Choice! Power, L.P. v. Michael Feeley

501 S.W.3d 199, 2016 Tex. App. LEXIS 8409, 2016 WL 4151041
CourtCourt of Appeals of Texas
DecidedAugust 4, 2016
DocketNO. 01-15-00821-CV
StatusPublished
Cited by28 cases

This text of 501 S.W.3d 199 (Choice! Power, L.P. v. Michael Feeley) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Choice! Power, L.P. v. Michael Feeley, 501 S.W.3d 199, 2016 Tex. App. LEXIS 8409, 2016 WL 4151041 (Tex. Ct. App. 2016).

Opinion

*203 OPINION

Laura Carter Higley, Justice

The trial court found in favor of appel-lee, Michael Feeley, on his breach of contract claim against appellant, Choice! Power, L.P., and awarded $353,705.57 in damages. In three issues on appeal, Choice argues that the trial court erred in its interpretation of the contract and that the evidence is legally and factually insufficient to support the trial court’s finding of breach of contract. 1 In his cross-appeal, Feeley argues the trial court' erred by granting summary-judgment against him on his claim for attorneys’ fees.

We affirm.

Background

In June 2011, Feeley entered into an employment agreement With Choice. Fee-ley was employed to be a broker for Choice. The agreement provided -that the term of his employment began - June 1, 2011, and continued for 54 months. The agreement also provided, “This Agreement may not be terminated by either party except (i) by Employer for Cause (as defined below) or (ii) by Employee for any material breach of this Agreement by Employer .... ” The termination provision lists nine categories of actions by Feeley that would constitute cause for’ termination. One of those categories permitted termination if Feeley “materially violate[d] any specific written instructions or policies of Employer.” The agreement established that “[t]he Parties understand that this Agreement creates an employment relationship for a term and shall not be construed as creating an ‘at will’ employment relationship.”

When he began working with Choice, Feeley primarily worked on brokering what are known as financially-settled contracts. A smaller portion of his work concerned what are known as physically-settled contracts. During Feeley’s employment with Choice, financially-settled contracts were reclassified as futures contracts, pursuant to federal regulations. In order for a broker to work on futures contracts, the broker had to be “Series 3 registered” by a certain date. In order to be Series 3 registered, the broker had to pass the Series 3 examination. Physically-settled contracts were not affected by this, change, and brokers for those contracts did not require Series 3 registration.

On September 7, 2011, Choice emailed its brokers about the change in regulations. The email discussed the regulatory changes designating financially-settled contracts as futures and the requirement to pass the Series 3 exam in order to broker futures. The email continued,

As you know, a broker must be NFA registered in order to orchestrate block/ EFS trades. By having all of our employees who broker cleared trades register as Aps, we will eliminate the risk that a non-registered broker will inadvertently enter a block/EFS trade, which could result in significant -penalties to -both the broker and our firms. Obviously, the brokerage of block/EFS trades also represents a significant source of bonus revenue that is not available to non-registered brokers. Every OTCGH broker should be NFA registered by the end of this year.

The regulatory deadline to be Series 3 registered subsequently changed. On September 12, 2012, Choice emailed its brokers, again discussing the requirements of the changed regulations. It continued,

*204 By changing the listing of all swap contracts to futures by the CME and ICE, it has also created a MANDATORY OBLIGATION FOR ALL OTCGH BROKERS TO BE SERIES 3 REGISTERED, ASSOCIATED PERSONS OF OUR INTRODUCING BROKER EOX. Only Series 3 registered Futures Brokers. can Broker Futures. If you currently broker natural gas options, crude options, fixed price, basis, PJM, Ercot power etc.—you have to be a series 3 registered broker.

Choice sent the last email pertinent email on December 17, 2012. The email was brief and said, in pertinent part,

If you are receiving this email, you have not registered for the series 3 exam and/or previously failed; YOU MUST SCHEDULE AND REGISTER AN EXAM DATE—PRIOR TO 12/31/2012. Subsequently, you must take the text and pass by March 31st.
If you fail to register for the exam by the end of the year, WE CANNOT EMPLOY YOU TO BROKER FUTURES AS OF 1/1/2013.

The evidence at trial showed that Feeley took the examination three times, but never passed the- examination. As a result, Feeley could not take the examination again for six months and could not broker financially-settled contracts for that time. Choice assigned Feeley to work exclusively on physically-settled contracts after that. Specifically, they charged. Feeley with developing business in emissions-related contracts. About two months later, Feeley had not succeeded in brokering any physically-settled contracts. Choice terminated Fee-ley, claiming it was for cause under the employment contract due to Feeley’s failure to comply with Choice’s instructions to pass the Series 3 examination.

Feeley brought suit against Choice, alleging breach of contract. Feeley also sought to recover his attorneys’ fees from Choice. Choice filed a motion for summary judgment on Feeley’s claim for attorneys’ fees. Choice argued that the plain text of the statute upon which Feeley was relying did not allow recovery of attorneys’ fees from Choice because it was a limited partnership. The trial court agreed and granted summary judgment against Feeley on his claim for attorneys’ fees.

The parties proceeded to a bench trial on Feeley’s .breach of contract claim. Following trial, the trial court issued findings of fact and conclusions of law. The trial court’s findings included the following:

2. Effective June 1, 2011, Feeley signed a new Employment Agreement ... under which he was employed as a “Broker”.Feeley brokered mostly financially settled power and gas contracts, but nothing in the Employment Agreement limited his employment to just certain types of brokering, ...
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4. ... Choice sent a September 7, 2011[ ] e-mail to its employees ... which stated “Every OTCGH broker should be NFA registered by the end of this year”_ Subsequent emails from Choteé reflect that the eventual deadline was moved to 2013....
5. In October of 2012, the financially settled gas and power contracts Choice brokered were reclassified by the Chicago Mercantile Exchange and the Intercontinental Exchange as “futures contracts”.... Accordingly, brokers of financially settled power and gas contracts were required to become Series 3 registered .... To become Series 3 registered, brokers had to take and pass the NFA’s Series 3 examination. Physically settled *205 contracts were not impacted by this regulation.
6. Choice sent a September 12, 2012[] e-mail to its brokers ... stating that [certain stock exchanges] had “created the MANDATORY OBLIGATION FOR ALL OTCGH BROKERS TO BE SERIES 3 REGISTERED” ....

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Bluebook (online)
501 S.W.3d 199, 2016 Tex. App. LEXIS 8409, 2016 WL 4151041, Counsel Stack Legal Research, https://law.counselstack.com/opinion/choice-power-lp-v-michael-feeley-texapp-2016.