Ward v. Tenneco Oil Co.

564 So. 2d 814, 1990 WL 88869
CourtLouisiana Court of Appeal
DecidedJune 27, 1990
DocketW89-1046
StatusPublished
Cited by49 cases

This text of 564 So. 2d 814 (Ward v. Tenneco Oil Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ward v. Tenneco Oil Co., 564 So. 2d 814, 1990 WL 88869 (La. Ct. App. 1990).

Opinion

564 So.2d 814 (1990)

Robert H. WARD, et al., Plaintiffs-Applicants,
v.
TENNECO OIL COMPANY, Defendant-Respondent.

No. W89-1046.

Court of Appeal of Louisiana, Third Circuit.

June 27, 1990.
Rehearing Denied August 8, 1990.

*816 Perret, Doise, Daigle, Longman, Russo & Zaunbrecher, Gary J. Russo, Lafayette, for plaintiffs-applicants.

Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, John G. Torian, II, Thomas G. Smart, Lafayette, for defendant-respondent.

Before DOUCET, LABORDE and KING, JJ.

LABORDE, Judge.

We granted a writ of certiorari in this case to consider the correctness of the trial court's judgment which granted in part defendant-respondent's motion for a partial summary judgment and which denied a motion to compel discovery filed by plaintiffs-relators.

FACTS

In its Reasons for Ruling, the trial court set forth the pertinent facts and legal questions at issue:

"In May of 1988, TENNECO INC. decided to sell most of its oil and gas business. An affidavit of Karl Stewart, Secretary of TENNECO INC., indicates that the corporate structure of TENNECO INC., at that time was as follows: TENNECO OIL COMPANY was a wholly-owned subsidiary of TENNECO CORPORATION which was a wholly-owned subsidiary of TENNESSEE GAS PIPELINE COMPANY, which was a wholly-owned subsidiary of TENNECO INC. All were Delaware Corporations. TENNESSEE OIL COMPANY[1] [sic] included two operating units, TENNECO OIL EXPLORATION AND PRODUCTION (E & P) and TENNECO OIL PROCESSING AND MARKETING (P & M).
According to the affidavit of the Secretary, TENNECO OIL COMPANY itself was not sold, because in some instances assets of businesses managed by E & P and P & M were conveyed to various corporate subsidiaries of TENNECO OIL which were then sold. In other instances the actual assets were sold by TENNECO OIL COMPANY or its affiliates to third parties.
It is important to TENNESSEE OIL COMPANY [sic] to keep certain key employees through the date of sale, in order to keep the value of the company from declining, which would result should these employees elect to leave their positions. They were offered a bonus in proportion to the sales price. The central dispute in this litigation concerns the mutual understanding of the parties as to the object of the sale, and the following letter is the primary documentary evidence of that intent:
CONFIDENTIAL
For: R.H. Ward
In the months ahead it is imperative that we maintain our nucleus of key employees within Tenneco Oil Exploration and Production. With the talent, commitment, and leadership you have demonstrated in the past, you are a critical part of that core group.
In recognition of that fact, I am pleased to inform you that you have been selected to participate in a special program designed to allow you to share in the sales price of our company. As a participant in the Tenneco Oil Exploration and Production Value Incentive Plan, you will be eligible for *817 a lump sum cash payment if the sales price for the company exceeds a minimum of $5.7 billion. Your award could range up to a maximum of $77,000 at a sales price of $7 billion.
We are relying on participants like you to make significant contributions toward one or more of these objectives:
1) INCREASE THE VALUE OF THE COMPANY by maximizing the effectiveness of its day to day business. This will demand outstanding performance in both technical and administrative areas.
2) INCREASE THE COMPANY'S ULTIMATE SALES PRICE by ensuring that potential purchasers recognize the true value of our company's assets and human resources.
3) HELP RETAIN OUR ORGANIZATION THROUGH THE DATE OF SALE by encouraging others through strong leadership, and by maintaining morale and teamwork.
Achieving these objectives will require significant contributions of time and energy on your part. But I assure you that, if achieved, these objectives will contribute both to your own welfare, and to the welfare of your fellow employees. The better we look as a company to a potential purchaser, the more viable we will be as an intact unit.
This program is limited in participation, so it is imperative that you maintain STRICT CONFIDENTIALITY. Violation of confidentiality could undermine the program's motivational intent. Therefore I ask that you discuss it only with the individuals who presented it to you. Additional points, as well as the payment schedule, are listed on the attached supplement.
I believe this plan will help us maximize the value of our company through encouraging the energetic leadership that we need. I want to express my deepest appreciation to you for helping make us one of the best in the business. We have a proud legacy to continue.
VALUE INCENTIVE PLAN SUPPLEMENT
You must materially contribute to the company's objectives of increasing value, increasing sales price, and maintaining the organization.
You must remain with the company until the date of sale.
This payment will be in addition to any other payments to which you may otherwise be entitled.
Award payments will be made at any sale price of $5.7 billion or more.
Award payments will increase as listed in the schedule below, up to a maximum level at a sale price of $7 billion.
Award payments for sale prices between the levels shown on the schedule will be interpolated, except for the minimum payment, which will be for a sale price range of $5.7 billion to $5.85 billion. The payment values shown below are rounded, while final payment will be based on the exact numbers.
Payments will be made in a lump sum, as soon after the date of sale as administratively possible.
      VALUE INCENTIVE TABLE
        (rounded amounts)
   SALES             AMOUNT
   PRICE              YOU
(billions)          RECEIVE
 5.70-5.85           4,700
  6.00              15,000
  6.15              25,300
  6.30              35,700
  6.45              46,000
  6.60              56,700
  6.75              65,700
  7.00              77,000
Affidavits from twenty-four of the plaintiffs have been filed in the record which uniformly affirm (1) that the affiant was not advised by any company representative that the phrase `the company' meant anything other than TENNECO OIL COMPANY and (2) that the affiant believed that the phrase `the company' meant TENNECO OIL COMPANY.
Plaintiffs allege that in October of 1988, TENNECO INC. announced that the total sales price for `the company' *818 sold in segments to various bidders was Seven Billion Three Hundred Million ($7,300,000,000.00) Dollars, and that on December 19th each received a check that was not sufficient under the terms of the contract alleged. The letters to which these bonus checks were attached indicated that the bonus amounts were based upon a total sales price of Six Billion Four Hundred Thirty-Eight Million ($6,438,000,000.00) Dollars. Essentially, the case presents two questions: 1) Were the bonus plan payments to be based on the sale price of TENNECO E & P and

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Bluebook (online)
564 So. 2d 814, 1990 WL 88869, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ward-v-tenneco-oil-co-lactapp-1990.