Boondoggles Corporation v. Yancey, No. 01-05-00185-CV (Tex. App. 8/3/2006)
| Decision Date | 03 August 2006 |
| Docket Number | No. 01-05-00185-CV.,01-05-00185-CV. |
| Parties | BOONDOGGLES CORPORATION, Appellant, v. JOHNATHAN F. YANCEY, Appellee. |
| Court | Texas Court of Appeals |
On Appeal from the 234th District Court, Harris County, Texas, Trial Court Cause No. 2002-31521.
Panel consists of Chief Justice RADACK and Justices TAFT and NUCHIA.
Appellant, Boondoggles Corporation (Boondoggles or the corporation) challenges a judgment that awarded appellee, Johnathan F. Yancey, actual damages, attorney's fees, and costs for his claim that Boondoggles breached its employment contract by not paying him the bonus of three percent of net sales specified in the contract. Trial was to the court, which filed findings of fact and conclusions of law. In six points of error, Boondoggles contends that it did not owe a bonus to Yancey as a matter of law, because an oral condition precedent to receiving a bonus was never fulfilled; that the trial court erred by awarding damages for month in which Yancey worked only part of that month and by calculating "net sales" as gross sales minus sales taxes collected; that the award of attorney's fees must be reversed because Yancey did not properly designate his counsel as an expert witness; that the trial court erred by concluding that the contract was not ambiguous; and that res judicata barred Yancey's claims as a matter of law. We affirm.
Boondoggles is a microbrewery and restaurant in the Clear Lake area of Houston. Boondoggles hired Yancey as general manager of the restaurant's operations in July 1999. The corporation had been experiencing financial difficulties, and Yancey was hired because of his experience in managing a similar restaurant, in particular, his skills in limiting theft, tracking and monitoring inventory, and managing staff. The president and secretary of Boondoggles joined Yancey in signing the employment contract on July 21, 1999, but neither the president nor the secretary testified at trial.
Yancey's contract with the corporation confirmed a base salary of $35,000 for the year beginning on July 12, 1999 and ending on July 11, 2000 and provided for renegotiation before July 11, 2000 "to increase the base salary and bonus, based on business growth and productivity." The contract specified that benefits included, but were not limited to, the following:
• Monthly bonus of 3% of net sales
• Two weeks paid vacation after one year of employment
• Medical insurance (full coverage upon obtaining medical insurance by Boondoggles Corp.)
• Monthly expenses for cellular phone
• Automobile mileage for business-related expenses.
The terms of the single-page contract also proscribed any modification of the contract unless made in writing and signed by the parties. The contract did not define the term "net sales."
While employed at Boondoggles, Yancey became a sixth shareholder-director of the closely held corporation. The board later added three additional shareholders. Yancey's responsibilities included on-site management at the Boondoggles restaurant for an average of 60 hours weekly and drafting checks for all expenses and salaries, including his own. He also kept the corporation's books until January 2000, when Boondoggles hired an independent company for that work. It is undisputed that Yancey never wrote a bonus check to himself while working for the corporation.
When asked at trial why he did not draft checks payable to himself to pay the bonus due, Yancey cited an agreement among the shareholders, which included him, to defer payment pending an improved financial outlook. Yancey also explained that payment of his bonus had become a "sticking point" with the board, beginning in October 1999. He attested, however, to discussions with other board members in January 2000, in response to the board's requests for an accounting of funds or debts owed to Yancey. Yancey claimed that he disclosed $40,000 to $50,000 owed to him, which included his unpaid bonuses, as well as debts for reimbursement for personal equipment and supplies Yancey brought into the corporation. Yancey affirmed that his discussions with board members about debts encompassed bonus payments owed to him and others, in addition to requests for reimbursement for his equipment and supplies, but the Boondoggle representatives who testified at trial denied any request relating to Yancey's bonus.
Boondoggles continued to experience financial problems, and the board considered liquidating in December 1999. By June 2000, the corporation was still losing money and had not turned a profit. On June 11, 2000, the board of directors notified Yancey of its decision not to renew his contract. Yancey acknowledged receiving this notice, but contended that he did not receive a written notice, dated the same day, which asked Yancey for a statement of amounts the company owed to him. The record contains a copy of the notice, but there is no record evidence that Yancey responded to the notice, and it is undisputed that Yancey did not request payment of his bonus before leaving Boondoggles.
Later in 2002, Yancey joined two other shareholders as plaintiffs in a shareholder-oppression action against the three majority shareholders whose shares at the time totaled 67%. The plaintiffs sought a declaration of their respective ownership interests in the Boondoggles coporation, actual and punitive damages, and attorney's fees; the majority shareholders filed counterclaims. The bench trial before the same trial court that presided over the instant case resulted in no damages, with each side bearing its own fees and costs, but the trial court's judgment recites a declaration of the amount and percentage of shares owned by each of the nine shareholders. With respect to Yancey, the April 4, 2002 judgment declared his ownership interest as 24,330 shares, or 1.3268 percent Boondoggles' total shares. The defendants in the instant case were declared majority shareholders whose interest totaled 63 percent.
Shortly after the shareholder action concluded, and after Yancey unsuccessfully demanded payment of Boondoggles pursuant to the bonus and vacation-pay provisions of his employment contract, he filed this action on the contract. The case was transferred to the trial court on Boondoogles' motion. Boondoggles' answer to Yancey's petition included claims of res judicata, mutual mistake and fraud. Boondoggles sought summary judgment on res judicata, but did not prevail.
The trial court ruled in Yancey's favor and awarded him $25,265.20 in actual damages on his claim for unpaid bonuses, and $16,000.00 for attorney's fees, in addition to interest and costs; Yancey did not prevail on his claim for unpaid vacation benefits. The trial court filed findings of fact and conclusions of law, to which Boondoggles excepted by requesting additional findings and conclusions. Boondoggles perfected its appeal and filed a cashier's check in the amount of $43,672.38 in lieu of a supersedeas bond.
Five of Boondoggles' six points of error challenge the trial court's findings of fact and conclusions of law. The trial court's conclusions of law are reviewable de novo as legal questions. State v. Heal, 917 S.W.2d 6, 9 (Tex. 1996); McDermott v. Cronin, 31 S.W.3d 617, 623 (Tex. App.-Houston [1st Dist.] 2000, no pet.). Conclusions of law will be upheld if the judgment can be sustained on any legal theory supported by the evidence unless they are clearly erroneous. Tex. Dep't of Pub. Safety v. Stockton, 53 S.W.3d 421, 423 (Tex. App.-San Antonio 2001, no pet.). Findings of fact in a case tried to the court have the same force and effect as a jury's verdict on questions and are reviewable for legal and factual sufficiency. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); Min v. Avila, 991 S.W.2d 495, 500 (Tex. App.-Houston [1st Dist.] 1999, no pet.). When, as here, the appellate record contains a complete reporter's record of the trial, the trial court's fact findings are not conclusive, but subject to the same, well-settled standards that govern legal and factual sufficiency challenges to jury findings. Comm'n of Contracts of the Gen. Executive Comm. of the Petroleum Workers Union v. Arriba, Ltd., 882 S.W.2d 576, 582 (Tex. App.-Houston [1st Dist.] 1994, no writ); In the Interest of M.J.Z., 874 S.W.2d 724, 728 (Tex. App.-Houston [1st Dist.] 1994, no writ).
In determining legal sufficiency, therefore, we apply the analysis recently stated by the supreme court in City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005), in which the court concluded that "[t]he final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." Id. at 827. "[L]egal-sufficiency review in the proper light must credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not." Id. We may not substitute our judgment for that of the trier-of-fact, here the trial court, however, when the evidence falls within a zone of reasonable disagreement, and although we must "consider evidence in the light most favorable to the judgment, and indulge every reasonable inference that would support it . . . , [i]f the evidence allows of only one inference, neither [the trier-of-fact] nor the reviewing court may disregard it." See id. at 822, 827.
In determining factual sufficiency, we must weigh all the evidence, both supporting and conflicting, and may set the finding aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951); Arriba, 882 S.W.2d at 582.
Several of Boondoggles' points of error also require that we analyze Yancey's employment contract with Boondoggles. Court...
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