Michael S. Gorbet v. Northwood Lincoln-Mercury and David Keilson

Affirmed and Memorandum Opinion filed November 3, 2005

Affirmed and Memorandum Opinion filed November 3, 2005.

In The

Fourteenth Court of Appeals

_______________

NO. 14-04-00813-CV

_______________

MICHAEL S. GORBET, Appellant

V.

NORTHWOOD LINCOLN‑MERCURY

and DAVID KEILSON, Appellees

______________________________________________________

On Appeal from 190th District Court

Harris County, Texas

Trial Court Cause No. 02‑60965

______________________________________________________

M E M O R A N D U M O P I N I O N

Michael S. Gorbet appeals a summary judgment entered in favor of Northwood Lincoln-Mercury (ANorthwood@) and David Keilson on the ground that he is entitled to damages for Northwood=s breach of his employment contract (the Acontract@). We affirm.

Background

In January 2002, Gorbet and Northwood entered into the contract, which contained the following clause:

If the terms and conditions of this AEmployment Contract@ are agreed by the signatures below, Northwood additionally agrees, in the event Mike [Gorbet] is terminated, or laid off within 12 months of the initial employment date of 01/08/02 Northwood will honor this contract by paying in full all remaining months to equal 12 full months of employment and employment pay at the time of termination or lay off.

Northwood discharged Gorbet in July of 2002, after Gorbet was involved in a physical altercation while attending an auto auction on behalf of Northwood.  Gorbet filed suit against Northwood, alleging, among other things, breach of contract.  Both parties filed cross motions for summary judgment, and the trial court granted Northwood=s motion and denied Gorbet=s.

In the trial court and on appeal, Gorbet argues that Northwood is liable to him for the remaining portion of the contract salary because it specifies that he was to be paid for 12 months even if he was Aterminated or laid off.@^[1] Northwood responds that it does not owe Gorbet for the remaining term of the contract because it terminated him for good cause.

Standard of Review

A traditional summary judgment may be granted if the motion and summary judgment evidence show that, except as to the amount of damages, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c). In reviewing a summary judgment, we take as true all evidence favorable to the nonmovant and indulge every reasonable inference, and resolve any doubts, in the nonmovant=s favor.  Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).  Where, as here, the parties file cross-motions for summary judgment, one of which was granted and the other denied, we review the summary judgment evidence presented by both sides, determine all questions presented, and affirm or reverse accordingly.  See id. 

Good Cause

Because Northwood=s affirmative defense of Agood cause@ to Gorbet=s breach of contract claim is dispositive of this case, we consider it first.  If an employer breaches an employment contract prior to complete performance, the employee may recover his salary due for the full term of the contract.  Watts v. St. Mary=s Hall, Inc., 662 S.W.2d 55, 58 (Tex. App.CSan Antonio 1983, writ ref=d n.r.e.).  However, if an employer is warranted in discharging an employee, the employee is not entitled to collect the salary accruing to him after the date of his discharge.  Id. When a contract of employment is for a term (as opposed to at will), the employer has the burden of showing good cause for the discharge.  See Lee-Wright, Inc. v. Hall, 840 S.W.2d 572, 578 (Tex. App.CHouston [1st Dist.] 1992, no writ).

Good cause is defined as the employee=s failure to perform duties in the scope of employment that a person of ordinary prudence would have done under the same or similar circumstances.  Id. at 580.  Additionally, an employee=s duties to his employer include an implied obligation to refrain from acting in a manner that would tend to injure the employer=s business, interests, or reputation.  Watts, 662 S.W.2d at 58.  Any breach of this obligation amounts to good cause and justifies an employer in discharging the employee from his services.  Id.  

In this case, the contract contains no terms regarding grounds for discharge.  However, Northwood=s Employee Handbook (the Ahandbook@) provides that A[d]isciplinary action may include . . . immediate termination of employment@ and that misconduct that may lead to disciplinary action includes engaging in verbal or physical altercations on company property and engaging in any actions that bring Aembarrassment or ridicule@ to Northwood.^[2]

Northwood=s uncontroverted summary judgment evidence showed that: (1) Gorbet engaged in a physical altercation while in the course and scope of his employment; (2) such conduct was adverse to Northwood=s interests and prohibited by the handbook; and (3) Gorbet was terminated for engaging in this conduct.  Gorbet argues that the contract must be paid in full upon termination of employment for any reason because it is silent as to the right of Northwood to terminate his employment for good cause.  However, Gorbet cites no legal authority in support of this contention, and at least one Texas case has rejected this argument.^[3]  Gorbet also contends that the issue of good cause is one for a jury.  However, where, as here, the facts regarding an employee=s conduct are undisputed, Agood cause@ becomes a question of law.  See Lee-Wright, 840 S.W.2d at 580; Watts, 662 S.W.2d at 59.  Because Gorbet=s issues have failed to refute that good cause for his discharge existed and was a valid defense to his claim, they are overruled, and the judgment of the trial court is affirmed.

/s/        Richard H. Edelman

Justice

Judgment rendered and Memorandum Opinion filed November 3, 2005.

Panel consists of Justices Fowler, Edelman and Guzman.

---

^[1]           It is not apparent how Gorbet=s appeal of the summary judgment against his contract claim would involve Keilson, who signed the contract on behalf of Northwood, but was not himself a party to it.

^[2]           Both Gorbet and Northwood attached copies of this manual to their summary judgment motions or responses.

^[3]           See Ingram v. Dallas County Water Control & Improvement Dist. No. 7, 425 S.W.2d 366, 367 (Tex. Civ. App.CDallas 1968, no writ) (refusing to agree with appellant=s contention that an employment contract for term silent on the issue of termination must be paid in full upon discharge for any reason).