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Lucia Power v. GSE Consulting, LP

Court of Appeals of Texas, Second District, Fort Worth

June 22, 2017



          PANEL: WALKER, MEIER, and KERR, JJ.



         I. Introduction

         In this appeal from a final judgment rendered on a jury verdict, Appellant Lucia Power argues in a single issue that the trial court reversibly erred by refusing to submit a jury question on her claim for quantum meruit. We will affirm.

         II. Background

         Appellee GSE Consulting, LP brokered agreements between energy-consuming commercial entities and energy-supplying retail energy providers (REPs). After GSE closed a deal and an REP started supplying energy to a consumer, the consumer paid the REP, the REP paid GSE pursuant to its agreement with GSE and based on the volume of energy that had flowed to the consumer, and only then did GSE pay a commission to the energy consultant who had brokered the deal between the consumer and the REP.

         Power began working for GSE in June 2004 as a business-development representative (BDR). BDRs contacted commercial entities with the hope of scheduling a meeting between the entity and a GSE energy consultant. If successful, the energy consultant would make a sales presentation and handle the remainder of the transaction, if any.[2]

         In July 2004, GSE and Power entered into a written employment agreement that outlined the terms of Power's employment as a BDR. One provision provided that Power was eligible to earn a sales commission (2‒3% for deals that she originated), but another provision prohibited Power from receiving a sales commission if her employment had been terminated.

         Sometime around March 2005, and after closing her first deal, GSE promoted Power to the position of energy consultant. According to Power, around the same time, one of GSE's owners, Jeremiah Collins, presented her with an employment agreement and instructed her to review it, sign it, and return it to him, which Power did. In addition to other terms, including provisions for both a car and a cell-phone allowance, the 2005 employment agreement provided that Power was eligible to receive a 20% sales commission on deals that she had closed but that were originated by a BDR and a 25% sales commission on deals that she had both originated and closed. At some point, GSE began paying Power a 30% sales commission. Over the next approximately six years, GSE paid Power as an energy consultant, consistent with the terms of the 2005 employment agreement, with the exception of the 30% sales commission rate.

         Significantly, the 2005 employment agreement expressly conditioned GSE's obligation to pay Power a sales commission on GSE's first being paid its fee from the REP. According to Justin Helms, one of GSE's owners, GSE's policy of paying a commission only after GSE had been paid by an REP was not intended as a punitive contractual measure but was instead necessary from a financial perspective.[3] In light of GSE's commission-payment policy, its energy consultants accumulated "backlog" sales commissions from deals that they had already closed but for which GSE had not yet been paid.[4]

         On October 31, 2011, GSE sold its assets to World Energy Solutions, Inc. (WES). Power negotiated with WES for an employment contract that contained more favorable terms than her 2005 employment contract with GSE but ultimately rejected WES's employment offer.[5] At the time of the sale, Power had backlog sales commissions, as did GSE's other energy consultants, but GSE did not pay Power any of them. Power later sued GSE for breaching its obligation to pay her sales commissions. She also alleged a claim for quantum meruit and sued WES. Power settled with WES but proceeded to trial against GSE.

         At trial, Power confirmed that she was "suing on" the 2005 employment agreement. She testified that GSE had failed to comply with the 2005 employment agreement by failing to pay her approximately $201, 000 in backlog sales commissions that existed as of October 31, 2011-the date that WES purchased GSE's assets. Power also sought an additional approximately $141, 000 in underpaid sales commissions, which she calculated by cross-referencing 413 "deal sheets" with seven-and-a-half years of sales-commission statements.

         Helms, Collins, and Byron Biggs, another GSE owner, each testified that although Power had been an energy consultant and had largely been paid in accordance with the terms of the 2005 employment agreement, her 2004 employment agreement was the operative contract at the time of the sale to WES because GSE did not have a signed copy of the 2005 employment agreement on file.[6] Notwithstanding the difference of opinion over which employment contract was operative, Helms, Collins, and Biggs each testified that GSE had no obligation to pay Power her backlog sales commissions because under the 2005 employment agreement, GSE's obligation to pay Power's sales commissions was conditioned on GSE's first being paid by an REP, and after GSE sold its assets to WES, the REPs quit paying GSE and began paying WES.[7]

         GSE instead maintained that WES was responsible for paying Power's backlog sales commissions. As part of the transaction between GSE and WES, GSE assigned its employee agreements to WES, and WES assumed GSE's contractual obligations under the agreements. Both Helms and Collins testified that in purchasing GSE's assets, including its ongoing business, WES had discounted the value that it had attributed to GSE's outstanding future cash flows, reflecting an expectation that WES was responsible for paying the energy consultants' backlog commissions. Power acknowledged that during her ...

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