Allied Mortgage Capital Corporation and Jason Clint Price v. Advantage Investors Mortgage Corporation and Access Lending Corporation ( 2008 )

Affirmed in Part, Reversed & Remanded in Part, and Memorandum Opinion filed October 14, 2008

Affirmed in Part, Reversed & Remanded in Part, and Memorandum Opinion filed October 14, 2008.

In The

Fourteenth Court of Appeals

____________

NO. 14-07-00170-CV

____________

ALLIED MORTGAGE CAPITAL CORPORATION AND JASON CLINT PRICE, Appellants

V.

ADVANTAGE INVESTORS MORTGAGE CORPORATION AND

ACCESS LENDING CORPORATION, Appellees

On Appeal from the 127th District Court

Harris County, Texas

Trial Court Cause No. 2003-51100

M E M O R A N D U M   O P I N I O N

Appellants Allied Mortgage Capital Corporation and Jason Clint Price, defendants in the trial court, appeal both the trial court=s summary judgment against them on the claims of appellees Advantage Investors Mortgage Corporation and real party in interest Access Lending Corporation (collectively AAdvantage@) and the trial court=s award of attorney=s fees to Advantage.  We affirm the summary judgment but reverse and remand for a new trial on attorney=s fees because the trial reporter=s record has been lost.

                                                  BAckground

Advantage, a nationwide residential mortgage lender and broker, hired Price as its Houston branch manager in December 2001.  Price executed an employment agreement, which contained a provision allowing Price, upon giving proper notice to Advantage, to terminate his employment immediately for cause or with forty-five days= notice without cause.

In January 2003, Price was unhappy with certain policy changes Advantage implemented, and he began searching for a new employer.  On January 30, 2003, one of Price=s co-workers sent Advantage an email stating that he, Price, and several other employees were resigning from Advantage Aeffective immediately@ but not providing any reason for their resignations. Dawn Pemberton, an Advantage vice president, emailed Price and reminded him that his employment agreement required forty-five days= notice of termination and thus his effective termination date would be March 15, 2003. Pemberton also left Price a phone message and sent another email, again reiterating the March 15 termination date, but Price did not respond until March 14, 2003 with an email to Pemberton.  In this email, Price stated he was Aclarify[ing]@ that he had terminated his employment with Advantage for cause because he believed Advantage breached the employment agreement when it implemented its policy changes.  Meanwhile, Price signed an employment agreement with Allied on January 31, 2003 and began collecting fees on loans and sharing the profits with Allied instead of Advantage.

Advantage sued Price and Allied for breach of contract, conversion, money had and received, and ratification, among other claims. Advantage moved for partial summary judgment on these claims, arguing that since Price=s termination notice was not a notice of for cause termination, he remained an employee for the next forty-five days, until March 15, and therefore all proceeds for loans originated during this time frame belonged to Advantage.  The trial court agreed and granted summary judgment. The parties then had a jury trial on the issues of damages and attorney=s fees.  The trial court awarded Advantage damages and trial attorney=s fees in accordance with the jury=s findings and awarded Advantage appellate attorney=s fees, even though the jury had answered Azero@ regarding appellate attorney=s fees.  In four issues, Allied and Price challenge the trial court=s summary judgment ruling and attorney=s fees award.

                                          Notice of Termination

Advantage moved for summary judgment under Texas Rule of Civil Procedure 166a(c).  The standard of review for a traditional motion for summary judgment is whether the successful movant at the trial level carried its burden of showing that there is no genuine issue of material fact and that judgment should be granted as a matter of law.  KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).  A plaintiff who moves for summary judgment must prove it is entitled to judgment as a matter of law on each element of the cause of action.  Fry v. Comm=n for Lawyer Discipline, 979 S.W.2d 331, 334 (Tex. App.CHouston [14th Dist.] 1998, pet. denied).  Under this traditional standard, this court must take as true all evidence favorable to the nonmovant and must make all reasonable inferences in the nonmovant=s favor.  See Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).

The section of Price=s employment agreement governing terminations by the employee provides as follows:

Manager shall have the right to terminate this Agreement with or without cause.  Any termination without cause shall be effective forty-five (45) days following the delivery by Manager to Advantage of written notice that Manager intends to so terminate this Agreement.  Any termination for cause shall be effective upon the delivery by Manager to Advantage of written notice that Manager intends to so terminate this Agreement.

The termination notice provided by Price states, AThis letter is to serve as formal notification that effective immediately, the following people resign from employment with [Advantage].@  We must decide whether this notice is sufficient to invoke a for cause termination of the employment agreement.  The trial court determined that it did not qualify as a for cause termination notice, and this was the basis of the trial court=s summary judgment on all of Advantage=s claims, which were premised on Price still being an Advantage employee until March 15.

In their first issue, Price and Allied contend that the trial court erred in reaching this conclusion.  We disagree.  The agreement clearly distinguishes between the two types of terminations and provides that Price must give Advantage notice of intent to Aso terminate.@  This language plainly requires Price to specifically notify Advantage if he intended to terminate for cause, which he did not.  See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005) (stating that A[c]ontract terms are given their plain, ordinary, and generally accepted meanings@).  Nothing in Price=s notice indicates that he was terminating the contract for cause.  Price and Allied argue that because Price stated that he was resigning Aeffectively immediately@ and only for cause terminations are immediately effective, his notice was of a for cause termination.  However, the effective date of the termination is not a type of termination but merely a consequence of the type of termination invoked.  The plain language of the contract requires a notice of intent to Aso terminate@ either for cause or without cause, not whether the employee considers the termination to be effective immediately.

Because Price failed to notify Advantage that his termination was for cause, his notice constituted a without cause termination, and we conclude the trial court did not err in granting summary judgment on this basis.  We overrule Price and Allied=s first issue.

In their second and third issues, Price and Allied argue that Price had a valid basis for terminating his employment for cause based on his good faith belief that Advantage had breached its duties to him.  However, given our conclusion that Price=s termination notice was not for cause, whether he had a proper basis for terminating for cause is irrelevant.  Price and Allied further contend that Price=s employment agreement conflicts with another agreement, the branch operating agreement, regarding Advantage=s duties under the contract, making summary judgment improper.  Again, this also goes to the issue of the propriety of a for cause termination, and since Price=s notice was not for cause, we need not address this issue.  Finally, Price and Allied argue that these two agreements conflict regarding certain termination procedures. Both, however, contain identical language requiring that a for cause termination notice must give notice of Price=s intent to Aso terminate.@  We have already determined that Price=s notice did not do this.  For these reasons, we overrule Price and Allied=s second and third issues.

                                               Attorney=s Fees

In their fourth issue, Price and Allied challenge the trial court=s award of attorney=s fees to Advantage.  They argue that the trial court erred in not allowing cross-examination on the issue of whether the attorney=s fees Advantage incurred were properly segregated between Price, against whom they contend attorney=s fees were recoverable, and Allied, whom they claim cannot be responsible for attorney=s fees.  Price and Allied also contend the trial court erred in ignoring the jury=s contrary finding and awarding appellate attorney=s fees.  The reporter=s record of the entire trial was lost, and the parties agree that Price and Allied are thus entitled to a new trial.  See Tex. R. App. P. 34.6(f).  Allied and Price assert that the new trial should cover all trial issues, not just attorney=s fees.  They argue that because their attorney=s fees issues involve segregation of fees and duplication of efforts and thus Arequire an understanding of the claims presented by Advantage and how they related@ to Allied and Price, Athe trier of fact should not be required to determine the issue of attorneys= fees on a skeletal record.@  On remand, Allied and Price can seek to offer whatever evidence they think is necessary to prove their defenses to Advantage=s attorney=s fees claim, but they are not entitled to a new trial on all issues just to defend against attorney=s fees, particularly when they have raised no appellate issue involving any other aspect of the trial.

We affirm the trial court=s judgment in all respects except as to attorney=s fees.  We reverse the trial court=s award of attorney=s fees and remand for a new trial solely on the issue of attorney=s fees.

/s/      Leslie B. Yates

Justice

Judgment rendered and Memorandum Opinion filed October 14, 2008.

Panel consists of Justices Yates, Anderson, and Brown.