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Vassar Group, Inc. v. Ko

Court of Appeals of Texas, Fifth District, Dallas

August 9, 2019

VASSAR GROUP, INC., Appellant
v.
HEESEON KO, Appellee

          On Appeal from the 14th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-02575

          Before Justices Schenck, Osborne, and Reichek

          MEMORANDUM OPINION

          DAVID J. SCHENCK JUSTICE.

         Vassar Group, Inc. d/b/a Dawn Energy Consulting ("DEC") appeals the trial court's order granting summary judgment in favor of Heeseon Ko ("Ko") on her breach of contract claim in a dispute over commission payments. DEC urges the trial court erred in granting summary judgment in favor of Ko, and in impliedly denying its own counter motion for summary judgment, on Ko's breach of contract claim. More particularly, DEC claims Ko failed to prove her entitlement to commissions and DEC conclusively established it has no obligation to pay Ko post termination of her employment. We conclude, as a matter of law, neither party proved its position as it relates to Ko's breach of contract claim. Thus, the trial court erred in granting summary judgment in favor of Ko. We reverse the trial court's judgment granting Ko summary judgment on her breach of contract claim and remand the cause to the trial court for further proceedings consistent with this opinion. Because all issues are settled in law, we issue this memorandum opinion. Tex.R.App.P. 47.4.

         Background

         DEC sells long-term energy contracts and subsequently receives monthly recurring revenue from its customers over the life of the contracts. On June 1, 2015, DEC hired Ko as an administrative assistant and she entered into a Confidentiality, Nondisclosure, and Invention Agreement ("NDA") with DEC. In addition to confidentiality and nondisclosure obligations, the NDA addresses compensation. The compensation provision provides Ko, as "Contractor," would be paid a salary and commissions. More particularly, the NDA states:

Contractor and DEC agree that DEC shall pay Contractor: an annual salary of $50, 000.00 payable semi-monthly on the first (1st) day and the fifteenth (15th) day of the month and subject to applicable federal, state, and local withholding. Upon termination of this Contract, payments under this paragraph shall cease; provided, however, that Contractor shall be entitled to payments for periods or partial periods that occurred prior to the date of termination and for which Contractor has not yet been paid, and for any commission earned in accordance with DEC's customary procedures, if applicable. This section of the Contract is included only for accounting and payroll purposes and should not be construed as establishing a minimum or definite term of employment. In addition, DEC will make commission payments to Contractor based on the following: 30% of NEW closed deals or 10% of RENEWAL closed deals of DEC by Claele Smith capped at $35, 000.00 for the period June 1, 2015 - May 31, 2016 and capped at $50, 000.00 for the period June 1, 2016 - May 31, 2017. 70% of ALL closed deals of Contractor will be paid, which shall be calculated separately from the commission paid on DEC deals and shall not have a yearly cap. This commission will be paid in accordance with the existing payment terms agreed upon by DEC and suppliers. If Contractor dies during the term of this Contract, Contractor's beneficiary shall be entitled to payments and commission payments for the period ending with the date of Contractor's death.

(emphasis added).

         In early 2017, Claele Smith ("Smith"), DEC's President, provided Ko with a revised version of the NDA ("Proposed Agreement"). The Proposed Agreement contained terms Ko was not willing to agree to, including a compensation package that was less favorable than the prior one, and what Ko considered to be onerous termination terms. Ko expressed concerns to DEC over the Proposed Agreement. The parties reached an impasse on the form of the new agreement and, on February 15, 2017, Ko emailed Smith stating "[s]ince you've given me no choice but to either sign the new agreement . . . or you would terminate me, I will consider myself to be terminated effective immediately." Ko demanded payment of commissions she claimed were owed.

         When it became apparent DEC was not going to make any further payments, Ko sued DEC asserting claims for breach of contract, quantum meruit, and unjust enrichment. DEC responded with a general denial and counterclaimed alleging breach of contract, misappropriation of trade secrets, and unlawful access of DEC's computer network and system under Chapter 33 of the Texas Penal Code and section 143.002 of the Texas Civil Practice & Remedies Code. DEC later nonsuited its counterclaims. DEC filed a motion for traditional summary judgment on Ko's breach of contract, quantum meruit, and unjust enrichment claims. Ko filed her own motion for summary judgment on her breach of contract claim only.

         In its motion for summary judgment, DEC argued it was entitled to summary judgment on Ko's breach of contract claim claiming the evidence showed it did not breach the agreement because, under the express language of the NDA and DEC's customary procedures, Ko is not entitled to commissions after termination of her employment. In support of its motion, and response to Ko's motion, DEC attached Ko's original petition; the NDA; Ko and Smith's email correspondence concerning the Proposed Agreement; the transcript of Smith's deposition; the transcript of Smith's then boyfriend, Nick Parker's, deposition; and Smith's affidavit in which she states the basic facts of the case, describing Ko as an entry-level employee who sold only one contract before she resigned in 2017, and for which Ko had already been compensated.

         In her motion for summary judgment, and in response to DEC's motion, Ko raised three grounds for summary judgment in her favor and in defense of DEC's motion: (1) the parties never terminated the NDA, meaning Ko was still entitled to receive the payments specified therein; (2) even if the NDA terminated upon the termination of her employment, the NDA provides that Ko is still entitled to commissions owed for "periods or partial periods that occurred prior to the date of termination and for which Ko has not yet been paid;" and (3) Ko is entitled to commissions under DEC's customary procedure of paying commissions to terminated contractors.[1] In support of her motion, and her response to DEC's motion, Ko attached the NDA; the Proposed Agreement; excerpts from Smith's deposition, in which she acknowledges that DEC was often paid months after a deal closed; excerpts from the deposition of Parker, explaining he, Eduard Cheney, and Sebastian Esquivel ran some deals through DEC; email correspondence between Ko and Smith; and Ko's affidavit in which she gives further background information, specifically stating DEC never notified her the NDA was terminated, indicating that payments from energy providers would not be received for months after DEC performed work for the provider, meaning commissions would be paid many months after work was actually performed, and citing DEC's "unwritten policy" of paying employees (Parker, Cheney, and Esquivel) commissions after termination. Additionally, in support of her claim DEC's customary procedure was to pay commissions post termination, Ko attached NDAs of former DEC contractors, and excerpts from the deposition of Parker.

         The trial court granted summary judgment in favor of Ko on the liability portion of her breach of contract claim. The trial court granted summary judgment in favor of DEC on Ko's quantum meruit and unjust enrichment claims. Thereafter, the parties, by Rule 11 agreement, stipulated to the amount of damages. Following a bench trial on attorney's fees, the trial court entered a final judgment awarding Ko actual damages of $12, ...


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