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NO. 12-20-00106-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

PETROCHOICE HOLDINGS, LLC & 

PETROCHOICE HOLDINGS, INC., 

APPELLANTS

V.

MARY PEARCE,

APPELLEE

§

§

§

APPEAL FROM THE 402ND 

JUDICIAL DISTRICT COURT

WOOD COUNTY, TEXAS

MEMORANDUM OPINION

PetroChoice Holdings, LLC and PetroChoice Holdings, Inc. (PetroChoice unless 

separately demarcated) appeals the trial court’s summary judgment order in favor of Mary 

Pearce. PetroChoice raises three issues on appeal. We reverse and remand.

BACKGROUND

From 2000 to 2016, Universal Lubricants employed Pearce as a salesperson in the 

industrial lubricant industry. Her job required her to travel, maintain customer relationships, and

sell lubrication products to Universal’s customers in her territory, which consisted of large 

portions of Texas, Northern Louisiana, and part of Mississippi. In April 2016, PetroChoice

acquired Universal Lubricants.1 Pearce received an email of the acquisition containing a 

mandatory meeting notice at PetroChoice’s warehouse in Dallas, Texas. PetroChoice extended 

an offer of at-will employment to some Universal employees such as Pearce. As a condition of 

employment, PetroChoice required Pearce to sign an employment agreement containing, among 

other items, a noncompetition covenant and confidentiality agreement. According to Pearce, she 

1 Pearce understood that either PetroChoice Holdings, LLC or PetroChoice Holdings, Inc. acquired 

Universal Lubricants. The record as it is currently developed does not definitively establish which entity acquired 

Universal and employed Pearce.
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wanted time to review the agreement, but was told that she must sign the agreement or be 

immediately terminated. Pearce reluctantly signed the agreement. 

On October 12, 2018, Pearce attended another mandatory meeting at PetroChoice’s

warehouse. At the meeting, she was terminated. Pearce began looking for work in the industrial 

lubricant industry, but had difficulty obtaining employment because of her PetroChoice

noncompetition agreement. However, SB Fleet – Lube, LLC, learned that she had been 

terminated at PetroChoice. Fleet Lube owner Lisle Budden called Pearce to set up a meeting to 

discuss the matter. Pearce described Fleet Lube as a customer she worked with while employed 

at PetroChoice. Pearce began working at Fleet Lube on January 2, 2019.

Prior to accepting employment at Fleet Lube, Pearce filed the instant suit in Wood

County, Texas on November 8, 2018.

2 In her petition, Pearce sought a declaration that the

covenant not to compete was unenforceable because at no point did PetroChoice provide any

consideration in exchange for its execution. Pearce also alleged that the covenant was 

unreasonable as to the geographic territory covered by the agreement. PetroChoice Holdings, 

LLC subsequently filed an answer and counterclaim denying Pearce’s allegations and claiming 

that Pearce, in violation of their agreement, became employed by Fleet Lube, which it alleged is 

a PetroChoice competitor. PetroChoice also alleged that she possessed and used its confidential 

information, along with allegations that she improperly solicited its clients, interfered with those 

relationships, and conducted business with its clients in violation of their noncompetition 

covenant.

During this litigation, PetroChoice Holdings, Inc. filed a separate claim against Pearce in 

Wood County. After its efforts to obtain a temporary restraining order (TRO) to temporarily 

enforce the agreement were unsuccessful, it nonsuited its claim against Pearce and filed suit 

against Fleet Lube in Collin County. It also joined Pearce as a defendant in the Collin County 

litigation, alleging the same claims against her as in its earlier nonsuited Wood County claim. 

After successfully obtaining an ex parte TRO temporarily enforcing the agreement in Collin 

County, it settled its claim with Fleet Lube, the terms of which included that Fleet Lube 

terminate Pearce’s employment, and nonsuited the claim against Pearce. PetroChoice Holdings, 

Inc. then filed a counterclaim against Pearce in her original declaratory judgment action against 

2 Pearce filed suit in Wood County pursuant to a clause in her PetroChoice employment agreement 

requiring that disputes arising from the agreement be litigated there.
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it and PetroChoice Holdings, LLC. The basis for the counterclaim was the same as PetroChoice 

Holdings, LLC’s earlier counterclaim, Petrochoice Holdings, Inc.’s nonsuited Wood County suit,

and its Collin County suit against Pearce. Based on this perceived forum shopping, Pearce filed 

a motion for sanctions under Chapter 10 of the Texas Civil Practice and Remedies Code. The 

trial court ordered that PetroChoice pay Pearce a total of $18,231.67 as sanctions. The trial court 

recited in its order that the purpose of the sanction was to reimburse Pearce for expenses incurred 

against PetroChoice’s “abuse of the judicial process designed and employed in an attempt to 

place [Pearce] in a financial stranglehold in hopes that she would eventually become financially 

unable to continue to pursue her remedies and continue litigation.”

Thereafter, the parties filed competing motions for summary judgment regarding the 

enforceability of the employment agreement’s noncompetition covenant. Pearce contended that 

the agreement was unenforceable because PetroChoice failed to provide consideration for its 

execution and that the agreement’s geographic limitation was unreasonable. Conversely, 

PetroChoice contended that the agreement was enforceable because it provided Pearce 

confidential information and training and that the agreement’s geographic limitations were 

reasonable. The trial court granted Pearce’s motion and denied PetroChoice’s motion. Pearce 

also filed a motion for costs and attorney’s fees, which the trial court granted in the amount of 

$53,362.50 through trial, as well as contingent appellate attorney’s fees. Having disposed of all 

parties and all issues, the trial court signed a final judgment and this appeal followed. 

SCOPE OF SUMMARY JUDGMENT ISSUES CONSIDERED ON APPEAL

In Pearce’s brief, she contends that the trial court properly granted summary judgment in 

part because PetroChoice materially altered the agreement by changing the identity of the parties. 

Specifically, Pearce argues that “PetroChoice Holdings, LLC” was the party that executed the 

agreement. After the agreement’s execution, PetroChoice representatives drew a line through 

that name, replaced it with “PetroChoice Holdings, Inc.,” and initialed the change. Pearce argues 

that this is a material change to the agreement that renders it null and void. 

With respect to this argument, we note that this ground was not presented to the trial 

court in support of Pearce’s motion for summary judgment or in opposition to PetroChoice’s 

competing motion for summary judgment. All theories in support of or in opposition to a motion 

for summary judgment must be presented in writing to the trial court. See TEX. R. CIV. P.
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166a(c). A motion for summary judgment must itself expressly present the grounds upon which 

it is made, and must stand or fall on these grounds alone. See id.; Science Spectrum, Inc. v. 

Martinez, 941 S.W.2d 910, 912 (Tex. 1997). A court cannot grant summary judgment on 

grounds that were not presented. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 

(Tex. 2002). This court can only address grounds for summary judgment that were raised in 

writing in the trial court. See TEX. R. CIV. P. 166a(c); Kaye/Bassman Intern. Corp. v. Help 

Desk Now, Inc., 321 S.W.3d 806, 818 (Tex. App.—Dallas 2010, pet. denied); Hackberry Creek 

Country Club, Inc. v. Hackberry Creek Home Owners Ass’n, 205 S.W.3d 46, 50 (Tex. App.—

Dallas 2006, pet. denied). In determining whether the grounds are expressly presented, we look 

only to the motion itself; we do not rely on briefs or summary judgment evidence. Science 

Spectrum, Inc., 941 S.W.2d at 912.

Pearce did not advance the argument that PetroChoice materially altered the employment 

agreement in her motion for summary judgment or in response to PetroChoice’s competing 

motion for summary judgment. Because the trial court cannot grant a motion for summary 

judgment on grounds not presented in the motion or in opposition thereto, we cannot consider 

this ground for the affirmance of the trial court’s summary judgment. See TEX. R. CIV. P.

166a(c); Johnson, 73 S.W.3d at 204; Science Spectrum, Inc., 941 S.W.2d at 912; 

Kaye/Bassman Intern. Corp., 321 S.W.3d at 818; Hackberry Creek Country Club, Inc., 205 

S.W.3d at 50. 

SUMMARY JUDGMENT – COVENANT NOT TO COMPETE

PetroChoice contends in its first issue that the trial court erred in granting summary 

judgment in Pearce’s favor, because the employment agreement containing the noncompetition 

covenant is enforceable as a matter of law, or alternatively, that underlying factual issues remain

unresolved.

Standard of Review

The movant for traditional summary judgment has the burden of showing that there is no 

genuine issue of material fact and that it is entitled to judgment as a matter of law. See TEX. R.

CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When 

reviewing traditional summary judgments, we perform a de novo review of the record in the light 

most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts 
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against the motion. See Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006); KPMG Peat 

Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).

When, as here, competing motions for summary judgment are filed, each party bears the 

burden of establishing that it is entitled to judgment as a matter of law. Tarr v. Timberwood 

Park Owners Ass’n, 556 S.W.3d 274, 278–79 (Tex. 2018). When the trial court grants one 

motion and denies the other, we review the summary judgment evidence presented by both sides,

determine all questions presented, and may reverse the trial court’s judgment and render such 

judgment as the trial court should have rendered, including rendering judgment for the other 

movant. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 

(Tex. 2009). If, however, a genuine fact issue exists, summary judgment for either party is 

inappropriate, and we reverse and remand. McCreight v. City of Cleburne, 940 S.W.2d 285, 288 

(Tex. App.—Waco 1997, pet. denied). A fact issue may be created either by disputed or 

ambiguous facts. Id.

Applicable Law

The enforceability of a covenant not to compete agreement is a question of law. 

Powerhouse Prods., Inc. v. Scott, 260 S.W.3d 693, 696 (Tex. App.—Dallas 2008, no pet.); see 

also Gorman v. CCS Midstream Servs., L.L.C., No. 12–09–00204–CV, 2011 WL 1642624, at 

*3 (Tex. App.—Tyler 2011, no pet.) (mem. op.). Likewise, what constitutes sufficient 

consideration for a contract is generally a question of law, but can be a question of fact. Roark v. 

Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991) (holding factual questions 

remained on consideration issue in summary judgment case due to failure to produce conclusive 

proof); Burges v. Mosley, 304 S.W.3d 623, 629 (Tex. App.—Tyler 2010, no pet.) (question of 

law).

A covenant not to compete is enforceable if it is (1) ancillary to or part of an otherwise 

enforceable agreement at the time the agreement is made and (2) reasonable, not imposing a 

greater restraint than is necessary to protect the goodwill or other business interest of the 

employer. See TEX. BUS. & COM. CODE ANN. § 15.50(a) (West 2011). The first element can be 

broken down into two inquiries: (1) whether there is an “otherwise enforceable agreement,” and 

(2) whether the covenant not to compete is “ancillary to or part of” that agreement at the time the 

otherwise enforceable agreement was made. See Mann Frankfort, 289 S.W.3d at 849.
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With regard to the first inquiry, “otherwise enforceable agreements” can emanate from 

at-will employment so long as the consideration for any promise is not illusory. Id. Moreover, a 

unilateral contract formed when an employer performs a promise that was illusory when the 

contract was formed can satisfy the requirements of the statute. See Alex Sheshunoff Mgmt. 

Servs., L.P. v. Johnson, 209 S.W.3d 644, 651 (Tex. 2006). Thus, when an employer makes an 

illusory promise of consideration and, later, performs in accord with the promise, the 

consideration is no longer illusory. See id. Additionally, even in the absence of an express 

promise to provide confidential information, when the nature of the employee’s work requires 

confidential information to be provided for him to perform the work, the employer impliedly 

promises the information will be provided. See Mann Frankfort, 289 S.W.3d at 850.

Concerning the second inquiry, for a covenant not to compete to be “ancillary to or part 

of” an otherwise enforceable agreement, the employer must establish both that (a) the 

consideration given by the employer in the agreement is reasonably related to an interest worthy 

of protection and (b) the covenant not to compete was designed to enforce the employee’s 

consideration or return promise in the agreement. See Marsh USA Inc. v. Cook, 354 S.W.3d 

764, 775 (Tex. 2011). “The covenant cannot be a stand-alone promise from the employee 

lacking any new consideration from the employer.” Sheshunoff, 209 S.W.3d at 651. The 

consideration from the employer “must give rise to the employer’s interest in restraining the 

employee from competing.” Id. at 648–49. Business goodwill, confidential or proprietary 

information, trade secrets, customer information, and specialized training are examples of 

interests that can be, in appropriate circumstances, worthy of protection by a covenant not to 

compete. See, e.g., Marsh USA Inc., 354 S.W.3d at 777; Sheshunoff, 209 S.W.3d at 651; 

Neurodiagnostic Tex, L.L.C. v. Pierce, 506 S.W.3d 153, 163–64 (Tex. App.—Tyler 2016, no 

pet.).

Discussion

Pearce contended in her motion for summary judgment and supporting affidavits that 

PetroChoice never promised or actually furnished her with any confidential information or 

training that would satisfy the “ancillary to or part of an otherwise enforceable agreement” 

requirement sufficient to render the agreement enforceable. PetroChoice argued in its competing 

motion that her former supervisor established in his affidavit that the company provided 

confidential information and training to Pearce after she began her employment there, and that in 
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any event, Pearce admitted she received such confidential information from PetroChoice in her 

deposition, rendering the agreement enforceable. 

Pearce explained in her initial affidavit that PetroChoice did not furnish her an office, that 

she worked mainly in her automobile, traveled to visit her customers, maintained a home office, 

and had a cell phone and company issued iPad. Pearce stated that PetroChoice never furnished 

her a lead about a new customer, and that all customers developed while working for 

PetroChoice were based entirely on her efforts, most of which came to her by referrals from 

other customers. Pearce continued that PetroChoice did not furnish her any confidential 

information, and that it was unnecessary to do her job, because she had worked in the lubricant 

business for more than thirty years. She stated that she could go online to obtain names of 

potential customers, which she had done on a regular basis. She further explained that she 

neither needed nor received any assistance from PetroChoice in that regard, and that she 

developed her sales contacts on her own. Finally, she explained that when she was terminated, 

she surrendered her phone that contained the names and contact information for customers that 

she serviced for many years while working at Universal and PetroChoice, and that she shipped 

all material back to PetroChoice, including her iPad and any documents or sales material she 

possessed at the time of her termination. Pearce clarified in her deposition that she only had a 

customer list of the customers she serviced while working for PetroChoice, many of whom she 

had developed prior to PetroChoice’s acquisition of Universal. She testified that she did not 

have a master list of PetroChoice’s customers or access to a company computer containing such 

information, and that any information she received from PetroChoice was not confidential but 

was instead available to the general public.

In response to Pearce’s motion, PetroChoice relied on an affidavit from Rick Palmore, 

PetroChoice’s former Western Regional Vice President and Pearce’s supervisor, along with 

admissions by Pearce as to certain confidential information she held. The entirety of the relevant 

portion of the affidavit stated only as follows:

Specifically, during her employment with PetroChoice, PetroChoice provided Pearce access to 

PetroChoice’s confidential information including, among other things, names of PetroChoice’s 

clients, client contact and decision maker information, pricing information, profit margins, sales 

volume and history, types and amounts of products purchased, terms and conditions of contracts, 

accounts receivable information, and whether PetroChoice’s clients had bulk storage equipment on 

loan and the terms of the arrangements. PetroChoice also provided Pearce access to confidential 

information concerning PetroChoice’s products including chemical analyses and comparisons of 
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PetroChoice’s products with competitors’ products. Further, PetroChoice provided Pearce with 

sales training including PetroChoice’s proprietary methods for competing with other distributors.

Palmore’s affidavit was unaccompanied by any other facts or evidence explaining the 

factually conclusory laundry list of alleged confidential information. See TEX. R. CIV. P. 166a(f); 

Atmos Energy Corp. v. Paul, 598 S.W.3d 431, 467-68 (Tex. App.—Fort Worth 2020, no pet.) 

(party’s summary judgment affidavit containing unexplained factually conclusory statements 

held insufficient on appeal); Miner, Ltd. v. Anguiano, 383 F. Supp. 3d 682, 698 (W.D. Tex. 

2019) (finding similar laundry list recitation of confidential information allegedly provided to 

former employee, unaccompanied by further explanation or proof, insufficient under Texas law

to establish enforceability of noncompetition covenant for purposes of preliminary injunction). 

Other than Palmore’s affidavit, PetroChoice relied on statements in Pearce’s deposition 

wherein she made certain admissions concerning the nature of the information she received 

while at PetroChoice. Specifically, the following exchange took place:

Q. Okay. The information that we’ve just talked about, we’ve talked about client names, 

addresses, product information, we’ve talked about the names of the people that you dealt with 

and their phone numbers that were in your cell phone, we’ve talked about quarterly reports that 

had total sales information, gallons, margins, reserve price list. With respect to that information, 

when you were at PetroChoice, were you free to share that information with PetroChoice’s 

competitors?

A. No.

Q. Did it — would you have thought that would have been an appropriate thing to do?

A. No.

Q. I assume Fleet-Lube has similar information like that pertaining to its customers?

A. As far as pricing?

Q. Well, just all the stuff that a company would have; names of clients, client contact information,

product information, sales history, sales volume, pricing, margins, Fleet-Lube has to have all that, 

too, right?

A. Sure.

Q. And I assume that you wouldn’t think it would be appropriate to share that with a Fleet-Lube 

competitor, would it?

A. Correct.

. . . .

Q. Okay. That’s all I was trying to get you to say. So, some of the information we just discussed 

is confidential.

A. Sure.

Q. Tell me what that would be.

A. The sales volume, pricing.

Q. Sure. What about contact person, who to call?

A. No. It’s public knowledge.

Q. Okay. Total — okay. Sales volume, pricing. Okay. Am I right in thinking that sales volume 

and pricing information with respect to clients changed over time, right? In other words, you 

might look in the beginning of 2019 and see a number on sales volume, but then you might look at 
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the end of 2019 — I’m sorry, 2018 — the beginning of 2018 and see a number and sales volume, 

then you look at the end of 2018 and see a different number, right? It would change over time.

A. Yes.

Q. And I assume pricing would, too. It has to change a lot, right? A lot of fluctuation on the price 

of oil and lubricants, and so forth. Am I right about that?

A. Yes.

Prior to the summary judgment hearing, Pearce filed a motion for leave to file a 

supplemental affidavit, which the trial court granted. The purpose of the supplemental affidavit 

was to (1) further expound upon her prior affidavit alleging that she received no confidential 

information from PetroChoice, (2) explain her admissions in her deposition testimony, and (3) 

rebut the alleged confidential information Palmore stated that PetroChoice provided in his 

affidavit.3 For example, she explained in her supplemental affidavit that even though she 

admitted some of the information was confidential, it was actually her that provided the 

information to PetroChoice. In relevant part, Pearce stated in her supplemental affidavit as 

follows:

At the time I was forced to sign the Employment Contract with PetroChoice Holdings,

LLC/Inc., I was promised nothing except what I was already entitled to receive. When Rick

Palmore says that while I was at PetroChoice I was provided confidential information, the truth is 

that I was furnished no confidential information that I had not received for the past 16 years.

PetroChoice never furnished me with any training, specialized or otherwise, that taught me how to

sell the same products I had been selling for the past 16 years. PetroChoice continued to sell

Universal’s products with Universal’s logo on them. An example is shown on Exhibit “A”

attached hereto. All of their products continued to bear the Universal name and logo until around 

May of 2018. PetroChoice never came to me and said we have a new product that you are going 

to be selling for us. Nothing like that ever happened. I sold the same products and services I had 

been selling for 16 years. In fact, Rick Palmore told me that PetroChoice wanted to learn our way

(Universal’s) of selling because of our success with customer retention and overall market success.

Insofar as sales volume is concerned, that is confidential but that was furnished by me to

PetroChoice and not the other way around. Product pricing is something that every salesperson is 

given on a regular basis. Universal and PetroChoice would tell their salesperson what prices they 

could quote. That is standard in the industry. It is nothing unusual and product pricing continued 

3 PetroChoice did not provide argument or authorities in its appellate brief that Pearce’s affidavit violated 

the “sham affidavit” rule. It did make that argument in the trial court and briefly at oral argument. Under the sham 

affidavit rule, if a party submits an affidavit that conflicts with the affiant’s prior sworn testimony and does not 

provide a sufficient explanation for the conflict, a trial court may disregard the affidavit when deciding whether the 

party has raised a genuine fact issue to avoid summary judgment. See Lujan v. Navistar, Inc., 555 S.W.3d 79, 82 

(Tex. 2018). Here, Pearce filed the supplemental affidavit to establish her own right to summary judgment, not only 

to avoid a competing motion for summary judgment. To the extent that her supplemental affidavit can be viewed in 

the context of opposing PetroChoice’s competing motion for summary judgment, we hold that, as we have 

described, the affidavit is not in direct conflict with her deposition testimony. Rather, the supplemental affidavit 

further expounds upon her statements in her earlier affidavit that PetroChoice did not provide her any confidential 

information or training. It was also made in response to the conclusory assertions in Palmore’s affidavit concerning 

the nature and extent of any confidential information PetroChoice allegedly provided to her. Accordingly, we hold 

that Pearce’s supplemental affidavit does not violate the “sham affidavit” rule. See id. 
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as it had been for 16 years before I was forced to sign the Employment Agreement with 

PetroChoice.

Pearce also stated elsewhere in her deposition that her employment at Fleet Lube would 

violate the covenant based on the language used in the agreement. However, when understood in 

context, she contended that the covenant was unenforceable, and that it was thus irrelevant 

whether she violated the technical language in the agreement. 

PetroChoice relies on McKissock, LLC v. Martin, where a continuing education course 

provider for real estate professionals sought to enforce a noncompetition agreement against one 

of its former employees. See 267 F. Supp. 3d 841, 846-48 (W.D. Tex. 2016). The former 

employee argued that her former employer did not provide her with any confidential information. 

See id. at 853-54. Despite the parties’ dispute concerning whether the company actually 

provided any information that was confidential, the federal district court granted a preliminary

injunction in the employer’s favor. See id.

Conversely, with respect to whether PetroChoice provided confidential information, other 

similar cases have different results than McKissock. See, e.g., Miner, Ltd. v. Anguiano, 383 F. 

Supp. 3d 682, 698 (W.D. Tex. 2019). In Miner, the employer was in the business of selling, 

installing, and servicing material handling equipment and loading dock products. Id. at 689. 

The company alleged that its former employee, a high-ranking account executive, possessed 

confidential information required for the work to be performed. Id. at 688-89. Texas courts 

have acknowledged that various types of consideration such as confidential information can, in 

appropriate circumstances, satisfy the “ancillary to or part of” element to constitute an interest 

worthy of protection. See, e.g., Neurodiagnostic Tex, 506 S.W.3d at 164. In Miner, the federal 

district court examined the record and concluded as follows:

Plaintiff has not persuaded this court that this case involved the dissemination of 

“confidential information.” In DeSantis v. Wackenhut Corporation, the Texas Supreme Court 

rejected the plaintiff’s claim that its supposed confidential information—the identity of their 

customers, pricing policies, cost factors, and bidding strategies—was protectable under the 

confidentiality agreement. It explained that the plaintiff “failed to show that its customers could 

not readily be identified by someone outside its employ, that such knowledge carried some 

competitive advantage, or that its customers’ needs could not be ascertained simply by inquiry 

addressed to those customers themselves.” Additionally, the Texas Supreme Court noted the 

plaintiff “failed to show that its pricing policies and bidding strategies were uniquely developed, 

or that information about its prices and bids could not, again, be obtained from the customers 

themselves.”

Like Wackenhut, Plaintiff has not shown its business practices, pricing, margin, or 

strategy were uniquely developed or not readily accessible. Furthermore, Plaintiff’s alleged 
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“confidential information” is vague at best. Plaintiff struggles to identify and expand upon the 

alleged confidential information. The court will not infer a fact into existence. The Employment 

Agreement lacks consideration and is unenforceable.

Miner, 383 F. Supp. 3d at 698 (internal citations omitted). Palmore’s affidavit contains a similar 

level of detail as the evidence in Miner.

In any event, McKissock and Miner are preliminary injunction cases, where the chief 

issue is whether temporary enforcement of the agreement pending resolution of the matter at trial

is necessary to prevent irreparable injury in the face of a substantial probability of recovery. See 

Miner, 383 F. Supp. 3d at 698; see also McKissock, 267 F. Supp. 3d at 853-54. That is distinct 

from the procedural posture and issue presented here, namely whether the record as it is currently 

developed conclusively establishes the covenant’s (un)enforceability for the purpose of rendering 

a full and final summary judgment without the need to resolve fact issues at trial.

A more procedurally and factually analogous case comes from one of this Court’s prior 

opinions. See generally Gorman v. CCS Midstream Services, L.L.C., No. 12-09-00204-CV, 

2011 WL 1642624, at *1 (Tex. App.—Tyler Apr. 29, 2011, no pet.) (mem. op.). There, Gorman

worked for Mobley, a company eventually acquired by CCS, which was in the business of 

transporting, managing, and disposing of oilfield fluids and liquids. Id. at *1. CCS acquired 

Mobley because it had specific expertise in an area in which CCS sought to expand. Id. During 

the acquisition, it offered certain high-level employees such as Gorman a written at-will 

employment agreement that contained a noncompetition covenant. Id. Although Gorman signed 

the agreement, CCS began to diminish Gorman’s responsibilities. Id. Dissatisfied, Gorman 

resigned and became employed by a CCS competitor. Id. CCS filed suit to enforce the covenant

and obtained a TRO and a temporary injunction. Id. at *1-2. CCS then filed a motion for 

summary judgment, alleging that the record conclusively showed that it provided Gorman 

confidential information, which the trial court granted. Id. at *2.

We reversed and remanded the suit because Gorman’s evidence raised a fact issue as to 

whether CCS actually provided the consideration in the form of confidential information that 

was reasonably related to an interest worthy of protection.4 Id. at *8. On the one hand, CCS 

4 Although Gorman contended that the covenant was enforceable as a matter of law on appeal, he did not 

file a competing motion for summary judgment, and we noted that, even if Gorman had established that the 

covenant was not enforceable as a matter of law, we could at most remand the proceeding. See Gorman, 2011 WL 

1642624, at *8-9. In any event, we held that factual issues remained. See id.
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pointed to evidence that Gorman admitted in his deposition that he received various pieces of 

confidential information, including pricing information and other financial information. Id. at 

*4-5. On the other hand, Gorman produced deposition testimony from Robert Miracle, 

Gorman’s supervisor at both Mobley and CCS. Id. at *5. Miracle admitted that CCS acquired 

Mobley and its valuable employees because of their preexisting expertise in an area that CCS 

lacked. Id. at *5. Miracle testified that Gorman had knowledge of CCS’s financial statements 

that detailed its expenses, and each category of expense makes up a percentage of the total 

operating cost, which is then used to formulate the bid based on the acceptable profit margin. Id. 

He testified that Gorman’s knowledge of this information would have given him and his new 

employer a competitive advantage in formulating bids against CCS. Id. at *5-6. He stated that 

the actual dollar amount of the expenses fluctuated, but the percentages and margins remained 

the same. Id. at *6. However, Miracle admitted that Gorman acquired this knowledge at 

Mobley, and that it largely remained the same after CCS acquired Mobley. See id. Both parties 

disagreed as to whether the evidence established the enforceability of the covenant as a matter of 

law, but we held that this conflicting evidence raised a fact issue. See id. at *8. 

Here, as in the similarly situated parties in Gorman, PetroChoice acquired Universal. 

PetroChoice admits that the purpose of the purchase was at least in part to acquire Universal’s

goodwill and customers it had accumulated. Pearce also provided evidence consistent with this 

purpose. For example, PetroChoice claimed that it provided her with training, but Pearce 

pointed to emails from Palmore and other high-level PetroChoice employees after the acquisition 

showing that they treated her as the “expert in Lifelines applications and would be the best 

person to talk to,” they were presenting the program “and don’t have a complete understanding 

of the entire program . . ., [that they would] love to pick [Pearce’s] brain, . . . [and] would like to 

get [her] in front of a handful of key prospects, [secure the program, and provide some] demo

training.” The e-mail communication chain continued, saying that Pearce would provide a 

“mentoring role” at the training as “best in class.” In other words, this evidence tends to show 

that Pearce was the former Universal employee providing the knowledge and training to 

PetroChoice employees after the acquisition. 

PetroChoice points to the Texas Supreme Court’s statement that “[t]he enforceability of 

the covenant should not be decided on ‘overly technical disputes’ of defining whether the 

covenant is ancillary to an agreement.” See Marsh USA Inc., 354 S.W.3d at 777. However, 
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given the procedural posture of this case at this juncture, we note that it must still establish its 

entitlement to summary judgment on the covenant’s enforceability, of which this inquiry is a 

component. Palmore’s conclusory affidavit does little to negate Pearce’s evidence that 

PetroChoice provided her no new information that she did not already know prior to its 

acquisition of Universal. 

But this does not end our inquiry. In Pearce’s deposition, she admitted that the “sales 

volume” and “pricing” were confidential. She explained in her supplemental affidavit that she 

provided the “sales volume” information to PetroChoice, which is consistent with the evidence 

that PetroChoice acquired Universal due to its customer base and goodwill. And it was Pearce 

who either serviced the same Universal clients as she had over the past several years or 

developed new clients herself while at PetroChoice after the acquisition. 

With respect to “pricing” though, the evidence is ambiguous. She admitted in her 

deposition that the “pricing” information was confidential as in Gorman. In her supplemental 

affidavit though, Pearce claimed that PetroChoice provides pricing information to her, just as it

does to every salesperson on a regular basis, which, according to her, is an industry standard.

She stated that Universal and PetroChoice would tell the salesperson what prices they could 

quote to a customer, but that product pricing is the same as it had been for the prior sixteen years 

before her employment at PetroChoice. Pearce admitted in her deposition that “pricing” 

fluctuated. Therefore, at least as to “pricing,” the facts are ambiguous, and she failed to 

conclusively establish that PetroChoice did not provide her with that information that she 

admitted was confidential. 

On the other hand, PetroChoice provided no evidence showing how its “pricing” is

reasonably related to an interest worthy of protection. Pearce stated generally that this 

information was consistent over time and that PetroChoice did not really provide her with 

information she did not already possess prior to signing the agreement, but in her deposition, 

Pearce admitted that “pricing” fluctuated over time. PetroChoice failed to explain the nature of 

its pricing structure or otherwise show that “pricing” was actually “confidential” and an interest 

worthy of protection as those terms are used in the covenant not to compete context. For 

example, in DeSantis, the Texas Supreme Court explained that the employer “failed to show that 

its customers could not readily be identified by someone outside its employ, that such knowledge 

carried some competitive advantage, or that its customers’ needs could not be ascertained simply 
14

by inquiry addressed to those customers themselves.” DeSantis v. Wackenhut Corp., 793 

S.W.2d 670, 684 (Tex. 1990). Additionally, it stated that the employer “failed to show that its 

pricing policies and bidding strategies were uniquely developed, or that information about its 

prices and bids could not, again, be obtained from the customers themselves.” See id.; see also

Miner, 383 F. Supp. 3d at 698. Therefore, without any evidence in this regard, along with its 

failure to rebut Pearce’s evidence claiming that PetroChoice did not provide her any other 

confidential information and training, PetroChoice has not shown its entitlement to summary 

judgment. 

In conclusion, on the record before us, Pearce failed to establish that the agreement was 

unenforceable as a matter of law. Moreover, PetroChoice neither conclusively negated an 

element of Pearce’s claim nor established in its competing motion that the covenant was 

enforceable as a matter of law. The record as it is currently developed shows only that disputed 

or ambiguous facts remain concerning whether PetroChoice provided confidential information 

worthy of protection to Pearce that would render its otherwise illusory implied promise to 

provide confidential information enforceable. In other words, although the enforcement of the 

covenant is a question of law, we hold that the record is not sufficiently developed at this 

juncture for us to evaluate that matter as a question of law, because factual issues remain 

unresolved, and neither party met their summary judgment burden. See Roark, 813 S.W.2d at 

496; Gorman, 2011 WL 1642624, at *8.

Finally, Pearce contends that the covenant was unreasonable as to its geographic scope. 

However, since we have held that factual issues remain regarding the threshold issue of whether 

the covenant was ancillary to an otherwise enforceable agreement, we need not examine this 

issue. See TEX. R. APP. P. 47.1; Fielding, 289 S.W.3d at 849 (citing Light v. Centel Cellular Co. 

of Tex., 883 S.W.2d 642, 644 (Tex. 1994)) (noting that whether agreement is “ancillary to or part 

of an otherwise enforceable agreement” is threshold inquiry made prior to determining 

convenant’s reasonableness as to time, geographical area, scope of activity to be restrained, and 

that it does not impose greater restraint than necessary to protect employer’s goodwill or other 

business interest). Furthermore, even if Petro Choice satisfied its burden on this threshold issue, 

yet Pearce prevailed on her contention that the geographic territory covered by the covenant is 

unreasonable, it would not result in a disposition that the agreement is unenforceable. See TEX.
15

BUS. & COM. CODE ANN. § 15.51(c) (West 2011). Rather, the trial court would be required to 

reform the covenant and enforce it as reformed. See id.

PetroChoice’s first issue is sustained insofar as the trial court erred in granting summary 

judgment in Pearce’s favor because fact issues remain to be resolved. 

ATTORNEY’S FEES

PetroChoice contends in its second issue that the trial court erred in awarding attorney’s 

fees to Pearce because the Covenant Not to Compete Act preempts her recovery of such fees 

under the circumstances presented in this case. See TEX. BUS. & COM. CODE ANN. §§ 15.51(c),

15.52 (West 2011). Because we have held that underlying fact issues remain concerning the

enforceability of the covenant, and consequently reversed the trial court’s summary judgment in 

Pearce’s favor, we need not address this issue, as it is unripe for review. See TEX. R. APP. P.

47.1.

SANCTIONS

In PetroChoice’s third issue, it contends that the trial court abused its discretion in 

assessing sanctions in the amount of $18,231.67 against it. 

Standard of Review

We review a sanctions order for an abuse of discretion. Brewer v. Lennox Hearth 

Products, LLC, 601 S.W.3d 704, 717 (Tex. 2020); Am. Flood Research, Inc. v. Jones, 192 

S.W.3d 581, 583 (Tex. 2006). A trial court abuses its discretion if it acts without reference to 

guiding rules and principles such that the ruling is arbitrary or unreasonable. Brewer, 601

S.W.3d at 717; Jones, 192 S.W.3d at 583. When reviewing a sanctions order, we are not bound 

by the trial court’s fact findings or conclusions of law; instead, we must review the entire record 

independently to determine if the trial court abused its discretion. Brewer, 601 S.W.3d at 717; 

Jones, 192 S.W.3d at 583.

Applicable Law

Chapter 10 of the Civil Practice and Remedies Code authorizes sanctions for filing a 

pleading or motion “for any improper purpose, including to harass or to cause unnecessary delay 

or needless increase in the cost of litigation.” TEX. CIV. PRAC. & REM. CODE ANN. § 10.001(1) 

(West 2017). The sanction must be limited to what is sufficient to deter repetition of the conduct 
16

and may include an order to pay to the other party the amount of the reasonable expenses 

incurred by the other party because of the filing of the pleading or motion, including reasonable 

attorney’s fees. Id. § 10.004(b), (c)(3) (West 2017). The trial court shall describe in its 

sanctions order the conduct the court has determined violated Section 10.001 and explain the 

basis for the sanction imposed. Id. § 10.005 (West 2017).

A court also has the inherent power to impose sanctions for the bad faith abuse of the 

judicial process that may not be covered by rule or statute. See In re Bennett, 960 S.W.2d 35, 40 

(Tex. 1997). This inherent power to impose sanctions may arise on the trial court’s own motion 

in appropriate cases. See id. This inherent power includes sanctions imposed for interference 

with a court’s traditional core functions, such as hearing evidence, deciding issues of fact raised 

by the pleadings, deciding questions of law, rendering final judgment, enforcing its judgment, 

managing its docket, and issuing and enforcing its orders. Liles v. Contreras, 547 S.W.3d 280, 

290-91 (Tex. App.—San Antonio 2018, pet. denied). As part of this power, a court may also use 

its inherent power to impose sanctions for conduct that, if tolerated, “breeds disrespect for and 

threatens the integrity of our judicial system.” In re Bennett, 960 S.W.2d at 40. 

The Supreme Court recently emphasized that “[b]ecause inherent powers are shielded 

from direct democratic controls, and because of their very potency, inherent powers must be 

exercised with restraint, discretion, and great caution[,]” and to that end necessitates a finding of 

bad faith. Brewer, 601 S.W.3d at 718 (internal quotations and footnotes omitted). The inherent 

authority to sanction is also limited by due process, so such sanctions must be just and not

excessive. Id. (citing TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 

1991)). First, in order for the sanction to be “just,” a direct relationship must exist between the 

offensive conduct and the sanction imposed. American Flood, 192 S.W.3d at 583. This means 

that a just sanction must be directed against the abuse and toward remedying the prejudice 

caused the innocent party. Id. Second, sanctions must not be excessive, meaning that “the 

punishment should fit the crime.” TransAmerican, 811 S.W.2d at 917. A sanction should be no 

more severe than necessary to satisfy its legitimate purposes. Id. It follows that courts must 

consider the availability of less stringent sanctions and whether such lesser sanctions would fully 

promote compliance. Id.
17

Discussion

After PetroChoice Holdings, LLC filed its answer and counterclaim to Pearce’s Wood 

County suit, admitting that Wood County had proper venue, PetroChoice Holdings, Inc. filed its 

separate claim against Pearce in Wood County, also averring that Wood County was a place of

proper venue concerning the enforceability and alleged breach of Pearce’s employment 

agreement. Immediately after unsuccessfully seeking a TRO, PetroChoice Holdings, Inc.

nonsuited its Wood County claim against Pearce and filed suit against Fleet Lube and Pearce in 

Collin County, Texas. After obtaining the TRO in Collin County that it unsuccessfully sought in 

Wood County, and after settling with Fleet Lube, PetroChoice Holdings, Inc. nonsuited the 

Collin County claim and filed its counterclaim to Pearce’s original Wood County declaratory 

judgment action. All of these suits concern the same issue as it pertains to Pearce—the 

enforceability and breach of the noncompetition covenant in her employment agreement. The 

same attorneys represented both PetroChoice entities through this phase of these lawsuits. 

Based on this perceived forum shopping, Pearce filed a motion for sanctions under 

Chapter 10 of the Texas Civil Practice and Remedies Code, alleging that this course of conduct 

was taken for an improper purpose, including to harass or to cause unnecessary delay or 

needlessly increase the cost of litigation. Pearce sought to recover its attorney’s fees and hourly 

charges for paralegal services incurred in defending the Collin County action. After a hearing,5

the trial court signed an order granting sanctions against PetroChoice, requiring it to pay Pearce 

$18,231.67. The trial court, in its order found as follows:

The Court reviewed and considered the pleadings, motions, testimony and exhibits filed by the 

parties and arguments by counsel. The Court weighed the credibility of the evidence presented 

giving [consideration to the] assertions and defenses of the parties. The parties to the original 

contract were aware that venue was proper in Wood County, Texas. The Court is of the opinion 

that despite venue was agreed and made an integral part of the contract, Defendant employed legal 

tactics that placed extreme financial hardship on Plaintiff by naming her as a party in a lawsuit in 

Collin County, Texas. It is the opinion of the Court that the procedural maneuvering by 

Defendant in filing a non-suit against Plaintiff in Wood County, naming her as a party in Collin 

County, and filing suit against her again in Wood County, was an abuse of the judicial process 

designed and employed in an attempt to place Plaintiff in a financial stranglehold in hopes that she 

would eventually become financially unable to continue to pursue her remedies and continue 

litigation. As such, sanctions are imposed against Defendants in the amount of $18,231.67 to 

reimburse expenses incurred by Plaintiff.

5 It is unclear whether the trial court conducted an oral hearing. Although the parties contend there was a 

hearing, the record contains no reporter’s record. In any event, we recognize the trial court may base its sanctions 

assessment “on the papers filed and the arguments of counsel” without an oral hearing or the need for a reporter’s 

record. See Otis Elevator Co. v. Parmelee, 850 S.W.2d 179, 181 (Tex. 1993).
18

As PetroChoice points out, the Wood County trial court was without authority to impose 

sanctions under Chapter 10 for impermissible conduct occurring in the Collin County lawsuit. 

See, e.g., Mantri v. Bergman, 153 S.W.3d 715, 718 (Tex. App.—Dallas 2005, pet. denied) 

(holding that only court with jurisdiction where allegedly frivolous litigation was pending had 

jurisdiction to impose sanctions under Chapter 10). Therefore, we may not affirm the sanctions 

order under Chapter 10. See id. 

However, the trial court retains inherent power to sanction the parties and attorneys in 

appropriate cases, even on its own motion. See In re Bennett, 960 S.W.2d at 40. Even though 

Pearce’s motion invokes only Chapter 10, the trial court’s order granting sanctions is silent as to 

the basis upon which it assessed sanctions. Furthermore, it states that it was based on an “abuse 

of the judicial process,” which is often recited as a basis for an inherent power-based sanctions 

order. Although the preferred practice is to explain the authority relied upon for assessing 

sanctions in the order, reviewing courts have examined whether the sanction order may be 

justified under the court’s inherent authority when the order is silent. See Houtex Ready Mix 

Concrete & Materials v. Eagle Const. & Envtl. Services, L.P., 226 S.W.3d 514, 523–24 (Tex. 

App.—Houston [1st Dist.] 2006, no pet.).

Moreover, sanctions ordered under the court’s inherent authority are not necessarily 

limited to conduct occurring solely within the sanctioning court. See Howell v. Tex. Workers’ 

Comp. Comm’n, 143 S.W.3d 416, 447 (Tex. App.—Austin 2004, pet. denied) (concluding that a 

court may impose sanctions for conduct in another court pursuant to its inherent power to impose 

sanctions); see also Finlan v. Peavy, 205 S.W.3d 647, 652-53 (Tex. App.—Waco 2006, no pet.) 

(where plaintiff filed action in Waco court consisting of counts severed from prior complaint 

already pending in Dallas district court and over which that court had asserted jurisdiction, Waco 

court had inherent power to dismiss action without prejudice in order to protect Dallas court’s 

jurisdiction to adjudicate entire dispute pending before it).

Other courts have examined similar conduct to that in the instant case and upheld 

inherent power-based sanctions. See, e.g., In re Bennett, 960 S.W.2d at 39-40 (upholding 

inherent power-based sanction for similar forum shopping conduct that was not sanctionable

when viewed in a vacuum, such as filing suit and nonsuiting parties, but when viewed in entire 

course of litigation, showed bad faith abuse of judicial process and interference with traditional 
19

core functions of court); Liles, 547 S.W.3d at 294–95 (upholding sanctions based on otherwise 

permissible conduct in another court that is part of overall litigation between parties).

Importantly, as recently explained by the Texas Supreme Court, such sanctions must be 

predicated on an express bad faith finding. Brewer, 601 S.W.3d at 718-19. The trial court’s 

description of the conduct justifying sanctions here is tantamount to a bad faith finding.6

But as we have stated, inherent power-based sanctions must be just and not excessive.

See id. at 718. Assuming without deciding that the trial court could have concluded that 

PetroChoice’s forum shopping was such an abuse to warrant sanctions under its inherent 

authority, we conclude that the order fails to satisfy the required due process standards. In its 

order, the trial court imposed sanctions in the amount of $18,231.67 to reimburse expenses 

incurred by Pearce for defending the Collin County action, without any explanation as to how it 

arrived at that amount. Furthermore, Pearce’s attorney, without supporting documentation,

identified in his motion only $15,172.50 incurred in connection with the Collin County 

litigation.

7 Without any explanation showing the basis for its sanctions amount or any 

supporting basis in the record justifying the trial court’s higher sanction in excess of Pearce’s 

requested amount, we must conclude that the sanction is unjust and excessive, and we therefore 

cannot affirm the sanctions order. See Low v. Henry, 221 S.W.3d 609, 621–22 (Tex. 2007)

(reversing $50,000 sanction where trial court did not identify basis for imposing that sanction

amount); State Office of Risk Mgmt. v. Foutz, 279 S.W.3d 826, 837–38 (Tex. App.—Eastland 

2009, no pet.) (when sanction does not explain basis for calculating amount, it constitutes an 

impermissible arbitrary fine); IFC Credit Corp. v. Specialty Optical Sys., Inc., 252 S.W.3d 761, 

772–73 (Tex. App.—Dallas 2008, pet. denied) (reversing inherent power-based sanction for 

attorney fee sanction in amount unsupported by evidence and unexplained by trial court, holding 

6 Bad faith in the sanctions context is not just intentional conduct but intent to engage in conduct for an 

impermissible reason, willful noncompliance, or willful ignorance of the facts. Brewer v. Lennox Hearth Products, 

LLC, 601 S.W.3d 704, 718. (Tex. 2020) (internal citations omitted). It includes “conscious doing of a wrong for a 

dishonest, discriminatory, or malicious purpose.” Id. Improper motive, not perfection, is the touchstone. Id. at 719.

The trial court found in its order that PetroChoice’s legal tactics were an “abuse of the judicial process designed and 

employed in an attempt to place [Pearce] in a financial stranglehold in hopes that she would eventually become 

financially unable to continue to pursue her remedies and continue litigation.” This finding is tantamount to bad 

faith.

7 Pearce’s attorney alleged that his firm incurred $9,990.00 in attorney’s fees and $5,182.50 for paralegal 

services in his motion, but did not provide evidence of billing records or other documentation explaining the basis 

for this amount of charges. 
20

that “we are unable to determine a relationship between the sanction, the conduct, and the abuse 

sought to be remedied”).

PetroChoice’s third issue is sustained. 

DISPOSITION

Having determined that neither party met their summary judgment burden, that 

unresolved fact issues remain, and that the trial court’s order granting sanctions against 

PetroChoice contained reversible error, we reverse the trial court’s judgment in Pearce’s favor

and remand for further proceedings consistent with this opinion. 

JAMES T. WORTHEN

Chief Justice

Opinion delivered January 13, 2021.

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
21

COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

JANUARY 13, 2021

NO. 12-20-00106-CV

PETROCHOICE HOLDINGS, LLC

& PETROCHOICE HOLDINGS, INC.,

Appellants

V.

MARY PEARCE,

Appellee

Appeal from the 402nd District Court

of Wood County, Texas (Tr.Ct.No. 2018-611)

THIS CAUSE came to be heard on the oral arguments, appellate record and 

briefs filed herein, and the same being considered, because it is the opinion of this Court that 

there was error in judgment of the court below, it is ORDERED, ADJUDGED and DECREED 

by this Court that the judgment be reversed and the cause remanded to the trial court for further 

proceedings in accordance with the opinion of this Court; and that this decision be certified to the 

court below for observance.

James T. Worthen, Chief Justice.

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.