COURT CASE BRIEF
Donald R. Schroerlucke, And Joyce D. Schroerlucke V United States 2011WL 4440599 (Fed.Cl) No. 09-772T
FACTS
Plaintiff Donald Schroerlucke is a former employee of WorldCom, Inc. His wife is Joyce D. Schroerlucke. In 1989, Mr. Schroerlucke was employed as Vice President of Operations at Long Distance Discount Services, Inc., the predecessor corporation to WorldCom. Pursuant to stock option agreements with Long Distance Discount Services, Inc., and then with WorldCom, Mr. Schroerlucke accumulated employee stock option grants between July 1991 and January 1998. His employment with WorldCom ended on January 4, 1999.
According to the terms of the stock option agreements and an April 7, 1998 memorandum titled, “WorldCom Employee Stock Option Program,” Mr. Schroerlucke was required to immediately exercise all of his employee stock options at the end of his employment. On January 2, 1998, Mr. Schroerlucke had accumulated 172,492 WorldCom stock options. Mr. Schroerlucke exercised all of his existing stock options on February 12, 1999, at which time the market value of his 172,492 WorldCom shares was $13,702,333.25, based on the $79.4375 per share, February 12, 1999, closing price of WorldCom stock.1.
According to the criminal Mr. Ebbers (CEO) and Mr. Sullivan (CFO Scott Sullivan) presented a “materially false and misleading picture of WorldCom’s operating performance and financial results” as part of a “scheme to deceive” and “inflate and maintain artificially the price of WorldCom common stock.” Mr. Schroerlucke was not eligible to participate in the securities fraud class action lawsuit which was brought against WorldCom on April 30, 2002. Only those who had purchased WorldCom stock between April 29, 1999 and June 25, 2002 were eligible. See In re WorldCom, Inc., Sec. Litig., 294 F. Supp. 2d 392, 397 (S.D.N.Y.), motion to certify appeal denied, 2003 WL 22533398 (S.D.N.Y. Nov. 7, 2003).
In total, plaintiffs’ claims for refunds, based on alleged theft losses on their WorldCom stock, amounted to $2,661,550.00, resulting from unreimbursed theft losses of $6,530,047.53. Donald and Joyce Schroerlucke filed a complaint on November 10, 2009 in the United States Court of Federal Claims, followed by an amended complaint, and then by a second amended complaint. Plaintiffs allege that they were victims of theft by taking and theft by deception under Georgia state law with regard to Mr. Schroerlucke’s WorldCom stock options. After filing its answer to plaintiffs' second amended complaint, the defendant filed a motion for summary judgment, alleging that there are no genuine disputes of material fact, and that defendant is entitled to judgment in its favor as a matter of law because, based on the facts presented, there cannot be a theft under Georgia law
ISSUES
Whether Georgia law even contemplates the type of loss presented by the facts in this case as a theft (1- theft by taking, 2- theft by deception, 3- theft by conversion, or 4- theft of services)
CONCLUSION
1- No
2- No
3- No
4- No
ANALYSIS
1- Under Georgia law, a theft by taking occurs when one “unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated.” Ga. Code Ann. § 16-8-2; see also Spray v. State, 476 S.E.2d 878, 880-81 (Ga. Ct. App. 1996) (affirming a conviction for theft by taking when the Chief of Police misappropriated law enforcement items for personal use), cert. denied (Ga. 1997). In the plaintiffs’ case, a theft by taking could not have occurred because WorldCom did not unlawfully take or appropriate any property from Mr. Schroerlucke and there is no evidence in the record that there was an intention by WorldCom and/or its executives to deprive Mr. Schroerlucke specifically of the property at issue.

2- In the above captioned case, theft by deception could not have occurred because the record does not contain evidence of knowingly false statements made to Mr. Schroerlucke with regard to past or existing events, or of a specific intent by WorldCom to deprive Mr. Schroerlucke of his property. As noted above, plaintiffs cite only to general statements, mostly made at unspecified times, predicting continued future performance by WorldCom. The decline in value of WorldCom stock between 2000 and 2002, after Mr. Schroerlucke exercised his options, also cannot establish theft by deception because WorldCom did not obtain the difference in the value resulting from the decline in the value of the stock, which is a necessary element of theft by deception. See Robinson v. State, 401 S.E.2d at 622-23 (in which a Georgia conviction for theft by deception was reversed because there was no evidence that the defendant had obtained the funds at issue).

3- In plaintiffs’ case, there was no theft by conversion, nor could there have been, because Mr. Schroerlucke did not provide any funds to WorldCom with directions that the funds be used for any specific application. Mr. Schroerlucke paid the exercise price for his employee stock options, as specified by the terms of the stock option agreements, and received the full market value of the stock options he was entitled to at the time, in accordance with the agreements. In Hill v. State, 401 S.E.2d 48, no theft by conversion was found when a seller of property gave no specific directions as to how a $2,500.00 fee was to be applied by the defendant. Id. at 49-50.

4- In the above captioned case, there was no theft of services because there is no evidence that WorldCom knowingly obtained services from Mr. Schroerlucke with intent to avoid payment. There is no allegation in the second amended complaint, or in other filings by plaintiffs, that Mr. Schroerlucke was not compensated, or not compensated fully, while working for WorldCom. See Johnson v. State, 283 S.E.2d at 712 (holding there was insufficient evidence that the accused intended to obtain use of equipment without paying for it); see also Jackson v. State, 687 S.E.2d 666, 670 (Ga. Ct. App. 2009) (quoting Roberson v. State, 244 S.E.2d at 630 (“‘The essential ingredient of the offense [theft of services] is the intention to avoid payment.’”).