Peter J. Ledig v. Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C.

CourtCourt of Appeals of Texas
DecidedMarch 23, 2006
Docket01-04-00922-CV
StatusPublished

This text of Peter J. Ledig v. Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C. (Peter J. Ledig v. Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peter J. Ledig v. Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C., (Tex. Ct. App. 2006).

Opinion

Opinion issued March 23, 2006





In The

Court of Appeals

For The

First District of Texas


NO. 01-04-00922-CV

__________

PETER J. LEDIG, Appellant

V.

DUKE ENERGY CORPORATION AND DUKE ENERGY TRADING AND MARKETING, L.L.C., Appellees


On Appeal from the 55th District Court

Harris County, Texas

Trial Court Cause No. 2003-23230


O P I N I O N

          Appellant, Peter J. Ledig, challenges the trial court’s rendition of summary judgment in favor of appellees, Duke Energy Corporation (“Duke Energy”) and Duke Energy Trading and Marketing, L.L.C. (“DETM”), in his suit for “unjust enrichment, rescission of contract, breach of contract, misrepresentation, and defamation,” brought after DETM terminated his employment. In four issues, Ledig contends that the trial court erred in granting partial summary judgment in favor of appellees because genuine issues of material fact exist regarding whether his election, made while employed by Duke Energy North America (“DENA”), to exchange 50% of any bonus he might receive in 2001 for Duke Energy stock options applied to the bonus he received from DETM following his transfer to DETM in 2001; whether “the illusory nature of the [election] agreement precludes summary judgment on [his] equitable claims”; whether DETM was required to pay Ledig a bonus for the full year of 2001, rather than a pro-rated bonus; and whether “libelous statements published by [a]ppellees defamed [a]ppellant given that a reasonable reader could reasonably believe them to be true.” We affirm.

Factual and Procedural Background

          On December 29, 2000, while employed by DENA, a non-party to this lawsuit, Ledig elected to exchange 50% of any bonus he might receive in 2001 for Duke Energy stock options. Ledig made this election by signing the “Short Term Incentive Exchange Program Election Form 2001.” The front page of the election form instructed Ledig to “[c]omplete and submit this form no later than Dec. 29, 2000, to make your election under this Program for 2001” and further stated that “[e]lections that you make to forgo bonus in exchange for stock options will remain in effect for subsequent years, unless you are no longer eligible for the Program or make a change during a subsequent election period.” The election form provided the following cautionary instruction: “Because your choices under this Program have significant financial implications, we encourage you to review your Program brochure and share the information with your financial or tax advisor.” By signing this form, Ledig acknowledged the following:

I hereby authorize Duke Energy to reduce my bonus . . . as I elected on this form. I understand . . . that if I forgo bonus under the Short-Term Incentive Exchange Program, I will be granted a stock option under the Duke Energy Corporation 1998 Long-Term Incentive Plan in exchange, with the number of shares and exercise price of my stock option to be determined on the grant date. I further understand that if my Duke Energy employment terminates or I become ineligible for the Program before the stock option is granted, my election to forgo bonus will automatically be cancelled. . . . I confirm that I have been given copies of the Short-Term Incentive Exchange Program brochure. . . . I also understand that my election[] to . . . forgo bonus to be earned in 2001 in exchange for a stock option under the Program [is] irrevocable after Dec. 29, 2000, will take effect Jan. 1, 2001, and will continue for subsequent years as long as I remain eligible unless I file a change in a subsequent election period.

(Emphasis added). The Duke Energy Short Term Incentive Exchange Program (the “Program”) brochure, which described the restrictions of the Program, and which Ledig conceded receiving prior to signing the election form, provided

          YOUR ELECTION MUST BE MADE IN ADVANCE AND IS IRREVOCABLE

          Participating in this program gives you certain tax advantages, but also imposes some restrictions. For example, the bonus that you exchange for stock options will not be subject to current income taxes. To preserve this tax advantage, however, you must decide about participating in the program before the beginning of the period during which you bonus is earned.

          Your agreement to make this exchange is irrevocable. After the annual election deadline, you cannot cancel the agreement and receive the cash bonus you elected to forgo. However, if your Duke Energy employment terminates before the option is granted, your election to forgo bonus is automatically cancelled.

The brochure further provided

          To participate in the program, you must have earned a bonus under the short term incentive plans applicable to your business unit. Below is a list of plans that determine how you become eligible for bonuses and the amount you may receive. These plans are incorporated by reference into this program.

Included in this list of nine plans were (1) the Duke Energy International/Duke Energy North America Annual Incentive Program (the “DENA Plan”) and (2) the Duke Energy Services Trading Pool Plan (the “DETM Plan”).

          Ledig testified that, in April 2001, he left his position with DENA and began employment with DETM as the Vice President of Eastern Gas Trading. His election to exchange 50% of his 2001 bonus for Duke Energy stock options under the Program was based on the fact that the DENA Plan was a corporate plan with limited bonus potential and that his maximum bonus potential under the DENA Plan was approximately 53% of his salary. After beginning employment with DETM, Ledig determined that his election under the Program “no longer made economic sense” because his bonus potential under the DETM Plan was over 700% of his salary. Thus, after beginning employment with DETM, he told Jackie Salinas, Director of Human Resources, that he wanted to change his election from 50% to 0%. Salinas told Ledig the he could not change his election due to an Internal Revenue Service regulation. In early 2002, Ledig was awarded $1,500,000 for his 2001 bonus under the DETM Plan and, based on Ledig’s election under the Program, DETM converted 50% of his bonus to Duke Energy stock options.

          

Free access — add to your briefcase to read the full text and ask questions with AI

Related

J.M. Davidson, Inc. v. Webster
128 S.W.3d 223 (Texas Supreme Court, 2003)
Green v. Morris
43 S.W.3d 604 (Court of Appeals of Texas, 2001)
Lawson v. B Four Corp.
888 S.W.2d 31 (Court of Appeals of Texas, 1994)
Hathaway v. General Mills, Inc.
711 S.W.2d 227 (Texas Supreme Court, 1986)
Randall's Food Markets, Inc. v. Johnson
891 S.W.2d 640 (Texas Supreme Court, 1995)
Eskew v. Plantation Foods, Inc.
905 S.W.2d 461 (Court of Appeals of Texas, 1995)
Farah v. Mafrige & Kormanik, P.C.
927 S.W.2d 663 (Court of Appeals of Texas, 1996)
Denton Publishing Company v. Boyd
460 S.W.2d 881 (Texas Supreme Court, 1970)
Fortune Production Co. v. Conoco, Inc.
52 S.W.3d 671 (Texas Supreme Court, 2000)
Huckabee v. Time Warner Entertainment Co.
19 S.W.3d 413 (Texas Supreme Court, 2000)
In Re Halliburton Co.
80 S.W.3d 566 (Texas Supreme Court, 2002)
Gonzalez v. United Brotherhood of Carpenters, Local 551
93 S.W.3d 208 (Court of Appeals of Texas, 2002)
American Broadcasting Companies v. Gill
6 S.W.3d 19 (Court of Appeals of Texas, 1999)
Summers v. Fort Crockett Hotel, Ltd.
902 S.W.2d 20 (Court of Appeals of Texas, 1995)
American Tobacco Co., Inc. v. Grinnell
951 S.W.2d 420 (Texas Supreme Court, 1997)
Black v. Victoria Lloyds Insurance Co.
797 S.W.2d 20 (Texas Supreme Court, 1990)
City of Austin v. Cotten
509 S.W.2d 554 (Texas Supreme Court, 1974)
Delta Air Lines, Inc. v. Norris
949 S.W.2d 422 (Court of Appeals of Texas, 1997)
Cigna Insurance Co. of Texas v. Rubalcada
960 S.W.2d 408 (Court of Appeals of Texas, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
Peter J. Ledig v. Duke Energy Corporation and Duke Energy Trading and Marketing, L.L.C., Counsel Stack Legal Research, https://law.counselstack.com/opinion/peter-j-ledig-v-duke-energy-corporation-and-duke-e-texapp-2006.