Court Opinion

ID: 9717994
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:14:21.895682+00
Date Added: 2024-06-11T11:26:53.496000
License: Public Domain

FROST, Justice,
dissenting.
The majority concludes that three letters from SK Investments, Inc. d/b/a Helikon Furniture Company1 to Tom Gaede, taken together, “contain all the essential elements of a one-year sales agency contract.” I respectfully disagree that the parties ever formed a binding or enforceable one-year contract, as Gaede failed to overcome the strong presumption of at-will status, and there was no mutuality of obligation to support a fixed-term agency agreement and no meeting of the minds on a material term,
Grounds Supporting Summary Judgment
At-Will Status Not Negated
In finding a fact issue regarding appel-lee’s intent to enter into a one-year sales agency agreement, the majority ignores the stringent standard Texas courts impose on contracts that purport to alter a party’s at-will status. To contractually bind an employer to modify an at-will employment relationship, the employer must unequivocally indicate a definite intent to be bound not to terminate the employee except under clearly specified circumstances. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex.1998). This rule should apply with equal force to a sales agency relationship.
In October 1996, in the first of the three letters, appellee stated that it expected “to continue with the current rep network for at least the next year.” In the second letter, sent about six weeks later, appellee outlined the “terms” of Gaede’s appointment as an independent representative for the company in its South Texas region. The third letter, sent in May 1997, announced appellee’s decision to consolidate its sales force as of June 1997, effectively terminating Gaede’s appointment. In this final letter, appellee agreed to continue to pay Gaede commissions for an additional six months following his termination, acknowledging its “commitment” made in September 1996 “to make no changes for one year.” These letters fail to negate appellant’s at-will status.
The first letter merely states appellee’s expectation that the “current rep network” would stay in place for a year. Even had the letter stated that appellee expected *762Gaede’s appointment (as opposed to the “rep network”) to be continued for one year, such an obscure and indefinite statement would not suffice as an unequivocal expression by appellee not to discharge Gaede during that period of time. While the second letter purports to “set forth the terms of [Gaede’s] appointment as an independent representative,” it fails to set out a specific duration of the appointment. More importantly, it fails to limit or otherwise modify appellee’s right to terminate Gaede’s agency relationship at any time. 'While the last letter, sent in conjunction with Gaede’s termination, makes an oblique reference to “making no changes for one year,” this statement cannot fairly be interpreted as a contractual commitment not to terminate Gaede’s appointment for a year. Therefore, nothing in the summary judgment record shows a “definite intent” by appellee to commit, directly or indirectly, to retain Gaede for one year or to limit appellee’s right to terminate Gae-de’s appointment “except under clearly specified circumstances.” Brown, 965 S.W.2d at 502
Even the most generous and liberal reading of the three letters on which Gaede and the majority rely do not meet Brown’s demanding standard. In Brown, the Texas Supreme Court made it clear that to overcome the at-will presumption, a contract must specifically and expressly convey the parties’ mutual understanding and intent that the employer relinquishes its right to terminate the employee on an at-will basis. Id. One who has no formal fixed-term agreement cannot construct such an agreement out of indefinite comments, encouragements or assurances. Id. Indeed, an employer’s general promises or assurances not to discharge an employee, except for unsatisfactory performance or for “good cause,” do not constitute a binding contract. Id. Surely, then, even less specific statements such as “we expect to continue with the current rep network for at least the next year” or we will “make no changes for one year■” do not rise to that level. For this reason, the trial court did not err in granting summary judgment.
No Mutuality of Obligation Or Agreement As To A One-Year Term
In order for a contractual term to be enforceable, the contract must evince a .mutuality of obligations between the parties. Tenet Healthcare Ltd. v. Cooper, 960 S.W.2d 386 (Tex.App.-Houston [14th Dist.] 1998, writ dism’d w.o.j.). Here, there is no showing of a mutuality of obligations between Gaede and appellee with respect to the duration of Gaede’s appointment as a sales representative. According to the summary judgment evidence, Gaede himself believed that he could terminate the agency agreement at any time and walk away from his representation of ap-pellee; 2 at a minimum, Gaede expressed uncertainty as to any obligation on his part not to “walk away.”
As there was no definite obligation on Gaede’s part to remain a sales representative for any specific period of time, there is no consideration for any obligation on ap-pellee’s part to maintain Gaede’s appointment for a one-year term or any other fixed period of time. For this additional reason, there was no enforceable fixed-*763term contract, and the agency appointment was terminable at will, by either party.
The majority, however, avoids this result by concluding that Gaede’s “part performance would constitute sufficient consideration to establish mutuality of obligation.”3 In so holding, the majority completely overlooks that it is the one-year term, not the fact that Gaede had an agency agreement with appellee, that is at issue. Appellee does not dispute that it contracted with Gaede; rather, it disputes that the parties had anything other than an at-will relationship. The majority’s reliance on cases holding that the “expenditure of time and effort is sufficient consideration to make a unilateral contract binding and enforceable” have no application in this context.
The fact that Gaede continued to perform “his sales agent duties through the remainder of 1996 and well into 1997” has no bearing on whether appellee was contractually committed to retain Gaede for a one-year term. Indeed, an agent in an at-will relationship could work for decades for his principal and that would not alter the at-will nature of the arrangement.4 The majority cites no cases to support the notion that a one-year term may be imposed on a contractual relationship based on one party’s “partial performance.” Application of such a rule in this context flies in the face of Brown’s holding that any agreement to alter one’s at-will status must be express and specific. In fact, the majority turns Broim on its head in concluding that “[bjecause appellee did not have the express contractual right to terminate the agent agreement unilaterally, before the expiration of the one-year term, [Gaede’s] part performance would constitute sufficient consideration to establish mutuality of obligation.” The majority’s analysis assumes the very fact it insists a jury should determine — the parties’ intent to enter into a one-year contract.
Moreover, a one-year sales agency contract does not exist here because Gaede failed to establish at least one material term — the commencement date of any one-year appointment. See Rios v. Tex. Commerce Bancshares, Inc., 930 S.W.2d 809, 815 (Tex.App.-Corpus Christi 1996, writ denied) (holding that letter stating an annual salary did not embody the terms of any agreement between the parties as it did not specify a beginning date, duration of time, and did not require acceptance signatures.). Notably, Gaede concedes the length of his appointment would constitute a material term of any fixed-term contract with appellee, yet there is no agreed term of appointment in the letter purporting to spell out the “terms” of the agreement or in either of the other two letters that form the basis of his claim. In fact, Gaede’s own summary judgment evidence utterly belies the notion that the parties ever agreed on a one-year term.
In his affidavit, Gaede claims he was wrongfully terminated before the end of the one-year period, yet he inexplicably calculates the one-year period from his termination date in June 1997, rather than from the date of the first letter in which appellee stated that it “expected to continue the rep network for at least the next year.” In his deposition, Gaede testified “the contract” entitled him to commissions through the end of June 1998, a date approximately twenty months after the October 1996 letter and thirteen months after his date of termination. Even if the language of the October 1996 letter could somehow be read to create a one-year contract, the contract period would have *764ended in October 1997.5 Gaede failed to produce any summary judgment evidence that appellee contractually limited its right to terminate him for the twenty months following the October 1996 letter. While the majority finds it should be up to the jury to ascertain the length of the appointment, under Texas law, the jury may not be called upon to construe the legal effect of an agreement or to supply an essential term upon which the parties did not mutually agree. See Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 814 (Tex.App.-Houston [1st Dist.] 1987, writ ref'd n.r.e.); see also Univ. Nat’l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex.App.-San Antonio 1989, no writ).
Gaede failed to produce any summary judgment evidence that would show, in a clear and specific manner, that appellee agreed to retain him as a sales representative for one-year following his appointment as its independent agent, let alone one-year following the day he was terminated as appellee’s representative. The inescapable conclusion is that Gaede and appellee never agreed on a length of appointment. Absent an express agreement on this material term, there is no one-year contract, and the granting of summary judgment in favor of appellee was proper.
Conclusion
Generally, where the existence of an agreement is disputed, the issue of whether the parties reached an agreement is a question of fact.6 However, even where there exists particular proof of a contract’s existence, such proof may be insufficient, as a matter of law, to create a contract. See Brown, 965 S.W.2d at 502. This is such a case. Even indulging every inference in favor of Gaede, the summary judgment record does not yield a genuine issue of material fact as to whether the parties entered into a one-year agency contract. The letters upon which the majority relies are not sufficient, as a matter of law, to negate the existence of an at-will relationship. Furthermore, there can be no one-year contract because the parties failed to agree on a material term. Therefore, the trial court was correct in granting appel-lee’s motion for summary judgment, and that decision should be affirmed.

. The majority uses "Helikon” to refer to ap-pellee. However, appellee did not acquire the stock but only the name and other assets of Helikon Furniture Company, Inc. Appellee did not assume Helikon Furniture Company, Inc.’s existing obligations, and thus was not a "predecessor of Helikon” for purposes of Gaede's agency relationship with that company.

. In his deposition, Gaede gave the following testimony:
Q. At any time during this time period— that’s set out — let’s say from October 29th, 1996 on — could you terminate your relationship with Helikon or ICF Group?
A. I believe I could yes.
Q. The question is, sir, did you feel that you were contractually bound, not morally, legally contractually bound to stay as a Helikon or ICF Group independent manufacturer's rep beyond the time period October 29th, 1996, for a period of time, at any time? Could you terminate it at any time?
A. I believe I could.
Q. The question is, sir, could you terminate your relationship with them [appel-lee]?
A. I guess I could.

. Gaede made no such assertions in appellant’s briefing.

. Furthermore, as noted above, the majority’s conclusion that "a jury might reasonably infer from these circumstances that [appellee] intended to extend [Gaede's] agency contract” is wholly inconsistent with well-settled law that requires an express agreement to alter the at-will relationship. See Brown, 965 S.W.2d at 502.

. Gaede’s claim to a one-year contract is not only unsupported by the correspondence but also defies logic because he claims he entered into a contract in October, 1996, which lasted through June 30, 1998, but admitted in his deposition that the end date of the contract was never even mentioned until he received the notice of termination in May 1997.

. See, e.g., Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enters., 625 S.W.2d 295, 298 (Tex.1981); State Bar of Texas Pattern Jury-Charges Business, Consumer & Employment PJC 101.1, 101.3 (1997) (jury question and instruction on existence of agreement).