X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Braden St. John Brown was working as a wholesale insurance broker for Jarrett Insurance Brokers when he met Matt Galtney. Jarrett treated Brown and Galtney as one person for purposes of compensation, that is, the pair was allocated one gross salary and gross commissions that they split between themselves. Despite this arrangement, each person still received his own separate check. In 1999, Galtney met with individuals at Insurance Brokers Services Inc. of Texas, a Dallas company, about Galtney opening a Houston office. Galtney indicated that he wanted Brown to work with him in that endeavor. IBS agreed, hiring both Galtney and Brown and treating them as a team. Under the IBS agreement, Galtney received 58 percent, and Brown 42 percent, of a $590,000 salary. Bonuses based on new business were also divided in such percentages, as were Galtney’s and Brown’s gross commissions. Both men were salaried employees, though Galtney was Brown’s supervisor. In 2000, IBS fired Brown after problems with Brown’s files arose. IBS offered Brown a severance, which included full pay and benefits for two months, and a payment of a year-end bonus based on gross commissions earned through the date of termination: $10,263. Brown rejected the bonus by writing “VOID” on the face of the check and returning it. Brown sued IBS and Galtney, asserting they: 1. wrongfully expelled him from a partnership that he had entered into with Galtney; 2. refused to pay him a bonus that he had earned (Brown claimed his bonus should have been $79,700); 3. fraudulently induced him to leave his previous employment by representing that he would continue to be Galtney’s partner at IBS; 4. tortiously interfered with his relations with, and made defamatory statements about him to, prospective employers; and 5. that IBS negligently hired and supervised Galtney. Brown and the defendants filed cross-motions for summary judgment on the partnership claims. The trial court granted all of the defendants’ motions, and denied all of Brown’s motions. HOLDING:Affirmed. The court first addresses Brown’s partnership-related claims. The court agrees with the defendants that Brown’s claims fail as a matter of law because the evidence established that he had no right to receive a share of the profits of the business; his salary and bonus compensation package was merely compensation for the services of an at-will employee. The fact that IBS agreed to divide Brown’s and Galtney’s portions of gross commissions in a proportion that Brown and Galtney had both agreed to does not change the nature of the bonus from compensation to profits. Brown and Galtney were not partners at IBS, as a matter of law, but were at-will employees, instead. They had a similar arrangement at Jarrett, so they were not partners at Jarrett, either. Consequently, IBS and Galtney could not have fraudulent induced Brown into continuing a partnership that never existed. Summary judgment against Brown on his conspiracy and fraud claims was thus proper. As to Brown’s claim that he was entitled to a bigger bonus, the court agrees that the doctrine of judicial estoppel prevents Brown from asserting that he was entitled to a $79,700 bonus instead of a $10,263 one. Brown filed a bankruptcy petition after he filed this suit. In the petition, he stated that he had assets under $50,000, which is in direct conflict with his petition in this case. The fact that the bankruptcy petition was ultimately dismissed does not mean that the bankruptcy court disagreed that he had under $50,000 in assets. The court next notes that Brown’s tortious interference claim rests exclusively on the existence of an independently tortious or unlawful act that the defendants’ negative comments were published within the industry, causing injury to Brown’s reputation so the court finds it must first determine the validity of Brown’s defamation claim. Brown claims there was negative information, unflattering e-mails and “disparaging things” were circulated and said about him, yet he provides no specifics, so he did not prove that the things said were either defamatory or untrue. Brown also complains of a co-worker’s reference to him in a fax as a “walking E & O,” presumably a comment speculating that the work in Brown’s files would subject the company to an errors-and-omissions lawsuit. The court finds that the statement was merely the co-worker’s opinion and not actionable. OPINION:Radack, C.J.; Radack, C.J., Keyes and Alcala, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.