Repipe, Inc. v. Turpin

• Decision Date: 29 July 2008
• Docket Number: No. 14-06-00704-CV.,14-06-00704-CV.
• Citation: 275 S.W.3d 39
• Parties: RePIPE, INC., Appellant, v. James E. TURPIN, Appellee.
• Court: Texas Court of Appeals

275 S.W.3d 39

RePIPE, INC., Appellant, v. James E. TURPIN, Appellee.

No. 14-06-00704-CV.

Court of Appeals of Texas, Houston (14th Dist.).

July 29, 2008.

Supplemental Opinion October 9, 2008.

Mario Ernesto De La Garza, Kent Rutter, Houston, for Appellant.

Charles B. Kirklin, Stephen R. Kirklin, Houston, for Appellee.

Panel consists of Justices YATES, GUZMAN, and BOYCE.

OPINION

EVA M. GUZMAN, Justice.

In this employment contract dispute, the employer challenges the legal and factual sufficiency of the evidence supporting the judgment. Because the evidence is legally sufficient to support the judgment and factually sufficient to support some, but not all, of the damages awarded, we suggest remittitur. If remittitur of the unsupported damages is timely filed, we will reverse and remand for retrial of attorneys' fees consistent with the reduced damage award; if it is not, we will reverse and remand for new trial.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellant rePipe, Inc., a sewer-line repair company, hired appellee James Turpin pursuant to a written Employment Agreement ("the Agreement"). In the Agreement, the parties described Turpin's duties as those "commensurate and consistent with" his employment as senior vice president for human resources. The parties further agreed that Turpin would have additional duties and responsibilities as assigned by rePipe's chief executive officer, provided that any such newly-assigned duties were not inconsistent with Turpin's then-current duties if he objected in writing within ten days.

The Agreement also described the different timing and consequences of resignation with or without "Good Reason." If Turpin resigned "with Good Reason," then he would be considered a part-time employee for one year and would be paid an amount equal to the average of his compensation for the preceding two years.¹ If he resigned "without Good Reason," then the resignation would become effective in thirty days and he would not receive compensation as a part-time employee.

On April 22, 2004, rePipe announced its restructuring. Chief Executive Officer Tim Tarrillion issued a memorandum explaining that the employment of rePipe's vice president of sales and marketing and its financial analyst was terminated and some of their former duties were reassigned to Turpin. On appeal, rePipe does not dispute that the newly-assigned tasks were inconsistent in some material respect with the position and responsibilities that Turpin held before the assignment.

Turpin performed the new duties without objection until June 2004. Around that time, rePipe terminated Tarrillion's employment for cause. According to rePipe, Tarrillion had misrepresented the company's profitability.

On June 7, 2004, Turpin gave rePipe written notice that, pursuant to the terms of the Agreement and effective immediately, he terminated his full-time employment for Good Reason and accepted part-time employment with rePipe. In the notice, he listed several reasons for his resignation, including rePipe's failure to pay Turpin's 2003 bonus and its assignment of duties to him, without his written consent, that were "inconsistent in material respects" with his then-current position and responsibilities. The next day, rePipe's acting vice president wrote Turpin that rePipe did not consider Turpin's stated reasons for resigning to constitute Good Reason under the Agreement; thus, it would treat Turpin's letter as a notice of termination without Good Reason.

Turpin sued rePipe for breach of contract and declaratory judgment, and the jury returned a verdict in his favor. As relevant to this appeal, the jury made the following findings:

• Turpin terminated his employment for Good Reason as defined by the Agreement;

• rePipe's failure to acknowledge such termination caused Turpin past damages in the amount of $277,747.56;

• rePipe failed to pay Turpin the discretionary, "non-financial" portion of his 2003 bonus;

• rePipe's failure to pay Turpin the non-financial bonus caused Turpin $16,976.92 in damages • rePipe's failure to comply with a material obligation of the Agreement was not excused; and

• the reasonable fees for the necessary services of Turpin's attorneys totaled $131,000.00 for preparation and trial, $50,000.00 in the event of an appeal, and $25,000.00 in the event of an appeal to the Texas Supreme Court.

The trial court rendered judgment on the jury's verdict,² and this appeal ensued.

II. ISSUES PRESENTED

In three issues, rePipe challenges the legal and factual sufficiency of the evidence supporting (a) the jury's finding that Turpin resigned for a Good Reason, (b) its award of $277,747.56 as compensation damages, and (c) its determination that rePipe failed to pay Turpin his 2003 non-financial bonus in the amount of $16,976.92. In its fourth issue, rePipe challenges the award of attorneys' fees.

III. STANDARD OF REVIEW

To determine whether the evidence is legally sufficient to support the judgment, we review the entire record, crediting favorable evidence if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). We assume that jurors decided questions of credibility or conflicting evidence in favor of the verdict if they reasonably could do so. Id. at 819, 820. If the evidence would enable reasonable and fair-minded people to differ in their conclusions, then it is legally sufficient to support the verdict. Id. at 822. We do not substitute our judgment for that of the trier-of-fact if the evidence falls within this zone of reasonable disagreement. Id. When reviewing a jury finding for factual sufficiency, we consider and weigh all of the evidence in a neutral light and conclude that the finding is not supported by sufficient evidence only if the finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam).

IV. ANALYSIS

A. Termination for Good Reason

In its first issue, rePipe asserts that the evidence is legally and factually insufficient to support the jury's finding that Turpin resigned for Good Reason as that phrase is defined in the Agreement. According to rePipe, the relevant provisions of the Agreement imposed the following requirements:

[I]f Turpin objected to the assignment of new responsibilities in writing within ten days, but rePipe nevertheless insisted that Turpin perform the unwanted new responsibilities, then Turpin would have 180 days during which he could resign for a "Good Reason"—unless, during those 180 days, he withdrew his timely objection and forfeited his "Good Reason" by giving written consent to the new responsibilities.³

RePipe contends the evidence is legally and factually insufficient because Turpin admits he did not object in writing within ten days of the April 22, 2004 assignment of inconsistent duties. Turpin, however, argues that the Agreement did not condition his right to resign for Good Reason upon such an objection.⁴ To evaluate rePipe's argument, we first must determine whether the Agreement required Turpin to object before resigning as rePipe contends.

1. Contract Construction

Our primary concern in interpreting a contract is to ascertain the true intent of the parties as expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex.2006). Ordinarily, the writing alone is sufficient to express the parties' intentions, "for it is objective, not subjective, intent that controls." Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738, 740 (Tex.2006) (per curiam) (quoting City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968)). We examine the writing as a whole in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). We presume that the parties to a contract intend every clause to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996). Thus, no single provision will be given controlling effect, and all provisions will be considered with reference to the entire contract. J.M. Davidson, 128 S.W.3d at 229. We give terms their plain, ordinary, and generally accepted meaning unless the contract shows the parties used them in a technical or different sense. Heritage Res., 939 S.W.2d at 121.

If the parties have entered into an unambiguous writing, we will enforce the parties' intentions as expressed in the contract. Matagorda County Hosp. Dist., 189 S.W.3d at 740. To determine if a contract is ambiguous, we first examine the words the parties chose to use, and considering the business activity to be served, determine whether both proffered interpretations are reasonable. XCO Prod. Co. v. Jamison, 194 S.W.3d 622, 628 (Tex.App.-Houston [14th Dist.] 2006, pet. denied). If both interpretations are reasonable, then the contract is ambiguous and there is a genuine issue of material fact regarding the parties' intent. J.M. Davidson, 128 S.W.3d at 229. But if only one interpretation is reasonable, we will enforce the contract according to its terms. XCO, 194 S.W.3d at 628.

2. Terms of the Agreement

The sections of the Agreement that are central to rePipe's first issue provide as follows:

Section [5(b)] Termination by the Employee. (i) The Employee will be entitled to terminate his Employment (A) for a Good Reason at any time within 180 days after the facts or circumstances constituting that Good Reason first exist and are known to the Employee ....

"Good Reason" for the Employee's termination of his Employment means: ... (iii) the assignment to the Employee without the Employee's written consent of duties inconsistent in any material respect with the Employee's then current positions, authority, duties or...