Reported / Citable
Background
In January 2023, Carter Russell entered a five-year Consulting Agreement with Dana Sadler and her company, Dr. Performance, LLC, an automobile engine components business. Under the agreement, Dr. Performance agreed to pay Russell $10,000 per month for consulting services—including finding new buyers for the company’s products and potential acquirers of the business itself—as well as a 4% commission on the gross sale price if Russell identified a buyer for all or part of the company. The contract also permitted either party to terminate the agreement for any reason on 30 days’ written notice.
In August 2023, less than a year into the engagement, Dr. Performance notified Russell it was terminating the agreement, effective 30 days later. It stopped paying the $10,000 monthly fee. Russell sued for breach of contract, arguing primarily that Section 4.01 of the contract entitled him to the monthly fee for the full five-year Engagement Term regardless of when termination occurred—a claim worth over $530,000. Alternatively, he argued that at minimum he was owed two unpaid monthly payments for August and September 2023, the period between the termination notice and its effective date.
The trial court granted summary judgment for Dr. Performance on the contract claim but struck the attorney’s fees paragraphs from the proposed order, leaving both parties with no recovery. Both sides appealed—Russell on the merits of his contract claim, and Dr. Performance seeking its attorney’s fees under the contract’s prevailing-party clause.
The Court’s Holding
The First Court of Appeals held that the Consulting Agreement is unambiguous and can be construed as a matter of law. Applying the harmonization canon, the court reconciled the apparent conflict between Sections 3.01 and 4.01 by reading them together: the $10,000 monthly fee obligation in Section 3.01 expressly continues only “as long as Consultant is providing consulting services,” so termination ends that payment obligation. Section 4.01’s declaration that Russell “shall be entitled to the fees set forth in Section 3.01 . . . through the Engagement Term regardless of when this Agreement is terminated” protects the separate 4% business-sale commission—a royalty-like fee that survives termination because it is not tied to ongoing services. The court thus rejected Russell’s primary argument that he was owed monthly payments for the remaining four-plus years of the term.
However, the court reversed the summary judgment and remanded on the narrower question of whether Russell was owed the $10,000 fee for August and September 2023. Russell’s affidavit averred that he was not paid for those two months, and Dr. Performance’s own evidence—Dana Sadler’s affidavit—did not conclusively establish that Russell stopped performing consulting services during the 30-day notice period. Because Dr. Performance bore the burden on its traditional motion for summary judgment and failed to negate that fact issue, the trial court improperly granted judgment on the unpaid-months claim.
Having reversed on the August–September payment issue, the court declined to reach Dr. Performance’s cross-appeal on attorney’s fees, leaving the prevailing-party question to be resolved by the trial court after the remand proceedings determine how much, if anything, Dr. Performance owes Russell.
Key Takeaways
- A termination clause stating a consultant is entitled to fees “through the Engagement Term regardless of when this Agreement is terminated” does not necessarily guarantee monthly service fees for the full contract term; when read alongside a provision tying the monthly fee to active service, it is more naturally read to protect only fee types—such as contingency commissions—that are not dependent on ongoing performance.
- Texas courts will apply the harmonization canon before declaring a contract ambiguous; if two provisions can coexist with distinct, coherent meanings, no ambiguity arises and the agreement can be decided as a matter of law at the summary-judgment stage.
- A moving party on a traditional motion for summary judgment bears the burden of conclusively negating every element of the non-movant’s claim; an opposing affidavit stating that specific monthly payments were not made is a factual assertion sufficient to survive summary judgment, even if the affidavit is characterized by the movant as self-serving.
- Attorney’s fees under a prevailing-party clause remain open on remand when the ultimate prevailing party has not yet been determined by the trial court.
Why It Matters
This decision offers practical guidance for drafting consulting and services agreements in Texas: compensation provisions must be carefully coordinated with termination clauses. Boilerplate language guaranteeing fees “through the engagement term regardless of termination” will not automatically extend periodic service-based payments beyond the end of active performance—it will instead be construed to protect only those fees, like finder’s fees or commissions, that are earned by an identifiable event rather than by ongoing work. Parties who intend to guarantee continued salary-like payments even after early termination must say so explicitly and reconcile that intent with any “as long as services are provided” language elsewhere in the agreement.
The case also reinforces the evidentiary standard on traditional summary judgment in Texas. A non-movant’s affidavit asserting specific unpaid amounts is a factual statement—not a conclusory one—and objections that it is merely “self-serving” will not carry the day when the movant’s own evidence fails to conclusively contradict it. Companies seeking to cut off compensation disputes at summary judgment must ensure their own affidavit evidence squarely addresses each element of the claim, including the timing and completeness of all payments made during any notice period.