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CAUSE NO. 2008-64753 47 Op
BARRY OLSEN, IN THE DISTRICT COU
Plaintiff
VS. HARRIS COUNTY, TEXAS
IDM EQUIPMENT, LLC,
Defendant. 281ST JUDICIAL DISTRICT
PLAINIFF’S RESPONSE TO DEFENDANT’S NO EVIDENCE AND TRADITIONAL
MOTIONS FOR SUMMARY JUDGMENT
TO THE HONORABLE JUDGE OF SAID:
COMES NOW Plaintiff, BARRY OLSEN, and respectfully files this Response to
Defendant’s No Evidence and Traditional Motions for Summary Judgment. In support
hereof, Plaintiff would show this Court the following:
I
FACTUAL BACKGROUND
This case involves breach of a sales commission agreement. Plaintiff, Barry
Olsen, is an oil rig salesman. Plaintiff was hired by Defendant IDM Equipment, LLC
during 2004. See Attached Exhibit “A”, Affidavit of Barry Olsen. At that time, Plaintiff
and Defendant executed a written agreement providing for a salary, and bonus sales
commissions to be paid to Plaintiff for selling Defendant’s products. The Agreement,
dated November 23, 2004 provides that Plaintiff is entitled to bonus commissions as
follows:
Compensation: Baso Salary - $7000 per moath (compensation plans are adjusted periodically)
Bonus - is earned for sles above @ minimum thresbold of $2.0 ntillioa-
Bows rate
of 0.5% of met sales (exchiding taxes, freight, etc.).
Bonuses are paid quarterty following receipt of customer payment.
RECORDER'S
MEMORANDUM
a oF Poor quanty
eof imaging
Thus, the agreement clearly provides that bonus commission is “earned” at a certain point
in time; i.e. when a minimum threshold of sales occurs. See Attached Exhibit “A”,
Affidavit of Barry Olsen.
The parties operated under this agreement for several years, and Plaintiff was paid
his salary, and his earned bonus under the commission agreement. During his time with
Defendant, Plaintiff sold in excess of $250 million dollars of Defendant’s products.
During 2007 and 2008, as a direct result of Plaintiff's efforts, Defendant made the
following sales of oil field equipment:
a) Grey Wolf #109; total sales price of $12,472,683.85 (closed 7/24/07);
b) Grey Wolf #110; total price of $13,351,683.00 (closed 11/07);
c) Union Drilling Rig #58: total price of $12,68 1,282.00 (closed 1/08);
d) SST Rig # 68; total price of $12,870,000.00 (closed 2008).
Under the November 23, 2004 agreement, bonus commissions would be due on these
sales as follows:
a) Grey Wolf #109: Commission at .5% = $62,363.42
b) Grey Wolf #110: Commission at .5% = $66,758.42
c) Union Drilling: Commission at 5% = $63,406.00
d) SST: Commission at .5% = $64,350.00
In July 2007, Plaintiff’s salary was increased. However, Plaintiff did not request
such an increase, he did not negotiate for this increase, nor was it part of any bargained
for exchange. See Attached Exhibit “A”, Affidavit of Barry Olsen. Instead, Plaintiff was
merely informed that Defendant desired to modify Plaintiff’s salary and bonus
commission; to raise his salary and essentially eliminate his bonus commission for the
remainder of 2007. See Attached Exhibit “A”, Affidavit of Barry Olsen. Plaintiff
objected to the arrangement because it eliminated significant commissions that he had
either already earned, or that he had been working towards earning for a long time. Asa
result, Plaintiff and Defendant’s Vice President, Ralph John, entered into a verbal
agreement that in exchange for the modification to Plaintiff's compensation package: 1)
Plaintiff would receive 2,000 shares of IDM stock; 2) Plaintiff would receive commission
for Grey Wolf #109 ($62,363.42) based upon the November 24, 2004 agreement; 3)
Plaintiff would have the future benefit of a new Bonus Commission Plan to be rolled out
in early 2008, ($127,756.00); and 4) Plaintiff would receive a one year severance
package. Despite this agreement and my reliance thereon, IDM did none of these things.
See Attached Exhibit “A”, Affidavit of Barry Olsen. Despite the agreement Plaintiff
negotiated with Ralph John, and Plaintiff's reliance thereon, Defendant did none of these
things.
In early 2008, Plaintiff was forced by management to sign a document purporting
to acknowledge a modification to Plaintiff's salary and bonus commission that had been
negotiated some six (6) months earlier. See Attached Exhibit “A”, Affidavit of Barry
Olsen. However, this document does not mention the shares of stock, the payment of
bonus commission for Grey Wolf #109, or the 2008 Bonus Commission Program in
which Defendant’s own CEO testified Plaintiff was entitled to participate. See Attached
Exhibit “A”, Affidavit of Barry Olsen and Exhibit “B”, Deposition of Byron Dunn, P. 74,
1. 17 — p. 75, I. 12).’ Nevertheless, Plaintiff was forced to sign this document or face
certain termination. See Attached Exhibit “A”, Affidavit of Barry Olsen. On June 4,
2008, after Plaintiff had sent a series of emails wherein he requested the status of his
1 Under the IDM Bonus Commission Plan effective January 1, 2008, the bonus commission percentages
remain the same, (.5%), but in order to receive bonus commission the salesman must generate $10 million
in revenue. The undisputed evidence establishes that tiff generated two (2) sales that closed within the
first three (3) months of 2008, generating over $24 million in customer purchases for Defendant. Thus,
during the year 2008, Plaintiff carned and is entitled to bonus commission of at least $127,756.00. See
Attached Exhibit “A”, Affidavit of Barry Olsen.
remaining 2007 bonus commissions, per the agreement of the parties, Defendant
terminated Plaintiff's employment. See Attached Exhibit “A”, Affidavit of Barry Olsen.
As of the date of Plaintiff's termination, Plaintiff's earned but unpaid bonus
commissions under the 2004 agreement would have totaled $256,878.84. See Attached
Exhibit “A”, Affidavit of Barry Olsen. Under the 2004 agreement as modified by the
parties, Plaintiff would be entitled to 2000 shares of IDM stock, .5% commission for
Grey Wolf #109, and commission thereafter based upon the IDM 2008 Bonus
Commission Program, See Attached Exhibit “A”, Affidavit of Barry Olsen. Thus, the
question for the jury is whether Plaintiff is entitled to bonus commission and, if so, under:
1) the 2004 agreement (because consideration has failed for the modification) or, 2) the
2004 agreement as modified verbally during 2007 (based in part on the 2004 plan, and in
part on the 2008 plan, together with the value of 2,000 shares of IDM stock).
Il.
SUMMARY JUDGMENT EVIDENCE
Attached hereto and incorporated herein by reference are the following items of
Summary Judgment evidence:
1 Exhibit “A”, Affidavit of Barry Olsen;
2 Exhibit “B”, Deposition of Byron Dunn;
Exhibit “C”, Affidavit of Margaret Star; and
Exhibit “D”; Emails from and between IDM officers relating to Barry
Olsen’s commission agreement.
lll.
ARGUMENT AND AUTHORITIES
AT WILL EMPLOYMENT DOES NOT PRECLUDE AN ENFORCEABLE
COMMISSION AGREEMENT.
Even if Plaintiff is considered to be an “at will” employee, employment at will
does not preclude the formation of other agreements, including sales commission
agreements, between employer and employee. Light v. Centel Cellular Co. of Tex., 883
S.W.2d 642, 644 (Tex. 1994). Such “other” agreements must be supported by
consideration, but in the context of at-will employment the consideration cannot be
dependent on a period of continued employment. /d. Such a promise would be illusory
in that it would fail to bind the promisor, who always retains the option of discontinuing
employment in lieu of performance. /d. at 645 (citing E. Line & Red River R.R. Co v.
Scott, 10 S.W. 99, 102 (Tex.1888) (noting that in at-will employment, “it is no breach of
contract to refuse to receive further services.”)). Even if one promise is illusory, a
unilateral contract may still be formed — the non-illusory promise can serve as an offer,
which the promisor, who made the illusory promise, can accept by performance. See
Light, 883 S.W.2d at 645, n. 6. The fact that the employer was not bound to perform
because he could have fired the employee is irrelevant; if the employee has performed, he
has accepted the employee’s offer and created a binding unilateral contract. Id.
In the present case, the enforceable agreement between the parties is the
agreement of Defendant to pay Plaintiff sales commission, in addition to his salary and
other benefits. According to the agreement between the parties, those bonus
commissions are earned at a certain point in time, are not part of Plaintiff’s salary and are
not dependent on continued employment. Defendant's obligation to perform was
accepted by Defendant the first time Defendant made a commission payment to Plaintiff
under the 2004 agreement. Plaintiff is therefore entitled to any and all commissions
earned, but unpaid, as of the date of his termination regardless of any alleged “at will”
status.
What Defendant asks this court believe is that Plaintiff voluntarily gave up earned
commission of almost $130,000.00, in exchange for a new salary of $140,000 and a
potential performance bonus from that point forward. Nothing could be further from the
truth. The undisputed summary judgment evidence establishes that in July 2007
Defendant promised Plaintiff certain things in return for Plaintiff's agreement to forgo a
substantial, and already earned commission. See Attached Exhibit “A”, Affidavit of
Barry Olsen. Defendant has produced no evidence to contradict the sworn testimony of
Plaintiff in this regard. Importantly, the affidavit of Defendant’s own Human Resource
Manager, Margaret Starr, confirms and/or corroborates Plaintiff's testimony that
Defendant’s vice president, Ralph John, as well as other IDM officers, agreed and
understood that Barry Olsen was owed commission for the 4" quarter of 2007 and the I“
quarter of 2008. See Attached Exhibit “C”, Affidavit of Margaret Starr.
B AT-WILL MODIFICATION NOT ESTABLISHED AS A MATTER OF LAW
Defendant’s argument that Plaintiff accepted a modification to the terms of his
at-will employment is negated by the summary judgment evidence offered by Plaintiff.
Contract modification is an affirmative defense. Brownlee v. Brownlee, 665 S.W.2d 111,
112 (Tex. 1984). Enforceable at-will employment contract modifications require proof of
(i) notice of the change and (ii) acceptance of the change. Hathaway v. General Mills,
Inc., 711 S.W.2d 227, 229(Tex. 1986). However, to satisfy notice, the employer must
prove that it “unequivocally” notified the employee of “definite changes” in employment
terms. Id. The employer must also prove, as a matter of law, that the employee knew of
the “nature of the changes” and the “certainty of their imposition.” /d. (emphasis added).
The summary judgment evidence offered by Plaintiff clearly shows that Barry Olsen,
Ralph John (Defendant’s VP), Ahmed Allouashe (Defendant’s CFO), Marjorie
Hankinson (Defendant’s accounting personnel) knew or believed that Plaintiff was still
owed bonus commission based upon his original agreement for sales made in the 4”
quarter of 2007 and the 1“ quarter of 2008. See, Exhibit “A”, Affidavit of Barry Olsen;
Exhibit “C”, Affidavit of Margaret Star; and Exhibit “D”, Emails from and between IDM
officers relating to Barry Olsen’s commission agreement. Byron Dunn, Defendant’s
CEO was copied on many of the April 2008 emails regarding Mr. Olsen’s commissions,
but in his deposition claimed he could not remember any of these communications. As
such, despite Defendant’s argument that Plaintiff “accepted” his fate with Defendant in
February 2008, the summary judgment evidence shows that Defendant, through Ralph
John and others, was telling Plaintiff that he would be paid as the parties agreed orally in
July 2007.
Under such circumstances, it cannot be said as a matter of law that Defendant
communicated to Plaintiff that the terms of the January 1, 2008 letter were being imposed
with certainty. In other words, the summary judgment evidence shows that none of those
involved actually believed or understood that the alleged changes were “certain in their
imposition”. Plaintiff testified that the document he was forced to sign did not represent
the terms he had agreed upon with Ralph John. See, Exhibit “A”, Affidavit of Barry
Olsen. The summary judgment evidence further shows that until January 2010, at the
earliest, Plaintiff had no reason to know that the agreement he made with Ralph John,
acting on behalf of Defendant, might not be honored. See, Exhibit “A”, Affidavit of Barry
Olsen: Exhibit “C”, Affidavit of Margaret Star, and Exhibit “D”, Emails from and
between IDM officers relating to Barry Olsen’s commission agreement. At that point in
time, Plaintiff had already performed his obligations under the original agreement, as
modified by Plaintiff and Defendant in July 2007, and could not have accepted the
alleged changes shown on the February 26, 2008 document by continuing his
employment thereafter.
Importantly, if the February 26, 2008 document actually included all of the
agreed upon changes to Plaintiff’s salary and/or commission agreement, then there would
be no need for Ralph John on October 5, 2007 to state in an email to Margaret Starr that
Defendant owes Plaintiff commissions “based upon his old agreement on the prospects he
was working on before.” See Exhibit “C”, Affidavit of Margaret Star and Exhibit “D”
Emails from and between IDM officers relating to Barry Olsen’s commission agreement.
There would likewise be no reason for Mr. John to tell Margaret Starr in another email
dated April 14, 2008, as well as verbally, that Mr. Olsen is supposed to be paid
commissions “from the old program he was on.” It would also not be necessary on April
14, 2008 for Defendant’s CFO and accounting personnel to calculate Plaintiff’s 2007 and
2008 commissions, and then conclude that they should be paid. See Exhibit “C”
Affidavit of Margaret Star, and Exhibit “D”, Emails from and between IDM officers
relating to Barry Olsen’s commission agreement.
Byron Dunn testified under oath that he does not remember any discussions
relating to Mr. Olsen's commissions, even though he was copied with several of the
above referenced emails between Ralph John and others during April 2008. Mr. Dunn
claims ignorance of these discussions, yet Margaret Starr testifies in her affidavit that Mr.
Dunn told her verbally, and in an email that Defendants have apparently not produced,
that Mr. Olsen will not be paid regardless of any agreement between him and Mr. John.
The summary judgment evidence even shows that Mr. Dunn told Margaret Starr that he
did not care what agreement Ralph John made with Barry Olsen — Barry Olsen was not
getting paid. See Exhibit “B”, Deposition of Byron Dunn, p. 110, 1. 12-1. 19 and Exhibit
“C”, Affidavit of Margaret Star. As the Texas supreme court has clearly stated, contract
modification depends on intent, which is a fact question. Hathaway, 711 S.W.2d at 229.
As was true in Hathaway, unequivocal notice of the nature of a definite change in
Plaintiff’s commission agreement is a disputed fact issue on which reasonable minds
could differ. Defendant’s modification affirmative defense is not conclusively
established. Summary judgment is not appropriate.
Cc 2008 BONUS COMMISSION PROGRAM
In addition, Defendant totally ignores the effect of the new IDM commission
structure implemented in January 2008. Even assuming that Plaintiff agreed to accept
$140,000 in salary and a potential performance bonus, according to Defendant’s CEO,
Byron Dunn, all sales personnel who signed the plan had the benefit of the new 2008
sales commission program. See, Exhibit “B”, Deposition of Byron Dunn, p. 74, 1. 25 - p.
75 -1.5. Mr. Olsen qualified for the 2008 Sales Commission Program. Mr. Olsen was a
salesman and signed the plan. See, Exhibit “A”, Affidavit of Barry Olsen and Exhibit
“B”, Deposition of Byron Dunn, p. 74, |. 25 — p. 75 — 1.5. These undisputed facts further
establish that Plaintiff met the new minimum requirements for commission during 2008
(i.e. $10 million in sales), that he is entitled to participate under the 2008 commission
program, that he was promised participation in the 2008 commission program when he
agreed to forgo commission during 2007, and that as a matter of law Plaintiff earned, and
is entitled to commissions for the year 2008. See, Exhibit “A”, Affidavit of Barry Olsen.
D ORAL CONTRACTS ARE ENFORCEABLE
“Parties may enter into an oral contract.” Cothrun Aviation, Inc. v. Avco
Corporation, 843 S.W.2d 260, 263 (Tex. App. — Fort Worth 1992, writ den’d). Genuine
issues of material fact exist where the parties entered into an oral contract but dispute the
terms, facts and/or circumstances of that oral contract. /d. At 263-264. “In determining
the existence of an oral contract, the court looks to the communications between the
parties and to the acts and circumstances surrounding those communications.” Copeland
v. Alsobrook, 3 S.W.3d 598, 605 (Tex. App. — San Antonio 1999, rev. den’d). The court
must also look to the conduct of the parties. /d.
Looking to the actions of the parties in this case establishes several key facts.
First, it is undisputed that Plaintiff and Defendant agreed to modify Plaintiff’s
commission structure. See, Exhibit “A”, Affidavit of Barry Olsen; Exhibit “C”, Affidavit
of Margaret Star; and Exhibit “D”, Emails from and between IDM officers relating to
Barry Olsen’s commission agreement. It is further undisputed that Defendant did offer
Plaintiff shares of stock after July 2007, but not in the amount agreed upon and as an
option, as opposed to outright compensation. See, Exhibit “A”, Affidavit of Barry Olsen:
Exhibit “C” and Exhibit “D”, Emails from and between IDM officers relating to Barry
Olsen’s commission agreement. The email records between the parties clearly indicate
that Plaintiff and certain officers of IDM, including Ralph John, VP of Sales, and Ahmed,
10
the comptroller of IDM, all understood that Plaintiff's compensation agreement involved
more than a salary and a potential performance bonus. The email records reveal a
number of important facts and admissions on the part of Defendant over the course of
nearly a year:
1 Email from Ralph John to Margaret Starr dated October 5, 2007 states:
“Did we give Barry his letter? We are (sic) owe him commissions based
upon his old agreement on the prospects he was working on before and as
we worked through the change in his compensation package. How/who
calculates this so | can work with them?” (emphasis added)
Email from Ralph John to Margaret Starr dated April 12, 2008 states:
“This is the outstanding balance of Barry’s bonus on the rigs that finally
shipped and commission due from the old program he was on. Could you
please review with Emily and let me know the amount is correct. ”
(emphasis added)
See, Exhibit “D”, Emails from and between IDM officers relating to Barry Olsen’s
commission agreement. Plaintiff has presented evidence of offer, acceptance,
performance and breach of an oral agreement for the continued payment of commissions
under the 2004 agreement for the 4" quarter of 2007 and the 1“ quarter of 2008 many
months (almost a year) after the alleged contract modification Defendant claims Plaintiff
accepted. There are fact questions left to be determined regarding the agreement between
Plaintiff and Defendant, precluding summary judgment.
E DURESS AND LACK OF CONSIDERATION
Defendant’s “at will” argument ignores another important fact; that Plaintiff’s
execution of a document under threat of termination does not create an enforceable
agreement, nor does it serve as legitimate consideration for a modification of the existing
agreement. If continued employment is not consideration for an enforceable agreement,
I
then forcing an employee to execute a document, or face termination, literally negates
consideration for the alleged agreement. Plaintiff's affidavit is sufficient evidence that he
was forced by management to sign a document purporting to undo an already negotiated
agreement that was actually performed by Plaintiff. The document that Defendant claims
represents the agreement in this case does not set forth the terms of the agreement
Plaintiff negotiated and relied upon, and does not reflect any bargained for exchange.
Duress is a question of fact and is the threat to do some act which the party
threatening has no legal right to do. Such threat must be of such character as to destroy
the free agency of the party to whom it is directed. It must overcome his will and cause
him to do that which he would not otherwise do, and which he was not legally bound to
do. The restraint caused by such threat must be imminent, and must be such that the
person to whom it is directed has no present means of protection. Shurtleff v. Giller, 527
S.W.2d 214 (Tex.Civ.App.—
Waco 1975, no writ). It is true, Plaintiff could have refused
to sign the document and simply sued Defendant for his commission. However, as of
January |, 2008, six (6) months after Plaintiff fully performed his obligations, Defendant
did not have the right to threaten to terminate Defendant's employment if he did not sign
the document dated January 1, 2008; at that point, Defendant’s return performance was
required. Plaintiff's summary judgment evidence is sufficient to show the existence of
fact questions regarding duress and, at a minimum, lack of consideration for the January
1, 2008 document. Jd. Summary judgment should be denied.
F PROMISORY FRAUD
Promissory fraud occurs when a person makes a promise the person did not intend
to perform when making the promise. Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432,
12
435 (Tex. 1986). The pretense of acknowledging a promise, plus the ultimate denial of
making a promise plus the failure to perform the promise comprises promissory fraud.
Id. Fraud also is the successful employment of cunning, deception or artifice to
circumvent, cheat or defraud another. Johnson v. Smith, 697 S.W.2d 625, 632 (Tex. App.
— Houston [14" Dist.] 1985, no writ). This fraud by conduct is not measured by the test
for misrepresentational fraud. Id.
Fraud can be, and is regularly proved by circumstantial evidence. While a party's
intent is determined at the time the party made the representation, it may be inferred from
the party’s subsequent acts after the representation is made. Spoljaric, 708 S.W.2d at
434. Intent is thus ordinarily a fact question, uniquely within the realm of the trier of fact
because it depends on the credibility of the witnesses and the weight to be given their
testimony. /d. Because intent to defraud is not susceptible to direct proof, it invariably
must be proven by circumstantial evidence. /d. at 435. Slight circumstantial evidence of
fraud, when considered with the breach of a promise to perform, is sufficient to support a
finding of fraudulent intent. /d. See also, Transport Ins. Co. v. Faircloth, 898 S.W.2d
269, 285 (Tex. 1995) (any claim of fraud will almost always depend on presence of
circumstantial evidence).
In this case, and in any case involving fraud and misrepresentation, the person
accused of fraud will rarely actually admit to the fraudulent activities. The summary
judgment evidence offered by Plaintiff establishes that certain promises were made to
Plaintiff, in exchange for Plaintiff’s agreement to modify certain aspects of his bonus
commission agreement. Defendant’s own internal emails, and the affidavit of Margaret
Starr, establish the fact that Defendant, through Ralph John and others, made and
13
acknowledged that promises were made to Plaintiff for payment of commission under the
“old program” for the 4" quarter of 2007 and the I" quarter of 2008, and that Defendant
refused to perform those promises.
This summary judgment evidence represents more than “slight” circumstantial
and direct evidence of fraud by Defendant at the time Plaintiff agreed to modify his
commission structure. This evidence points out the existence of genuine issues of
material fact as to Defendant’s intent. Defendant’s Motions for Summary Judgment
should therefore be denied.
G MALICE
Plaintiff has presented evidence of fraud. Malice, necessary for an exemplary
damage award, is established by direct and/or circumstantial evidence. Fisher v. Beach,
671 S.W.2d 63, 67 (Tex.App.—Dallas 1984, no writ). Malice means “ill will, evil
motive, or reckless disregard of the rights of others.” /d. Plaintiff has presented evidence
that Ralph John, acting on behalf of Defendant as its vice president and person with
authority to negotiate Barry Olsen’s compensation agreement, made promises to Mr.
Olsen, thus inducing him to continue selling oil rigs for Defendant. See, Exhibit “A”,
Affidavit of Barry Olsen; Exhibit “C”, Affidavit of Margaret Star; and Exhibit “D”,
Emails from and between IDM officers relating to Barry Olsen’s commission agreement.
Plaintiff has also produced evidence that Mr. John instructed Margaret Starr to include
language in the January 1, 2008 letter with the intention of causing Mr. Olsen to lose the
benefit of the promises previously made, and relied upon by Barry Olsen. See, Exhibit
“C”, Affidavit of Margaret Star. This is sufficient evidence of malice to survive
14
summary judgment. The jury should decide what the intentions of Mr. John were, acting
on behalf of Defendant.
H VICE PRINCIPAL LIABILITY , INTENT AND RATIFICATION
To impose liability for Ralph John’s intentional fraud, Mr. John’s actions must
either be imputed to Defendant, or Mr. John’s acts must be considered those of the
company. Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997). Actions
of a vice-principal of a corporation committed in the workplace may be deemed to be the
acts of the corporation itself and are imputed to the corporation regardless of whether the
vice-principal is acting within the scope of his employment when he commits an
intentional tort. GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 618 (Tex. 1999)(vice-
principal’s acts supporting intentional infliction of emotional distress were corporation's
acts). The summary judgment evidence establishes that Mr. John is a vice president of
Defendant, and was Plaintiff's direct supervisor. See, Exhibit “A”, Affidavit of Barry
Olsen and Exhibit “C”, Affidavit of Margaret Star. This evidence establishes that Ralph
John is a vice principal of Defendant and, thus, his actions can be imputed to Defendant.
See id.
Intent to commit a tort may be inferred from the actor’s conduct. Pineda v. City of
Houston, 175 S.W.3d 276, 283 (Tex. App.—Houston [1st Dist.| 2004, no pet.) (citing
Restatement (Second) of Torts § 8A (1965) (intent established when facts demonstrate
actor desired to cause consequences of his act, or he believes consequences are
substantially certain to result from it.) The summary judgment evidence shows that Mr.
John either: 1) knew his promises would not be honored by IDM, 2) that Byron Dunn,
Defendant’s CEO ratified Mr. John’s fraudulent promises, or 3) that Mr. John’s promises
15
were effectively negated by Byron Dunn’s unilateral decision to deny Barry Olsen the
benefit of the bargain he struck with Ralph John. Under this set of facts, summary
judgment should be denied so the jury may consider and weigh the testimony and other
evidence in this case.
“Ratification is the affirmance by a person of a prior act which when performed
did not bind him, but which was professedly done on his account, whereby the act is
given effect as if originally authorized by him.” Disney Enters., Inc. v. Esprit Fin., Inc.,
981 S.W.2d 25, 31(Tex.App.—San Antonio 1998, pet. dism'd w.o.j.). “Ratification may
occur when a principal, though he had no knowledge originally of the unauthorized act of
his agent, retains the benefits of the transaction after acquiring full knowledge.” Land
Title Co. of Dallas, Inc. v. F.M. Stigler, Inc., 609 S.W.2d 754, 756 (Tex. 1980). The
critical factor in determining whether a principal has ratified an unauthorized act by his
agent is the principal’s knowledge of the transaction and his actions in light of such
knowledge. /d. In this case, there is evidence that Byron Dunn understood Mr. John had
made certain promises to Mr. Olsen without the intent of performing the same. See,
Exhibit “A”, Affidavit of Barry Olsen; Exhibit “C”, Affidavit of Margaret Star; and
Exhibit “D”, Emails from and between IDM officers relating to Barry Olsen’s
commission agreement. Despite this knowledge, and the fact that Defendant had
accepted the significant benefits of Mr. Olsen’s performance and reliance, Mr. Dunn as
corporate CEO intentionally refused to honor the promises made by Mr. John and,
instead, repudiated those promises without cause or justification. There is direct and
circumstantial evidence in this case that Mr. Dunn, as Defendant’s CEO, ratified the prior
fraudulent statements and actions of Mr. John. Summary judgment should be denied.
16
I QUANTUM MERUIT
In the event the Court finds there is no enforceable agreement between the parties
with respect to bonus commission, Plaintiff has alleged a claim for Quantum Meruit. To
recover on a claim of Quantum Meruit, Plaintiff must prove that: (1) valuable services
were rendered; (2) for the person sought to be charged; (3) which services were accepted
by the person sought to be charged used and enjoyed by him; (4) under such
circumstances as reasonably notified the person sought to be charged that the Plaintiff in
performing such services was expecting to be paid by the person sought to be charged.
Vortt Exploration Co., Inc. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990).
Clearly, Plaintiff has offered sufficient evidence in this proceeding of each of these
elements. Summary judgment is therefore inappropriate.
In the event Defendant contends that recovery under Quantum Meruit is
precluded, the Defendant must plead and prove the affirmative defense that there was a
valid, express contract with the Defendant covering the supplied services. Id.; Truly v.
Austin, 744 S.W.2d 934, 936 (Tex. 1988). Failure of the Defendant to plead and prove
this affirmative defense, results in waiver of the same. Fortune Prod. Co. v. Conoco,
Inc., 52 S.W.3d 671, 685 (Tex. 2000); Freeman v. Carroll, 499 S.W.2d 668, 670
(Tex.Civ.App.-Tyler 1973, writ ref'd n.r.e.). Defendant has offered no summary
judgment evidence to establish this affirmative defense as a matter of law. Summary
judgment is inappropriate.
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that
Defendant’s No Evidence and Traditional Motions for Summary Judgment be DENIED
17
in all things, and that Plaintiff be granted any further relief, at law or in equity to which
he may shown himself entitled.
Respectft bmitted
* BRYANT YAW FIRM
<_ 4 [>
David A. Bryant, Jr.
State Bar No. 00785730
18 Augusta Pines Drive, Suite 200W
Spring, Texas 77389
(281) 290-8866 Telephone
(281) 290-8867 Facsimile
ATTORNEYS FOR PLAINTIFF
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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing was forwarded to
counsel for Defendant via facsimile, hand delivery and/or certified mail, return receipt
requested, on this 11" day of June, 2010.
Chris C. Pappas
1010 Lamar, Suite 1800
Houston, Texas 77002
David A. Bryant, Jr.
19