Griffin MacY v. Waste Management, Inc. ( 2009 )

Opinion issued August 28, 2009  

In The  

Court of Appeals

For The  

First District of Texas

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NO. 01-07-00276-CV

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  GRIFFIN MACY, Appellant/Cross-Appellee

V.

WASTE MANAGEMENT, INC., Appellee/Cross-Appellant

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On Appeal from the 157th District Court

Harris County, Texas  

Trial Court Cause No. 2004-47274

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OPINION CONCURRING WITH THE DENIAL

OF EN BANC CONSIDERATION By focusing solely on the absence of the three words "final and binding," Justice Jennings's dissent from the denial of en banc consideration ignores the contents of the hundreds of words that comprise the 13 page contract between Griffin Macy and Waste Management, Inc. For this reason, as well as the fact that this case does not meet the criteria for en banc consideration, I concur in the denial of en banc consideration.  

The Totality of the Agreement

Only by ignoring the totality of the Agreement can Justice Jennings suggest that the absence of the three words "final and binding" is pertinent. An examination of the Agreement as a whole plainly provides that the Board is the entity that is to determine cause, as long as the Board follows certain procedures. Section 5(c) of the Agreement states,

• •"The Company may terminate Employee's employment hereunder for 'Cause' at any time[.]"

• •"An individual will be considered to have been terminated for Cause if the Company determines that the individual engaged in an act constituting cause[.]"

• •"Any determination of Cause under this Agreement shall be made by resolution of the Company's Board of Directors adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors at a meeting called and held for the purpose and at which Employee is given an opportunity to be heard."

(Emphasis added). As shown by the express words of the Agreement, "the Company determines that the individual engaged in an act constituting cause[.]"

Macy argues that unless the words "final and binding" had been added to the sentence that states, "An individual will be considered to have been terminated for Cause if the Company determines that the individual engaged in an act constituting cause[,]" then some other entity–without any deference to the Company's decision –could determine whether there was Cause to terminate Macy. The problem with Macy's interpretation is that it ignores the plain words used in the Agreement that give Waste Management the sole power to decide whether Cause existed, as long as Waste Management followed the procedural requirements described in the Agreement.

If Macy had evidence to raise an issue of fact, then he would have been entitled to have a jury determine whether

• •Waste Management made the Cause finding by a resolution of the Company's Board of Directors, adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting called and held for that purpose at which Macy was given the opportunity to be heard;

• •the Company determined that Macy engaged in fraud; and

• •the Company found fraud by using procedures in accordance with the Company's normal, internal investigative procedures consistently applied in comparable circumstances.

If there had been any factual issue concerning whether these procedures had been followed, then the jury would have to decide whether Waste Management breached the Agreement that required Waste Management to follow these procedures. Because there was no factual issue whether Waste Management fully complied with the Agreement, the trial court properly resolved this case by summary judgment.

In the panel opinion, we explain that this Agreement is similar, but not identical, to those agreements where decisions are left to one party's sole discretion; in those cases, the jury reviews for bad faith only, without reviewing the employer's actual determination that the employee was not entitled to benefits. In the panel opinion, we state,

Because no evidence raises the issue, the trial court did not err by declining to allow the jury to decide if the Board acted in bad faith. Macy cites Goudie v. HNG Oil Co., 711 S.W.2d 716, 718 (Tex. App.--El Paso 1986, writ ref'd n.r.e.), Associated Milk Producers v. Nelson, 624 S.W.2d 920, 926 (Tex. Civ. App.--Houston [14th Dist.] 1981, writ ref'd n.r.e.), and Texaco, Inc. v. Romine, 536 S.W.2d 253, 255 (Tex. Civ. App.--El Paso 1976, writ ref'd n.r.e.). These decisions hold that in situations

where there is an employer-funded plan which is made a part of the employment contract between the employer and the employee, and with provisions which make the employer's determination final, that if the employer determines that an employee is not entitled to benefits, the only way that determination can be attacked is by showing that there was bad faith or fraud in the employer's actions.

Goudie, 711 S.W.2d at 718.

Macy v. Waste Management, Inc., No. 01-07-00276-CV, 2009 WL 1493012, at *8 (Tex. App.--Houston [1st Dist.] May 28, 2009, no pet. h.) (mem. op.). Goudie, Associated Milk Producers, and Romine are similar to this case in that the employer, alone, is the entity given the decision making power to decide the matter of benefits due to an employee. See Goudie, 711 S.W.2d at 718; Associated Milk Producers, 624 S.W.2d at 926; Romine, 536 S.W.2d at 255. In these types of agreements where one entity is alone given the power to make the decision, a jury may decide whether the entity's decision was made in bad faith, but the jury may not review the correctness of the actual decision. See Goudie, 711 S.W.2d at 718; Associated Milk Producers, 624 S.W.2d at 926; Romine, 536 S.W.2d at 255. Similarly to the decisions in these cases, the panel opinion determined that, here, the jury could not review the correctness of the actual decision, but the jury, if there was a question of fact, could review whether Waste Management complied with all the procedural requirements described in the Agreement.

Although the agreements in these decisions included the word "final," nothing in the decisions requires the inclusion of the word "final" for the decision to be left to the sole discretion of one party. See Goudie, 711 S.W.2d at 718; Associated Milk Producers, 624 S.W.2d at 926; Romine, 536 S.W.2d at 255. Furthermore, the agreements in these decisions refer to general employment contracts with an "employer-funded plan," which is different from the arms-length Agreement between these sophisticated parties that negotiated particular procedures to be followed when the Company made its decision. See Goudie, 711 S.W.2d at 718; Associated Milk Producers, 624 S.W.2d at 926; Romine, 536 S.W.2d at 255.

To support its accusation of "judicial fiat," the dissenting opinion fails to accurately apply the authority on which it relies. See Fortis Benefits v. Cantu, 234 S.W.3d 642, 649 n.41 (Tex. 2007). Excluding the legal citation, note 41 in its entirety states,

As a rule, a court should not by judicial fiat insert non-existent language into statutes or into parties' agreed-to contracts, or delete existent language from them either. Our confined duty is to construe the contract as is, and holding that equitable considerations trump contrary contract terms would render contractual subrogation a nullity.

Id. The dissenting opinion violates Fortis by requiring the insertion of the magic words "final and binding"; by inserting non-existing language in the Agreement in allowing another entity other than the Company to determine Cause; by deleting existing language from the Agreement that gives the Company, alone, the power to decide Cause; and by failing to construe the Agreement "as is." See id.

If there was any evidence that showed that Waste Management had failed to comply with the terms set forth in the Agreement, then Macy would be entitled to have a jury decide whether Waste Management breached the Agreement. Because no evidence shows that Waste Management failed to comply with each of the terms set forth in the Agreement, I concur in the en banc court's decision to deny en banc consideration of this case.

Texas Rules of Appellate Procedure Disfavor En Banc Consideration

The Texas Rules of Appellate Procedure plainly state that en banc consideration is "disfavored" and "should not be ordered" unless one of two circumstances exist:

• •En banc consideration is appropriate if it is "necessary to secure or maintain uniformity of the court's decisions."

• •En banc consideration is appropriate if "extraordinary circumstances require en banc consideration."

See Tex. R. App. P. 41.2(c). Unless one of these two circumstances exists, the rules of appellate procedure require cases be decided in panels composed of three justices. See id. Justice Jennings was not assigned as a member of the three justice panel assigned to hear this case, nor did he participate in the panel conference, nor did he hear the oral argument heard by the panel.

In a footnote, Justice Jennings suggests that this case is worthy of en banc consideration because Macy claims that the panel's opinion "reads an arbitration provision into an agreement" and creates "a new standard pursuant to which parties must expressly state that they are not forfeiting their right to sue." The panel opinion does not hold that this is an arbitration case; it is plainly evident that this is not an arbitration case as it was resolved based on the merits by summary judgment in the trial court. The panel opinion does not hold that Macy forfeited his right to sue; it is plainly evident this case does not concern the forfeiture of the right to sue, in that this case was resolved based on the merits by summary judgment in the trial court.

The panel opinion does not create a new standard, but instead applies well-established breach of contract law. The panel opinion states,

"Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered." David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 451 (Tex. 2008) (quoting Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)). . . . Our primary concern in interpreting a contract is to ascertain and give effect to the intent of the parties as it is expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). The intent of the parties must be taken from the agreement itself, not from the parties' present interpretations, and the agreement must be enforced as it is written. See Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731-32 (Tex. 1981).

  Macy, 2009 WL 1493012, at *4. This is a breach of contract dispute between sophisticated parties who entered into an arms-length contract with terms specific to their particular desires. Because the panel opinion applies well established law set by the Texas Supreme Court and our Court, nothing about this case lacks uniformity with established precedent or is legally extraordinary. Justice Jennings, therefore, disregards the rules of appellate procedure criteria for en banc consideration.

Designation of "Opinion" Inconsistent with Rules of Appellate Procedure The panel that decided this case issued what was styled a "Memorandum Opinion" on March 12, 2009 and again on May 28, 2009, but the designation is now changed to "Opinion" due to Justice Jennings's vote that the case be designated an "Opinion." See Tex. R. App. P. 47.4 ("An opinion may not be designated a memorandum opinion if the author of a concurrence or dissent opposes that designation."). I respectfully disagree with designating this case an "Opinion" because this case does not meet the criteria in the rules of appellate procedure for that designation.

According to Rule 47.2 of the Texas Rules of Appellate Procedure, "A majority of the justices who participate in considering the case must determine whether the opinion will be signed by a justice or will be per curiam and whether it will be designated an opinion or memorandum opinion." Tex. R. App. P. 47.2(a) (emphasis added). Here, the panel of justices who decided the case unanimously reached the decision to designate this case a "Memorandum Opinion" on March 12, 2009 and again on May 28, 2009.

The panel correctly designated this a "Memorandum Opinion." Rule 47.4 of the Texas Rules of Appellate Procedure states,

If the issues are settled, the court should write a brief memorandum opinion no longer than necessary to advise the parties of the court's decision and the basic reasons for it. An opinion may not be designated a memorandum opinion if the author of a concurrence or dissent opposes that designation. An opinion must be designated a memorandum opinion unless it does any of the following:

(a) establishes a new rule of law, alters or modifies an existing rule, or applies an existing rule to a novel fact situation likely to recur in future cases;

(b) involves issues of constitutional law or other legal issues important to the jurisprudence of Texas;

(c) criticizes existing law; or

(d) resolves an apparent conflict of authority.

See Tex. R. App. P. 47.4 (emphasis added). None of these circumstances exist here. Because Justice Jennings disregards the rules of appellate procedure criteria for evaluating the case, we are compelled to designate the case as an "Opinion," even though the panel that decided the case unanimously voted to issue the decision as a "Memorandum Opinion" and none of the criteria in the rules of appellate procedure for designating the case as an "Opinion" apply in this case.

Conclusion I respectfully concur with the en banc decision to deny en banc consideration in this case because the panel opinion is legally correct and this case does not meet the criteria for en banc consideration. Furthermore, I oppose changing the designation of the case to "Opinion" because the case does not meet the criteria for that designation.

Elsa Alcala

Justice

Panel consists of Chief Justice Radack and Justices Alcala and Hanks.

En banc consideration was requested. See Tex. R. App. P. 41.2(c).

A majority of the Court voted to deny en banc consideration. See Tex. R. App. P. 49.7.  

Justice Alcala, concurring to the denial of en banc consideration.

Justice Jennings, dissenting from the denial of en banc consideration, joined by Justice Keyes.