U.S. Department of Labor
Office of Administrative Law Judges
Heritage Plaza, Suite 530
111 Veterans Memorial Blvd.
Metairie, LA 70005
(504) 589-8201
DATE: MAY 3, 1994
CASE NO.: 86-ERA-23
IN THE MATTER OF:
JOSEPH J. MACKTAL, JR.
Complainant
v.
BROWN & ROOT
Respondent
ORDER GRANTING RESPONDENT'S MOTION TO STAY PROCEEDINGS
On the 25th of March, 1994, a hearing was held in Dallas,
Texas on Respondent's Motion to Stay Proceedings Pending Return of
Settlement Monies. Respondent filed a proposed Order Staying
Proceedings Pending Return of Settlement Monies April 8, 1994.
Complainant filed a Motion for Interlocutory Review April 18, 1994.
As Complainant has not contradicted Respondent's recitation of the
background of this litigation, the Court will adopt by reference
and incorporate herein the procedural history recited in the
paragraphs entitled Findings of Facts, The Settlement Agreement and
Release, the November 14, 1989 Order and The Appeal and Remand off
Respondent's notion.
The Secretary's October 13, 1993 Order disapproved the prior
settlement (hereinafter the "agreement") and no party has an
enforceable obligation under that agreement. Although Respondent
contends that Complainant's retention of the settlement funds
ratified the settlement and worked an accord and satisfaction
irrespective of paragraph 3, this matter now has been remanded for
hearing. Accordingly, the parties are in the same position they
were prior to their execution of the Agreement in November, 1986,
with one important exception -- Complainant continues to enjoy the
benefit of settlement monies which he has not earned and has no
right to possess.
Irrespective of the enforceability of the Agreement, if
Complainant wishes to continue with this §210 claim he must return
the $35,000.00, with interest, and restore the parties to their
prior status.
Respondent conferred a benefit of $35,000.00 upon Claimant in
exchange for a full and final settlement of his §210 claim and
release of all claims against Brown & Root and the Comanche Peak
companies arising out of his employment on the Comanche Peak
project. Although Respondent paid Complainant the money and
performed all of its duties under the Agreement, it did not receive
the dismissal of this case that both parties had contemplated.
Where one has been unjustly enriched by the receipt of a benefit to
which he is not entitled, equity will intervene to restore the
benefit to its rightful owner. See Klein v. Jones, 980 F.2d 521,
527 (8th Cir. 1992) (equitable doctrine of unjust enrichment
prohibits one from unfairly profiting at the expense of another);
Hercules. Inc. v. Pages, 814 F.Supp. 74, 80 (M.D. Fla. 1993) (unjust
enrichment occurs where a benefit is conferred upon and retained by
a defendant under circumstances where it would be inequitable for
him not to pay for it). See also Harker Heights v. Sun Meadows
Land, 830 S.W. 2d 313, 319 (Tex. App. 1992)("principle of unjust
enrichment suggests that restitution is an appropriate remedy in
circumstances where the agreement contemplated is unenforceable,
impossible, not fully performed, thwarted by mutual mistake or void
for other legal reasons."). Under the circumstances, Respondent is
entitled to the return of its money. See generally Restatement of
Restitution, §1 (1937)("a person who has been unjustly enriched at
the expense of another is required to make restitution to the
other").1
1 It is well established that
restitution awards include
prejudgment interest. See Union Bank of Benton v. First National
Bank, 677 F.2d 1074, 1077-78 (5th Cir. 1982) (under Texas law,
equitable grounds underlying remedy of restitution broadens scope
of recovery; award of prejudgment interest proper). See generally
Restatement of Restitution, §156 (duty to pay interest arises if
the benefit was a sum certain and payment is necessary to avoid
injustice).
2 Texas law provides that, where
one pays money to another in
anticipation of an agreement which fails to materialize, equity
requires that the money be returned. King v. Tubb, 551 S.W.2D 436,
442-443 (Tex. App. 1977); Acoustical Screens, 524 S.W.2d 346, 350
(Tex. App. 1975). In light of the Secretary's conclusion that no
agreement existed for purposes of dismissal until he approved the
Agreement, return of the money is appropriate in the present case.