Macy v. Waste Management, Inc. (Tex.App.- Houston [1st Dist.] Mar. 12, 2009)(Alcala)
AFFIRM TC JUDGMENT: Opinion by Justice Alcala
Before Chief Justice Radack, Justices Alcala and Hanks
01-07-00276-CV Griffin Macy v. Waste Management, Inc.
Appeal from 157th District Court of Harris County
MEMORANDUM OPINION
Appellant, Griffin 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 Managment was due the return of only those fees it advanced 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:
. . . .
(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 such 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 Managment
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 the Securities and Exchange Commission.
Waste Managment filed a matter-of-law motion for final summary judgment asserting the Agreement allowed the
determination of cause to be made at any time prior to the date of any payment due under the Agreement.
Waste Managment also argued that the Agreement's unambiguous provisions required the Board to be the
sole and final authority for the determination of cause. Waste Management further sought repayment of the
attorney's fees it advanced to Macy. Waste Management later filed a matter-of-law and no-evidence motion for
final summary judgment that the decision by the Board was made in good faith, and alternatively, seeking
summary judgment limiting the fact finder to a review of whether the Board acted in good faith when it found
Macy committed fraud.
Macy filed responses to Waste Management's motion for final summary judgment and competing motions for
summary judgment. Macy challenged the Board's determination of cause under the Agreement by asserting he
did not clearly waive his right to sue; the Board's determination of cause was not timely made under the terms
of the Agreement; the Board waived its right to determine cause due to the delay in finding cause; the
Agreement did not preclude the jury from reviewing whether cause to terminate Macy existed; and alternatively,
if the trial court determined the Board's finding could be reviewed only on the matter of whether the Board
acted in good faith, there was evidence raising a question of fact on the Board's good faith.
The trial court rendered partial summary judgment in favor of Waste Managment, stating, "Section 5(c)(ii) of the
Agreement allows the Board . . . to make a cause determination at any time prior to a payment date for any
amount due under the Agreement." The trial court subsequently granted Waste Management's motion for final
summary judgment.
Upon prevailing in the summary judgment motions that determined Waste Management did not breach the
Agreement, Waste Management filed a summary judgment motion for repayment of all the attorney's fees and
litigation expenses it had advanced to Macy under the terms of the Agreement. The trial court declined the full
amount requested by Waste Management, granting the motion for an apportioned amount.
After the trial court granted summary judgment in favor of Waste Managment, Macy filed a motion for
reconsideration of the court's order granting final summary judgment. In addition to reurging arguments
previously presented, Macy asserted new arguments and evidence. After Waste Management responded to the
motion for reconsideration, the trial court denied the motion and rendered the final, appealable judgment.
During the course of the underlying litigation, Macy issued multiple requests for production and interrogatories,
ultimately filing a motion to compel. Waste Management requested protection from the discovery, as it
pertained to individuals other than Macy. The trial court denied Macy's motion to compel and granted Waste
Management's motion for protection.
Summary Judgment for Macy's Claims for Breach of Contract
Macy challenges the trial court's orders granting summary judgment in favor of Waste Management.
A. Standard of Review
We review a trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). To prevail on a
summary judgment, the movant has the burden of proving that there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison
County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.
1995); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A defendant moving for summary
judgment must either (1) disprove at least one element of the plaintiff's cause of action or (2) plead and
conclusively establish each essential element of an affirmative defense to rebut the plaintiff's cause. Cathey,
900 S.W.2d at 341.
In our review, we take as true all evidence favorable to the nonmovant, and indulge every reasonable inference
and resolve any doubts in the nonmovant's favor. Dorsett, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215; Sci.
Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). Our task is to "consider whether reasonable and
fair-minded jurors could differ in their conclusions in light of all of the evidence presented." Goodyear Tire &
Rubber Co. v. Mayes, 236 S.W.3d 754, 755-56 (Tex. 2007) (citing Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d
566, 568 (Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 822-25 (Tex. 2005)). When, as here, a
summary judgment does not specify the grounds on which it was granted, we will affirm the judgment if any one
of the theories advanced in the motion is meritorious. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150,
157 (Tex. 2004). B. Applicable Law Concerning Interpretation of Contract
"Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a
whole in light of the circumstances present when the contract was entered." David J. Sacks, P.C. v. Haden, 266
S.W.3d 447, 451 (Tex. 2008) (citing Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587,
589 (Tex. 1996)). "When parties disagree over the meaning of an unambiguous contract, the court must
determine the parties' intent by examining and considering the entire writing in an effort to give effect to and
harmonize all provisions so that none will be rendered meaningless." Rolling Lands Invs., L.C. v. Nw. Airport
Mgmt., L.P., 111 S.W.3d 187, 196 (Tex. App.--Texarkana 2003, pet. denied) (citing Coker v. Coker, 650
S.W.2d 391, 393 (Tex. 1983); First City Nat'l Bank v. Concord Oil Co., 808 S.W.2d 133, 136 (Tex. App.--El
Paso 1991, no writ); KMI Cont'l Offshore Prod. Co. v. ACF Petroleum Co., 746 S.W.2d 238, 241 (Tex.
App.--Houston [1st Dist.] 1987, writ denied)). Terms in contracts are given their plain, ordinary, and generally
accepted meaning. Creel v. Houston Indus., Inc., 124 S.W.3d 742, 749 (Tex. App.--Houston [1st Dist.] 2003, no
pet.). Our primary concern in interpreting a contract is to ascertain and give effect to the intent of the parties as
it is expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex.
2006). The intent of the parties must be taken from the agreement itself, not from the parties' present
interpretations, and the agreement must be enforced as it is written. See Sun Oil Co. v. Madeley, 626 S.W.2d
726, 731-32 (Tex. 1981).
The dispute between the parties is over which of the benefits under section 6 of the Agreement Macy is entitled
to receive. The parties here agree that Macy was an at-will employee who could be terminated for no reason at
all. See Tex. Farm Bureau Mut. Ins. Cos. v. Sears, 84 S.W.3d 604, 609 (Tex. 2002). Because Macy was an
at-will employee, Waste Management was required to give Macy only those benefits specified in the Agreement.
See Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738, 740 (Tex. 2006) (noting that to alter at-will
relationship, employer must unequivocally indicate definite intent to be bound not to terminate employee except
under clearly specified circumstances).
C. Terms of Agreement for Board's Determination of Cause
In his first issue, Macy contends he should be allowed to have a jury independently decide whether there is
cause to terminate him because the Agreement fails to specify that the Board's decision is final and binding on
Macy. Macy cites Goudie v. HNG Oil Co., 711 S.W.2d 716, 718 (Tex. App.--El Paso 1986, writ ref'd n.r.e.),
Associated Milk Producers v. Nelson, 624 S.W.2d 920, 926 (Tex. Civ. App.--Houston [14th Dist.] 1981, writ ref'd
n.r.e.), and Texaco, Inc. v. Romine, 536 S.W.2d 253, 255 (Tex. Civ. App.--El Paso 1976, writ ref'd n.r.e.).
However, these cases do not require that an express statement about finality be included in the Agreement.
Rather, we must examine the Agreement to determine the intent of the parties. See Seagull Energy, 207
S.W.3d at 345. Although the Agreement does not expressly state that the decision is final and binding, it plainly
states that Waste Management is to make the determination of cause. An examination of the entire Agreement
shows it does not provide Macy any right of appeal to another entity, nor does it refer to any other entity as
having the authority to determine cause. We conclude the intent of the Agreement is that the determination of
cause must be made by Waste Management alone. See id. Nothing in the Agreement supports Macy's position
that a jury should independently decide whether there is cause to terminate Macy. See id.
Macy also contends on appeal, "The Board's decision cannot be afforded any finality because the contract
does not include a clear waiver of the right to sue, therefore the Court erred in granting summary judgment to
Waste Management." See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 132 (Tex. 2004) (orig. proceeding)
(holding right to trial by jury in civil case may be waived "with sufficient awareness of the relevant circumstances
and likely consequences"). However, the trial court did not hold that Macy had waived the right to a trial by jury.
Rather, the trial court determined the merits of the lawsuit for breach of contract by finding that as a matter of
law, Waste Management did not breach its Agreement with Macy. The summary judgment ruling, deciding the
Agreement was not breached as a matter of law, obviated the need for a jury to resolve the lawsuit for breach
of contract. Therefore, the lack of an express waiver of the right to sue is immaterial because the trial court did
allow Macy to sue for breach of contract and the court did decide the merits of the claim, albeit by summary
judgment.
Also within his first issue, Macy asserts the trial court erred in granting summary judgment because Macy
presented evidence raising issues of fact whether "Macy voluntarily resigned or whether he was terminated for
Cause." Macy contends Waste Management failed to conclusively show there was no dispute about the
credibility of the witnesses, the inferences to be drawn from the evidence, and the weight to give the evidence.
The evidence conclusively shows the Board followed the terms of the Agreement in determining Macy was
terminated for Cause. Macy does not dispute that all of the procedural requirements in section 5(iii) were met
by Waste Managment. More specifically, Macy does not dispute that the determination of cause under this
Agreement was made by resolution of the Board adopted by affirmative vote of not less than a majority of the
entire membership of the Board at a meeting called and held for that purpose and at which Macy was given an
opportunity to be heard.
The dispute between the parties is whether the requirements in section 5(c)(i) were met by Waste
Management. Section 5(c)(i)(C) provides that Waste Management "may terminate" Macy's employment for
"Cause," which means "fraud determined in accordance with the Company's normal investigative procedures
consistently applied in comparable circumstances." Giving effect to the intent of the parties as it is expressed in
the contract, the plain reading of the Agreement shows the only conditions for Waste Management's
determination of cause under 5(c)(i)(C) are that the Board must (1) find fraud (2) as determined in accordance
with the company's normal investigative procedures consistently applied in comparable circumstances. See
Seagull Energy, 207 S.W.3d at 345. The record conclusively shows that the Board found Macy committed fraud
in understating his departmental "headcount" and in accumulating accruals.
Macy suggests irregularity occurred in the investigation procedures. Examining the evidence before the trial
court at the time it rendered the summary judgments, Macy's evidence does not raise a question of fact on the
matter of whether the company's normal investigative procedures were applied to Macy in a manner consistent
with comparable circumstances. Brian Thelen's testimony shows that FAS typically took the lead in conducting
investigations for impropriety within the company. Thelen said he had been involved in approximately a dozen
investigations initiated by a senior vice president such as Caddell, and that at least half a dozen of those
investigations involved allegations of fraud and were conducted solely by FAS.
In contrast, Macy pointed to testimony by Karen Francis, one of the interviewers conducting the forensic audit,
who said that she destroyed her notes after the interviews. Francis testified that after the interviews were
conducted,
one of us would write up the interview, based on our notes, send it to the other one, the other one would read
it, compare it to their [sic] notes, make any appropriate edits deemed appropriate by both interviewers and
have a final interview report that we agreed on as accurate. And then we shred our interview notes after it's
recorded into the interview report. So we probably shredded those notes before the end of the ESD review.
Although Macy suggests there is a sinister motive behind the destruction of the notes, he fails to provide any
evidence to refute Francis's testimony that all of the information in the notes was recorded into the interview
report. More importantly, he fails to show that this was not the usual practice of the forensic auditor. The
absence of the handwritten notes does not raise a factual issue on the matter of whether the company's normal
investigative procedures were applied to Macy in a manner consistent with comparable circumstances.
Macy also suggests irregularity in the forensic audit by pointing out that the company never interviewed Macy
or any executive to whom Macy reported. No evidence shows that the company's normal investigative
procedures included interviewing all ESD employees or the subject of the investigation. The failure of the
forensic auditor to question all employees in ESD also does not raise an issue of fact concerning the regularity
of the investigation procedure.
Macy further contends that Waste Management applied a stricter standard to Macy than to others at Waste
Management. Macy refers to testimony by the chairman, who said that anyone complicit in the headcount or
accrual manipulation should be fired. Macy then argues that "various people in the ESD group knew of the
supposed and alleged improprieties of Macy, not to mention Warren Brauer and Gary Rind's direct
involvement, and still no person was disciplined or terminated for their [sic] complicity." The evidence fails to
raise an issue of fact because the subordinates were not similarly situated to Macy, who was vice president of
ESD. Moreover, the Agreement required the Board's fraud finding be "determined in accordance with the
Company's normal investigative procedures consistently applied in comparable circumstances." Under the plain
language of the Agreement, the reference to consistency in application to comparable circumstances refers to
the investigative procedures; the reference does not speak to whether there must be equality in the
punishment for certain conduct by dissimilar employees.
Macy further asserts, "The most egregious aspect of the special review is that Waste Management did not have
an official headcount policy and no one involved (both interviewer and interviewee) had seen a policy regarding
accruals." The Agreement, however, requires the Board's fraud finding to be "determined in accordance with
the Company's normal investigative procedures consistently applied in comparable circumstances." Under the
plain language of the Agreement, the reference to consistency in application to comparable circumstances
refers to the investigative procedures. The absence of a written or verbal policy is not pertinent to the
procedure employed to investigate Macy. Macy's complaint about the absence of a policy is a substantive
complaint concerning the merits of the Board's finding and is not a challenge to the Agreement's requirement
that a finding of fraud be "determined in accordance with the Company's normal investigative procedures
consistently applied in comparable circumstances."
We conclude Macy's evidence presented to the trial court when the trial court rendered summary judgment in
favor of Waste Management fails to raise a factual issue. We overrule Macy's first issue.
D. Timeliness of Determination for Cause
In his second issue, Macy challenges the trial court's finding that the Board's determination of cause was timely
under the Agreement. Macy asserts the trial court erred in interpreting the Agreement to allow the Board to
make a cause determination after the initial severance payment was due. Although the parties agree the
language of 5(c) is unambiguous, they disagree about its meaning. Macy interprets the section to mean that
the Board's right to make a cause determination existed only from the time the causative act occurred until the
next severance payment date, which here means within 10 days of the day when Macy stopped working for
Waste Management. Macy further argues that because the Board did not act more timely, it waived its right to
determine the nature of Macy's termination. Waste Management responds that a determination of whether
cause for the termination existed may be made prior to the date of any severance payment, not just the first, or
next, severance payment due.
We agree with the trial court's interpretation of section 5(c)(ii). Giving effect to the intent of the parties as it is
expressed in the contract, the plain reading of this section shows the Board is allowed to make a cause
determination at any time prior to a payment date for any amounts due under the Agreement. See Seagull
Energy, 207 S.W.3d at 345. The Agreement unambiguously states, "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 . . . ." (Emphasis added). Furthermore, the
Agreement allows the determination of cause to be made at a later point, even when the employee initially
departs for a different reason. The Agreement unambiguously provides that the determination of cause can be
made "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." Under the
specific terms of the section describing termination for cause, the timing of the Board's determination of cause
was permitted under the Agreement.
An examination of the entire Agreement is further evidence that the parties did not intend to limit the
determination of cause to the first severance payment, or 10 days. Looking at sections 5 and 6(e) together,
Macy's interpretation would require Waste Management to discover the basis of the cause, accumulate and
investigate relevant facts, convene a special meeting of the Board, and determine cause within 10 days of
Macy's termination. If this were not accomplished, under Macy's interpretation, Waste Management would waive
its contractual right to determine cause and would be required to continue paying all severance benefits owed
even if an investigation ultimately produced evidence of cause.
When we read section 5(c)(ii) in light of the definitions, procedures, and review required by sections 5(c)(i) and
(iii), and in light of the severance provisions of section 6, we cannot interpret the phrase "prior to a payment
date for any amounts due hereunder" as reflective of the parties' intent to undertake all of the requirements of
section 5(c) prior to the first severance payment. Macy's interpretation would immediately cut off the
determination rights afforded Waste Management in sections 5(c)(ii) and (iii), rendering those rights
meaningless. See Rolling Lands Invs., 111 S.W.3d at 196-97. Macy's interpretation is not supported by a
reading of the entire Agreement. See Dorsett, 164 S.W.3d at 662. We conclude section 5(c)(ii) is more
reasonably interpreted to intend such a time frame that the procedures of 5(c)(i) and (iii) could be conducted.
We hold that the trial court properly granted summary judgment, finding as a matter of law that the Board's
determination of cause was timely, and not waived, under the Agreement. See Nixon, 690 S.W.2d at 548.
Macy also contends Waste Management waived the right to claim termination for cause due to its 16-month
delay in convening the Board to make that determination. The record reflects that Macy's successor suspected
cause for Macy's termination shortly after Macy's departure, and that Waste Management filed an amended
answer within months of Macy's petition suggesting termination may have been for cause, conducted internal
investigations, convened its Board, and determined cause within 16 months of Macy's termination. Having held
Waste Management timely determined cause, we do not infer Waste Management's conduct demonstrated an
actual intent to relinquish its right to determine cause, and Waste Management did not waive its right to do so.
See Williams v. Moores, 5 S.W.3d. 334, 337 (Tex. App.--Texarkana 1999, pet. denied).
Macy further asserts, "Since Waste Managment failed to make payments to Macy as they came due, the
company had materially breached the Agreement and was therefore precluded from taking advantage of the
termination for cause provisions at a later date." Macy is correct that under contract law a party who has broken
a contract cannot thereafter enforce the remaining terms. See Baker Marine Corp. v. Weatherby Eng'g Co.,
710 S.W.2d 690, 696 (Tex. App.--Corpus Christi 1986, no writ) (noting breaching party "cannot take advantage
of provisions favorable to it contained in the very contract which it was found to have breached"). However, as
we have explained above, the record undisputedly shows that the Agreement allowed Waste Management to
make its cause determination at any point before any of the severance payments were due and even after
termination for reasons other than cause. We hold that Waste Managment did not breach the Agreement by
determining cause for termination after Macy separated from the company for a different reason.
We overrule Macy's second issue.
Macy's Motion for Reconsideration of the Summary Judgment
In its appellee's brief, Waste Management contends we should disregard most of the evidence Macy refers to in
his appellant's brief because the evidence was not part of the evidence before the trial court when the trial
court granted the summary judgments in favor of Waste Management. Although Macy filed a reply brief, he did
not dispute that he could have presented the evidence in the motion for reconsideration when the trial court
rendered the summary judgment order, nor does he explain why this evidence was not presented to the trial
court prior to rendition of the summary judgment.
"After a court grants a summary judgment motion, the court generally has no obligation to consider further
motions on the issues adjudicated by the summary judgment." Kelly v. Gaines, 181 S.W.3d 394, 416 (Tex.
App.--Waco 2005), rev'd on other grounds, 235 S.W.3d 179 (Tex. 2007); see Gorrell v. Tex. Utils. Elec. Co.,
915 S.W.2d 55, 60 (Tex. App.--Fort Worth 1995), writ denied, 954 S.W.2d 767 (Tex. 1997). The standard of
review for a motion to reconsider a prior summary judgment is whether the trial court abused its discretion. AIC
Mgmt. v. Baker, No. 01-02-01074-CV, 2003 WL 22724629, at *7 (Tex. App.--Houston [1st Dist.] 2003, pet.
denied) (mem. op.). An abuse of discretion will not be found if the movant cites no additional evidence "beyond
that available to him" when the first summary judgment was granted. See Kelly, 181 S.W.3d at 416.
After the trial court rendered the summary judgment order in favor of Waste Management, Macy filed a motion
for reconsideration that included a large volume of evidence he had never before presented to the trial court.
Macy presented new evidence to assert a question of fact by claiming that (1) "there was no defined
methodology for conducting the investigation or special review, and the auditor tasked with performing the
review, Karen Francis, was not familiar with the whistleblower process of Waste Management"; (2) portions of
interviews that were conducted were omitted from the special review report; (3) some people who were
interviewed were not afforded the opportunity to review their statements for inaccuracies and some felt
intimidated; (4) "[w]itnesses were shocked to find material misstatements and mischaracterizations 'attributed' to
them after finally getting the chance to review their witness statements" created by the audit team; and (5)
some members of the Board reviewed the entire forensic audit report when Macy was allowed only 10 pages to
present his case.
The motions for reconsideration are based on evidence and arguments available to Macy before the trial court
rendered the summary judgment order. See id. We cannot conclude the trial court abused its discretion by
refusing to reconsider its summary judgment. See id.
Denial of Discovery
In his third issue, Macy challenges the trial court's order denying certain discovery to Macy.
An appellate court reviews a trial court's ruling on a motion to compel discovery under an abuse-of-discretion
standard. See Johnson v. Davis, 178 S.W.3d 230, 242 (Tex. App.--Houston [14th Dist.] 2005, pet. denied)
(citing Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004) (discussing discovery sanctions)). Trial courts have
broad discretion in matters of discovery. Johnson, 178 S.W.3d at 242. An appellate court should reverse a trial
court's ruling on a motion to compel only when the trial court acts in an arbitrary and unreasonable manner,
without reference to any guiding principles. See Barnett v. County of Dallas, 175 S.W.3d 919, 924 (Tex.
App.--Dallas 2005, no pet.).
Macy states that he "attempted to pursue discovery regarding Revenue Management System and the
'substantial impact' of a potential $60 Million write down on the company's books and records as compared to
the accrual balance Macy was accused of accumulating." Macy contends, "The contract required that any gross
negligence or gross misconduct attributed to Macy have a 'substantial effect on the company.'" This evidence is
immaterial to whether Waste Management failed to comply with the terms of the contract that left it up to the
Board to decide whether Macy committed fraud.
Macy next contends he wanted more discovery into other investigations conducted by Waste Management to
determine whether this investigation was conducted "in accordance with the Company's normal, internal
investigative procedures consistently applied in comparable circumstances." As shown by the exhibits attached
to the motion for reconsideration of the summary judgment, Macy deposed the chairman, many of the
employees assigned to ESD, and individuals conducting the forensic audit. Macy fails to show how the trial
court abused its discretion by denying further discovery into other investigations conducted by the forensic
auditors. We conclude the denial of the discovery was not so arbitrary and unreasonable that it amounts to a
clear and prejudicial error of law. Austin v. Countrywide Homes Loans, 261 S.W.3d 68, 75 (Tex. App.--Houston
[1st Dist.] 2008, pet denied); Johnson, 700 S.W.2d at 917; see also Lovelace v. Sabine Consol., Inc., 733
S.W.2d 648, 652 (Tex. App.--Houston [14th Dist.] 1987, writ denied). We hold the trial court did not abuse its
discretion by denying the requested discovery. See Dillard Dep't Stores, Inc. v. Hall, 909 S.W.2d 491, 492 (Tex.
1995).
We overrule Macy's third issue.
Waste Management's Cross Appeal for Entire Amount of Attorney's Fees
In its two issues in the cross-appeal, Waste Management challenges the trial court's grant of summary
judgment for a partial amount of the attorney's fees it requested from Macy.
As we explain above, we review a trial court's summary judgment de novo. See Dorsett, 164 S.W.3d at 661.
The movant has the burden of proving that there is no genuine issue of material fact and that he is entitled to
judgment as a matter of law. See Nixon, 690 S.W.2d at 548. We take as true all evidence favorable to the
nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant's favor. Dorsett,
164 S.W.3d at 661.
Shortly after the lawsuit was filed in 2004, the trial court granted Macy's motion to have Waste Management
advance interim attorney's fees and costs pursuant to section 10 of the Agreement, which provides,
If at any time during the term of this Agreement or afterwards there should arise any dispute as to the validity,
interpretation or application of any term or condition of this Agreement, the Company agrees . . . to promptly
provide sums sufficient to pay . . . Employee's reasonable costs and reasonable attorney's fees . . . , provided:
(a) that Employee shall repay any such amounts paid or advanced if Employee is not the prevailing party with
respect to any dispute or litigation arising under Sections 5(c) or 8 of this Agreement, or (b) . . . [that] Employee
did not initiate frivolously such litigation.
Section 8 is inapplicable because it pertains to restrictive covenants not to compete. Section 5(c) is the section
describing termination for cause. Thus, the question is whether this entire dispute from the beginning arose
under section 5(c), because if it did, then Waste Management is entitled to the entire amount, but if it did not,
then Waste Management is entitled to only the amount from the point that the dispute began to arise under
section 5(c).
Waste Management contends it should have received the full amount of the fees it advanced to Macy, which is
$357,843.40, rather than the portion it received, which is $170,173.19. The court initially calculated
reimbursement due to Waste Management in the amount of $187,932.74 by determining that was the amount
Waste Management advanced to Macy from the point the Board determined Macy was terminated for cause on
August 25, 2005 to the point the litigation culminated. The court then subtracted $17,759.55 from the
$187,932.74 because $17,759.55 was the amount of fees spent in the parties' section 10 dispute over the
repayment of costs and fees. Accordingly, the court ordered Macy to repay fees in the amount of $170,173.19.
Examining the plain terms of the Agreement, Macy, as the non-prevailing party, must repay the sums advanced
"with respect to any dispute or litigation arising under Sections 5(c) . . . of this Agreement." See Creel, 124
S.W.3d at 749 (requiring examination of plain terms). Section 5 of the Agreement included departures from
Waste Management for reasons of voluntary termination by the employee, and termination by Waste
Management without cause. Those departures would not invoke section 10 of the Agreement, which only
referenced departure under section 5(c), the section describing termination for cause. Section 5(c) of the
Agreement was not the subject of the dispute between Macy and Waste Management until the Board referred
to section 5(c) in deciding to terminate Macy for cause on August 25, 2005. When the Board made its
determination that Macy was terminated for cause, the dispute became about section 5(c) of the Agreement.
Before then, the dispute pertained to section 5(e) for termination without cause and section 6(e) for the
company's failure to pay severance due to Macy for terminating him without cause. Although section 5(c)(ii)
permits the cause determination to apply retroactively to the date of Macy's departure, it does not serve to
amend the nature of the claims Macy filed in his lawsuit. Having reviewed the language of section 10 and giving
those terms their plain and ordinary meaning, the trial court properly determined that only those sums that
accrued after the August 25, 2005 cause determination arose under section 5(c). See id. Similarly, the court
properly determined that the sums advanced after August 25, 2005 to dispute the repayment of fees under
section 10 of the Agreement did not arise from sections 5(c) or 8 of the Agreement. We therefore hold the trial
court properly awarded Waste Managment the amount of $170,173.19.
We overrule the two issues presented in Waste Management's cross-appeal.
Conclusion
We affirm the judgment of the trial court.
Elsa Alcala
Justice
Panel consists of Chief Justice Radack, and Justices Alcala and Hanks.