Choice! Power, L.P. v. Michael Feeley
501 S.W.3d 199
Tex. App.2016Background
- Feeley (broker) and Choice entered a 54-month employment agreement (starting June 1, 2011) that expressly removed at-will status and permitted termination only for enumerated "cause" categories, including "materially violat[ing] any specific written instructions or policies of Employer."
- CME/ICE reclassified certain financially-settled contracts as futures, creating a regulatory requirement that brokers be Series 3 registered to broker those futures; physically-settled contracts were unaffected.
- Choice sent three company-wide or targeted emails in 2011–2012 notifying brokers of the Series 3 requirement and warning non-registered brokers they "cannot be employed to broker futures as of 1/1/2013."
- Feeley failed the Series 3 exam multiple times (could not broker futures) and was reassigned to physically-settled contracts (including development of an emissions desk) but did not produce profits; Choice terminated him in June 2013, citing failure to follow instructions to pass the exam.
- Feeley sued for breach of contract; trial court found Choice lacked cause and awarded Feeley $353,705.57. Choice appealed on contract interpretation and sufficiency grounds; Feeley cross-appealed the grant of summary judgment denying his claim for attorneys’ fees under Tex. Civ. Prac. & Rem. Code § 38.001.
Issues
| Issue | Plaintiff's Argument (Feeley) | Defendant's Argument (Choice) | Held |
|---|---|---|---|
| Whether the contractual "instruction" ground for "cause" is unambiguous and permits termination for failure to follow any written instruction | The clause must be read in context with the whole agreement limiting termination; Choice's broad reading would convert term employment to at-will | The word "any" shows employer could terminate for violation of any written instruction or policy | Court: Construction is contextual; cannot read that single provision to render term employment at-will — no error in trial court's contract interpretation |
| Whether evidence legally/factually supports finding Choice lacked cause to terminate Feeley for failing to pass Series 3 (breach of contract) | Emails did not communicate a terminable instruction to Feeley to pass the exam; failure only restricted him from brokering futures and he was allowed to work physicals; termination was for unprofitability (not a valid contractual ground) | Emails constituted a direct instruction to take and pass the Series 3 and Feeley’s failure was a material violation justifying termination for cause | Court: Affirmed — sufficient evidence supports trial court’s findings that emails merely explained regulatory limits (not a terminable instruction) and Choice failed to prove a material violation |
| Whether Feeley could recover attorneys’ fees under Tex. Civ. Prac. & Rem. Code § 38.001 from a limited partnership | Section 38.001 should be read to allow recovery from entities broadly described as "corporation" to include limited partnerships | Section 38.001 authorizes recovery only against an "individual or corporation," and a limited partnership is neither | Court: Affirmed summary judgment — section 38.001 does not permit recovery of attorneys’ fees from a limited partnership |
Key Cases Cited
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (contract interpretation — unambiguous contracts construed as a matter of law)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency review standards and viewing evidence in light most favorable to verdict)
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (bench-trial conclusions of law reviewed de novo; affirm if any legal theory supported by evidence)
- Montgomery Cnty. Hosp. Dist. v. Brown, 965 S.W.2d 501 (Tex. 1998) (requirements for converting at-will employment to a term contract)
- Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (appellant burden in legal-sufficiency challenges when it had burden of proof)
- Fleming & Assocs., L.L.P. v. Barton, 425 S.W.3d 560 (Tex. App.—Houston [14th Dist.] 2014) (section 38.001 does not allow recovery of fees from partnerships)
- Combs v. Health Care Servs. Corp., 401 S.W.3d 623 (Tex. 2013) (high bar for declaring a plain-text statutory result "absurd")