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Landry v. Posigen, Inc.

United States District Court, E.D. Louisiana

April 4, 2019

LOGAN LANDRY, ET AL.
v.
POSIGEN, INC., ET AL.

         SECTION “B” (5)

          ORDER AND REASONS

         Defendants PosiGen, Inc. et al filed a motion for summary judgment on liability. Rec. Doc. 94. Plaintiffs filed a response in opposition. Rec. Doc. 220. Defendants sought, and were granted, leave to file a reply. Rec. Doc. 228.

         For the reasons discussed below, IT IS ORDERED that defendants' motion for summary judgment is GRANTED in part and plaintiffs' federal claims are DISMISSED.

         IT IS FURTHER ORDERED that plaintiffs' remaining state law claims are REMANDED to state court for adjudication, including those sought to be urged by recent late amendment.[1]

         IT IS FURTHER ORDERED that plaintiffs' motion to expedite hearing (Rec Doc. 236) is GRANTED. The magistrate judge's denial of plaintiffs' motion for leave to amend complaint (Rec. Doc. 230) is AFFIRMED, and plaintiffs' objections to same (Rec. Doc. 235) are OVERRULED.

         IT IS FURTHER ORDERED that plaintiffs' “motion to expedite” (Rec. Doc. 232) and defendants' “Motion in Limine to Exclude Certain Evidence at Trial” (Rec. Doc. 241) are DISMISSED as moot.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         This case arises from an employment contract dispute between plaintiff Logan Landry and defendants PosiGen Inc, et al over whether defendants PosiGen violated plaintiff Landry's employment contract by failing to pay him bonuses, award stock options, and forcing him to commute to New Orleans for work. In their amended complaint, plaintiffs bring federal Racketeer Influenced and Corrupt Organizations (RICO) claims against defendants, alleging that defendant Thomas Neyhart, owner, president, and director of PosiGen of Louisiana LLC, has been running a number of fraud schemes involving submitting false tax credit requests to the federal government, fraudulently inducing BLG to sell its customer lists and assets to PosiGen La, and forcing Landry to participate in the tax credit fraud scheme. Rec. Doc. 12. The facts of defendants' alleged scheme are laid out in greater detail in an earlier Order and Reasons issued by this Court and are incorporated by reference here. Rec. Doc. 54.

         Three claims remain in this lawsuit: plaintiffs' claim that Neyhart violated RICO and caused them damages by operating PosiGen LA through a pattern of mail and wire fraud; (2) Landry's claim that defendants breached his employment contract by requiring him to travel to New Orleans for work and not awarding him stock options; and (3) Landry's claim that he relied to his detriment on promises defendants made to him relating to his office location, stock options, and bonuses when deciding to accept employment with PosiGen LA. Rec. Doc. 94 at 1.

         The Court recently granted in part and denied in part defendants' motion for partial summary judgment on damages. Rec. Doc. 221. The Court held that plaintiffs were not entitled to recover damages for: the value of BLG's assets they allege were lost when plaintiffs were fraudulently induced to sell BLG's assets to PosiGen LA, the value of Delta Sky Miles, and emotional distress damages for fraud. Rec. Doc. 221. The Court also held that plaintiffs may be entitled to recover damages for unpaid bonuses pursuant to their detrimental reliance and RICO claims, and attorneys' fees under RICO. Id.

         Defendants filed the instant motion for summary judgment on liability, arguing that they are entitled to summary judgment dismissing plaintiffs' RICO claims, breach of contract claims, and detrimental reliance claims because plaintiffs have no evidence in support of their remaining claims. Rec. Doc. 94. Plaintiffs filed a response in opposition asserting that they have provided competent summary judgment evidence to demonstrate a genuine dispute of material fact in support of those claims. Rec. Doc. 220.

         PARTIES' CONTENTIONS

         Defendants argue entitlement to summary judgment on the RICO claim because plaintiff cannot prove that Neyhart or PosiGen LA engaged in any racketeering activity, or a pattern of such activity. Id. at 2. Defendants assert that plaintiff has no evidence that Neyhart knowingly and intentionally misrepresented the nonexistence of a prior battery by fighting conviction on Green Grant LLC's application for residential and commercial contractor licenses, with the intent to obtain unjust advantage or as part of a scheme to defraud. Rec. Doc. 94-1 at 11. Defendants also assert that plaintiffs have no evidence to support their original claim in the amended complaint that Neyhart, through PosiGen LA, used interstate wires or the mail to file fraudulent tax credit “requests, ” “packets, ” or “submissions” with the IRS. They submit that documents do not need to be assembled into “packets” to obtain a federal tax credit and defendants have attested that they are not aware of any person transmitting any “tax credit packet” to the IRS. Id. at 13- 15. Defendants assert that plaintiffs have no evidence for the new claims, not alleged in the amended complaint, that Neyhart directed contractors to falsify the placed-in-service date on documents, or that their accounting firm, Wegmann, relied on placed-in-service dates to prepare federal tax returns claiming the ITC. Rec. Doc. 228 at 5. Defendants further argue that plaintiffs have no evidence that Neyhart made misrepresentations to Landry about the terms of his employment or the purchase price PosiGen LA would pay for BLG's assets during a phone call while Landry was in Vegas. Neyhart has no recollection of this phone call and plaintiffs cannot remember what was said on the call or identify anything Neyhart said that was untrue. Rec. Doc. 94-1 at 16-17. Defendants argue that plaintiffs have not proven a pattern of racketeering activity because they cannot show that the three predicate acts described above are related and amount to, or prose a threat of, continued criminal activity. Id. at 17-19.

         According to defendants, the breach of contract claim also fails because plaintiffs cannot prove that PosiGen was obligated to award Landry stock options, but only that it was obligated to ensure a stock option program was established in which Landry would be eligible to participate. Rec. Doc. 94-1 at 20. Defendants state that plaintiffs cannot prove that defendants breached Landry's employment contract by requiring him to commute to New Orleans because PosiGen LA was entitled to require him to travel outside of Houma for work and Landry did not suffer compensable damages as a result of the alleged breach relating to his commute. Additionally, defendants argue that plaintiffs cannot prevail on the detrimental reliance claim because they cannot show that defendants promised Landry that he would be awarded stock options, be allowed to work only in Houma, or receive bonuses. Id. at 23. To the extent that plaintiff claims defendants did make these promises, defendants aver that Landry's reliance on the promises is unjustified considering the language in his fully integrated employment agreement does not provide that he will be awarded any stock options, guarantee him the right to work exclusively in Houma, or obligate PosiGen LA to pay him bonuses. Id. at 24. Defendants note that plaintiffs cannot prove ...


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