JCB, Incorporated, d/b/a Conveying & Power Transmission Solutions, Appellant,
The Horsburgh & Scott Company, Appellee
March 13, 2019
Certified Questions From the United States Court of Appeals
for the Fifth Circuit
D. Blacklock Justice
opinion addresses two questions of Texas law certified from
the United States Court of Appeals for the Fifth
Circuit. Our jurisdiction to answer these questions
comes from article V, section 3-c of the Texas Constitution.
The questions concern the damages and attorney's fees
available under chapter 54 of the Business and Commerce Code,
also known as the Texas Sales Representative Act. Tex. Bus.
& Com. Code §§ 54.001-.006. We accepted the
questions and answer them below.
Factual, Legal, and Procedural Background
disputed portion of the statute provides:
§ 54.004. Damages
A principal who fails to comply with a provision of a
contract under Section 54.002 relating to payment of a
commission or who fails to pay a commission as required by
Section 54.003 is liable to the sales representative in a
civil action for:
(1) three times the unpaid commission due the sales
(2) reasonable attorney's fees and costs.
Bus. & Com. Code § 54.004.
Fifth Circuit sets out the following undisputed facts, which
we supplement with undisputed facts provided by the parties
and district court. Plaintiff JCB, Inc., d/b/a Conveying
& Power Transmission Solutions ("JCB"), was a
commissioned sales representative for Defendant Horsburgh
& Scott Company ("Horsburgh"), a manufacturer
of gears and gearboxes. Under a written agreement, JCB's
commissions were due "on approximately the 10th of each
month following the payment of a commissionable order by the
customer to [Horsburgh]." The parties later terminated
that agreement but separately agreed that Horsburgh would pay
commissions on orders received up to May 24, 2015. JCB claims
Horsburgh owed approximately $280, 000 in commissions under
these agreements. JCB claims all these commissions were paid
late, while Horsburgh says only some were paid late.
March 2016, Horsburgh told JCB it could either accept further
delays in payment or accept reduced commissions. JCB rejected
these options and sued Horsburgh for treble damages and
attorney's fees under section 54.004. Prior to the suit,
Horsburgh made some commission payments. When suit was filed,
Horsburgh still owed commissions totaling $77, 000-$90, 000.
The case was removed to federal court. While the case was
pending, Horsburgh paid all remaining commissions plus
approximately five percent interest. Horsburgh then moved for
federal district court granted summary judgment for
Horsburgh. The court's opinion briefly addressed the
applicability of section 54.004. The court found persuasive
Horsburgh's argument that "the Act does not apply
because it only applies to unpaid commissions, and all of the
commissions owed [to JCB] have been paid." JCB, Inc.
v. Horsburgh & Scott Co., No. 6:16-CV-146-RP, 2017
WL 6805045, at *4 (W.D. Tex. Oct. 25, 2017).
Fifth Circuit certified the following questions to this
(1) What timing standard should courts use to determine the
existence and amount of any "unpaid commissions
due" under the treble damages provision of Tex. Bus.
& Com. Code § 54.004(1)?
(2) May a plaintiff recover reasonable attorney's fees
and costs under Tex. Bus. & Com. Code § 54.004(2),
if the plaintiff does not receive a treble damages award
under Tex. Bus. & Com. Code § 54.004(1), and under
JCB, Inc. v. Horsburgh & Scott Co., 912 F.3d
238, 241 (5th Cir. 2018). Writing for the panel, Judge Ho
authored an opinion certifying these questions. As that
opinion explained the treble-damages question, there is no
dispute that the parties had "a contract under Section
54.002 relating to payment of a commission" and that
Horsburgh "fail[ed] to comply with a provision of [that]
contract." Tex. Bus & Com. Code § 54.004. The
dispute is over the date as of which the "unpaid
commission due" should be calculated. If the amount of
"unpaid commission due" should be calculated as of
the date the commissions were originally due under the
contract, Horsburgh may face treble damages of three times
the $280, 000 it initially failed to pay. If the correct date
is the date suit was filed, Horsburgh may face treble damages
of three times the amount it still owed at the time of
filing. If the correct date is the time of trial or judgment,
the district court was right. There was no "unpaid
commission" due by that time, so there was nothing left
to treble. JCB, Inc., 912 F.3d at 240. The panel
also asked this Court to determine whether JCB can recover
attorney's fees under section 54.004(2) even if it does
not recover treble damages under section 54.004(1).
Id. at 241.
addition to the panel's opinion, Judges Duncan and Ho
authored concurring opinions touching on the merits of the
certified questions. Under Judge Duncan's reading of
section 54004, JCB can recover treble damages on the full
amount it claims because the amount of "unpaid
commission due" should be calculated as of the time the
parties' contract made the commissions due Id.
at 244-46 (Duncan, J, concurring). According to Judge Duncan,
section 54.004 incorporates section 54.003 when there is no
written contract and section 54.002 when there is a written
contract. Id. at 245. Section 54.003 provides a
thirty-day deadline to pay the commission, and under section
54.002, the written contract provides the due date. In either
case, in Judge Duncan's view, the amount of "unpaid
commission due" for trebling purposes must be calculated
as of the date the commission was initially due. Id.
at 245-46. Under this reasoning, because Horsburgh and JCB
had a written contract with a ten-day deadline, all
commissions paid after that deadline are "unpaid
commission due" under section 54.004 even though they
have later been paid. Id. at 245.
Duncan also addressed the second certified question. In his
view, the correct answer is an easy "yes."
"Section 54.004 contains no indication that it makes
recovering attorney's fees dependent on recovering treble
damages. Rather, the text makes recovering fees contingent
only on the principal's breach of a contractual provision
relating to commission payments under Section 54.002, or on