941 F.3d 144
5th Cir.2019Background
- CPTS was an independent sales representative for Horsburgh, earning commissions; after termination Horsburgh owed ~ $280,000 in commissions.
- Horsburgh made late but periodic payments and ultimately paid all outstanding commissions plus interest while the lawsuit was pending.
- CPTS sued in Texas state court under the Texas Sales Representative Act (TSRA); Horsburgh removed to federal court; district court granted summary judgment for Horsburgh, holding no treble damages because no commissions were unpaid at judgment.
- The Fifth Circuit certified two questions to the Texas Supreme Court about (1) the timing for determining "unpaid commission due" under §54.004(1) and (2) whether attorney’s fees under §54.004(2) are recoverable absent a treble award.
- The Texas Supreme Court held the relevant time is when the factfinder or trial court determines liability (e.g., at trial or summary judgment)—so paid commissions at judgment are not "unpaid due"—and held that attorney’s fees may be awarded even without treble if the fees were reasonably incurred.
- The Fifth Circuit affirmed the denial of treble damages, vacated the denial of attorney’s fees, and remanded for the district court to determine reasonable fees (discounting fees spent pursuing treble after full payment).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timing standard for "unpaid commission due" under §54.004(1) | Unpaid commissions should be measured at an earlier point (e.g., when commission accrued or when breach occurred) so treble can apply even if later paid before judgment | Measure unpaid commissions at the time the court or jury determines liability (trial or summary judgment) | Court held measurement occurs when the factfinder or trial court determines liability; commissions paid before that time are not "unpaid due" for trebling |
| Availability of attorney’s fees under §54.004(2) if no treble awarded | Fees recoverable even if treble not awarded; plaintiff entitled to fees for pursuing valid claims | Fees only available if treble damages are awarded | Court held fees may be awarded without treble if they were reasonably incurred; fees pursuing treble after full payment are likely unreasonable |
Key Cases Cited
- JCB, Inc. v. Horsburgh & Scott Co., 912 F.3d 238 (5th Cir. 2018) (Fifth Circuit opinion discussing TSRA interpretation and certifying questions)
- Gurule v. Land Guardian, Inc., 912 F.3d 252 (5th Cir. 2018) (opinion addressing reasonableness limits on fee awards)