Southwestern Bell Telephone, L.P. v. Richard D. Chappell

CourtCourt of Appeals of Texas
DecidedJanuary 24, 2013
Docket02-12-00071-CV
StatusPublished

This text of Southwestern Bell Telephone, L.P. v. Richard D. Chappell (Southwestern Bell Telephone, L.P. v. Richard D. Chappell) 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
Southwestern Bell Telephone, L.P. v. Richard D. Chappell, (Tex. Ct. App. 2013).

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 02-12-00071-CV

Southwestern Bell Telephone, L.P. § From the 141st District Court

§ of Tarrant County (141-208589-04) v. § January 24, 2013

Richard D. Chappell § Opinion by Chief Justice Livingston

JUDGMENT

This court has considered the record on appeal in this case and holds that

there was error in the trial court’s judgment. It is ordered that the judgment of the

trial court is reversed. We render judgment for appellant Southwestern Bell

Telephone, L.P. on its breach of contract claim against appellee Richard D.

Chappell for $106,990. We also remand the cause to the trial court for the

limited purpose of considering the award of interest, attorney’s fees, and costs. It is further ordered that appellee Richard D. Chappell shall pay all of the

costs of this appeal, for which let execution issue.

SECOND DISTRICT COURT OF APPEALS

By_________________________________ Chief Justice Terrie Livingston

2 COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

SOUTHWESTERN BELL APPELLANT TELEPHONE, L.P.

V.

RICHARD D. CHAPPELL APPELLEE

----------

FROM THE 141ST DISTRICT COURT OF TARRANT COUNTY

MEMORANDUM OPINION1

In three issues, appellant Southwestern Bell Telephone, L.P.

(Southwestern Bell) appeals the trial court’s take-nothing judgment in favor of

appellee Richard D. Chappell. We reverse and render in part and reverse and

remand in part.

1 See Tex. R. App. P. 47.4.

3 Background Facts

Southwestern Bell employed Chappell as a sales representative. Chappell

worked within the company’s win-back group, which focused on contacting

former commercial customers and attempting to make them long-term customers

again. By the terms of his employment agreement, Chappell received

commissions from the sales he made. To be entitled to receive and keep any

commission on a win-back, Chappell had to make a sale to a new customer, that

customer’s lines had to be activated within six months of the sale, and that

customer had to issue a “letter of authorization” to Southwestern Bell.

In February 2001, Chappell signed a “Document of Understanding” that

stated in part,

I specifically understand that I will receive sales compensation payouts based on components of the 2001 Sales Compensation Plan. These payouts assume that I am meeting the pre-established sales objectives and retention criteria for designated products and services. I understand that if my total sales results for the year or the portion of the year that I am on the Plan do not meet these objectives and criteria by end of year or by the month I leave the plan, and because the incentive plans are cumulative to the end of the year, I understand there are circumstances where I may have received more compensation than I have earned.

In the event of any overpayment or chargeback, I understand the overpayment or chargeback will be deducted from future scheduled sales compensation . . . . If I am not a participant in the 2002 Sales Compensation Plan or I leave the 2001 Plan anytime during 2001, overpayment can be paid by sending a money order for the full amount to Southwestern Bell . . . . Upon 30 days of leaving the compensation plan, arrangements need to be made . . . for re- payment of any overpayments.

4 In the same month that he signed the Document of Understanding, Chappell

signed a compensation election form in which he chose to be paid based on a

smaller base salary and a larger “sales incentive.” A year later, Chappell signed

a document titled “Sales Compensation Administrative Guide and Policies,”

which stated,

In the event of any overpayment, I understand and agree to repay the overpayment. While on the 2002 Plan [the overpayment] will be trued up with the next scheduled sales compensation payout(s). If I am not a participant in the 2003 Sales Compensation Plan or I leave the 2002 Plan anytime during 2002, remittance for the overpayment can be made by certified check . . . . The total amount shall be recovered within three (3) months or as prescribed by state law.

....

If I refuse to repay an overpayment, or make arrangements to do so, within 30 days of being notified, I understand that [Southwestern Bell] has the right to initiate collection actions . . . .

Chappell acknowledges that he understood while working for Southwestern Bell

that the effect of the documents that he signed in 2001 and 2002 was that he

agreed to repay any overpayments, or “chargebacks,” of commission that he had

received from Southwestern Bell but that he was not ultimately entitled to.2

In December 2001, Chappell worked on a sale of approximately 1,300

lines of telephone service to Allstate Insurance Company (Allstate).

2 According to Leslie Pendergrass, who is a Southwestern Bell sales manager, employees are entitled to keep a commission until the commission is “trued up and [Southwestern Bell has] documentation to show otherwise.” [36, 39] Pendergrass described the “true up process [as] kind of like an auditing process.”

5 Southwestern Bell paid Chappell a large commission from that sale in early 2002.

Chappell resigned from Southwestern Bell in July 2002. At that time, he was

aware that at least some commissions that he had made in 2001 were being

charged back. He also knew that the Allstate sale was not final; he testified at

trial that he had worked on the sale “in the beginning, and then it [had] got[ten]

sent to . . . the implementation group.” According to Chappell’s testimony at trial,

at the time he left his employment, he believed that the Allstate representative

who had signed the agreement with Southwestern Bell had the authority to do so

and that the sale would eventually be completed. But after resigning from

Southwestern Bell, Chappell did not contact anyone at Southwestern Bell to

check on the status of the sale.

Southwestern Bell eventually determined that almost five hundred of the

lines that were to be part of the Allstate sale were already Southwestern Bell’s

lines and that the sale of the remaining lines could not be completed because the

representative from Allstate who had signed the contract did not have the

authority to bind individual Allstate franchisees. Chappell testified at trial,

however, that he did not receive notice of any problem with the Allstate sale in

2002 or in the first several months of 2003.3

3 Pendergrass indicated that after Chappell left his employment with Southwestern Bell, he could have called one of Southwestern Bell’s employees to learn whether the Allstate sale had been completed and whether he was entitled to keep the commission from that sale. Pendergrass also opined that Chappell should have investigated the status of the lines subject to the Allstate

6 Pendergrass, who worked with Southwestern Bell at the same time that

Chappell did, testified that in 2002 and 2003, Southwestern Bell contacted

individual Allstate franchisees to attempt to secure the sales of the lines that

Chappell had originally attempted to sell. According to Pendergrass,

Southwestern Bell did not begin the chargeback process in the summer of 2002

because it was attempting to “save the [Allstate] sale,” which, according to

Pendergrass, would have also saved Chappell’s commission. Pendergrass did

not know why, upon Chappell’s resignation from the company, someone did not

tell him that 491 lines that were part of the Allstate sale were already

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