Jennings Dissent in Macy v. Waste Management, Inc. (on motion for en banc
hearing)(Tex.App.- Houston [1st Dist.] Aug. 28, 2009)(Dissent by Jennings) (en banc consideration,
designation of opinions)
OPINION DISSENTING TO THIS COURT'S JUDGMENT: Dissenting Opinion by Justice Terry Jennings
Before Chief Justice Radack, Justices Alcala and Hanks
01-07-00276-CV Griffin Macy v. Waste Management, Inc.
Appeal from 157th District Court of Harris County
OPINION DISSENTING FROM THE
DENIAL OF EN BANC CONSIDERATION [bold rendition of terms or phrases added]
In its opinion, the panel erroneously concludes that the intent of appellant, Griffin Macy, and appellee,
Waste Management, Inc., as expressed in their employment contract, was for Waste Management "alone" to
have the power to make the legal determination as to whether Waste Management had terminated Macy's
employment "with cause." However, as conceded by the panel, the contract "does not expressly state that
the decision" of Waste Management's board of directors to terminate Macy's employment with cause has the
legal effect of being "final and binding," precluding him from litigating the issue in a court of law. In effect, as
argued by Macy in his Motion for En Banc Consideration of this case, the panel, "by judicial fiat," inserts
this "non-existent language" into the employment contract in violation of well-established Texas law. See
Fortis Benefits v. Cantu, 234 S.W.3d 642, 649 n.41 (Tex. 2007). Thus, the panel errs in affirming the
judgment of the trial court. Accordingly, I respectfully dissent from the denial of en banc consideration of the
case. (1) See Tex. R. App. P. 41.2(c).
Macy's employment contract provided that Waste Management could terminate his employment "with" or
"without cause." If terminated without cause, Waste Management agreed to pay Macy two times the sum of
his base salary "plus his target annual bonus (as then in effect), of which one-half shall be paid in a lump
sum within ten (10) days after such termination and one-half shall be paid during the two (2) year period
beginning the date of Employee's termination . . . ." If terminated with cause, Waste Management agreed to
pay Macy only accrued wages.
Section 5 of the employment contract expressly defined "cause" and outlined a specific procedure for Waste
Management to follow in terminating Macy's employment for cause:
(c) Termination by the Company for Cause. The Company may terminate Employee's employment
hereunder for "Cause" at any time after providing written notice to Employee.
(i) For purposes of this Agreement, the term "Cause" shall mean any of the following . . . (C) fraud or
embezzlement determined in accordance with the Company's normal investigative procedures consistently
applied in comparable circumstances . . . .
(ii) An individual will be considered to have been terminated for Cause if the Company determines that the
individual engaged in an act constituting Cause at any time prior to a payment date for any amounts due
hereunder, regardless of whether the individual terminated employment voluntarily or is terminated
involuntarily, and regardless of whether the individual's termination initially was considered to have been for
Cause.
(iii) Any determination of Cause under this Agreement shall be made by resolution of the Company's Board
of Directors adopted by affirmative vote of not less than a majority of the entire membership of the Board of
Directors at a meeting called and held for that purpose and at which Employee is given an opportunity to be
heard. (Emphasis added.)
Pursuant to the contract, Waste Management could only terminate Macy's employment for cause after
providing him with written notice and an opportunity to be heard. Although Waste Management could,
regardless of whether it had previously determined that the termination of Macy's employment was without
cause, subsequently consider his employment terminated with cause, nothing in the contract evidences an
intent of the parties that this determination would be considered "final and binding," precluding him from
litigating the issue in a court of law.
Believing that his employment had been constructively terminated without cause, Macy stopped working for
Waste Management on April 5, 2004. In August 2004, he sued Waste Management for breach of the
employment contract. One year later, in August 2005, only after being sued for breach of contract, and while
the lawsuit was pending, did Waste Management's board of directors meet to determine whether it had
previously terminated Macy's employment "with" or "without cause." Thus, in August 2005, after being sued,
the board determined that it had terminated Macy's employment "with cause" in April 2004.
After the board made its belated determination, Waste Management then filed its summary judgment motion,
asserting that the board was the sole and final authority for making the legal determination as to whether
Macy had been terminated for cause in April 2004. The trial court granted Waste Management summary
judgment, and the panel affirms.
In its opinion, under the subheading "Decision is Final Despite Absence of Certain Words," the panel
reasons,
Although the Agreement does not expressly state that the decision [of the board] is final and binding, it
plainly states that Waste Management is to make the determination of cause. An examination of the entire
Agreement shows it does not provide Macy any right of appeal to another entity, nor does it refer to any
other entity as having the authority to determine cause. We conclude the intent of the Agreement is that the
determination of cause must be made by Waste Management alone. . . . Nothing in the Agreement supports
Macy's position that a jury should independently decide whether there is cause to terminate Macy.
(Emphasis added.)
There are at least three serious flaws in the panel's reasoning.
First, the parties to a contract do not have to expressly state in their contract that they have the right to
enforce the contract in a court of law and have a jury determine fact issues. Rather, the opposite is true.
Only if the parties intend that their contract may be enforced in a specific way or in a specific forum, must the
contract expressly state how and where. Here, it is indeed the "absence of certain words" regarding dispute
resolution that precludes the panel's conclusion to the contrary.
Second, the plain language of the contract does not evidence any intent of the parties to provide a
mechanism for dispute resolution, especially one in which Waste Management's board of directors would be
the final arbiter of any disputes between Waste Management and Macy. It is well-settled that Texas courts
are to determine the intent of the parties to a contract by construing the plain language actually used in the
contract and considering the contract as a whole. Motiva Enterps., LLC v. McCrabb, 248 S.W.3d 211, 215
(Tex. App.--Houston [1st Dist.] 2007, pet. denied) (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)).
Here, the panel inserts "non-existent language" into the employment contract in violation of this Court's
precedent and well-established Texas law. See id.; see also Fortis Benefits, 234 S.W.3d at 649 n.41. As
argued by Macy,
The panel's opinion and judgment, in effect, reads an arbitration provision into the Agreement, and makes
the Board of Directors the arbiters. This is in conflict with a prior opinion of this Court, . . . stating that "[t]his
Court may not expand upon the terms of the contract or tolerate a liberal interpretation of it by reading into it
a voluntary, consensual agreement to arbitrate when one otherwise does not exist." Bates v. MTH
Homes-Texas, L.P., 177 S.W.3d 419, 422 (Tex. App.--Houston [1st Dist.] 2005, orig. proceeding). This
apparent conflict raises an issue of uniformity that should be addressed by this Court en banc.
Tex. R. App. P. 49.7
Only by improperly inserting "certain words," which are absent, into the contract could the panel possibly
come to the conclusion that the parties intended that Waste Management's board of directors would be the
final arbiter of any disputes between Waste Management and Macy.
Third, the plain language of the contract evidences that the parties had the exact opposite intent. Under the
panel's interpretation, Waste Management would obviously have the final and binding say as to whether
Macy's employment was terminated with cause. This interpretation, of course, defeats the obvious intent of
the parties to actually protect Macy from the arbitrary termination of his employment through the provision of
additional benefits for termination of his employment without cause. Section 5(c) of the contract simply
defines cause and provides the procedure for terminating Macy's employment with cause, giving him the
right of prior written notice and an opportunity to be heard. It also provided Waste Management with the
protection of reconsidering any termination status upon learning that Macy had defrauded the company or
embezzled from the company "at any time prior to a payment date for any amounts due hereunder."
However, nothing in the contract evidences an intent of the parties that such a determination would be
considered final and binding, precluding enforcement of the contract in a court of law and resolution of fact
issues by a jury.
In fact, section 10 of the employment contract, entitled "Disputes and Attorneys Fees," provides that "should
any dispute arise as to the validity, interpretation or application of any term of condition" of the contract,
Waste Management agrees, upon a written demand, to provide Macy sums sufficient to pay his reasonable
attorneys fees and costs incurred "in connection with any dispute or any litigation." (Emphasis added).
Section 10 further provides that Macy must repay any amounts furnished if he "is not the prevailing party
with respect to any dispute or litigation arising under [s]ection[] 5(c)." Thus, section 10 expressly
contemplates litigation with respect to Macy's termination for cause in accordance with section 5(c), and
nothing in section 10 limits the scope of the litigation or otherwise suggests that Macy should be precluded
from challenging the cause determination in a court of law. Certainly, if the parties had intended to include
such significant limitations on Macy's rights in the event of his termination, the parties would have expressly
included these limitations in the section of the contract addressing "disputes."
Accordingly, I would hold that the trial court erred in granting summary judgment in favor of Waste
Management. The panel's insertion of non-existent language into the employment contract and conclusion
that Macy and Waste Management intended that Waste Management "alone" would have the power to make
a final and binding legal determination as to whether it had terminated Macy's employment with "cause" are
in serious error. See Fortis Benefits, 234 S.W.3d at 649 n.41.
Thus, I would grant Macy's motion for en banc consideration of the case. Tex. R. App. P. 41.2. I would
further sustain his first issue, reverse the judgment of the trial court, and remand the case for a trial on the
merits.
Terry Jennings
Justice
Panel consists of Chief Justice Radack and Justices Alcala and Hanks.
En banc consideration was requested. See Tex. R. App. P. 41.2(c).
A majority of the Court voted to deny en banc consideration. See Tex. R. App. P. 49.7.
Justice Alcala, concurring to the denial of en banc consideration.
Justice Jennings, dissenting from the denial of en banc consideration, joined by Justice Keyes.
1. In regard to the Concurring Opinion From the Denial of En Banc Consideration, it must first be noted that
the Texas Supreme Court has made clear that "when a court of appeals votes against hearing a case en
banc, any member of the court is entitled to file a dissent, regardless of whether the judge was on the
original panel deciding the case." O'Connor v. First Court of Appeals, 837 S.W.2d 94, 97 (Tex. 1992). Here,
Macy, in his motion, asserts that the panel's opinion "reads an arbitration provision into the agreement,"
raising an issue of uniformity with another First Court of Appeals' opinion. See Bates v. MTH Homes-Texas,
L.P., 177 S.W.3d 419 (Tex. App.--Houston [1st Dist.] 2005, orig. proceeding).
Macy further argues that the "panel's opinion and judgment also create a new standard pursuant to which
parties must expressly state that they are not forfeiting their right to sue when entering into a contract that
delegates a particular decision to a particular person or entity," and that this newly-created standard is
contrary to "well-established law." These arguments are objectively valid. This is not a situation in which
there is a simple disagreement with the panel's opinion over an important issue. Rather, as pointed out by
Macy, the panel's error is extraordinary, requiring en banc consideration. See Tex. R. App. P. 41.2(c).
Accordingly, Macy's motion should be granted.
Second, the Texas Rules of Appellate Procedure expressly provide that "[a]n opinion may not be designated
a memorandum opinion if the author of a concurrence or dissent opposes that designation." Tex. R. App. P.
47.4.