COMPANY MANAGER PERSONALLY LIABLE FOR CONTRACT BREACH

PMC Chase, LLP v. Turnbow
Dallas Court of Appeals, No. 18-01383 (January 28, 2020)
Justices Myers, Schenck, and Carlyle (opinion linked here)
This is a cautionary tale for anyone who signs contracts or purchase orders for their company: Unless you want to be personally responsible for performing the contract, be sure the document clearly indicates you’re signing as the company’s representative.

BSS contracted to perform structural steel construction at PMC’s business. The one-page contract was directed to “Attention: Steve Turnbow,” and Turnbow, PMC’s manager, signed it. After substantial completion, BSS sent its invoice to Turnbow at PMC’s address. When it did not receive payment, BSS sued both Turnbow and PMC for breach of contract and (alternatively) quantum meruit. At trial, BSS abandoned its contract claim against PMC, insisting “the contract was with just Mr. Turnbow individually.” BSS retained its quantum-meruit claim against PMC.

PMC and Turnbow argued Turnbow acted only as an agent for PMC and was not, therefore, individually liable for any breach. After a bench trial, the court entered judgment against Turnbow for breach of contract and against PMC for quantum meruit, awarded the same damages and attorney’s fees for both causes of action, and held the defendants jointly and severally liable. The Dallas Court of Appeals affirmed the judgment.

Citing the “well-settled [principle] that the law does not presume agency,” the Court of Appeals held that because the contract “bears Mr. Turnbow’s signature and does not mention PMC Chase or indicate representative capacity in any way … it unambiguously shows it is the obligation of Mr. Turnbow personally.” This conclusion could not be altered, the Court held, by parol evidence of the parties’ intent, including both signatories’ testimony “that they understood Turnbow to have signed the contract for PMC Chase.”

The Court also affirmed the quantum-meruit judgment against PMC, holding that “appellants’ position that ‘there can be no recovery under quantum meruit where the same transaction is covered by a valid contract’ is contrary to established construction contract law,” citing Gentry v. Squires Construction, Inc., 188 S.W.3d 396, 402-03 (Tex. App.—Dallas 2006, no pet.). Finally, the Court noted that the judgment imposing joint and several liability for the same damages under the two causes of action precluded a double recovery.

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