Beesley v. Hydrocarbon Separation, Inc.
358 S.W.3d 415
Tex. App.2012Background
- In 1992, HSI purchased Dell Chemical, a Canadian firm owned by Beesley, which held the Value 100 formula.
- Beesley and HSI executed two agreements: Agreement for Sale of Shares and a Contract for Provision of Services, each providing Beesley would be employed as a consultant.
- HSI never paid Beesley under the consulting agreements; Beesley invoiced in 2004 for 500,000 Canadian, which remained unpaid.
- HSI’s charter was forfeited in 1996, after which HSI was dissolved for purposes of Texas law, with limited continuing existence.
- Beesley sued HSI and McPeak for breach of contract and fraud in 2007; the trial court granted summary judgment for HSI and McPeak.
- On appeal, the court partly reversed: it held issues remained as to McPeak’s liability as a promoter and remanded, while affirming other aspects and addressing limitations and dissolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does dissolution of HSI bar Beesley's contract claim? | HSI's continued existence or admissions precluded summary judgment. | Dissolution under article 7.12 bars claims after the three-year window. | Summary judgment proper; dissolution bars most claims. |
| Is McPeak individually liable under the Employment Agreement as promoter or alter ego? | McPeak is liable as promoter or alter ego; capacity defenses do not bar merits. | McPeak is not individually liable under the statute or contract; no evidence of adoption. | Promoter liability exists as fact issue; summary judgment reversed on promoter theory. |
| When did Beesley's breach of contract claim accrue under the installment contract? | Accrual occurs at end of contract; limitations trouble for early missed payments. | Accrual occurs for each missed installment; limitations run from each due date. | Limitations run on each installment; claims for earlier installments barred except last two. |
| Did the Employment Agreement create a continuing contract or installment-based debt for purposes of limitations? | Employment contract is not a typical installment contract; accrual delayed. | Language shows periodic payments; accrual upon each due date. | Court found language supports installment-based accrual; not a perpetual continuing contract. |
Key Cases Cited
- Rogers v. Adler, 696 S.W.2d 674 (Tex.App.-Dallas 1985) (when a debt is created or incurred for purposes of 171.255, prior to charter forfeit)
- Curry Auto Leasing, Inc. v. Byrd, 683 S.W.2d 109 (Tex.App.-Dallas 1984) (debts arising from contract created when contract entered)
- Schwab v. Schlumberger Well Surveying Corp., 198 S.W.2d 79 (Tex. 1946) (debt creation under continuing contracts)
- Intermedics, Inc. v. Grady, 683 S.W.2d 842 (Tex.App.-Houston [1st Dist.] writ ref'd n.r.e.) (continuing contract rule; exception for periodic payments)
- Dae Won Choe v. Chancellor, Inc., 823 S.W.2d 740 (Tex.App.-Dallas 1992) (discussion of when debt is created or incurred under 171.255)
- Davis Apparel v. Gale-Sobel, 117 S.W.3d 15 (Tex.App.-Eastland 2003) (continuing contract rule; separate installments within limitations)
- Lichtenstein v. Brooks, 12 S.W. 975 (Tex. 1889) (accrual under continuing contract; employee rights from breach)
- Rogers v. Adler, 696 S.W.2d 674 (Tex.App.-Dallas 1985) (reiterated for 171.255 accrual discussion)
- Emmett Properties, Inc. v. Halliburton Energy Services, Inc., 167 S.W.3d 365 (Tex.App.-Houston [14th Dist.] 2005) (forfeiture and limited continuing existence under 7.12)
- Dell Computer Corp. v. Rodriguez, 390 F.3d 377 (5th Cir. 2004) (addressed continuing contract in Texas law context)