, maintains that Honeywell never provided the Agreement or a copy thereof to him. Doc. 72, att. 1, p. 1, ¶ 1 (Ackley statement of uncontested material facts); see doc. 66, att. 3, pp. 26-27 (Ackley deposition). Honeywell disputes this and notes that its records show that Option Agreements were distributed to recipients of 2001 option awards, a group which would have included Ackley, on or about July 27, 2001. Doc. 66, atts. 6 & 9; see doc. 80, att. 2, p. 1 (Honeywell response).

         Ackley did not attempt to exercise his stock options during the time he was employed at Honeywell. From July 2001 until some time before March or April 2012, he received periodic statements from Honeywell about his stock options which stated that he had 1, 000 shares outstanding and describing the hypothetical pre-tax gain of those shares. Doc. 1, att. 1, p. 5, ¶ 9; doc. 66, att. 3, pp. 33-34. He remained employed at Honeywell until he was involuntarily terminated on April 29, 2009, as part of a reduction in force. Doc. 66, att. 3, pp. 8-9; doc. 66, att. 12. On that date Ackley was provided with an employment separation agreement and release (“Separation Agreement”), which he signed on June 10, 2009. Doc. 66, att. 12, pp. 1-7. That agreement specified that Ackley released all claims against Honeywell arising out of his employment or the termination thereof, including those for incentive compensation awards. Id. at 3. A four-page exhibit to the agreement provided a summary of employee benefits and noted that stock options must be exercised within “the lesser of (i) three years from [his] Termination of Employment Date, or (ii) the full remaining option term.” Id. at 54.

         In late March 2012, after noticing that he had not received any documentation relating to his stock options in some time, Ackley first made inquiries to Honeywell in an effort to exercise his stock options by calling Honeywell's human resources line. Doc. 64, p. 3, ¶ 10; doc. 66, att. 3, pp. 31-32. Honeywell compensation analyst Steven Foglyano responded via phone and then followed up via email on April 9, 2012. Doc. 66, att. 3, pp. 32-33; doc. 66, att. 13. He informed Ackley that the stock options had expired on July 15, 2011, pursuant to the Option Agreement.[1]Doc. 66, att. 13.

         Ackley states that he continued pursuing his stock options until his efforts were finally rejected by Honeywell in a letter dated October 31, 2014. Doc. 64, pp. 4-6, ¶¶ 14-17. Ackley then filed suit against Honeywell in the 14th Judicial District Court, Calcasieu Parish, Louisiana, on March 10, 2015, seeking to recover based on claims of breach of contract and detrimental reliance. Doc. 1, att. 1, pp. 4-10. Honeywell removed the suit to this court on the basis of federal diversity jurisdiction, 28 U.S.C. § 1332. Doc. 1. Since that time, Ackley has twice amended his complaint and Honeywell has also filed a counterclaim alleging that Ackley breached his separation agreement by maintaining the instant suit. Docs. 16, 27, 64. The matter is now before the court on cross-motions for summary judgment, which have been fully briefed and are ripe for review.


         Summary Judgment Standard

         A court should grant a motion for summary judgment when the movant shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. The party moving for summary judgment is initially responsible for identifying portions of pleadings and discovery that show the lack of a genuine issue of material fact. Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995). The court must deny the motion for summary judgment if the movant fails to meet this burden. Id.

         If the movant makes this showing, however, the burden then shifts to the non-moving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505, 2511 (1986) (quotations omitted). This requires more than mere allegations or denials of the adverse party's pleadings. Instead, the nonmovant must submit “significant probative evidence” in support of his claim. State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 106 S.Ct. at 2511 (citations omitted).

         A court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 120 S.Ct. 2097, 2110 (2000). The court is also required to view all evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Clift v. Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material fact exists if a ...

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