Salazar v. Coastal Corp.

928 S.W.2d 162, 1996 Tex. App. LEXIS 2465, 1996 WL 336092
CourtCourt of Appeals of Texas
DecidedJune 20, 1996
Docket14-95-00310-CV
StatusPublished
Cited by24 cases

This text of 928 S.W.2d 162 (Salazar v. Coastal Corp.) 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
Salazar v. Coastal Corp., 928 S.W.2d 162, 1996 Tex. App. LEXIS 2465, 1996 WL 336092 (Tex. Ct. App. 1996).

Opinion

OPINION

AMIDEI, Justice.

This appeal from a summary judgment in a suit arising from the termination of an agency relationship presents the questions of whether Texas law should be applied to govern the parties’ agreement, whether material fact questions exist, and whether discovery was properly denied. Appellant, Carlos Salazar (“Salazar”), sued appellees, the Coastal Corporation (“TCC”), and its subsidiaries, Coastal States Trading, Inc. (“CSTI”), and Coastal Petroleum Marketing N.V. n/k/a Coastal Petroleum N.Y. (“CPNV”), after CSTI terminated Salazar’s agency relationship with it in Ecuador. The trial court granted summary judgment for appellees, and Salazar appeals in three points of error. We reverse and remand.

Salazar began acting as CSTI’s legal representative in Ecuador in 1986. He entered into an agreement with Mobile Bay Refining Company (“Mobile Bay”), which acted as CSTI’s general agent in Latin America. Mobile Bay’s contract with CSTI expired in mid-1990. On July 9, 1990, CSTI and Salazar entered an agency agreement, executed in Miami, Florida, continuing Salazar’s services for CSTI (“the agency agreement”). Salazar was to receive a monthly retainer of $1,500, to be recovered from commissions paid to him based on $.03 per barrel of crude or refined petrochemical products that were sold to or purchased from Ecuador’s government-controlled oil company, PetroEcuador. CSTI notified PetroEcuador that Salazar would continue as its local representative in Ecuador.

The agency agreement provided for an initial term of six months, and it could be renewed from year to year or cancelled by either party on thirty days written notice. It is undisputed that no renewals were entered. It is also undisputed that after the initial six-month period, the parties continued to operate under the terms of the agency agreement with respect to Salazar’s compensation. Both parties continued the agency relationship until February 18, 1992, when CSTI notified Salazar that it decided to “wind up its operations in Ecuador,” and the agency relationship would terminate in thirty days. The day before, on February 17, TCC requested and received authorization from Pe-troEcuador for CPNV to be permitted to respond to PetroEcuador’s tender offers on TCC’s behalf. After Salazar’s agency was terminated, TCC began doing business in Ecuador through CPNV. 1

Salazar filed suit alleging breach of contract, quantum meruit, tortious interference, breach of fiduciary duty, fraud, constructive fraud, negligence, negligent misrepresentation, conspiracy and promissory estoppel. He also claimed that all of the Coastal entities were alter egos of one another. Salazar alleged that the terms of his agreement were orally modified to include a promise that he would remain the agent for any and all of the Coastal companies so long as any Coastal company did business in Ecuador. He claimed that his termination was a “charade” to “dump” him and avoid compensating him for the value of his services. He contended that Coastal falsely told him none of its companies would be doing further business in Ecuador. Salazar asserted that approximately two months after his agency terminated, as a result of his efforts, CPNV obtained a contract with PetroEcuador for *166 12,000 barrels per day and appellees refused to pay the commissions owed to him.

Appellees moved for summary judgment, and Salazar requested the trial court to take notice of and apply Ecuadorian law. Responses to both motions were filed, and both motions were denied by Judge Eileen O’Neill on December 27,1994. On January 12,1995, shortly before the trial setting, the new presiding judge of the 190th District Court, Judge John Devine, held a hearing on appel-lees’ motion to quash depositions and also considered other pending motions. During this hearing he granted appellees’ request to reconsider their summary judgment motion, denied Salazar’s motion to reconsider application of Ecuadorian law, denied Salazar’s motion to compel discovery, and granted ap-pellees’ motion to quash depositions. The court then entered its take nothing judgment against Salazar, and this appeal resulted.

CHOICE OF LAW

Because determination of the proper choice of law is necessary before we may address the propriety of the summary judgment granted by the trial court, we first consider Salazar’s second point of error contending that the trial court erred in overruling his motion to apply Ecuadorian law. The question of which law to apply is a question of law for the court and is subject to de novo review. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984); Hull & Co. v. Chandler, 889 S.W.2d 513, 517 (Tex.App.—Houston [14th Dist.] 1994, writ denied); see also Tex.R. Civ. Evid. 203.

In the agency agreement, the parties provided that Texas law would control. While it is true that the agency agreement expired under its own terms and no written renewal was executed, both parties continued to act as if the agreement were still in effect. It is well settled in Texas that a continuance of the employment relationship in accordance with the terms of a written employment contract after the contract has expired by lapse of time is a continuance of the old contract as a matter of law. Southwest Airlines Co. v. Jaeger, 867 S.W.2d 824, 833 (Tex.App.—El Paso 1993, writ denied); Fenno v. Jacobe, 657 S.W.2d 844, 846 (Tex.App.—Houston [1st Dist.] 1983, writ ref'd n.r.e.). There is nothing in the record indicating the parties intended to change the choice of law provision in the agency agreement after its expiration. Therefore, we conclude the parties were continuing to operate under their contractual Texas choice of law provision.

Under the concept of “party autonomy,” we respect the parties’ choice of law unless the chosen law has no relation to the parties or the agreement, or their choice would offend the public policy of the state whose laws otherwise ought to apply. DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677 (Tex.1990), cert. denied, 498 U.S. 1048, 111 S.Ct. 755, 112 L.Ed.2d 775 (1991); see also First Commerce Realty Investors v. K—F Land Co., 617 S.W.2d 806, 808-09 (Tex.Civ.App.—Houston [14th Dist.] 1981, writ ref'd n.r.e.) (recognizing that the parties’ express agreement controls if the contract bears a reasonable relation to the chosen state and there is no countervailing public policy demanding otherwise). This rule has been codified in Texas as:

[W]hen a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.

Tex. Bus. & Com.Code Ann. § 1.105(a) (Vernon 1994).

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Cite This Page — Counsel Stack

Bluebook (online)
928 S.W.2d 162, 1996 Tex. App. LEXIS 2465, 1996 WL 336092, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salazar-v-coastal-corp-texapp-1996.