Supreme Court of Texas
══════════
No. 21-0036
══════════
Thomas Brandon Perthuis,
Petitioner,
v.
Baylor Miraca Genetics Laboratories, LLC,
Respondent
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the First District of Texas
═══════════════════════════════════════
Argued February 2, 2022
JUSTICE YOUNG delivered the opinion of the Court, in which Chief
Justice Hecht, Justice Lehrmann, Justice Devine, Justice Blacklock,
Justice Busby, and Justice Bland joined.
JUSTICE HUDDLE filed a dissenting opinion, in which Justice Boyd
joined.
When a seller agrees to pay sales commissions to a broker (or
other agent), the parties are free to condition the obligation to pay
commissions however they like. But if their contract says nothing more
than that commissions will be paid for sales, Texas contract law applies
a default rule called the “procuring-cause doctrine.” Under that rule,
the broker is entitled to a commission when “a purchaser [was] produced
through [the broker’s] efforts, ready, able and willing to buy the property
upon the contracted terms . . . .” Goodwin v. Gunter, 185 S.W. 295, 296
(Tex. 1916). In this case, the agreement between the parties was silent
about any exceptions to the duty to pay commissions for sales that
petitioner procured. The procuring-cause doctrine therefore applies.
Because the court of appeals held otherwise, we reverse its judgment
and remand for further proceedings.
I
Respondent Baylor Miraca Genetics Laboratories, LLC (BMGL)
made petitioner Brandon Perthuis its Vice President of Sales and
Marketing in early 2015. BMGL drafted the two-page employment
agreement, which Perthuis signed without alteration. The agreement
gave Perthuis an annual base salary of $145,000 and stated that
Perthuis’s employment would be “at-will.” As to Perthuis’s commissions,
it provided: “Your commission will be 3.5% of your net sales.” Nothing
more—the employment agreement did not, for example, define “net sales”
or place any other parameters on the commission obligation. The
employment agreement also noted that Perthuis would be eligible for
retention bonuses; it referenced a separate “retention agreement,” which
Perthuis also signed the same day. The retention agreement expressly
conditioned any retention bonus on Perthuis’s continued employment.
BMGL develops and analyzes genetic tests. BMGL sells its tests
to “channel partners,” who return test specimens to BMGL after
obtaining orders from physicians. Perthuis served BMGL by pursuing
and negotiating contracts with channel partners, the most prominent of
2
which was Natera, Inc. In 2015, Perthuis negotiated such a contract
between Natera and BMGL. Natera agreed to purchase a minimum
number of tests; in exchange, it received an exclusivity agreement, under
which BMGL promised not to perform tests for Natera’s direct
competitors. Natera, moreover, would pay a penalty and forfeit that
exclusivity if it failed to purchase the stated minimum. Perthuis’s role
with respect to the sales that flowed from the Natera agreement was then
done; he did not, for example, solicit batches of particular test orders, send
invoices, or collect payments. But he received commissions on all sales
that arose under the Natera agreement. BMGL calculated those
commissions by multiplying “net” sales (i.e., gross sales to Natera under
the contract, adjusted by a collection rate) by 3.5%.
Although the Natera agreement was drafted to last for five years,
Natera completed its minimum-purchase requirement far more quickly.
Natera was set to meet that requirement by the end of 2016, at which
point Natera would have had no further obligation to continue buying
any tests under the agreement (although Natera had the option to
continue purchasing a certain number of tests each quarter to retain
exclusivity until 2020). BMGL, unsurprisingly, preferred increasing its
business with Natera to either losing that business or being forced to
retain an exclusive relationship with only minimal ongoing sales.
BMGL therefore directed Perthuis to negotiate a contractual
amendment. Perthuis spent months doing so and completed the
negotiations in January 2017. The terms of the amended contract
substantially increased Natera’s minimum-purchase requirement,
making it the largest such contract in BMGL’s history.
3
Perthuis relayed his success to BMGL leadership on Thursday,
January 19. The CEO immediately requested a meeting with Perthuis,
which was set for the following Monday, January 23. The meeting, it
turns out, was not to commend Perthuis, but to fire him. The very next
day, January 24, BMGL executed the amendment that Perthuis had
negotiated.1
BMGL refused to pay Perthuis commissions on any sales that
were finalized after his termination, including sales that flowed from the
amended Natera contract. Nor did BMGL pay anyone else commissions
for those sales. In fact, earlier in January—before Perthuis announced
his breakthrough with Natera—BMGL’s leadership had sought to cut
costs by altering its commission and compensation plans. BMGL rolled
out a new commission plan for its junior sales team, which expressly
stated that commission fees would only “be made to employee if employed
at the end of the commission period.” BMGL did not, however, change
Perthuis’s commission structure.
Perthuis claimed that he was the procuring cause of all sales to
Natera and other channel partners that were finalized in the period
from his termination through trial in October 2018.2 He sued BMGL for
breach of contract, asserting that he was entitled to a commission on all
Just over two months after BMGL terminated Perthuis, BMGL and
1
Natera executed another amendment, modifying the pricing terms. Six
months later, BMGL and Natera again modified the pricing through a
memorandum of understanding.
2The parties (and the Court) focus on the sales to Natera because those
sales dwarfed those to other channel partners and commissions for them
constitute the bulk of the jury’s award.
4
those sales.3 BMGL denied having any further commission-related
obligations to Perthuis. It argued that the employment agreement’s text
clearly displaced any role for the procuring-cause doctrine. But even if
the contract were silent and that doctrine did apply, BMGL argued that
Perthuis could not meet his burden to show that he qualified as a
“procuring cause” of any sales for which he claims unpaid commissions.
The case went to trial, and the court instructed the jury on the
procuring-cause doctrine as follows:
Perthuis’ “sales” included all sales for which he was the
procuring cause.
A “procuring cause” of a sale is the principal and immediate
cause of the sale. It need not be the sole cause, and an
agent is said to be the procuring cause of a sale when his
acts have so contributed to bringing about the sale that but
for his acts the sale would not have been accomplished.
The fact that Mr. Perthuis was discharged by BMGL prior
to the time a sale was completed does not bar his right to a
commission if he was the procuring cause of the sale.
The jury found for Perthuis as to Natera and other channel
partners but did not award him the full amounts that he sought. The
trial court rendered judgment on the verdict but declined to award any
attorneys’ fees to Perthuis.4
BMGL appealed; Perthuis cross-appealed to challenge the denial
of attorneys’ fees. The court of appeals reversed and rendered judgment
3 Perthuis also brought other claims, but only his breach-of-contract
claim was tried to a jury, and only that claim is before us.
4 The judgment awarded Perthuis $962,336.89 in compensatory
damages for unpaid commissions, $80,282.63 in prejudgment interest, and
postjudgment interest at 5%.
5
for BMGL. According to that court, the parties’ contract unambiguously
entitled Perthuis to commissions only for sales made during his
employment, not for procuring potential buyers for sales that closed
after he was terminated. The court of appeals thus declined to address
BMGL’s further challenges to the trial court’s judgment. The court
upheld the denial of attorneys’ fees for Perthuis because Perthuis no
longer was the prevailing party.
II
This Court most clearly articulated the procuring-cause doctrine
in Goodwin v. Gunter over a century ago, describing it as a “settled and
plain” rule. 185 S.W. at 296. The doctrine provides nothing more than a
default, which applies only when a valid agreement to pay a commission
does not address questions like how a commission is realized or whether
the right to a commission extends to sales closed after the brokerage
relationship ends.
When a plaintiff seeks to recover commissions under the procuring-
cause doctrine, as in this case, three main questions arise. First, did the
parties have the kind of contractual relationship to which the procuring-
cause doctrine applies? If so, did the parties displace the doctrine by the
terms of their contractual agreement? Finally, if the procuring-cause
doctrine applies to the parties’ dispute and was not displaced, to what
extent does the doctrine impose liability for the specific commission
payments that the plaintiff demands? We address these questions in turn.
A
If a plaintiff seeks to invoke the procuring-cause doctrine, the
initial question is whether the doctrine even applies to the contractual
6
relationship between the parties. Goodwin and other cases make clear
that the minimum prerequisite for the doctrine to apply is an agreement
to pay a commission on a sale. Id. The quintessential example of such
a contractual relationship is a broker seeking to procure a buyer for real
property, as in Goodwin itself. Yet in cases far beyond the real-estate
industry, Texas courts,5 and those of many other jurisdictions,6 have
employed and continue to employ the procuring-cause doctrine.7
The function of the procuring-cause doctrine is to credit a broker
(or salesman, or other agent) for a commission-generating sale when “a
5 Texas lower-court cases have applied the procuring-cause doctrine to
contracts involving metal buildings, marine equipment, mules, and rose bushes,
to offer but a few non-real-estate examples. See, e.g., Murphy v. McDermott
Inc., 807 S.W.2d 606, 607, 612 (Tex. App.—Houston [14th Dist.] 1991, writ
denied) (marine equipment); Metal Structures Corp. v. Bigham, 347 S.W.2d
270, 273 (Tex. Civ. App.—Dallas 1961, writ ref ’d n.r.e.) (metal buildings); Ray
v. Robinson, 271 S.W.2d 159, 163 (Tex. Civ. App.—Texarkana 1954, no writ)
(rose bushes); Gibbens v. Williams, 4 S.W.2d 316, 317 (Tex. Civ. App.—Austin
1928, no writ) (mules).
6 To take two examples, Zelensky v. Viking Equipment Co., 422 P.2d
293, 296–97 (Wash. 1966), applied the procuring-cause doctrine to an
electronic-device sale and Gunderson v. North American Life & Casualty Co.,
78 N.W.2d 328, 331–33 (Minn. 1956), applied the doctrine to the sale of life
insurance. See also, e.g., Cisne v. Gen. Elec. Cap. Corp., 26 F. App’x 229, 232–
33 (4th Cir. 2002) (sale of vehicle-service program to car dealers); Mastaba, Inc.
v. Lamb Weston Sales, Inc., 23 F. Supp. 3d 1283, 1298–99 (E.D. Wash. 2014)
(frozen potato products).
7 The doctrine remains in active use in Texas courts. See, e.g., Logan v.
Randall, No. 05-19-00043-CV, 2020 WL 948381, at *5 (Tex. App.—Dallas Feb.
27, 2020, pet. denied) (confirming and applying the doctrine’s “general rule” in
real-estate context); Cohen-Sagi v. ProFinance Assocs., Inc., No. 04-08-00181-
CV, 2009 WL 540217, at *2 (Tex. App.—San Antonio Mar. 4, 2009, pet. denied)
(describing litigation involving the doctrine in the context of selling businesses).
This Court has not needed to address the procuring-cause doctrine since 1952.
Air Conditioning, Inc. v. Harrison-Wilson-Pearson, 253 S.W.2d 422 (Tex. 1952).
7
purchaser [was] produced through [the broker’s] efforts, ready, able and
willing to buy the property upon the contract terms . . . .” Goodwin, 185
S.W. at 296. Under this doctrine, the broker’s entitlement to a commission
vests on his having procured the sale, not on his actual involvement in a
sale’s execution or continued employment through the final consummation
of the sale. Goodwin’s analysis rested on the idea that—absent contractual
language to the contrary—the contract deems a sale to be the broker’s
sale if the broker, while under contract with the owner, made the sale
possible. The Court’s essential holding was that “the commissions are
earned and the broker is entitled to their payment according to the
contract if, while it is in force, he procures a purchaser to whom the owner
directly makes a sale upon terms which are satisfactory to himself . . . .” Id.
“This is but a rule of fairness and right,” the Court continued. Id.
After all, when a broker fully complies with his obligations, “the owner
receives the full benefit of the broker’s effort. Through the diligence of
the broker a buyer is produced.” Id. Once a broker performs the task of
“[h]aving interested a prospective buyer,” an owner cannot deny the
broker “a fair opportunity of making a sale to him upon the terms
authorized.” Id. Of course, an owner may always “take the matter into
his own hands, avail himself of the broker’s effort, [and] close a sale upon
satisfactory terms,” but if he does, the owner’s right to “deny the broker’s
right of compensation, is a proposition not to be countenanced.” Id.
We specifically rejected the argument, heavily pressed by BMGL,
that eliminating a broker’s role immediately before finalizing a sale
means that the broker could not have taken the necessary final step to
earn a commission:
8
It is no answer in such a case to say that a purchaser has
not been produced by the broker . . . and the owner is
therefore free to deal with the buyer, though produced by
the broker, without any liability to the latter. That becomes
unimportant in the face of the outstanding fact that it is by
the broker the buyer is produced, and, before his negotiation
is concluded, a sale is made, as the result of his effort . . . .
The owner will therefore be deemed, in such a case, to have
waived the terms to which the broker was confined, and the
law declares him liable for the commissions fixed by the
contract, for the reason that, except as to such waived
provision, the broker’s part of the contract has been fully
performed. . . .
Id. at 296–97; see also Keener v. Cleveland, 250 S.W. 151, 152 (Tex.
Comm’n App. 1923, judgm’t affirmed) (confirming that a broker is entitled
to a contractual commission if he was the procuring cause of the sale
even if the sale was concluded by the seller or another broker).
The procuring-cause doctrine is not a judicially created “term” for
commission contracts. It does not add anything to a contract or take
anything away. It does not restrict parties’ ability to modify their
contractual relationships and it does not change the law governing
whether parties have entered into such a relationship in the first place.
Parties certainly may condition the obligation to pay a commission on
something other than procuring the sale—they need only say so. The
doctrine provides nothing more than a default rule to enforce parties’
existing agreements as set forth in their contract. Functionally, it
precludes post hoc efforts to rewrite contracts by adding exceptions
under the guise of ambiguity.
When an agreement’s “language can be given a certain or definite
legal meaning or interpretation,” courts determine that meaning “as a
9
matter of law.” El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389
S.W.3d 802, 806 (Tex. 2012). Only if ambiguity remains “after applying
the pertinent rules of construction” could there be a fact question about
intent. Id. (emphasis added; internal quotation omitted). For contracts
involving commissions, all the usual “rules of construction” apply, like the
familiar presumptions favoring consistent usage, disfavoring surplusage,
and using the plain meaning of undefined terms. See, e.g., Great Am. Ins.
Co. v. Primo, 512 S.W.3d 890, 892–93 (Tex. 2017) (discussing several of
the “well-established rules of contract construction”). The procuring-
cause doctrine plays the same analytical role: allowing courts to ascertain
and honor the parties’ intent as expressed in their text. Judicial
interpretations of contracts are “governed by what [the parties] said in
[their] contract, not by what one side or the other alleges they intended
to say but did not.” Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s
London, 327 S.W.3d 118, 127 (Tex. 2010).
Thus, by analogy, parties may freely define an ordinary word to
have an unusual meaning; when they do, they rebut the presumption of
ordinary usage.8 Without any textually expressed bespoke meaning,
however, courts will adopt the ordinary usage as a matter of law. See,
e.g., URI, Inc. v. Kleberg County, 543 S.W.3d 755, 764 (Tex. 2018).9
8 See, e.g., FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426
S.W.3d 59, 64 (Tex. 2014) (“We cannot interpret a contract to ignore clearly
defined terms . . . .”).
9 The dissent contends that the parties should have been allowed to
introduce extrinsic evidence to give meaning to the parties’ written agreement.
Post at 2–3, 12. In URI, however, the Court rejected the use of extrinsic evidence
to “interpolate constraints not found in the contract’s unambiguous language.”
534 S.W.3d at 758, 769. As URI makes clear, extrinsic evidence only “elucidates
10
Likewise, parties may freely provide their own rules for paying or
withholding commissions. If they do, the procuring-cause doctrine
becomes irrelevant. But without such additional terms, courts will not
indulge a party’s effort to smuggle in limitations on commission payments
that parties could have, but did not, textually express.
The procuring-cause doctrine, therefore, is just a manifestation of
our larger refusal to countenance any effort by parties to override the
authoritative constructions of contracts. Stability and predictability of
contract law, and maintaining parties’ incentives to write with clarity,
require holding parties to the text as written—and require courts to read
text as consistently as possible from case to case. The procuring-cause
doctrine contributes to that stability by providing a default rule to
understand what it means to promise to pay commissions for procuring a
sale. We reiterate, however, that the doctrine imposes no substantive
limits. Parties remain free to structure commission agreements as they
choose.
To be clear—and as discussed in greater detail in Part II.C—the
doctrine fully respects the factfinder’s authority and obligation to
determine whether the broker’s action produced the purchaser, which
generally is “purely a question of fact.” Goodwin, 185 S.W. at 297.
the meaning of the words employed” and cannot prove that “the parties intended
additional requirements or constraints that were not expressed in the
agreement—such as delivery by 5:00 p.m. or only on Sundays.” Id. at 765–66.
The same reasoning applies in this case, where the use of extrinsic evidence
would be to prove a limitation on the commission obligation (specifically,
continued employment) that the agreement does not include. Equally
important, we reiterated that extrinsic evidence may not be used to “create
ambiguity.” Id. at 757 (quoting Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen,
525 S.W.3d 671, 688 (Tex. 2017)).
11
Under this framework, at least since Goodwin, Texas courts have
applied the doctrine’s rule when it arises.10
Because the employment contract here promises commissions for
sales, BMGL and Perthuis’s contractual relationship is the kind to which
the procuring-cause doctrine applies.11 We thus proceed to the second
question: Did the parties take any steps to displace the doctrine?
B
We must ask the question because the procuring-cause doctrine
is merely a default rule. “As always, parties dissatisfied with the
common-law rule we [reaffirm] today remain free to provide, by contract,
for additional or different rules . . . .” Monroe Guar. Ins. Co. v. BITCO
10 See, e.g., Frady v. May, 23 S.W.3d 558, 563 (Tex. App.—Fort Worth
2000, pet. denied) (collecting cases); see also, e.g., Sec. & Commc’ns Sys., Inc. v.
Hooper, 575 S.W.2d 606, 607 (Tex. Civ. App.—Dallas 1978, no writ); Metal
Structures, 347 S.W.2d at 273.
11 The dissent asserts that the procuring-cause doctrine is inconsistent
with a Texas Workforce Commission (TWC) rule on commissions and bonuses.
Post at 7–8. Neither party to this case has mentioned the TWC. The cited rule
seems consistent with the doctrine: “Unless otherwise agreed, the employer
shall pay, after separation, commissions or bonuses earned as of the time of
separation.” 40 Tex. Admin. Code § 821.26(b). The rule contemplates paying
commissions “after separation.” Id. (emphasis added). It confirms that
commissions “are earned when the employee has met all the required conditions
set forth in the applicable agreement with the employer.” Id. § 821.26(a)(1).
Nothing that we see poses any conflict with our resolution of the common-law
question presented here. We reserve to a future day any potential conflict with
TWC decisions. That day seems unlikely ever to come, because the statutory
scheme administered by the TWC is “an alternative remedy that is cumulative
of the common law” and “do[es] not abrogate common law claims against
employers for an alleged failure to pay compensation.” Igal v. Brightstar Info.
Tech. Grp., Inc., 250 S.W.3d 78, 88 (Tex. 2008), superseded by statute on other
grounds, Act of Apr. 28, 2009, 81st Leg., R.S., ch. 21, §§ 1–2, 2009 Tex. Gen.
Laws 40, 40 (codified at Tex. Lab. Code § 61.052(b-1)).
12
Gen. Ins. Corp., 640 S.W.3d 195, 203 n.12 (Tex. 2022) (Huddle, J.). If
they do, they can displace the procuring-cause doctrine, and we will honor
their choice.
Departing from the procuring-cause doctrine’s default rule
requires no magic language. A contract merely needs to provide terms
that are inconsistent with the default rule—which is to say, terms that in
some way cabin the textually imposed contractual obligation to pay a
commission. The contract could deny the payment of commissions from
procured sales absent continued employment; authorize commissions
only on sales that close during the employment or brokerage relationship;
condition commissions on the money from the sale being received within
a particular time frame; provide a time limit after termination beyond
which commissions from procured sales will not be paid; or include a
myriad of other terms that could displace the procuring-cause doctrine in
whole or in part.
When a contract prescribes otherwise-valid binding terms for how
to handle post-termination commissions, therefore, the courts will enforce
them. Contractual silence, however, leaves the procuring-cause doctrine
intact as to those contracts to which the doctrine applies.
The parties before us were entitled to freely depart from the
procuring-cause doctrine’s default rule. The core of BMGL’s argument
is that the parties did displace the doctrine—by signing the employment
agreement.12 BMGL’s argument, therefore, depends on finding
12 Indeed, BMGL’s objection to the jury charge was not to its
substance—that is, it did not contend that the trial court misstated the law of
the procuring-cause doctrine. BMGL only contended that the procuring-cause
13
something in the employment agreement’s text that addresses whether
the parties intended to depart from the default rule. The agreement’s
at-will provision and its “your net sales” provision are the only textual
possibilities, but they cannot displace the procuring-cause doctrine. Nor
is there any ambiguity that creates a fact question.
1
First, we cannot agree that the agreement’s “at-will” provision
displaces the procuring-cause doctrine.13 This argument is not really
based on the text between these two parties; rather, it reflects the far
broader position that at-will employment is inherently inconsistent with
the default rule. We disagree with that assertion.
Distinctions in employment status—for example, whether
Perthuis was an at-will employee or an independent contractor or
something else—have nothing to do with the question that implicates
the procuring-cause doctrine. That question is whether commissions
that would flow from sales procured while the employee was employed
(or otherwise engaged) may be forfeited solely because, before the
commission is paid, the employment ends.
Perthuis’s termination certainly generated other important
consequences for both parties. He was no longer entitled to his salary
instruction should not have been included at all, so BMGL’s sufficiency
challenge, discussed below, should be evaluated against the jury charge that
was given. We thus need express no opinion about the particular language of
that charge or the extent to which it would comply with today’s opinion.
13 The employment agreement states: “Your employment will be ‘at-
will,’ which means that you or BMGL may terminate your employment at any
time for any reason, with or without cause, and with or without notice.”
14
(because he was an at-will employee) or any retention bonus (because he
signed an agreement that expressly disclaimed such a bonus if he was
no longer employed). By making Perthuis an employee and paying him
a salary—rather than leaving him as an independent contractor—
BMGL gained Perthuis’s exclusivity. Perthuis, in turn, had received the
certainty of at least some income no matter what happened vis-à-vis his
sales. The retention bonus played a similar role; it made it more
attractive for Perthuis to stay with BMGL. Perthuis’s termination
ended these mutual benefits and obligations.
Sales commissions, however, function differently. They rewarded
the fruits of Perthuis’s past labor. While Perthuis was employed by
BMGL, he received continuing quarterly commissions as sales flowed in
under the contracts he had previously negotiated with Natera and other
channel partners. To receive those commissions quarter after quarter,
nothing more was necessary from him. He did not need to be involved
in the details of individual sales or the invoicing and processing of batches
of genetic tests. No such roles are inherently necessary for entitlement
to sales commissions: “The fact that the owner himself has negotiated
the sale does not prevent the broker from being regarded in law as the
procuring cause of the transaction.” Hutchings v. Slemons, 174 S.W.2d
487, 489 (Tex. [Comm’n Op.] 1943).14
14
BMGL argues that completed “sales” that can generate commissions
exist only once tests are “ordered, performed, and billed.” But Perthuis does not
argue, and we do not hold, that he would be entitled to commissions without
sales that were completed that way. Rather, the question is whether Perthuis’s
work, during the time that he was employed, made him the procuring cause of
such completed sales. In any event, the jury could reasonably regard the Natera
15
If the jury could conclude that Perthuis had “fully performed” his
“part of the contract” by the time BMGL fired him, Goodwin, 185 S.W.
at 297, then the termination made no difference. Perthuis presented his
role as getting the larger deal done, just as with the original Natera
contract. If this in fact reflected his duty to BMGL, then BMGL had
extracted from Perthuis essentially everything that it would have gotten
from him vis-à-vis the new Natera deal whether he was fired or not.15
BMGL signed that deal the day after it fired Perthuis, without further
work.
Accordingly, Perthuis’s termination does not inherently affect his
entitlement to commissions. Absent the parties’ direction to deviate
from the default rule, it is analytically unsound to derive any meaning
from the at-will-employment context regarding the obligation to pay
commissions for sales procured before termination. Just as salary may
be owed for days of work completed before termination, so too may
commission fees be owed for sales to buyers procured from work
completed before termination. So long as Perthuis was the procuring
cause of any particular sale (a question we address in Part II.C), then he
was entitled to a commission absent some contractual language to the
agreement as having greater teeth than BMGL suggests, given Natera’s
affirmative promise (subject to financial consequences for breach) to buy a
minimum number of genetic tests: “Natera shall purchase 36,000 Analytical
Services using GeneAware . . . .”
15 We discuss the arguments in this conditional way because we leave
it in the first instance to the court of appeals to review whether the evidence
was both legally and factually sufficient. We recognize that the standard of
review requires that all inferences favor the jury’s verdict. Our point here is
to illustrate how the legal analysis applies.
16
contrary.16
2
The only other contractual provision that might displace the
procuring-cause doctrine is the employment agreement’s lone sentence
that addresses commission fees: “Your commission will be 3.5% of your
net sales.” Neither in isolation nor read within the context of the short
employment agreement of which it is a part, however, does anything in
that spare sentence address whether terminating Perthuis’s employment
would affect his entitlement to commissions for sales that he procured
while still employed.
To the contrary, far from displacing the procuring-cause doctrine,
the employment agreement’s statement that Perthuis would receive a
“commission” for his “net sales” is the very text that implicates the
doctrine. “[Y]our net sales” provides the trigger for paying commissions.
The doctrine would not apply without a promise of a commission tethered
to sales. The contract defines neither “commission” nor “net sales,” and
those terms’ ordinary meanings do not suggest that firing Perthuis would
end any entitlement he had to commissions for sales that his prior work
procured.
16 The dissent agrees that the procuring-cause doctrine “makes sense”
for broker relationships in the real-estate context but doubts its applicability
for at-will employees. Post at 6–7. But neither the dissent nor any party has
shown any material distinction; no one has shown why offering a (potentially
quite small) wage along with (potentially significant) commissions would
change the nature of the commissions. Neither the dissent nor BMGL cites—
and we have not discovered—a case where a court, in Texas or elsewhere, held
that at-will status alone forestalls the payment of commissions for sales
completed after termination but procured from work done before termination.
17
3
Finally, BMGL argues in the alternative that the contract is at
least ambiguous about the parties’ intent relative to what would happen
upon Perthuis’s termination. The dissent likewise finds ambiguity by
contending that both parties offered “reasonable” interpretations of the
commission provision. Post at 11–12. We agree that if there were
insoluble ambiguity about the commission obligation, it would present a
fact question for a jury. We cannot agree, however, that any fact question
arises here. The contract is silent about any exceptions to the obligation
to pay commissions; it is not ambiguous.
The procuring-cause doctrine does not preclude severing the
obligation to pay sales commissions from procuring the sales. The
doctrine’s very function, however, is to deem silence about such an
exception to reflect the parties’ intent to foreclose such an exception.
Said another way, it is unreasonable as a matter of law to allow for such
an exception when the contract is silent. This analysis reflects how we
deploy all other tools of contractual construction, whose function is to
reduce the range of interpretations that qualify as “reasonable.” Parties
can define ordinary words to have bizarre meanings, for example; but if
they are silent, we will dismiss as unreasonable any post-litigation effort
to give words a peculiar meaning.17
17 Our disagreement with the dissent largely boils down to this point.
The dissent faults the procuring-cause doctrine for not asking a jury to
determine “what these parties intended their contract to mean.” Post at 13–14
(original emphasis). That objection could apply to any number of tools that
courts use to eliminate ambiguity, however. And if we were to endorse that
objection and prioritize subjective intent to such a degree, we would surely see a
18
Accordingly, there is only one reasonable interpretation here: that
BMGL and Perthuis did not agree to cancel, upon termination of
Perthuis’s employment, commissions he otherwise would be owed. No
fact issue on contract interpretation exists. Our conclusion is consistent
with our goal of giving effect to the parties’ “intent as expressed in the
written document.” Piranha Partners v. Neuhoff, 596 S.W.3d 740, 744
(Tex. 2020). In no way does it “remake their contract by reading
additional provisions into it.” Gilbert Tex. Constr., 327 S.W.3d at 126.
Quite the contrary; the procuring-cause doctrine functions to ensure
that no one can inject “additional provisions”—including the sort that
BMGL suggests.18 Had BMGL intended continuing employment to be a
surge in cases where clear contractual text is deemed ambiguous. We reaffirm,
however, that courts give effect to intent as expressed in writing because “it is
objective, not subjective, intent that controls.” Matagorda County Hosp. Dist.
v. Burwell, 189 S.W.3d 738, 740 (Tex. 2006) (quotation omitted).
18 The dissent cites two cases for the proposition that ambiguous
commission provisions warrant consideration of extrinsic evidence. Post at 7
n.6. We take no position on the correctness of those cases but note that they
support rather than undermine our point. In Tex–Fin, Inc. v. Ducharne, the
contract indicated that the employee would earn a sales bonus if certain
conditions were met. 492 S.W.3d 430, 441–42 (Tex. App.—Houston [14th Dist.]
2016, no pet.). Continued employment was not one of those conditions, and the
court therefore concluded that the “plain language of the agreement [did] not
condition earning a sales bonus on any annual employment requirement.” Id.
(holding that the TWC erred in relying on extrinsic evidence that the employer
did not intend to pay a bonus based on a partial year of employment but that
the TWC appropriately considered extrinsic evidence that bonuses were paid
in December). Likewise, in Vassar Group, Inc. v. Heeseon Ko, the contract
provided that, “[u]pon termination of this Contract,” the contractor would be
paid “any commission ‘earned’ in accordance with the [employer’s] customary
procedures . . . .” No. 05-18-00814-CV, 2019 WL 3759467, at *1 (Tex. App.—
Dallas Aug. 9, 2019, no pet.). The contract expressly invoked those “customary
procedures,” the parties advanced differing theories on what “‘earned’ in
19
condition for Perthuis to receive commissions on sales that he had already
procured, then “it would have been simple to have said so.” Id. at 127.
If BMGL had done so and Perthuis had accepted it, we would enforce it.
Notably, BMGL did use such language elsewhere—in the retention
agreement, which Perthuis signed the same day as the employment
agreement, and in the new policy governing more junior employees’
commissions, which BMGL announced the very month that it fired
Perthuis.
We find no ambiguity. Regardless, latent ambiguity would not
change the result. BMGL’s counsel drafted the employment agreement,
which Perthuis accepted as presented. Even assuming for argument’s sake
that the words “your net sales” were ambiguous, a court would resolve
ambiguity about whether the parties intended to displace the procuring-
cause doctrine against BMGL, the drafter of the employment agreement.
See, e.g., Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990)
(requiring the construction of contractual ambiguity “against the party
who drafted it since the drafter is responsible for the language used”);
Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of
Legal Texts 42, 151 (2012) (endorsing “the venerable principle that an
ambiguity should be resolved against the party responsible for drafting
the document” and “the rule that ambiguities in contracts will be
interpreted against the party that prepared the contract”).19
accordance with the [employer’s] customary procedures” meant, and the court
considered extrinsic evidence about the employer’s usual practices. Id. at *5.
19 We need not quarrel with the dissent’s contention that use of this tool
is a last resort—after all, that is still before asking a jury what the parties
20
Accordingly, the court of appeals’ error was to misapprehend the
consequence of its correct observation that “[n]othing in the language of
the [employment agreement] indicated that the parties intended to pay
commissions under a procuring-cause standard or that Perthuis was
entitled to commissions based solely on the [contracts with the channel
partners].”20 The court was right that the contractual text does not itself
adopt the procuring-cause standard in the employment agreement. But
no such “opt-in” is required. Likewise, a contract has no obligation to
expressly define a word to use its ordinary meaning. In both instances,
the default rule requires opting out, not the other way around. The legal
consequence of silence is that the default rule remains intact.
* * *
We hold that nothing in the agreement between the parties before
us displaced the procuring-cause doctrine.
C
We arrive at the third question. Even when the procuring-cause
doctrine applies to a contractual relationship, as it does here, the plaintiff
still must show that he was in fact the procuring cause of specific sales.
intended. See post at 5 n.2. In any event, we do not rely on the fact that BMGL’s
counsel drafted and signed the employment agreement—we simply note that
this undisputed fact would further undermine any effort to submit a fact
question to a jury.
20Likewise, the court observed, “Nothing in the parties’ agreement . . .
indicates that BMGL agreed to compensate him for sales from customers that
he had ‘procured’ even after Perthuis was no longer employed by BMGL.
Nothing in the contract indicates that Perthuis was entitled to a commission
for procuring channel partners or for negotiating Laboratory Services
Agreements like the one with Natera.”
21
1
A plaintiff who properly invokes the procuring-cause doctrine to
recover sales commissions must prove that the specific sale was the direct
and proximate result of the plaintiff ’s efforts or services. See Keener,
250 S.W. at 152 (referring to the “general rule” that a broker earns a
commission when the broker’s “efforts were the primary, proximate, and
procuring cause of the deal negotiated” and where “the transaction is
directly attributable to the broker” (quotation omitted)).21 A plaintiff
meets that burden by proving the plaintiff set in motion “a chain of
events . . . which, without a break in their continuity, cause the buyer
and seller to reach agreement on the sale” as a primary and direct result
of the plaintiff ’s efforts. 49 Am. Jur. Proof of Facts 3d 399 § 13 (1998).22
This necessarily requires the plaintiff to be both the “proximate” and
“but for” cause of those sales. Embrey v. W.L. Ligon & Co., 12 S.W.2d
106, 108 (Tex. [Comm’n Op.] 1929).23
A plaintiff could satisfy this standard by proving that he was the
21Indeed, “[a]s used in that branch of the law relating to brokers’
commissions, the terms ‘procuring cause,’ ‘efficient cause,’ and ‘proximate
cause’ have substantially, if not quite, the same meaning and are often used
interchangeably.” 12 C.J.S. Brokers § 258 (2015).
22See also 12 C.J.S. Brokers § 257 (“A sale or other transaction must be
the direct and proximate result, or the immediate causal connection, of the
broker’s efforts or services, as distinguished from one that is indirect and
remote, between the introduction of the broker and the consummation of the
transaction.” (footnotes omitted)).
23 By contrast, the ordinary contractual causation standard requires a
plaintiff to show that “the damage sued for has resulted from the conduct of
the defendant.” McKnight v. Hill & Hill Exterminators, Inc., 689 S.W.2d 206,
209 (Tex. 1985).
22
procuring cause of a single contract that, without further negotiations
or modifications, produced a stream of sales. Or he could show that any
changes to the contract were immaterial and his role was still the
primary and direct cause of the sales. But it would not be enough for a
plaintiff to simply identify and claim credit for a general relationship,
like BMGL’s relationship with Natera.
These requirements ensure both that a plaintiff recovers
commissions that are due and that a defendant is not obligated to pay
commissions that are attenuated from the plaintiff ’s role. A “rule of
fairness and right,” Goodwin, 185 S.W. at 296, after all, requires fairness
for the defendant as well as the plaintiff. The defendant must be free to
show that the causal link was severed. As this Court has explained, for
example, a salesman who “made an unsuccessful effort to induce the
buyer to purchase the property and had ceased his efforts to accomplish
that result, all without fault on the part of the owner,” is not the
procuring cause when the sale was later made “as the result of
independent negotiations directly between the owner and the buyer, or
through the medium of some other broker.” Air Conditioning, Inc. v.
Harrison-Wilson-Pearson, 253 S.W.2d 422, 425 (Tex. 1952) (quotation
omitted); see also, e.g., Shepard v. Wesson, 266 S.W.2d 393, 395 (Tex.
Civ. App.—Amarillo 1953, no writ) (upholding the jury’s finding that the
broker was the procuring cause of the sale when there was no intervening
act between the broker’s actions and the sale).
Another manifestation of this principle is almost the reverse
scenario—where the jury could find that the passage of time eventually
severs the causal link between a plaintiff ’s initially successful role as
23
broker or agent and some later sale. Even if the defendant must pay
commissions for earlier sales, therefore, that defendant can defeat
commissions beyond a given point by showing that, from then on, the
plaintiff was at best only a remote and attenuated cause of the later sales,
not a primary and direct cause. A binding, multi-year contract that a
plaintiff brokered and that generates repeated sales with no material
adjustments may require commissions throughout the full term, because
all those sales could be attributed to the same labor on the plaintiff ’s
part. But significant maintenance may be required for other contractual
relationships to endure. If the efforts of others were indispensable to
salvaging or preserving a foundering contractual relationship, or if the
contract itself must be reworked, a jury could conclude that the
entitlement to commissions no longer existed.
Likewise, a defendant could sever the causal link by establishing
that no commissions would be due to the plaintiff even if she had
remained employed. A plaintiff who lacks continuing employment could
not recover commissions under the procuring-cause doctrine if the same
person would not be entitled to them if still employed.
These consequences follow from the basic principle that the courts
will not award speculative damages, including for any claim that is “too
remote and depend[ent] upon too many contingencies . . . .” Signature
Indus. Servs., LLC v. Int’l Paper Co., 638 S.W.3d 179, 187 (Tex. 2022)
(quotation omitted). Damages must always be “proved with reasonable
certainty,” id. at 186 (quotation omitted), a principle that “acknowledges
the limited competence of courts to track the complex effects of a breach
of contract in an interdependent marketplace.” Id. at 187.
24
Claims of procuring-cause status will usually present a fact
question.24 When they do, trial courts should give juries clear
instructions regarding the plaintiff ’s burden to show his status as the
procuring cause for each sale at issue and the defendant’s ability to
defeat that showing, in whole or in part, with evidence that the plaintiff ’s
original role had been overtaken by events and changed circumstances.25
2
The jury in this case found that Perthuis was in fact the procuring
cause of at least some of BMGL’s sales. The standard of review requires
courts to view the record in the light most favorable to the jury’s verdict.
See, e.g., Ingram v. Deere, 288 S.W.3d 886, 893 (Tex. 2009).
But Perthuis must show his entitlement to commissions on sales
even as the BMGL–Natera relationship evolved in various phases. At a
certain point, even Perthuis acknowledges the theoretical possibility
that his contribution could have become too attenuated to qualify as a
“procuring cause” for any further sales. Both in his briefing and at oral
argument, Perthuis agreed that if an entirely new contract with Natera
had to be negotiated (at least for reasons other than a bad-faith attempt
24 That is, while the question of the doctrine’s applicability is typically
a legal question, whether the plaintiff actually had the status of a procuring
cause generally requires factual assessment of the plaintiff ’s contribution to
the sale at issue.
25We accordingly find greatly overstated BMGL’s repeatedly expressed
concern that a plaintiff who establishes her direct and primary role in causing
some sales might, by that mere fact, establish a “lifetime” commission on all
future sales involving that buyer. Perthuis himself advocated no such rule, and
our decision precludes recovery of such claimed commissions absent sufficient
evidence regarding every sale for which the plaintiff claims to be the procuring
cause.
25
to escape the commission obligation), then Perthuis could claim no
further commissions despite his central and significant role in
maintaining the BMGL–Natera relationship early on. That is, Perthuis
concedes that it would not be enough to say something like, “Without my
efforts, Natera’s business would have been lost forever, so I am still the
procuring cause under a totally new contract.”
Perthuis contended that the nature of the contractual relationship
did not materially change, and that he remained the procuring cause of
sales to Natera all the way up to trial. BMGL, of course, strenuously
argued the opposite. The jury refused to award the full amounts that
Perthuis requested, which suggests that at least some of BMGL’s
arguments regarding Perthuis’s decreasing causal link to later sales
persuaded the jury.
The court of appeals has not yet undertaken its sufficiency analysis
under the proper legal framework because it reversed the judgment for
Perthuis for an independent reason: its conclusion that the procuring-
cause doctrine did not apply to the parties’ contract. The court of appeals’
disposition made it unnecessary for that court to reach the remainder of
BMGL’s arguments that are predicated on the evidence presented at trial.
Our decision today requires consideration of those arguments.
We therefore reverse the judgment of the court of appeals and
remand the case to that court for further proceedings, including assessing
any further challenges to the trial court’s judgment that BMGL has
preserved. We express no opinion on whether each or any of the relevant
contractual amendments, or anything else, was sufficiently substantial
to sever any causal link between Perthuis and sales to Natera (or other
26
channel partners). We leave to the court of appeals in the first instance
to determine the proper disposition of this case, and we disclaim any
intention to limit the court of appeals’ resolution of the case on remand.26
III
The court of appeals’ judgment is reversed and the case is
remanded to the court of appeals for further proceedings.
Evan A. Young
Justice
OPINION DELIVERED: May 20, 2022
26Depending on its resolution of Perthuis’s entitlement to commissions,
the court of appeals should consider his cross-appeal with respect to attorneys’
fees.
27