thank you from a please the court my name is jeff tillotson i represent the two appellants and the one individual cross of kelly billy bowden they were all defendants below we asked the court here to reverse the judgment entered by the district  court on several of the claims on several grounds first we asked this court to to reverse the judgment with respect to punitive damages that were entered against defendant conciliation the grounds are simple which is there was not legally sufficient evidence of malice to support an award of punitive damages as the court knows there must be clear and convincing evidence of a specific intent to harm someone in order to work punitive damages and second which played a particular role in this case the evidence of ill will or malice has to be different from the evidence you put on to show the tort for which you're seeking punitive damages in other words here the tort was torturous interference if your sole evidence is that someone this case this was what i call essentially a garden variety employee who left a company and turns out in violation of his non compete and was hired by another company there was a fight at trial over whether the two companies even competed but one thing they didn't fight about was that the individual mr gresham who left took with him no business no clients never contacted anyone from his old employer and the appellee in this case could not identify a single los customer from any of this nonetheless the jury only ordered your files he took that that constituted a different claim and punitive damages were not sought nor were they appropriate on that harmful access the statute for p e damages into in the civil practice and remedies code says the conduct for which you are seeking the punitive damages must be made with malice so other things he did unrelated to that claim we would argue don't support the punitive damages he clearly went in there and even if i'm not saying this is this case but what if they tortuously interfere with the non compete and non disclosure requirements etc if they want to get files from the other company couldn't that support a malice finding on tortious interference that's the this pacific and i'm not saying that's the facts here but i think it could your honor i mean you're obviously not just limited to the evidence for tortious interference because you would never be able to prove it so but it has to be conduct related to the that you're trying to get the punitive damages for ensure merit hawkins by hiring this one employee there was no evidence they were trying to undermine them or trying to steal a big group of their employees the evidence was this is the only person from the company they ever hired they didn't hire anyone afterwards that individual left about we were unable to really locate a case that in this context said there's not enough they cite two cases which are employee rating cases where the court in this court said that is enough it could support a we largely distinguish those because there they were large scale ratings where you went after someone in a competitive effort it took their whole department and i agree that those are better cases for punitive damages those too but what i'm trying to find out is so this is below that but is it is it still enough and that's why be helpful to see a case where it was taken away unfortunately mostly it's going to the texas supreme texas court cases which of which have taken away when there is simply no evidence i think this is really just a no evidence case if you look at the a pelleas brief on page twenty eight of their of their response they list essentially five bullet points which is all of the evidence they contain supports it if you look at those four bullet points only to deal with conciliar made directly to your point of those two the first one is you hired a guy that you had a not complete which is clearly not sufficient evidence the second one is you located your business near ours which is neither evidence of malice nor connected to us hiring mr gresham the reason why and we established our business a year and a half before we have a hard mr gresham so the linkage between the proximity and us hiring couldn't be there the last two points deal with billy bowden who was our employee who texted mr gresham back and forth the first bullet point they say he was a better ex employee and he was fired and he was unhappy but there was no testimony at trial that anything he did was either on our behalf or was trying to injure his former employee in fact the only testimony that was given was that mr bowden told mr gresham don't leave that company was he was worried that he might not get a job where he worked and the last one is he sent a joking text message that told mr gresham on your way out of our old boss a slap on the back of the head mr bowden explained that he was joking and there was certainly no evidence that could be inferred from that of malice on our part now the last point with respect to this is the court has to be careful because what mr bowden was doing was unconnected to our hiring of mr gresham he testified it was contradicted that he played no role and had no decision making a in that hiring and therefore despite the fact he was texting back and forth and even if you didn't like his former employee that doesn't constitute legally sufficient evidence therefore we think that this is a seriously flawed verdict we think the jury essentially tried to move damages around to make sure it didn't hit the employees and that they were not there was no evidence to support the malice finding or there were no no issues with respect to whatever the jury charge the judge gave the jury on them pointedly when i read the issue relative to that question we believe he instructed the jury correctly we just don't think there was evidence sufficient to support that finding there is a second issue we raise with respect to damages overall of course if the court reverses on just the damages awarded it would take away the punitive damages portion of it and that is that the happily married hawkins had one witness who testified as to their damages mark smith their company president there is a disconnect in our briefs i believe we're not arguing the company president was incompetent to give testimony about damages generally the case law on that is clear what we argue is that there are limits as to what a company president can do as a lay expert witness and mr smith in this case well exceeded the boundaries of what would be permissible we' detailed in our brief some of the things he did but he first testified as to damages as to eight hundred dollars per page of documents that mr gresham had deleted without support sound ation methodology or any other backup evidence it appear to us at trial to be literally pulled out of whole cloth because there was no supporting testimony that this is what would force to recreate that information or any data to support it second he testified as to lost profits caused by the departure of mr gres to do anything particularly when the lay witnesses going to testify about lost profits we agree a business owner generally can get up within reason and speak to lost profits but you have to ask what is the basis for that testimony if i give you an example to make my point if the business owner has to say i took last night's lot winning lottery number multiplied and those are my last profits we would all agree there is no methodology for that so i just challenge it under what is qualified under seven o one did you bring him a challenge to that we did what ability the methodology we did we did both we did both to the district court we challenged his qualifications because we felt the things he was testifying about he wasn't qualified yes he was company president but he had never duplicated documents or information so we had no basis for that he had the training program for example was ongoing you were subbing people in or out and he had no basis by which to make that determination and we question the methodology and his his last profits analysis and why we would challenge it is it wasn't we lost this employee in a lost his business to do that he simply said he just measured it against a new employee who came in not mr gresham's replacement and said that person only did x business and we thought maybe mr know we're right well yes i think he was he was offering essentially lay opinions as a lay witness for things which were normally are supposed to be within his realm of right and you challenged him across the board number one  he wasn't tendered as an expert but they put him on as a well informed lay witness shall we say to testify about these properties and i guess the point i'm getting to i was trying to get back to kind of how didn't cut you off at the pass by saying you know go forward so you do a good lawyers do make the gallup bad on the stand unworthy of believe it cetera but in turn i take it in your case there was no count of ballots by somebody showing affirmatively here's why what this guy said can't be believed out of not so on and that is correct i mean i don't have a complaint that the trial judge prevented us from asking this witness something that we thought we should be able to ask and we did not call an expert witness to come in and say here's our own methodology for how would be because so you rip him to shreds my words not yours thank you but i just you know kind of visualizing just a feast on cross examination you know where you just go after him up down sideways and the whole nine yards to which you hope the jury will see like this guy can't testified but despite the keeper form function at the door that doesn't let in bad methodology so for example i think for every document every piece of paper that mr gresham to lead in one hundred dollars is fair seems simple and easy sounds great however should that come in is there a methodological reason that would support that at the first instance it's not fact based testimony since i saw him deleted it is i'm coming up with my own analysis as to what our damages were same thing with training cos they don't have a training program where you sub one person and one person out if he leaves he just simply took a round number of their ongoing training program this is a company that has twenty five percent turnover a year so people are coming and going he didn't identify specific out of pocket loss he did some math on the back of an armadillo to get numbers to say here it is and our argument is here are to your point is that the methodology for that lacks any evidence or foundation should not come in and should not serve as a basis in future cases for people to say as long as the guy's my president and he's been there for a bunch of time he can say almost anything and that's really the two issues in this case number one is when you hire someone even with a non compete but on the last profits and you're not doubting the accuracy of what he said he says this guy left the company based on the way and he was bringing in this much business and i'm going to compare him to this this other new employee who wasn't bringing in much business and here's the difference that's all within his is knowledge is the c e o or the president that's you can attack it is sure not i don't hear you saying it's not true so the jury heard it i mean what it's not about what you say it's a methodology there's no you don't need some  what not to include art aren't you aren't you really something that they meet the standard of an expert witness in effect if he's going to step outside the typical president which is our sales last year one million  is that this is not about whether or not mr smith could testify about damages but the limits of that testimony when he steps outside of reciting facts and his knowledge and says i think a good comparison is mr gresham versus this new employee or i think hang on i'm i'm trying to work my way through it is why i did it you know i guess this is a bad analogy but to me it's like hearsay evidence if you get an objection you know sustain it is hearsay but nobody objects you know is evidence so effective now which you really are going for years you don't want us to put an opinion out here then embraces you know this kind of witness so in another case you're up against it and i would get that if that's the subliminal piece of it but if it's really you know it's a fully tried jury case you know what the evidence is there we get the issue you know saying it was an abuses question i mean the weight of the evidence maybe i wouldn't give it some but if he comes with this number i'm when when a witness steps in to evaluate if testimony so outside members when a witness steps into judgment what's its right to compare to come up with a damages figure as opposed to here are my profits here is what i spent on this individual and lost out of pocket when you get into that realm of the law say it is not just to the way there is a function first to is this something that she even go to says i came up with one hundred dollars because as he testified it seems simple and not that much that can't rationally based on anything it's a witness says i don't really know what happened to mr gresham's clients i mean i know some other people didn't but i'm not comparing them to this i don't think that's rationally based if the witness gives testimony that's not rationally based on a methodology that is supportable the typical case loads as not helpful to the very emotionally based upon the witnesses  would otherwise running would open it up to almost anything a company president saying look it's my perception we got killed last year in sales i don't look at the numbers but i see a lot of sad faces our sales department a lot of gloomy people my bank called me tell me where i'm up i don't want a credit i think we lost a couple million dollars but that's like a personal knowledge that's why i go back to you're not disputing what he said than the productivity was of the guy who left or what the productivity was of this new woman so he's just saying this guy made this much she made this much in the job that's all within his knowledge if he has that perception in the jury hears it and they they figure out what they want to do with that what if he'd said the average person in our company makes this much in the person who left made this much in this much business i think the problem is if he could link those in other words the loss of an employee doesn't necessarily mean you've lost revenue and so to pick someone out to get that comparison with no basis behind it i mean i week long well tried case with very capable lawyers on both sides this court should reject mr tillotson and frontal assault on a modest in conservative jury verdict that again was reached after a five day trial would be clear that this is not some sort of runaway jury situation but rather a jury that issue of verdict robustly supported by record evidence and accepted in its entirety almost at its  gresham's covenant and yet still they pressed on this isn't there any evidence that this was a pattern that there were other employees console him took from your client your honor when the court denied the rule fifty motion on this it was aware of to subdivide the market into permanent staffing and temporary staffing but right on their website judge taken about them right on their website it boldly says they do permanent staffing as well as temporary staffing merit hawken specializes in permanent staffing but this is a really a distinction the trial court rejected and it's based on the plain language of their website so yes any evidence that gresham when he stole the computer files or took the computer files  evening raid he raids the computer system on sunday evening or signs by e mail and the next morning at seven am without coming back into the office of the last time he's in the office it's to conduct this this raid on a major his computer system  dollars in damages on mr gresham harmful access by computer our expert our forensic expert mr kelly jones he came in to investigate this breach of security and to find out what had happened what had been taken what had been deleted independent of his litigation costs build m a j sixty thousand dollars so mr jones is bill alone and his sixty thousand dollars bill exceeds the jury's award of fifty thousand dollars so i think we're on a very solid ground with regard to that fifty thousand dollar award for harmful access by computer against mr gresham and there's also evidence in the record that the in house ip consultant had to spend eight and a half hours at his hourly rate on this one top of of mr ha there was a dispute between this third party arthur marshall and m h a regarding mr gresham's return there was a settlement reached between the parties so there was consideration paid in that settlement or given in that settlement  to get mr gresham back on board of m a j here of course there never was any subset settlement there was a week long jury trial with the jury finding this would be a very different analysis if they had given consideration  based on their improper recruitment of mr gresham and also i think the situation is very different your honor given again this awareness that everyone from mr hawkins on down to mr bo these covenants said they were the architects of these covenants and yet chose to ignore them and i think the danger of jury confusion i don't think there was an abuse of discretion your honor there that there would have been some sort of mini trial trying to compare this arthur marceau situation in settlement to the situation in this case i don't think that would have been helpful to the jury i think it of confuse the jury i think would've been prejudicial in judge chiles  hands slapped for it and having that having to settle the matter but your honor let me go back to mr smith's testimony that was the subject of so much discussion with mr tillotson because i think that a very simple way out of this box a straight line out of this maze and that's the testimony from mr smith the president of the company the judge cost alluded to that there was thirty thousand dollars in change in lost profits here calculated very simply on this new employee wilmoth who was the indirect replacement for mr gresham over the twelve month period in his non compete runs for twelve months that's the amount of profit the company lost that's about as straightforward as it gets and i think a twenty six year company employee had worked in every aspect of the business rising through the ranks to become president eight years as president can testify to that i knew opposing counsel doesn't like this one hundred dollars per file not pro per file and some of these files were many hundreds of pages but the jury could get this thirty thousand dollar number on lost profits without ever using that number in fact i think it's a testament to the quality of mr tillotson cross examination th jury limited its award of last profits to the thirty thousand dollars attributable to the wilmoth gresham comparison and did not give the forty five thousand dollars in training costs and did not give the  twenty seven thousand dollars for deleted documents or forty two thousand dollars for information removed so again i think president smith was on very solid ground on that thirty thousand returning employee as a recruiter on m h a and mr tillotson pointed to some evidence that there was not recruitment this sort of self serving testimony from bowden that he really wasn't trying to recruit gresham the jury simply didn't credit that there were eighty five text messages multiple phone calls multiple in person meetings and mr bowden working hand in glove with the in house corporate recruiter at concealing i'm a woman named christina sullivan i believe that he was reporting supervisor on the head on the way out as a joke the jury didn't take it that way and reading the cold record same record this panel has access to i didn't either at trial he mr clay i asked him about it he volunteered that he stood by the comment he up mr clay i was walking him through his text messages his eighty five text messages retreating mr gresham and he could see where mr clay a was going that he was soon going to ask him about the infamous slap to the back of the head and before mr clay  could get there he said and i and i i forget the exact wording but he essentially said i stand by that's by the slap on the head so this jury was making its credibility determinations in weighing they did not have to take that as a joke so again what you have is a copycat company down the street founded by the same man who founded m h a and sold out founded by the same man who came up with m h a's restrictive covenants and found and in terms of interference but he was not found to be liable for any damages for that i think it's a there was no complaint from the other side about the charge no objection to the charge no effort on their part to try to link the damages questions for can silly  scheme and put the blame in put the damages on him rather than on mr bowden even though mr bowden was there coconspirator and even he was acting in the course and scope of his of his employment we also heard of a cross appeal on the very small award of damages two thousand dollars against mr bowden for breach of his non solicitation clause and this is really a i think of fairly straightforward question of contractual interpretation in mr bowden's agreement there is a liquidated damages provision that casts damages for violation of his contract in terms of a successful p recruitments in other words taking a business from m h a to his new company of course that's not what mr bowden did he didn't breach his non compete he breached his not solicit and he stole away his friend former coworker mr gresham and because he was not stealing business it's our position that as a matter of law that liquidated damages clause simply does mr gresham and those employees obviously don't recruit physicians so if the interpretation of the liquidated damages clause the judge so lease reached is correct then mr bowden or anyone who signed the same clause it's has it's open season on non revenue generating employees at m h a and that's simply not a reasonable outcome and so i think that's the one area where judge sillies got it wrong and the judge the jury got it right the jury awarded this modest two thousand dollar release almost a symbolic award against mr bowden just so lease took that away on a real fifty motion and based on the liquidated damages clause we would argue that under texas law interest are you saying judge so we didn't recognize that he could give fees for work it was an extra couple intertwined ever did he just not find that there was a sufficient basis for making that kind of that there's a problematic statement in his order where he talks about work that's exclusively attributable to the harmful access by computer climb and so i thought of it doesn't he also also recognize that inextricably intertwined work is can be awarded he does recognize that but then he doesn't award the feed so there is some internal tension in judge so lisa's order limiting the fees to what's directly attributable to our successful harmful access by computer claim and i would say that so for example we didn't prevail on the could see a basis for saying those are sort of two separate the other thing that i think chip's elise got wrong in this good causes as you can see from my remarks the enforceability of these covenants not to compete is a massive issue to both these companies i don't think we'd be down here fighting about a two hundred thousand dollars judgment if it wasn't those covenants were found to be enforceable budgets ollie's he entered summary judgment that mr gresham had breached his covenant not to compete and then he allowed the jury to hold that mr had breached his covenant not to solicit so by prevailing on those contractual claims even though we didn't receive substantial monetary damages that's a remarkably important victory  for m h a that i think makes us a prevailing party under thirty eight point zero one eight of the texas civil practice and remedies code as well as under the thief shifting provision of the bowden and gresham employment agreements that would give fees to the prevailing party record i'd like to start with the census the last thing that was mentioned first the only claim by which merit hawkins was entitled to fees was harmful access and computer claimed they got zeroed out on everything else so the problem was they submitted their fees for everything and said the old fashioned gosh it's all intertwined judge didn't get the standard wrong because he told them this is the scanner now going to segregate and everyone knew because we had segregated and included something telling fees along with several fees on our few requests they came back with twenty seven thousand dollars off a four hundred thirty thousand dollars fee the court said you've made it impossible for me really to do it you've heavily redacted as a result and then they try to make this the standard the judge this as a did there is the court knows he then basically zero out the fees and say you won this claim they won that claim i'm going to do without i want to just in the in the modest defense of two thousand dollars for mr bowden because it is important to an individual for who went through his first loss damages on torturous interference and you think it was the ringleader that would felt different two thousand dollars on the nonsense station the problem was that agreement was covered by liquidated damages provision for the first time in the lawsuit after the judgment is rendered after we go to the jury they say wait a minute that provision isn't enforceable never raised in their pleadings never raised in the summary judgment pleadings never even raised in the preacher order the only people who raised it was us who kept saying he is bound by this liquidated damages provision only allowed damages evidence that relates to this provision that was overruled however judge believes then fix that on our motion for judgment as it was a matter of law and mr about there is no basis to disturb it and there is no basis to let this company who spent thousands of dollars trying to enforce their contractual rights after they get something they all like to say this one particular provision is invalid these were not contracts that were negotiated they were presented to employees and told sign them and they have to live with it finally with respect to mouse the case they talk about in their brief that this was mr hawkins trying to steal back his business and correct this competitive entity and do all these things was not tried there was no evidence with respect to that mr hawkins didn't even testify judge tulisa excluded evidence of the sale of his business judge so least there was no evidence regarding any other employee hire in fact that's the only employee ever hired from mary hawkins at the time that the lawsuit happened and more importantly there was no evidence that somehow can silly and thought it could injure these guys by hiring this one employee or any purpose for doing it and i would draw distinctions i think the case law does between disliking someone or not being happy and then doing an act is designed to injure them i have a bad experience with a particular business i didn't have a good job there someone says i'm thinking about interviewing there and you say i wouldn't go there you may not be specifically trying to injure them you need something more than that they keep saying and i told you this is what they're going to argue which is joe watkins knew about these non competes they all did however that is an president testifying but for us it was the a value to part that we found so problematic reshape the court's time thank you very much all right thank you counsel both