Multilevel Marketing Scheme Promises Barred By Parol Evidence Rule

AmeriPlan Corporation’s customers pay a monthly membership fee in order to access a network of healthcare professionals who have agreed to provide discounted medical services.  Anderson worked as an independent contractor for AmeriPlan, and recruited its customers, healthcare professionals, and other independent contractors.  AmeriPlan’s business model is based on multilevel direct marketing, and Anderson was compensated through commissions and bonuses.  After AmeriPlan terminated his employment, Anderson sued AmeriPlan claiming that he was promised “lifetime residual income,” but did not receive any commissions or bonuses after his termination.  The trial court rendered judgment for Anderson, and AmeriPlan appealed.

The issue on appeal was whether the evidence was legally sufficient to support the jury’s finding that AmeriPlan breached Anderson’s written sales contract.  AmeriPlan argued that the contract unambiguously required it to pay commissions and bonuses only during the continuation of the contract.  Anderson alleged that the jury was entitled to consider AmeriPlan’s promise of “lifetime vested benefits” contained in AmeriPlan’s marketing materials in deciding whether AmeriPlan breached the written contract.  The court of appeals concluded that the parol evidence rule barred the jury from considering the statements made in AmeriPlan’s marketing materials because the alleged promises were not a collateral consistent agreement.  The court also found that the fraud exception to the parol evidence rule was inapplicable because Anderson was not the defendant, and was not seeking to avoid the contract.  Because the jury was precluded from giving weight to AmeriPlan’s alleged promises, the court of appeals held that the evidence was legally insufficient to support Anderson’s breach of contract claim.  The court reversed and remanded to the trial court for consideration of the jury’s alternative liability and damages findings.

AmeriPlan Corp. v. Anderson, No. 05-11-00628-CV