In Re Vaughter

109 B.R. 229, 4 Tex.Bankr.Ct.Rep. 83, 1989 Bankr. LEXIS 2348, 20 Bankr. Ct. Dec. (CRR) 109, 1989 WL 162793
CourtUnited States Bankruptcy Court, W.D. Texas
DecidedDecember 29, 1989
Docket19-50141
StatusPublished
Cited by10 cases

This text of 109 B.R. 229 (In Re Vaughter) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Vaughter, 109 B.R. 229, 4 Tex.Bankr.Ct.Rep. 83, 1989 Bankr. LEXIS 2348, 20 Bankr. Ct. Dec. (CRR) 109, 1989 WL 162793 (Tex. 1989).

Opinion

MEMORANDUM OPINION

FRANK R. MONROE, Bankruptcy Judge.

This matter comes before the Court on a Motion For Contempt And Sanctions Of Defendant (the “Motion”) wherein the Debtors complain about certain actions taken post-petition by Southwestern Bell Yellow Pages, Inc. (“SWB”) in repaying to itself post-petition an indebtedness which the Debtors incurred prepetition by reason of certain advances which SWB made to Phillip Vaughter against his commissions to be earned in the future. The facts are not in substantial dispute and the issue is whether or not the repayment by SWB to itself of its prepetition commission advances to the Debtor out of the Debtor’s post-petition commission earnings constitutes a legal recoupment or an unauthorized setoff.

FINDINGS OF FACT

1. The Debtors (hereinafter the Debtors will be referred to as Debtor) filed a voluntary petition under Chapter 7 of the Bankruptcy Code on November 15, 1988.

2. For several years prior to filing, Debtor was, and at the present time still is, employed by SWB as an Account Specialist.

3. The employment relationship of the Debtor and SWB during all relevant times is governed by SWB Exhibit 1, the 1986 Labor Agreement between the Communications Workers of American and Southwestern Bell Publications, Inc., specifically Article XXVII therein (hereinafter referred to as the “Employment Contract”).

4. The Debtor’s right to payment for services rendered under the Employment Contract is on a commission only basis.

5. In April, 1988, the Employment Contract was amended pursuant to recommendations made at a Joint Company — Union Conference Committee on Working Relationships to provide a plan to provide improved cash flow to the Account Specialists (the “Amendment”).

6. The Amendment was made for the purpose of providing a voluntary plan pursuant to which improved cash flow to the Account Specialist could be effected. In essence, the Amendment provided a procedure pursuant to which advances upon commissions to be earned in the future by an Account Specialist (in addition to those standard advances provided for in the Employment Contract) could be made so that such Account Specialist would not have to wait until the final accounting relative of each “Market Canvass” upon which the Account Specialist worked in order to be paid for his or her work thereon. The Amendment was to provide a manner of putting the receipt of commissions by all Account Specialists on a more even flow throughout the term of any particular Mar *231 ket Canvass. Participation, when offered by SWB, was voluntary, i.e. an Account Specialist did not have to participate.

7. Account Specialists are routinely assigned to various and particular Market Canvasses. A separate Market Canvass is conducted for each Yellow Page book published by SWB, that is, the Market Canvass for the Dallas Yellow Page book occurs separate and apart from the Market Canvass for the Austin Yellow Page book. Additionally, these Market Canvasses routinely occur at different times and the starting and completion dates of certain Market Canvasses at times overlap. An Account Specialist is routinely assigned to particular Market Canvasses and has an assignment of particular clients (advertisers) to service with regard to each Market Canvass. Not all Account Specialists work on the same Market Canvasses. Advances to Account Specialists against commissions under both the Employment Contract and the Amendment are accounted for by SWB on each separate Market Canvass.

8. It appears that the Debtor has been treated the same as all other Account Specialists with regard to assignment to Market Canvasses as well as assignment of clients to be serviced by each particular Market Canvass.

9. At any one point in time SWB has a number of Market Canvasses being conducted. Further, an Account Specialist may be working on more than one Market Canvass at the same time although that is the exception rather than the rule.

10. Debtor, during the year 1988, worked on the following Market Canvasses in the following sequence: Houston Metro East (January, February and part of March), Sequin (part of March and part of April), Bastrop (part of April), Austin South (May through September), Temple (part of October), Hillsboro (part of October and part of November), and Corpus Christi (part of November and part of December). As of the date of the filing of this case, Debtor was in the middle of the Corpus Christi Market Canvass. In 1989, the Debtor worked on the following Market Canvasses in the following sequence: Waco (January and part of February), Sequin (part of February), Hillsboro (part of February and part of March), Austin South (part of March, part of April, all of May, June, July, August and part of September), Waco (part of April), Temple (part of September), and Houston Metro Central (October and November).

11. In May, 1988, SWB made an advance to the Debtor under the Amended Employment Contract procedures in the amount of $10,588.00 against commissions to be earned by him under the Austin South Market Canvass. An additional $750.00 was advanced thereafter in August, 1988 against the Debtor’s commissions in the same Market Canvass. Accordingly, on the date of the institution of this case, the Debtor was indebted to SWB in the amount of $11,238.00 for commission advances made against his commissions to be earned in the Austin South Market Canvass pursuant to the Amendment.

12. Article XXVII of the Employment Contract at Section 3, Subparagraph (b) provides for a “true up” for each Market Canvass to occur on the 25th of the month in which the 60th day after that Market Canvass has “closed to the public” occurs. The Contract specifically provides that:

“When actual commissions earned are determined, all advanced commission payments will be deducted from the total amount due the specialist prior to payment. If that deduction results in a deficit, and such deficit exceeds the payments due for that month from all sources, the excess will be deducted from the next month’s commission payment.” (Emphasis added.)

13. True up for the Austin South Market Canvass occurred on November 25, 1988, i.e. after the filing of this case on November 15, 1988.

14. Subsequent to the filing of the Chapter 7 case, SWB paid itself back out of commissions earned by the Debtor the following sums on the following dates:

A. $1,902.59 on November 25, 1988,
B. $294.98 on December 25, 1988,
C. $3,834.67 on January 25, 1989,
*232 D. $1,749.17 on February 25, 1989, and
E. $1,746.30 on April 25, 1989,

for a total of $9,527.71. It is unclear from the evidence whether and to what extent the amounts set forth above constituted commissions earned by the Debtor from the Austin South Market Canvass although such should be able to be easily determined from SWB’s records.

15. It is unclear from the evidence whether or not the remaining balance of $1,702.29 has been paid to SWB by additional withholdings from the Debtor’s commissions.

16.

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Cite This Page — Counsel Stack

Bluebook (online)
109 B.R. 229, 4 Tex.Bankr.Ct.Rep. 83, 1989 Bankr. LEXIS 2348, 20 Bankr. Ct. Dec. (CRR) 109, 1989 WL 162793, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-vaughter-txwb-1989.