TeleResource Corporation v. Accor North America, Inc.

427 S.W.3d 511, 2014 WL 975736, 2014 Tex. App. LEXIS 2915
Court of Appeals of Texas·Decided March 13, 2014·No. 02-12-00475-CV·Published·Cited by 6 cases

Opinion

OPINION

BILL MEIER, Justice.

I. Introduction

Appellant TeleResource Corporation (TRC) appeals from a partial summary judgment granted in favor of Appellee Ac-cor North America, Inc. and a final judgment following a jury trial. In seven issues, TRC argues that the trial court erred by granting Accor summary judgment on TRC’s anticipatory repudiation claim, that the evidence is legally and factually insufficient to support some of the jury’s findings, and that the trial court erred by submitting an improper jury question on Accor’s damages. We will affirm as modified.

II. Background

Accor is a Delaware corporation with its principal place of business in Carrollton. Accor owns, operates, or franchises over 900 economy hotels across the United States, Canada, and Mexico under the names Motel 6 and Studio 6.

TRC is a Texas corporation with its principal place of business in Dallas. It provides telecommunication services and support, sometimes through subcontractors, for companies in the hospitality industry.

In early April 2003, Accor and TRC signed a Master Services Agreement (MSA) in which TRC agreed to provide specific services and support for the telecommunication systems used by Accor’s properties, including repairing or replacing defective telecommunication parts and components, conducting routine maintenance of the systems, and providing remote alarm monitoring. The MSA had an initial term of forty-two months and called for two types of fees to be paid by Accor to TRC: (l)fees for recurring services and (2) fees for nonrecurring services. The monthly recurring-services fee was based upon a set fee per guest room and covered the support and services set out in the MSA. Under Modification 2 to the MSA, TRC invoiced Accor sixty days in advance of the month that TRC was to perform recurring services, and Accor’s payment was due thirty days before TRC commenced the services. 1 The fee for nonre *516 curring services covered labor and materials for services that were not included in the recurring-services fee. 2 TRC invoiced Accor bimonthly for nonrecurring services, and Modification 2 required Accor to pay for the services within fourteen days of invoicing.

Modification 2 to the MSA contained the following provision regarding payment of fees:

Material Default. If [Accor] shall fail to provide payment in strict accordance with the dates, deadlines and obligations set forth herein the same shall be a material default. In the event of a material default TRC may, at its sole option, suspend provision of Services under this Agreement until such time as the deficiency, in payment, is made without affecting the binding nature of this Agreement. Immediately upon receipt of payment in full, of such past due monies, which caused the material default, TRC may require adequate assurance of future performance by [Accor] and upon receipt of such assurance shall immediately resume provision of Services under this Agreement. [Accor] expressly agrees that any suspension of Services resulting from such Default shall not relieve [Accor] of monies due under this Agreement for the term of any such suspension.... In the event that any such past due fees remain unpaid for thirty (30) days beyond the due date, a material Default shall have occurred. [Emphasis added.]

TRC completed transitioning Accor’s properties from the previous support provider in August 2003. Thereafter, the parties proceeded under the MSA and Modifications — TRC provided services and support to Accor’s properties, and Accor paid TRC for those services.

With the initial term of the MSA ending in 2006, Accor invited TRC and other businesses to submit bids in March 2006 as part of a request for proposal process that Accor launched in December 2005. TRC submitted a bid, but Accor ultimately chose another business, Source, Inc., to provide the telecommunication services and support for its properties after the MSA expired. It was around that time that, according to Jorge Gonzalez, TRC’s former CFO and president, “things got a little bit messy.”

On August 1, 2006, TRC sent Accor an invoice for October’s recurring-services fee, but Accor declined to pay it because according to the version of the MSA in its possession, the initial term of the MSA commenced on April 11, 2003, (the effective date) and expired forty-two months later in early October 2006. Thus, Accor did not want to pay for recurring services beyond the initial term of the MSA. 3 When the parties met to compare contracts, they learned that TRC had a different version of the MSA-TRC’s MSA had a handwritten effective date of June 1, 2003, meaning that the initial term of the MSA expired at the end of November 2006, not in early October 2006.

By letter dated August 23, 2006, TRC notified Accor that it would suspend service to Accor’s properties effective at 5:00 p.m. that day because pursuant to section g.l.(b) of Modification 2 to the MSA, and “as a result of the failure of [Accor] to provide payment in strict accordance with the dates, deadlines and obligations set forth therein,” Accor had committed a ma *517 terial default under the MSA. To avoid a suspension of service, TRC demanded that Accor pay the invoices detailed in a spreadsheet attached to the letter by 5:00 p.m. that day. According to the spreadsheet, the “Total Balance Outstanding” was $811,183.33. Of that amount, approximately $198,000 represented the October 2006 fee for recurring services, which was not due until August 31, 2006, according to Modification 2 to the MSA. The remaining approximately $112,000 represented invoices for nonrecurring services. Of that $112,000, only twelve invoices totaling approximately $3,400 had gone unpaid for over thirty days, and sixty-three invoices totaling approximately $23,000 had gone unpaid for at least fourteen days but less than thirty days. Thus, considering Modification 2’s payment requirements for recurring and nonrecurring services, of the $311,183.33 that TRC demanded Accor pay to avoid suspended service, approximately $284,000 was not yet due.

TRC extended the due date for the payment that it had demanded by one day, and Accor made efforts to contact TRC’s counsel and negotiate, but TRC ultimately suspended service to Accor as of 5:00 p.m. on August 24, 2006. 4 On September 1, 2006, about a week after TRC had suspended service, TRC received Accor’s payment for the twelve invoices for nonrecurring services that had gone unpaid for over thirty days and for forty-seven of the invoices for nonrecurring services that had gone unpaid for at least fourteen days, but TRC did not withdraw its suspension of service. Accor consequently initiated an “emergency plan” — its own employees were fielding service-related calls — and it accelerated the transition period that had to occur before Source was fully capable of handling Accor’s telecommunication needs.

The parties sued each other for breach of contract and other claims.

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TeleResource Corporation v. Accor North America, Inc., 427 S.W.3d 511, 2014 WL 975736, 2014 Tex. App. LEXIS 2915 (Tex. Ct. App. 2014).

427 S.W.3d 511 (TeleResource Corporation v. Accor North America, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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