John R. Fuller v. Wholesale Electric Supply Company of Houston, Inc.

CourtCourt of Appeals of Texas
DecidedMarch 31, 2020
Docket14-18-00328-CV
StatusPublished

This text of John R. Fuller v. Wholesale Electric Supply Company of Houston, Inc. (John R. Fuller v. Wholesale Electric Supply Company of Houston, Inc.) 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
John R. Fuller v. Wholesale Electric Supply Company of Houston, Inc., (Tex. Ct. App. 2020).

Opinion

Affirmed and Opinion filed March 31, 2020.

In The

Fourteenth Court of Appeals

NO. 14-18-00328-CV

JOHN R. FULLER, Appellant

V.

WHOLESALE ELECTRIC SUPPLY COMPANY OF HOUSTON, INC., Appellee

On Appeal from the 270th District Court Harris County, Texas Trial Court Cause No. 2016-82422

OPINION A former employee appeals the trial court’s summary judgment dismissing his claims against his former employer, a supply company, based on an alleged decades-old oral promise made to him by the company’s founder. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1986, appellant/plaintiff John R. Fuller served as Vice President and Branch Manager of Nunn Electric Supply Company’s Houston location. Fuller had opened the company’s maintenance and repair order (“MRO”) branch in Deer Park, Texas, in 1981, and had run the department for four years. At the time, appellee/defendant Wholesale Electric Supply Company of Houston, Inc., also in the electric supply industry, was considering building an MRO operation in Deer Park. Clyde Rutland, the owner, founder, President, and Chairman of the Board of Directors of Wholesale, met with Fuller several times to discuss a potential MRO operation at Wholesale. Fuller said that he could bring with him a team of approximately 15 employees from Nunn along with Nunn’s major MRO customers. Fuller told Rutland he could modernize and computerize Wholesale’s MRO operations and then turn over the Deer Park branch to another employee, Jeff Woodward. Fuller asked Rutland for two percent of the stock of Wholesale. Rutland did not agree to give Fuller two percent of the stock. Instead, according to Fuller, Rutland orally promised to pay Fuller “the equivalent of 2% of [Wholesale] when [Fuller] retired” (the “Two-Percent Agreement”). The two men shook hands, and Rutland told Fuller “my word is my bond.” They did not put the Two-Percent Agreement in writing. After the meeting, Rutland mentioned the agreement to Joe Jones, a Wholesale executive. Fuller told Woodward, his subordinate from Nunn, that he had reached an agreement with Rutland. Fuller continued to work for Wholesale for the next 25 years. Following Rutland’s death in 2011, Rutland’s daughter, Pam McKellop became Chairman of Wholesale’s Board of Directors and consolidated the ownership of Wholesale. Fuller approached McKellop about the Two-Percent Agreement. Wholesale denied Rutland had ever made the Two-Percent Agreement and refused to pay the amount Fuller sought.

2 Fuller’s Claims

Fuller filed a lawsuit against Wholesale, asserting a claim for breach of the Two-Percent Agreement, and in connection with that claim Fuller set out the communications between Rutland and Fuller leading up to the formation of the alleged contract. The timeline of the alleged acts, statements made, and surrounding circumstances leading to the formation of the deal, as alleged in Fuller’s live pleading, are as follows:

August 29, 1986 “Fuller met with Rutland to propose to [Wholesale] his offer to build a successful MRO operation at [Wholesale] with the team and the customers he would bring from Nunn.” “Fuller promised to bring members from his team, customers, and the technical knowledge necessary to sustain the operation in exchange for two percent (2%) of the stock of [Wholesale].” August 30, 1986 “Rutland, Fuller, and others met to discuss the proposed deal further” September 2, 1986 “Fuller and Rutland met to finalize their agreement. Fuller again mentioned he was willing to do what they had previously discussed in exchange for two percent (2%) of [Wholesale].” “Rutland told Fuller he was not willing to issue Fuller stock certificates at that time because when he had done so in the past with other employees, some had left without fulfilling their obligations.” “Fuller assured Rutland he was not going anywhere and planned on staying at [Wholesale] until he retired. Rutland then agreed and promised Fuller he would be paid the equivalent of two percent (2%) of [Wholesale] when he retired.” In his petition Fuller alleges that immediately after the parties reached the Two- Percent Agreement, Fuller proposed involving lawyers and memorializing the agreement in writing, and Rutland assured Fuller “My word is my bond,” after

3 which Rutland and Fuller shook hands.

Fuller alleges that, after the parties entered into the Two-Percent Agreement, Fuller began working for Wholesale and brought approximately 15 employees from Nunn to work for Wholesale. Fuller claims that his team retained key customers from Nunn as Fuller had promised.

Fuller alleges that in 2002 Wholesale privately acknowledged Fuller’s full performance. Fuller alleges that he talked with Rutland about their agreement and requested that they reduce it to writing, but that Rutland did not want to do any paperwork related to ownership at that time. Fuller claims that Rutland told him that Fuller had “done everything he had asked him to do and had earned his two (2%) of the company.” Fuller alleges that in 2002 Wholesale publicly identified Fuller as an owner of the company based on a reference in a Dunn & Bradstreet report in which Fuller contends he was “identified as an owner of the company.”

In addition to his breach-of-contract claim, Fuller asserted claims for promissory estoppel, quantum meruit, fraud, and a purported claim for “substantial performance.” Fuller also sought to avoid the application of the statute of frauds to the Two-Percent Agreement based on the doctrines of full performance, partial performance, and promissory estoppel. Wholesale’s Motion for Summary Judgment

Wholesale filed a motion for summary judgment, challenging all of Fuller’s claims. In its motion, Wholesale asserted that the statute of frauds contained in section 26.01(b)(6) of the Texas Business and Commerce Code bars enforcement of the Two-Percent Agreement and therefore Wholesale is entitled to judgment as a matter of law as to each of Fuller’s claims, including his breach-of-contract claim. Wholesale argued that the alleged Two-Percent Agreement violates the statute of frauds because its material terms require performance beyond one year 4 from the date Fuller and Wholesale allegedly shook hands. In connection with Wholesale’s statute-of-frauds argument Wholesale asserted various traditional summary-judgment grounds in support of the proposition that the doctrines of substantial performance, partial performance, and promissory estoppel do not allow the Two-Percent Agreement to escape the application of the statute of frauds. Wholesale also asserted various traditional summary-judgment grounds challenging Fuller’s claims for promissory estoppel, quantum meruit, fraud, and a purported claim for “substantial performance.”

Fuller’s Summary-Judgment Response

Fuller filed a response in opposition to Wholesale’s summary-judgment motion. In it Fuller relied largely on the same evidence presented in Wholesale’s motion, but Fuller also submitted the verified errata-sheet from his deposition and Fuller’s post-deposition declaration.

Though most facts are undisputed, in his response Fuller took a narrower view of the oral contract’s terms, implicitly discarding Fuller’s retirement as a material term. Fuller argued that the oral agreement was performable in less than a year and therefore did not violate the statute of frauds. Fuller also argued that even if his retirement were a term of the agreement, Wholesale’s statute-of-frauds argument still would fail because payment upon retirement could have occurred within a year of the handshake deal. Fuller contended that because the parties never agreed to a particular retirement date, the duration of the contract remained indefinite such that Fuller was free to retire at any time.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

MacK Trucks, Inc. v. Tamez
206 S.W.3d 572 (Texas Supreme Court, 2006)
Goodyear Tire and Rubber Co. v. Mayes
236 S.W.3d 754 (Texas Supreme Court, 2007)
1001 McKinney Ltd. v. Credit Suisse First Boston Mortgage Capital
192 S.W.3d 20 (Court of Appeals of Texas, 2006)
FM Properties Operating Co. v. City of Austin
22 S.W.3d 868 (Texas Supreme Court, 2000)
Nagle v. Nagle
633 S.W.2d 796 (Texas Supreme Court, 1982)
Mays v. Pierce
203 S.W.3d 564 (Court of Appeals of Texas, 2006)
Niday v. Niday
643 S.W.2d 919 (Texas Supreme Court, 1982)
Dave Boothe Construction, Inc. v. Johnson
705 S.W.2d 204 (Court of Appeals of Texas, 1985)
Wiley v. Bertelsen
770 S.W.2d 878 (Court of Appeals of Texas, 1989)
M.D. Anderson Hospital & Tumor Institute v. Willrich
28 S.W.3d 22 (Texas Supreme Court, 2000)
Tenneco Inc. v. Enterprise Products Co.
925 S.W.2d 640 (Texas Supreme Court, 1996)
Dynegy Midstream Services, Ltd. Partnership v. Apache Corp.
294 S.W.3d 164 (Texas Supreme Court, 2009)
Parker Drilling Co. v. Romfor Supply Co.
316 S.W.3d 68 (Court of Appeals of Texas, 2010)
Johnson v. Brewer & Pritchard, P.C.
73 S.W.3d 193 (Texas Supreme Court, 2002)
Metromarketing Services, Inc. v. HTT Headwear, Ltd.
15 S.W.3d 190 (Court of Appeals of Texas, 2000)
Beverick v. Koch Power, Inc.
186 S.W.3d 145 (Court of Appeals of Texas, 2006)
T.O. Stanley Boot Co. v. Bank of El Paso
847 S.W.2d 218 (Texas Supreme Court, 1993)
Meyer v. Texas National Bank of Commerce of Houston
424 S.W.2d 417 (Texas Supreme Court, 1968)
Stiver v. Texas Instruments, Inc.
750 S.W.2d 843 (Court of Appeals of Texas, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
John R. Fuller v. Wholesale Electric Supply Company of Houston, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-r-fuller-v-wholesale-electric-supply-company-of-houston-inc-texapp-2020.