Sun Medical, Inc. v. Overton

864 S.W.2d 558, 1993 Tex. App. LEXIS 2950, 1993 WL 276794
CourtCourt of Appeals of Texas
DecidedNovember 3, 1993
Docket2-92-051-CV
StatusPublished
Cited by10 cases

This text of 864 S.W.2d 558 (Sun Medical, Inc. v. Overton) 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
Sun Medical, Inc. v. Overton, 864 S.W.2d 558, 1993 Tex. App. LEXIS 2950, 1993 WL 276794 (Tex. Ct. App. 1993).

Opinions

OPINION

HILL, Chief Justice.

Sun Medical, Inc. appeals from a judgment recovered by Bruce Overton, a former employee of Sun Medical, following a jury trial on Overton’s claim that Sun Medical had breached a written employment agreement. In various ways, Sun Medical claims in three points of error that the judgment is barred by the four-year statute of limitations, TEX. CIV.PRAC. & REM.CODE ANN. § 16.004 (Vernon 1986). Overton urges, in two cross-points of error, that the trial court erred by limiting his damages to those that accrued after May 1984, because the statute of limitations did not bar any of his claim, and that the trial court erred in denying his motion to disregard the jury’s answer to question number seven because it is not material to the verdict.

We reverse and render judgment that Overton take nothing in his suit because we agree with Sun Medical’s contention that the undisputed evidence established that Over-ton’s claim against it is barred as a matter of law by the statute of limitations. Consequently, we also hold that the trial court did not err in failing to award Overton damages accruing before May 1984, and that any error of the trial court in failing to disregard jury question number seven is not an error that would have amounted to such a denial of Overton’s rights as was reasonably calculated to cause or that probably did cause the rendition of an improper judgment in this cause.

Sun Medical asserts in points of error numbers one, two, and three that the trial court erred: (1) in granting Overton’s motion for judgment n.o.v., in denying its motion for judgment on the verdict, and in rendering judgment for Overton because Overton’s cause of action is barred as a matter of law by the statute of limitations; (2) in denying its motion for directed verdict because the evidence establishes that Overton’s cause of action is barred as a matter of law by the statute of limitations; and (3) in granting Overton’s motion to disregard the jury’s answer to question eight because the question is material to the verdict.

[560]*560Overton contends in two cross-points of error that the trial court erred in limiting his recovery to damages that accrued to him after May 1984 because the statute of limitations did not bar any of his claim, and that the trial court erred in denying his motion to disregard the jury’s answer to question number seven.

Under the employment agreement between Sun Medical and Overton, Overton was assigned a “Territory” into which he sold medical-related products for Sun Medical. His territory consisted of both a geographic region as well as certain product lines. His territory originally included Oklahoma and all of Sun Medical’s product lines.

The employment agreement provided that Sun Medical could change Overton’s “Territory” on written notice to him thirty days prior to the effective date of the change. In June 1982, Sun Medical changed Overton’s “Territory” so he was no longer allowed or paid to sell intravenous products in Oklahoma. The parties disputed whether Sun Medical provided Overton with written notice of the change in his territory, as required by the employment agreement. The jury found that Sun Medical breached its agreement with Overton.

Overton continued to work for Sun Medical until May 1986, at which time he was terminated. He did not continue to make sales in his old territory, only in his new territory. In 1988, after Sun Medical sued him, for reasons not pertinent here, Overton counterclaimed, seeking to recover his commission for all product sales made by others in the State of Oklahoma during the time he was employed by Sun Medical.

The parties agree that Overton’s action is barred if brought more than four years from the date his cause of action accrued. TEX.CIY.PRAC. & REM.CODE ANN. § 16.004. The issue, then, is when Overton’s cause of action accrued.

Overton filed his counterclaim on May 4, 1988. The trial court awarded Overton the amount found by the jury to have been losses resulting to Overton due to Sun Medical’s breach of contract subsequent to May 1984, but denied recovery to him for losses resulting from Sun Medical’s breach of contract prior to May 1984.

Sun Medical argues that as a matter of law Overton’s action for breach of contract accrued in June 1982, at the time Overton learned that Sun Medical would not be paying him the disputed commissions. Sun Medical, therefore, contends that all of Over-ton’s claim is barred by the statute. Overton claims that because the employment agreement contemplated continuing performance on his part, the cause of action did not accrue until Overton was terminated on May 12, 1986; therefore, he argues, all of his claim was timely filed.

The cause of action for the breach of an employment contract arises immediately upon the breach of the contract and limitations run from that time. Dixie Glass Co. v. Pollak, 341 S.W.2d 530, 540 (Tex.Civ.App.—Houston 1960), writ ref'd n.r.e. per curiam, 162 Tex. 440, 347 S.W.2d 596 (1961). Consequently, we hold that Overton’s claim is barred by limitations because it was brought more than four years after it accrued.

Overton argues that limitations did not begin to run until the conclusion of his services under the contract because his contract provides for continuing performance by him. He relies in part upon the cases of Intermedics, Inc. v. Grady, 683 S.W.2d 842, 845 (Tex.App.—Houston [1st Dist.] 1984, writ ref'd n.r.e.) and City and County of Dallas Levee Imp. Dist. v. Halsey, 202 S.W.2d 957, 960-61 (Tex.Civ.App.—Amarillo 1947, no writ).

We find both cases to be distinguishable. In Intermedies, Inc., Dr. Frank Grady brought an action against Intermedies, Inc. to recover the value of certain shares of the company’s stock that had been promised him in an oral employment contract.

Grady did certain work for the company. In return, he was to be paid a salary and stock. He never received the stock. When he inquired, he was told that he need not worry, his stock would be forthcoming at a time more convenient to the corporation. When Albert Beutel, the company officer and board member who had hired Grady, died, Grady demanded the transfer of the stock. [561]*561Instead of transferring the stock to Grady, the company terminated his employment contract.

The court held that limitations did not begin to run until March 1979, when, upon Beutel’s death, Grady demanded the stock from Intermedies. Intermedies, Inc., 68B S.W.2d at 846. The court further held that until Beutel’s death there was not such a distinct and unequivocal refusal by the corporation to effect the transfer that would have given Grady the right to sue. Id. at 847. In effect, then, the court held that there was no real breach of the employment contract until Beutel’s death.

In this case the alteration of Overton’s territory and therefore his compensation without proper notice to him was unequivocal, so that the breach of contract occurred in June 1982. Therefore, Overton’s claim accrued at that time.

In Halsey,

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Sun Medical, Inc. v. Overton
864 S.W.2d 558 (Court of Appeals of Texas, 1993)

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Bluebook (online)
864 S.W.2d 558, 1993 Tex. App. LEXIS 2950, 1993 WL 276794, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-medical-inc-v-overton-texapp-1993.