MacY v. Waste Management, Inc.

294 S.W.3d 638, 2009 Tex. App. LEXIS 7110, 2009 WL 1493012
CourtCourt of Appeals of Texas
DecidedAugust 28, 2009
Docket01-07-00276-CV
StatusPublished
Cited by54 cases

This text of 294 S.W.3d 638 (MacY v. Waste Management, 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
MacY v. Waste Management, Inc., 294 S.W.3d 638, 2009 Tex. App. LEXIS 7110, 2009 WL 1493012 (Tex. Ct. App. 2009).

Opinions

OPINION

ELSA ALCALA, Justice.

Appellant, Griffin Macy, has filed a motion for rehearing of our March 12, 2009 memorandum opinion and judgment. We deny that motion. We, however, withdraw our March 12, 2009 memorandum opinion and judgment and issue this memorandum and judgment in its stead to clarify the analysis of the legal authority cited by Macy in his first appellate issue. Macy appeals a final judgment ordering he take nothing from appellee, Waste Management, Inc. The judgment also orders Macy to pay $170,173.19 to Waste Management for repayment of attorney’s fees and litigation expenses advanced to Macy. Macy’s three issues contend the trial court erred by (1) determining as a matter of law that Waste Management complied with the terms of the employment Agreement it had with Macy; (2) finding the Board of Directors’ determination of cause was timely under the Agreement; and (3) denying certain discovery to Macy. In two issues in a cross-appeal, Waste Management contends it was entitled to judgment for $357,843.41, the entire amount of the fees it advanced to Macy, because Macy was not the prevailing party under the terms of the Agreement and the Agreement does not provide for segregation of attorney’s fees. We conclude the trial court properly determined Waste Management complied with the terms of the Agreement; that Waste Management was due the return of only those fees it ad[642]*642vanced to Macy following the decision of the Board of Directors (the Board) that Macy was terminated for cause, excluding the amount pertaining to litigation over the amount of the fees; and that the trial court properly denied the requested discovery. We affirm.

Background

Waste Management hired Macy in 2000 as the vice president of Enterprise Systems Development (ESD) in charge of software development. Macy had an employment Agreement with Waste Management, which provided that his employment “shall continue ... unless terminated pursuant to the terms of Section 5 and 6 of this Agreement.”

Section 5 of the Agreement, entitled “Termination of Employment,” provided that employment “may be terminated under the following circumstances.” Those circumstances included death; total disability; voluntary termination by the employee; termination by the company without cause; and termination by the company for cause. The Agreement listed the following three criteria applicable to the designation of termination for cause under section 5:

(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.

In the event of a dispute arising out of section 5(c) — the section describing termination for cause — section 10 of the Agreement provided for advance payment of the employee’s attorney’s fees for resolution of disputes between the employee and Waste Management.

Depending on the circumstances under which the employee stopped working for the company, section 6 of the Agreement provided for the structure of compensation following termination. Upon termination for cause or voluntary termination of employment, the employee received few benefits, such as payment of accrued wages. However, for termination without cause, the employee received more substantial benefits to be paid over a two-year period of time. The Agreement provided,

(e) Termination by the Company Without Cause.... [T]he company shall pay the following amounts to Employee:
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(iii) An amount equal to two times the sum of Employee’s Base Salary plus his or her target annual bonus (as then in effect), of which one-half shall be paid in a lump sum within ten (10) days after [643]*643such termination and one-half shall be paid during the two (2) year period beginning the date of Employee’s termination ....

In early 2004, Lynn Caddell was hired by Waste Management as its Chief Information Officer. At a meeting between Caddell and Macy, Macy stated he was thinking about leaving the company. On April 5, 2004, Macy stopped working for Waste Management. Caddell indicated she was accepting Macy’s resignation. Macy, however, believed he was terminated without cause and entitled to severance fees in accordance with the Agreement.

Waste Management’s Forensic Audit Services (FAS) conducted a “Special Review” of ESD, issuing an audit report in June. 2004. FAS typically investigated financial impropriety within the company. The report indicated 12 people were interviewed, including Warren Brauer, “Finance Manager, ESD (Contractor)”; Gary Rind, “Budget Coordinator, ESD (Contractor)”; and Christy Cooper, “IT Controller.” Macy was not interviewed.

In August 2004, Macy sued Waste Management for breach of contract for failure to pay the severance fees required for termination without cause. Waste Management generally denied, later amending to include affirmative defenses that Macy resigned or could have been terminated for cause.

In August 2005, and while Macy’s lawsuit was pending, Waste Management convened the Board to determine the classification of Macy’s departure. The Board, in writing, told Macy he was “invited to be heard at a special meeting called to consider whether [Macy] engaged in an act constituting Cause.” Macy and Waste Management were told they could each submit a 10-page position paper with no more than 10 pages of exhibits, submit a proposed Board resolution, and make an oral presentation to the Board. Although the Board originally limited the oral presentations to 15 minutes per side, Macy’s counsel was allowed approximately 30 minutes to address the Board at the meeting, which lasted approximately two hours. In addition to considering the oral statements by the parties’ respective attorneys, the Board considered Macy’s employment Agreement; the executive summary of the forensic audit report; and written documents submitted by counsel for Macy and Waste Management. Determining Macy committed fraud, the Board issued a resolution by a unanimous vote that cause existed for Macy’s April 2004 termination. The Board determined Macy committed fraud by understating his departmental “headcount” and accumulating accruals. According to the Chairman of the Board, John Pope, these two problems could result in lack of compliance with Securities and Exchange Commission regulations.

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Cite This Page — Counsel Stack

Bluebook (online)
294 S.W.3d 638, 2009 Tex. App. LEXIS 7110, 2009 WL 1493012, Counsel Stack Legal Research, https://law.counselstack.com/opinion/macy-v-waste-management-inc-texapp-2009.