No. 12-14-00288-CV 

 

In the Twelfth Court of Appeals

Tyler, Texas

J. MARK SWINNEA

Appellant

v.

ERI CONSULTING ENGINEERS, INC.

AND LARRY SNODGRASS

Appellees

Appealed from the 114th Judicial District Court

Smith County, Texas 

APPELLANT’S BRIEF

Michael E. Gazette Greg Smith

Texas Bar No. 07784500 Texas Bar No. 18600600

Law Office of Michael E. Gazette Nolan Smith

100 E. Ferguson, Suite 1000 Texas Bar No. 24075632

Tyler, Texas 75702 RAMEY & FLOCK, P.C.

Telephone: 903-596-9911 100 E. Ferguson, Suite 500

Facsimile: 903-596-9922 Tyler, Texas 75702

megazette@suddenlink.com Telephone: 903-597-3301

 Facsimile: 903-597-2413

 gsmith@rameyflock.com

 nolans@rameyflock.com

ATTORNEYS FOR APPELLANT

ACCEPTED

12-14-00288-CV

TWELFTH COURT OF APPEALS

TYLER, TEXAS

5/11/2015 8:32:04 PM

CATHY LUSK

CLERK

 FILED IN 12th COURT OF APPEALS TYLER, TEXAS 5/11/2015 8:32:04 PM CATHY S. LUSK Clerk
The Parties and Their Counsel

I. Appellant:

J. Mark Swinnea

II. Appellees:

ERI Consulting Engineers, Inc.

Larry Snodgrass

III. Counsel for Appellant:

Gregory D. Smith

Nolan Smith

RAMEY & FLOCK, P.C.

100 E. Ferguson, Suite 500

Tyler, TX 75702

Telephone: (903) 597-3301

Facsimile: (903) 597-2413

gregs@rameyflock.com

nolans@rameyflock.com

Michael E. Gazette

Law Office of Michael E. Gazette

100 E. Ferguson, Suite 1000

Tyler, TX 75702

Telephone: (903) 596-9911

Facsimile: (903) 596-9922

megazette@suddenlink.com

i
IV. Counsel for Appellees:

Deborah Race

Ireland, Carroll & Kelley, P.C.

6101 S. Broadway, Suite 500

Tyler, TX 75703

Telephone: (903) 561-1600

Facsimile: (903) 581-1071

drace@icklaw.com

Mike A. Hatchell

Locke Lord, LLP

100 Congress Avenue, Suite 300

Austin, TX 78701

Telephone: (512) 305-4752 

Facsimile: (512) 305-4800

mahatchell@lockelord.com

Roger W. Anderson

Gillen & Anderson

613 Shelley Park Plaza

Tyler, TX 75701

Telephone: (903) 581-8600

Facsimile: (903) 581-8790

randerson@gillenanderson.com

 /s/ Gregory D. Smith 

GREGORY D. SMITH

ii
CONTENTS

Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

The Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Facts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Summary of the Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

I. Snodgrass should take nothing. . . . . . . . . . . . . . . . . . . . . . . . . . . 8

A. Because Snodgrass has proved no individually

recoverable actual damages, he cannot recover.. . . . . . . . 8

B. The Court should have addressed Swinnea’s attacks

on Snodgrass’s standing to recover ERI’s lost profits

and punitive damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

II. The Court should eliminate or revise the trial court’s

disgorgement award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

A. If punitive disgorgement is to be allowed in this case, it

is subject to all recognized limitations on the recovery

and amount of punitive damages. . . . . . . . . . . . . . . . . . . 11

1. Disgorgement that ventures beyond restoring a

windfall is a species of punitive damages. . . . . . . 11

2. The plaintiffs have been awarded a punitive

disgorgement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

iii
a. Being punitive and not restitutionary, the

disgorgement is subject to all restrictions

upon the recovery and amount of punitive

damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

B. Because no actual damages have been recovered in

connection with the buy-out transaction, there is no

legal basis for even a punitive disgorgement.. . . . . . . . . 15

C. Because the law will not support two punitive-damage

awards for the same conduct, one or the other of the

$1 million punitive damages or the $720,000 punitive

disgorgement must go.. . . . . . . . . . . . . . . . . . . . . . . . . . . 16

III. Because the $1 million punitive-damage award and the punitive

disgorgement award have been entered without the required dueprocess analysis, the Court should, at a minimum, remand both

awards for a proper excessiveness analysis. . . . . . . . . . . . . . . . . . . . . 17

A. The reduction in actual damages requires a new analysis of

punitive damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

IV. The $1 million punitive-damage award and the punitive disgorgement award necessarily are excessive, both individually and

collectively. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

A. The disgorgement is excessive insofar as it requires Swinnea

to return monies he did not come by in the buyout. . . . . . . . . . 24

B. Both punitive awards are excessive in relation to

statutory limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

1. The Court should reconsider and reverse its sua sponte

decision to invoke an inapplicable exception to the

statutory cap on punitive damages. . . . . . . . . . . . . . . . . . 25

iv
a. When the Court invoked a cap-busting exception

to affirm, it rendered an improper, sua sponte

decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

b. There has been no cap-busting offense. . . . . . . . . 27

c. Because the criminal offense was not the subject

of findings in the trial court, there is no basis for

busting the statutory punitive-damage cap. . . . . . 30

d. Because no actual damages have been awarded

in connection with the cap-busting conduct, there

is no predicate for an uncapped punitive-damage

award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

e. Because the disgorgement awarded is punitive, it

must be aggregated with any punitive-damage

recovery and the total subjected to a single

statutory cap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

C. The awards violate the Krause factors and are excessive in

relation to due-process limitations. . . . . . . . . . . . . . . . . . . . . . . 32

V. The plaintiffs are not entitled to attorneys fees. . . . . . . . . . . . . . . . . . 36

VI. The law of the case does not bar this Court from granting any of

the relief Swinnea requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Conclusion and Prayer.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Certificate of Service.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Certificate of Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Appendix

v
AUTHORITIES

CASES:

Allstate Ins. Co. v. Kelly, 680 S.W.2d 595 (Tex. App.-Tyler 1984,

writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Bennett v. Reynolds, 315 S.W.3d 867 (Tex. 2010). . . . . . . . . . . . . . . . . . 33, 34

Boyce Iron Works, Inc. v. Sw. Bell Tel. Co., 747 S.W.2d 785

(Tex. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Boyer v. Wilmington Materials, Inc., 754 A.2d 881 (Del. Ch. Ct 1999). . . . 24

Bradleys’ Elec., Inc., v. Cigna Lloyds Ins. Co., 995 S.W.2d 675

(Tex. 1999) (per curiam). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Briscoe v. Goodmark Corp., 102 S.W.3d 714 (Tex. 2003). . . . . . . . . . . 37, 38

Bunton v. Bentley, 153 S.W.3d 50 (Tex. 2004) (per curiam). . . . . . . . . . 17, 24

Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999). . . . . . . . . . . . . . . . . . . . . . 2, 18

City of Houston v. Jackson, 192 S.W.3d 764 (Tex. 2006). . . . . . . . . . . . 37, 40

Cleaver v. Cleaver, 140 S.W.3d 771 (Tex. App.-Tyler 2004, no pet.).. . . . . 21

Commodity Futures Trading Comm’n v. Sidoti, 178 F.3d 1132

(11

th Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Comm. Gen. Life Ins. Co. v. Bryson, 219 S.W.2d 799 (Tex. 1949). . . . . . . . 38

Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000). . . . . . . . . . . . . 37

Doubleday & Co., Inc. v. Rogers, 674 S.W.2d 751 (Tex. 1984). . . . . . . . 9, 39

vi
Glazener v. Jansing, No. 03-02-00796-CV, 2003 WL 22207226,*6

(Tex. App.-Austin Sept. 25, 2003, no pet.).. . . . . . . . . . . . . . . . . . . . . 28

Haase v. Glazner, 62 S.W.3d 795 (Tex. 2001).. . . . . . . . . . . . . . . . . . . . 27, 28

Hernandez v. Sovereign Cherokee Nation Tejas, 343 S.W.3d 162

(Tex. App.-Dallas 2011, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . 35

Hopwood v. State of Texas, 236 F.3d 256 (5th Cir. 2000).. . . . . . . . . . . . . . . 40

Hudson v. Wakefield, 711 S.W.2d 628 (Tex. 1986). . . . . . . . . . . . . . . . . . . . 37

Int’l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567 (Tex. 1963). . 11, 12

Int’l Telecharge, Inc. v. Bomarko, Inc., 766 A.2d 437 (Del. 2000). . . . . . . . 16

Khorshid, Inc. v. Christian, 257 S.W.3d 748 (Tex. App.-Dallas

2008, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509

(Tex. 1942). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Marin v. IESI TX Corp., 317 S.W.3d at 314 (Tex.App.--

Houston [1st

 Dist.] 2010, pet denied). . . . . . . . . . . . . . . . . . . . . . . . . . 29

McCullough v. Scarbrough, Medlin & Assoc., Inc., 435 S.W.3d 871

(Tex. App.–Dallas 2014, pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . 30

Miller v. Bank of Am., N.A., 326 P.3d 20 (N.M. Ct. App. 2013). . . . . . . . . . 16

Moore v. Jet Stream Invs., Ltd., 261 S.W.3d 412 (Tex. App.-

Texarkana 2008, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Morton v. Nguyen, 412 S.W.3d 506 (Tex. 2013). . . . . . . . . . . . . . . . . . . . . . 12

Mossler v. Nouri, 2010 WL 2133940 at *3 (Tex. App.-Austin 2010,

pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

vii
Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35

(Tex. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Pat Baker Co. v. Wilson, 971 S.W.2d 447 (Tex. 1998)(per curiam). . . . . . . 26

Peden v. State, 917 S.W.2d 941 (Tex. App.—Fort Worth 1996,

pet. ref’d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Preston Carter Co. v. Tatum, 708 S.W.2d 23 (Tex. App.-Dallas 1986,

writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Redmon v. Griffith, 202 S.W.3d 225 (Tex. App.-Tyler 2006, pet. denied). . . 8

Safeshred, Inc. v. Martinez, 365 S.W.3d 655 (Tex. 2012). . . . . . . . . . . . . . . 16

S.E.C. v. First City Fin. Corp., Ltd., 890 F.2d 1215 (D.C. Cir. 1989). . . . . . 25

Serv. Corp. Int’l v. Guerra, 348 S.W.3d 239 (Tex. App.-Corpus Christi

2009, pet. granted).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

State Bar of Texas v. Evans, 774 S.W.2d 656 (Tex. 1989)(per curiam).. . . . . 9

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 208, 123 S. Ct.

1513, 155 L.Ed.2d 585 (2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006). . . . . 19, 32

Trevino v. Turcotte, 564 S.W.2d 682 (Tex. 1978). . . . . . . . . . . . . . . . . . . . . 40

U.S. v. Project on Gov’t Oversight, 572 F. Supp.2d 73 (D.D.C. 2008). . . . . 16

Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993). . . . . . . . . . . . . . . . . . . . . . 26

Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp.2d 1072

(C.D. Cal. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

viii
Western Reserve Life Assurance Co. of Ohio v. Graben, 233 S.W3d

360 (Tex. App.-Fort Worth 2007, no pet.). . . . . . . . . . . . . . . . . . . . . . 37

Wingate v. Hajdik, 795 S.W.2d 717 (Tex. 1990). . . . . . . . . . . . . . . . . . . . . . . 8

OTHER AUTHORITIES:

Bill Analysis, SB 25, Acts of April 11, 1995, 74th Leg., R.S.,

ch. 19, 1995 Tex. Gen. Laws 108 (amended 2003). . . . . . . . . . . . . . . 27

Doug Dendleman, Measurement of Restitution, 68 WASH. & LEE

L. REV. 973. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

George P. Roach, Unjust Enrichment in Texas: Is it a floor wax or a

dessert topping? 65 BAYLOR L. REV. 153 (Winter 2013). . . . . . . . . . 11

RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT

§ 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT

§ 42 cmt d (2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT

§ 51 cmt. e (2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT

§ 51, cmt. f (2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT

§ 51 cmt h. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45 cmt c. . . . . . . . . . . . 14

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45(1). . . . . . . . . . . . . . . 14

ix
RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45

reporter’s note, cmt c.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

TEX. ATTY. GEN. OP. NO. MW-582 (1983).. . . . . . . . . . . . . . . . . . . . . . . . . . 28

TEX. CIV. PRAC. & REM. CODE ANN. §41.004(a). . . . . . . . . . . . . . . . . . . . . . . 9

TEX. R. APP. P. 44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

TEX. R. APP. P. 47.1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

TEX. R. APP. P. 49.9.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

TEX. UNIFORM TRADE SECRETS ACT § 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

x
The Case

This case litigates claims for breach of fiduciary duty and fraud between 

ERI Consulting Engineers, Inc., and its current sole owner, Larry Snodgrass, on 

the one hand, and the company’s former 50% co-owner, Mark Swinnea, on the 

other. 

After a bench trial, the Honorable Cynthia Stevens Kent, former presiding 

Judge of the 114th District Court, found for ERI and Snodgrass, on claims for 

fraud and fiduciary duty. ERI Consulting Eng’gs, Inc. v. Swinnea, 318 S.W.3d 867, 

871 (Tex. 2010). Judge Kent rendered judgment awarding $720,000 as 

disgorgement of the consideration Swinnea received in the buyout of his ERI 

stock, together with $300,000 in lost-profit damages. 2 CR 173-74.1 Snodgrass 

recovered another $1,000,000 in punitive damages. Id. 

Swinnea appealed. In an opinion by Justice Griffith, this Court initially 

rendered a take-nothing judgment, on the basis that there was no evidence of 

any actual damage. Swinnea v. ERI Consulting Eng’gs, Inc., 236 S.W.3d 825, 832 

(Tex. App.-Tyler 2007). On further review, the supreme court affirmed in part 

and reversed in part: (1) it affirmed the holding that ERI and Snodgrass take 

noting on civil conspiracy claims against Swinnea’s company, Brady 

Environmental; (2) it reversed and remanded the buyout consideration awards 

1 All clerk’s record cites are cites to the clerk’s record from the original trial. 

1

 
for the trial court to apply the equitable disgorgement facts set out in Burrow v. 

Arce, 997 S.W.2d 229 (Tex. 1999); and, (3) finding some evidence of about 

$178,000 in lost profits, reversed and remanded the lost profits issue together 

with “any remaining issues concerning the trial court’s initial award of $1 million 

in punitive damages . . .” ERI Consulting Eng’gs, Inc. v. Swinnea, 318 S.W.3d 867, 

889, 882 (Tex. 2010).

Next, this Court, in a second opinion by Justice Griffith, suggested a 

remittitur of $121,398.95 in lost profit, which the plaintiffs accepted (reducing 

actual damages to $178,601.25 in lost profits). ERI Consulting Eng’gs, 364 S.W.3d 

at 422. The Court affirmed the $1 million punitive-damage award to Snodgrass--

-without addressing Swinnea’s arguments that Snodgrass lacked the necessary 

actual-damage predicate and without addressing whether the award exceeded a 

constitutionally permissible ratio---even though the recovery now far exceeds the 

presumptive constitutional cap (a 4-to-1 ratio to actual damages).

On further remand, the trial court, the Honorable Christy Kennedy, has 

reinstated the same disgorgement that her predecessor initially awarded. She did 

not conduct a requested due-process review of punitive damages because she 

reasoned that this Court’s decision foreclosed that right.

Issues

1. May a corporate shareholder recover lost profits individually when the 

recovery is solely based on harm to a corporation? May such a 

2
shareholder recover punitive damages if he has no properly recovered

actual damages? And may the Court now address these matters, which it 

failed to address in its prior opinion in the case.

2. Should the punitive-damage award and the punitive disgorgement be 

remanded, for an aggregate analysis of compliance with common-law, 

statutory, and constitutional requirements, in light of the remitted and 

recharacterized actual damages?

3. Is the combination of a $1 million punitive-damage award and a $720,000 

punitive disgorgement statutorily or constitutionally excessive when actual 

damages are only $178,000 and the case does not involve death, grievous 

physical injury, financial ruin, or actions that endanger a large segment of 

the public?

4. Does a court err when it disgorges profits (such as, in this case, rental 

revenues) that were not obtained by wrongdoing?

5. Does concurrent recovery of both express punitive damages and punitive 

disgorgement violate principles forbidding double recovery of punitive 

damages?

6. Does it violate the one-satisfaction rule and other relevant principles to 

award a claimant attorney’s fees if the claimant’s greatest recovery is not in 

contract but is under a fiduciary-duty theory?

3
Facts

As the Court will recall from prior proceedings, Larry Snodgrass and 

Mark Swinnea owned equal interests in two business entities, ERI Consulting 

Engineers, Inc., and Malmeba Company, Ltd., which they operated together for 

ten years. 2 RR 21.2 Snodgrass and ERI then bought Swinnea’s ERI stock, in 

2001. PX6; 4 RR 129. ERI paid $497,500 in cash consideration while Snodgrass 

gave Swinnea Snodgrass’s half-interest in Malmeba, which owned the building 

ERI officed in. PX7.

Meanwhile, Chris Power, a key ERI employee who was restless to own his 

own company, was preparing to leave ERI. When Swinnea learned of Power’s 

intentions, he persuaded Power to remain at ERI. To satisfy Power’s desire for 

business ownership, the two men and their wives formed an abatement 

contractor, Air Quality Associates (AQA), which their wives owned and would 

operate. 2 RR 64. 

While ERI was a consulting company, in the business of handling 

abatement project design, bidding, and oversight, AQA instead handled the 

complimentary tasks typical of an abatement contractor. The relationship 

between the two types of businesses---consulting company and abatement 

2 Unless preceded by an “SH”, all record and exhibit cites are to the original trial record from 

2005. Any citation to the status hearing that occurred in November 2013 is preceded by “SH.”

4

 
contractor---was in respects similar to that of an architect and a building 

contractor. 

Almost immediately, AQA began winning competitive bids for ERIadministered projects. Merico, a Longview abatement contractor and AQA 

competitor, investigated AQA’s ownership, discovering Power’s and Swinnea’s 

involvement with the new company. 4 RR 136-41; 5 RR 10. (Power and Swinnea 

were board members and their wives were officers, with Power’s wife being 

AQA’s president. 2 RR 72, 79). Merico told Snodgrass it would sever its 

relationship with ERI unless he agreed to block AQA from bidding on ERIadministered projects. 5 RR 13. Pleased with the AQA relationship, Snodgrass 

refused. Id. So Merico stopped bidding ERI projects. Id. About the same time, 

the Swinneas exited AQA, selling out to Power and his wife.

AQA won many more ERI-administered abatement projects. And both 

companies---AQA and ERI---prospered. At ERI, corporate revenue doubled in 

the three years after Swinnea sold his stock. 4 RR 201. In 2004, the year before 

trial, ERI earned $800,000 in net profits---earning nearly twice the cash 

consideration paid for Swinnea’s stock, in just a single year. 4 RR 114. 

ERI’s accountant concluded the inevitable: Swinnea’s share of the 

business had been worth the consideration paid in the buyout. 4 RR 115. At the 

hearing before Judge Kennedy, on remand, Swinnea’s accounting expert, Nick 

Burkette, agreed. SH 73. Specifically, Burkette valued Swinnea’s share of the 

5
business in a range between $613,000 and $800,000. SH 73. Further, illustrating 

the company’s post-buyout prosperity, Burkette concluded that a year after the 

buyout, at the end of 2002, Swinnea’s ownership share had appreciated to 

$979,000, and he estimated that two more years later (i.e., at the end of 2003), the 

half interest ERI/Snodgrass had bought for $497,000 in cash consideration was 

worth just shy of $1.5 million. SH 73.

Meanwhile, the relationship between Swinnea and Snodgrass had 

deteriorated. Snodgrass ultimately fired Swinnea. (A part of the buyout called for 

Swinnea to remain at the company as an employee for several years.) Snodgrass 

and ERi then sued Swinnea, Malmeba, and Brady Environmental. 

In the bench trial, Swinnea’s counsel was outmatched and 

outmaneuvered. The result, as this Court knows, was a judgment (1) concluding

that Swinnea breached his fiduciary duty, committed fraud, and conspired with 

Brady, and (2) awarding over a million dollars in what the court characterized as 

actual damages---lost profits and disgorgement of buyout consideration---as well 

as attorney’s fees and a million-dollar punitive-damage award to Sndograss.

Summary of the Argument

The $178,000 in lost ERI profit is the only actual damage recovered. 

Snodgrass, ERI’s shareholder, may not recover ERI’s lost profits, and thus his 

failure to recover proper actual damages dooms his recovery of punitive 

6
damages. Swinnea briefed this matter in the initial appeal. But the Court never 

reached it. The Court may and should do so now. 

This case also involves a $720,000 punitive disgorgement award. The 

award is punitive and not restitutionary because Swinnea has not reaped any 

windfall and thus has nothing needing to be restored. The evidence from both 

disdes’ accountants is that the value of Swinnea’s ERI stock supported the 

consideration given in exchange. Nonetheless, the trial court has reinstated the 

same punitive disgorgement award while this Court has upheld the punitive 

damages under a cursory analysis. No one has considered the punitive damages 

in light of either the reinstated disgorgement or the vast reduction in actual 

damages. 

Worse, this Court has short-circuited the statutory cap upon punitive 

damages---which rightfully sets the maximum total amount of punitive 

disgorgement and punitive damages at $356,000---and it has done so on an 

unbriefed, sua sponte, ground for excepting this case from the statutory cap. Nor 

has any court analyzed the excessiveness of the combination of both punitive 

awards as measured against the U.S. Constitution’s due-process limitations on 

excessive punishment. Yet the awards are clearly excessive. Both awards exceed 

the 4:1 ratio of punitive damages to actual damages elicited by both the United 

States and Texas Supreme Courts as a benchmark maximum. And the case lacks

the factual underpinnings that would be required to break free of this benchmark 

7
(death, grievous physical injury, financial ruin, or actions endangering a large 

segment of the public).

And, finally, the recovery of attorney’s fees violate the one-satisfaction 

rule. Here, the plaintiffs’ greatest recovery comes under a fiduciary-duty theory, 

which is a non-fee-bearing claim..

Argument

I. Snodgrass should take nothing.

A. Because Snodgrass has proved no individually recoverable 

actual damages, he cannot recover.

A corporate shareholder like Snodgrass may not recover individually for a 

loss sustained only by the corporation. Wingate v. Hajdik, 795 S.W.2d 717, 719 

(Tex. 1990). The recovery must be the corporation’s, so that the damages can be 

available to pay the corporation’s creditors. Id. In other words, a corporate 

shareholder lacks standing to recover individually for a wrong done to the 

corporation--even if he is injured by that wrong, see Redmon v. Griffith, 202 S.W.3d 

225, 233 (Tex. App.-Tyler 2006, pet. denied), and even if a corporation only has 

one shareholder. Mossler v. Nouri, 2010 WL 2133940 at *3 (Tex. App.-Austin 

2010, pet. denied).

Here, ERI alone owns the cause of action under which lost profits were 

awarded because the sole evidence of lost profits derives from harm to the 

corporation (ERI’s loss of a customer). See Amended Additional Findings of 

8
Fact and Conclusions of Law, Findings of Fact ¶ 6a (“recovery of lost profits, 

alone, from the loss of the Merico relationship as actual damages . . .”). Because 

Snodgrass lacks standing to recover ERI’s lost profits, two things follow. First, 

the Court should reform the lost-profit award to eliminate Snodgrass as a 

recipient. And second, because Snodgrass has not recovered any proper actual 

damages, the court should also vacate the punitive-damage award, which has 

been rendered solely in Snodgrass’s favor. See Tex. Civ. Prac. & Rem. Code Ann. 

§ 41.004(a)(claimant seeking punitive damages must actually recover damages 

other than nominal damages); Doubleday & Co., Inc. v. Rogers, 674 S.W.2d 751, 

753-54 (Tex. 1984) (“Under Texas law, punitive damages are not recoverable as 

a general rule in the absence of actual damages”). It is really that simple.

B. The Court should have addressed Swinnea’s attacks on 

Snodgrass’s standing to recover ERI’s lost profits and 

punitive damages.

The Court was required to address all issues necessary to the rendition of 

complete relief. See State Bar of Texas v. Evans, 774 S.W.2d 656, 659 n. 5 (Tex. 

1989)(per curiam); Bradleys’ Elec., Inc., v. Cigna Lloyds Ins. Co., 995 S.W.2d 675 

(Tex. 1999) (per curiam) (requiring consideration of all points affording greatest 

relief). Swinnea on appeal challenged Snodgrass’s right to any recovery – be it 

actual or punitive damages – on the ground that any lost profit was solely 

9
recoverable by ERI. See Appellant’s Brief at xiii, 45-48 (Appendix C). The Court 

failed to address this claim-determinative argument. 

II. The Court should eliminate or revise the trial court’s disgorgement 

award.

Here, Swinnea received no extra or additional contractual consideration 

for his ERI stock as a result of any wrongdoing. As the undisputed evidence 

establishes, the consideration Mr. Swinnea gave up – his ERI stock – was worth 

as much as the consideration he received in return. And, the record is void of 

any metric suggesting that Swinnea’s conduct increased the sales price. In such 

circumstances, there is no need for disgorgement, whether as restitution or as 

punishment. Rather, if Swinnea was to be punished, it should have been solely 

through the award of punitive damages. There is no reason why a proper 

punitive-damage recovery would not fully serve the purposes of such awards. 

There has been a single award of actual damages–$178,000–conferred solely as 

compensation for the profits ERI lost from severance of the Merico 

relationship. So, it is fitting that there should be a single punitive award. 

The punitive disgorgement overlaps and duplicates the express punitive 

damages and is unnecessary.

10
A. If punitive disgorgement is to be allowed in this case, it is

subject to all recognized limitations on the recovery and 

amount of punitive damages.

1. Disgorgement that ventures beyond restoring a windfall 

is a species of punitive damage.

Primarily, the disgorgement remedy seeks to neutralize windfalls to 

defendants. RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT

§ 51 cmt. e (2011) (“the object of the disgorgement remedy—to eliminate the 

possibility of profit from conscious wrongdoing”); George P. Roach, Unjust 

Enrichment in Texas: Is it a floor wax or a dessert topping? 65 BAYLOR L. REV. 153, 248 

(Winter 2013) (“disgorgement is measured by the defendant’s gain and 

effectively seeks to restore the defendant to her original position”). A 

restitutionary disgorgement award would neutralize any windfall to Swinnea from 

the buyout: it would restore him as nearly as possible to the pre-buyout state. See 

Int’l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 576-77 (Tex. 1963) (limiting 

disgorgement to only the incremental windfall – not total consideration – gained 

because of improper conduct). If the recovery goes deeper, leaving a defendant 

like Swinnea with less than he brought into the transaction, it is a species of 

punitive damage. That is, when a court orders a defendant to disgorge more than 

his net profits, the disgorgement award becomes a punitive damage award. 

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 51 cmt h 

(“ . . . making the defendant liable in excess of net gains, results in a punitive 

11
sanction . . . ”); RESTATEMENT (THIRD) OF RESTITUTION & UNJUST 

ENRICHMENT §§ 42, 51 (2011) (disgorgement liability exceeding the defendant’s 

windfall crosses the border into punitive damages). 

Here, in holding that disgorgement is available in cases involving 

contractual or buy-out consideration, the Texas Supreme Court did not imply

that disgorgement may be used as a device purely to circumvent the traditional 

and constitutional limitations upon punitive-damage recoveries. To say otherwise 

would overturn decades of jurisprudence. See, e.g., Int’l Bankers Life Ins. Co., 368 

S.W.2d at 576-77.

2. The plaintiffs have been awarded a punitive 

disgorgement.

In this case, the disgorgement award is 100% a second punitive-damage 

award. After all, 

• there is no windfall in Swinnea’s favor to be disgorged in restitution;

• in promoting the award, the plaintiffs invoked punitive-damage principles;

• the award’s judicial analyses have all been under the analytical framework

applicable to punitive damages; and

• while restitution should generally be mutual3

, there has been no reciprocal 

restitution to Swinnea. 

3 See, e.g., Morton v. Nguyen, 412 S.W.3d 506, 509-10 (Tex. 2013)(discussing the “common alw 

requirement of mutual restitution”).

12

 
As the undisputed evidence proves, the legitimate consideration Swinnea 

gave up – principally his ERI stock – was worth as much as what he received in 

return and now has been ordered to disgorge. Swinnea’s conduct, however 

culpable the Court may perceive it to be, did not create any windfall such as 

occurs when a fiduciary takes a secret commission. See, e.g., Kinzbach Tool Co. v. 

Corbett-Wallace Corp., 160 S.W.2d 509 (Tex. 1942). Undisputed evidence shows 

that Swinnea’s shares of ERI stock were very valuable. Swinnea came by the 

shares honestly. And their value at the time of sale was derived honestly, 

accumulated through years of toil. As the undisputed proof shows, these shares 

were valued at or above the consideration paid to Swinnea in the buy out. Nor 

did Swinnea profit from his brief engagement with AQA.

Moreover, a proper restitutionary award would require ERI and Snodgrass 

to likewise restore the consideration received in exchange. Here, there has been 

no award returning reciprocal consideration.

Even if there would have been some identifiable windfall to Swinnea, the 

actual damages would fully offset it. This would eliminate any basis for 

restitutionary disgorgement. 

The restitutionary remedy serves to deprive the defendant of unjust 

gains, but it also has the effect of compensating the plaintiff to the 

extent of the award for any losses resulting from the appropriation. 

Similarly, an award of the plaintiff’s proven losses also has the 

effect of reducing the defendant’s unjust enrichment by the amount 

of the award. An award of the greater of the two remedies thus ordinarily 

serves the objectives of both forms of relief and best prevents double recovery. 

13
RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45 cmt c

(emphasis added).

Consequently, a plaintiff is generally entitled to recover the greater of (1) his own 

full loss or (2) the defendant’s windfall. RESTATEMENT (THIRD) OF UNFAIR 

COMPETITION § 45(1).

4 For this reason, when there are actual damages, the only 

unjust enrichment that may be recovered is that unjust enrichment “that is not 

taken into account in computing actual loss.” TEX. UNIFORM TRADE SECRETS 

ACT § 3; accord RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45 reporter’s 

note, cmt c. A plaintiff’s recovery of both her damages and the defendant’s 

profits would be “anomalous in restitution terms, constituting a punitive 

sanction.” RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 

42 cmt d (2011).

In these circumstances, the disgorgement cannot be considered as 

anything but a species of punitive-damage recovery. ERI essentially conceded 

this. Its arguments to the trial court in support of disgorgement didn’t identify 

any windfall and had nothing to do with neutralizing one. Instead, the pervasive 

theme was that Swinnea should be punished.

4 Accord Doug Dendleman, Measurement of Restitution, 68 WASH. & LEE L. REV. 973, 985 (citing 

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT ¶¶ 13-15, 40-43, 45-56) 

(Where the plaintiff is damaged and the defendant unjustly enriched, “the plaintiff may choose 

between compensatory damages and restitution”).

14

 
a. Being punitive and not restitutionary, the 

disgorgement is subject to all restrictions upon 

the recovery and amount of punitive damages.

Three things follow from the fact that the disgorgement here is a punitive 

damage. First, to be sustainable as a punitive-damage recovery, the conduct at 

issue must have been the source of an actual-damage award. Second, the 

disgorgement cannot overlap or duplicate another punitive-damage award. And 

finally, any disgorgement must be screened for excessiveness under Texas 

common law, statutory law, and the due-process clauses of the Texas and U.S. 

constitutions. Due process does not allow any such disgorgement except to the 

extent that the sum of disgorgement and any express punitive damages remains 

within a constitutionally permissible ratio in relation to the remitted and 

reconstituted actual damages. It cannot be any other way, or else these 

fundamental protections would be too easily avoided. 

The disgorgement in this case violates each of these principles.

B. Because no actual damages have been recovered in 

connection with the buy-out transaction, there is no legal 

basis for a punitive disgorgement.

While restitutionary relief, including restitutionary disgorgement, can be 

awarded even where there are no actual damages proved, this applies only if the 

award is in fact a restitutionary one. All punitive-damage awards, in contrast,

15
require a predicate recovery of actual damages, even where the punitive award is 

meted out in the form of a “disgorgement.”

Here, the buyout did not cause any actual damage. Therefore, any 

punitive-damage award tied to the buyout is improper.

C. Because the law will not support two punitive-damage awards 

for the same conduct, one or the other of the $1 million 

punitive damages or the $720,000 punitive disgorgement must 

go.

Even if each punitive award would have otherwise been sustainable, they 

could not both be recovered, because the law condemns “multiple punitive 

damages awards for the same conduct.” State Farm Mut. Auto. Ins. Co. v. Campbell, 

538 U.S. 208, 422, 123 S. Ct. 1513, 155 L.Ed.2d 585 (2003); Safeshred, Inc. v. 

Martinez, 365 S.W.3d 655, 664 (Tex. 2012). A court may award one punitivedamage recovery per injury. Allstate Ins. Co. v. Kelly, 680 S.W.2d 595, 606 (Tex. 

App.-Tyler 1984, writ ref’d n.r.e.) (recovery of both exemplary damages and 

treble damages amounted to an improper double recovery of punishment 

damages). As a result, disgorgement may not be awarded, in addition to punitive 

damages, when to do so results in double punishment. Int’l Telecharge, Inc. v. 

Bomarko, Inc., 766 A.2d 437, 442 (Del. 2000); see also U.S. v. Project on Gov’t 

Oversight, 572 F. Supp.2d 73, 77 (D.D.C. 2008); Miller v. Bank of Am., N.A., 326 

P.3d 20, 32-33 (N.M. Ct. App. 2013); Wecosign, Inc. v. IFG Holdings, Inc., 845 F. 

Supp.2d 1072, 1084 (C.D. Cal. 2012).

16
While disgorgement can sometimes co-exist with punitive damages, in 

such cases the disgorgement should be strictly limited to merely neutralizing the 

defendant’s windfall. It cannot spill into duplicative punishment for the same 

conduct. Campbell, 538 U.S. at 423. Because the disgorgement in this case is 

solely punitive, either it or the separate punitive-damage award must give way.

III. Because the $1 million punitive-damage award and the punitive 

disgorgement award have been entered without the required dueprocess analysis, the Court should, at a minimum, remand both 

awards for a proper excessiveness analysis. 

A. The reduction in actual damages requires a new analysis of 

the excessiveness of punitive damages.

The reduction in actual damages---a five-fold reduction in what the trial 

court perceived as actual damages when setting the punishment--requires a 

remand for a new and coordinated look at all exemplary-damage awards. Bunton 

v. Bentley, 153 S.W.3d 50, 53 (Tex. 2004) (per curiam). Indeed, any substantial 

“adjustment of compensatory damages” “requires reevaluation of the factors 

supporting an award of exemplary damages.” Id. Here, the actual damages have 

been reduced by roughly 80 percent. The initial punitive-damage award was 

rendered by a trial court that fictitiously construed the $720,000 in buy-out 

consideration as actual damages and thought the lost profits were about twice as 

much as actually was proved. The trial court formerly thought it was setting a 1:1 

ratio of punitive to actual damages. To award $1 million in express punitive 

17
damages, let alone $1.72 in total punishment, would not have been possible in 

this case---which does not involve death, grievous physical injury, or anything 

approaching economic calamity---had the trial court known that actual damages 

were only $178,000.

Being a species of punitive damage, the disgorgement in this case must be 

considered in connection with all other punitive damages when it comes to 

evaluating the awards against the applicable statutory and constitutional limits. 

Were the law to require anything less, the constraints on excessive punishment 

could be circumvented merely by dividing an excessive punishment into two 

smaller awards – one expressly termed punitive damages and another called 

forfeiture or disgorgement. 

Not only must each punitive award withstand isolated scrutiny, but the 

total of all such awards must satisfy all common-law, statutory, and 

constitutional due-process requirements. Anything less would be illogical. 

Because the disgorgement award is punitive and not restitution, it (together with 

any award of express punitive damages to Snodgrass) must be analyzed by the 

trial court as an initial matter and by this Court for constitutional excessiveness 

and compliance with the Krause factors. The trial court has not done so. 

Application of the Burrow factors, which have been applied to the disgorgement 

award in isolation, does not avoid analysis under the Krause factors or the 

statutory and constitutional requirements.

18
Despite clear Supreme-Court precedent requiring a due-process analysis, 

Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998); Tony Gullo 

Motors I, L.P. v. Chapa, 212 S.W.3d 299, 307 (Tex. 2006), no court has lifted a 

finger to consider whether the combined $1.72 million in punitive awards might 

be constitutionally excessive. They presumptively are because they far exceed the 

4:1 ratio that is the presumptive dividing line between permissible and 

constitutionally-invalid punishment.

Rather than consider the limits due process places upon a defendant’s 

punishment, once the supreme court had reversed in part on other grounds, 

Justice Griffith’s opinion perfunctorily invoked Alamo National Bank v. Krause

with no real attempt at analysis, solely in connection with the express punitive 

award to Snodgrass. When he did so, Justice Griffith

• failed to attempt any constitutional due-process analysis, 

• invoked an impermissible, sua sponte ground to avoid the statutory cap, and

• denied Swinnea any chance to brief any of these matters.

Justice Griffith’s discussion failed to acknowledge the effect of the lost-profits 

remittitur, the supreme court’s reconstitution of the disgorgement as other than 

actual damages, or even the fact that the latter award had been vacated and 

remained to be reassessed on remand. Worse, the Court’s decision has precluded

the trial court from conducting any punitive-damage analysis in light of the 

19
revised actual damages and the remanded disgorgement. That, of course, put the 

cart far in front of the horse, as even the plaintiffs acknowledged when they told 

the supreme court a due-process analysis of the award to Snodgrass occurring in 

isolation, before the punitive disgorgement could be assessed, would as a matter 

of law be “premature.” See Response to Petition for Review at 3-7 (attached as 

Appendix D).

To convince the supreme court to deny Swinnea’s petition for review---

which sought a due-process excessiveness analysis---ERI and Snodgrass argued

that such analysis should be reserved to the trial court on remand, to be 

performed in conjunction with the disgorgement-factor analysis. See Response to 

Petition for Review at 3-4 (“. . . the trial court will no doubt follow this 

Court’s instruction that a change in the underlying damage awards 

requires a new due process review”)(attached as Appendix D). The trial court, 

however, didn’t perform any excessiveness analysis---in part because it didn’t 

interpret this Court’s decision as allowing it to do so and in part because the 

plaintiffs reversed field. Despite their estoppel/admission, ERI and Snodgrass 

subsequently avoided a constitutional analysis of punitive damages, incorrectly 

telling the District Court that it need not engage the necessary excessiveness 

review because “[t]he Supreme Court and the Court of Appeals have disposed of 

the issues with regard to the lost profits and punitive damages.” See 1 RR 4 

20
(November 12, 2013 Hrg). Their prior position in the appellate courts renders 

the latter position void.

By persuading the supreme court into denying review through an 

argument that the trial court would perform a due-process review, ERI and 

Snodgrass are estopped from arguing against the propriety of such a review now. 

See Cleaver v. Cleaver, 140 S.W.3d 771, 775 (Tex. App.-Tyler 2004, no pet.) 

(“judicial estoppel requires only that a party take an affirmative position that is 

successfully maintained in the earlier proceeding, and that is contrary to the 

position it now seeks to invoke”).

The trial court did not set out to order punitive damages at a 5:1 ratio. 

Instead, it is highly likely that the trial court, knowing what everyone now knows 

about the modest level of actual damages---would today reshape the punitivedamage award more in keeping with established norms, if given a chance. This 

Court’s prior decision--affirming punitive damages notwithstanding the 

remittitur of lost profits and the recasting of the disgorgement award to reveal its 

punitive nature--has denied the trial court the chance to synchronize the 

punishment, if any, with the true harm. 

When actual damages have been reduced to only about 15% of their 

former amount, it should suggest taking a fresh look at the amount of punitive 

damages, unencumbered by the initial punitive award---an award that was 

21
molded by and bears the mark of the trial court’s initial, judicially-repudiated 

assessment of actual damages. 

A trial court that initially saw fit to punish Swinnea at what the court 

mistakenly thought was a 1:1 ratio would likely reformulate its view of the 

proper punishment in light of the reformulated actual damages. Most reasonable 

jurists in this circumstance would adopt the position famously attributed to John 

Maynard Keynes. When accused of a flip flop on economic policy, he is said to 

have replied: “When the facts change, I change my mind. What do you do, sir?” 

Here, the sine qua non in assessing the amount of punitive damages---actual 

damages---has changed dramatically. That the trial court initially saw a 1:1 ratio 

of punitive to actual damages as appropriate, today implies a total punishment in 

the range of $180,000. Judge Kennedy, the new trial judge, presumably also 

would conform the punitive damages to fit the true level of actual damages. So, 

the law, equity, and basic principles of fairness all say the trial court should be 

afforded the opportunity to evaluate punitive damages anew, armed with 

accurate knowledge of (1) the true actual damages, (2) the disgorgement award’s 

status as a punitive-damage award, and (3) the necessity to measure propriety of 

the combination of all punitive awards (disgorgement and express punitive 

damages) against the applicable legal, statutory, and constitutional yardsticks. 

The punitive-damage award that this Court has affirmed is erroneous 

because it arises from an erroneous trial-court analysis. The trial court’s 

22
disgorgement analysis is of course erroneous because, among other things, it 

does not consider the disgorgement in context of the total punitive damages, 

including the award to Snodgrass, and does not acknowledge that the 

disgorgement would be subject to the traditional protections against excessive 

punitive damages. 

This assuredly caused the rendition of an improper judgment, and is thus 

reversible. TEX. R. APP. P. 44. It cannot be cured or papered over by appellate 

review purporting to pronounce the punitive-damage amount to be within a 

range that is statutorily and constitutionally permissible under the correct facts. 

The punitive awards must be vacated and remanded because they rest on an 

improper analysis, in circumstances that don’t allow the Court to find the error 

harmless. It is simply not possible to say with any assurance that the trial court 

would again issue a million dollar punishment on top of a $720,000 punitive 

disgorgement (for a total of $1.72 million in punishment) now, in this $178,000 

damage case, simply because its predecessor issued a million dollars in total

punishment when actual damages were purported to be $1,020,000.

When the actual damages were reduced fivefold, it triggered the 

requirement for a constitutional due-process review. Bunton, 153 S.W.3d at 53. 

Ever since, Swinnea has sought such a review. And when it seemed in their 

interest to do so, even the plaintiffs agreed such a review was required in the trial 

court. Respectfully, the Court should have afforded Swinnea the prior 

23
opportunity to brief the constitutionality of punitive damages in light of the 

major appellate reduction in underlying actual damages. Id. Now, a remand to 

afford the trial court the chance to reevaluate the combined punitive awards is 

required, and would be required even had the current punitive-damage amount 

been constitutionally sustainable. Id.; See Moore v. Jet Stream Invs., Ltd., 261 S.W.3d 

412, 432 (Tex. App.-Texarkana 2008, pet. denied) (remanding to the trial court 

to reconsider attorney’s fee award in light of modified damage award).

Because this complaint did not exist before appeal but arises from this 

Court’s judgment, and because ERI shooed off supreme-court review with its 

promise of a forthcoming, actual due-process review of the punitive damages, 

this complaint is fair game for this appeal. Bunton, 153 S.W.3d at 53; TEX. R. APP.

P. 49.9.

The punitive awards must be vacated and remanded for a proper analysis. 

IV. The $1 million punitive-damage award and the punitive 

disgorgement award necessarily are excessive, both individually and 

collectively.

A. The disgorgement award is excessive insofar as it requires 

Swinnea to return monies he did not come by in the buyout.

A court may not disgorge profits that were not obtained as a result of 

wrongdoing. Boyer v. Wilmington Materials, Inc., 754 A.2d 881, 907 (Del. Ch. Ct 

1999); Commodity Futures Trading Comm’n v. Sidoti, 178 F.3d 1132, 1137-38 (11th

Cir. 1999). The courts must therefore distinguish between those profits that are 

24
obtained through wrongdoing (and thus are disgorgeable) from those that are 

not. S.E.C. v. First City Fin. Corp., Ltd., 890 F.2d 1215, 1231 (D.C. Cir. 1989); see 

also RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 51, cmt. 

f (2011). The recovery in this case does not do so. Rather, it confiscates 100% of 

the rentals ERI paid Swinnea to lease office space, even though half of this sum 

is rentals earned on the 50% interest Swinnea acquired in the leased premises years before the 

events at issue. The latter amount, totaling $66,500, is not disgorgeable under any 

circumstance.

B. Both punitive awards are excessive in relation to statutory 

limits.

1. The Court should reconsider and reverse its sua sponte 

decision to invoke an inapplicable exception to the 

statutory cap on punitive damages.

Today, Swinnea labors under $1.72 million burden of punitive awards---$1 

million in punitive damages to Snodgrass and $720,000 in punitive disgorgement. 

Per Section 41.008 of the Civil Practice and Remedies Code, these awards 

cannot legally exceed about $356,000 (two times economic damages) in 

combination. 

25
a. When the Court invoked a cap-busting exception 

to affirm, it rendered an improper, sua sponte

decision.

Notwithstanding the facially applicable statutory punitive-damage cap, this 

Court affirmed the entire $1 million in express punitive damages based on a 

determination that the cap could be disregarded because the trial court 

supposedly found “the type of conduct described in” one of the section 

41.008(c) cap-busting exceptions (the subsection 41.008(c)(11) exception for the 

felony offense of securing execution of a document by deception). Swinnea, 364 

S.W.3d at 424. This was wrong. It not only afforded Swinnea no chance to brief 

the issue of the statutory cap (or the issue of excessiveness in light of the 

reduction in actual damages and reconstitution of disgorgement) but it violated 

an important prohibition on sua sponte rulings.

Respectfully, the issue of the cap-busting statute was never the Court’s to 

decide. A court of appeals may not render a decision sua sponte upon an issue that 

no party has raised or briefed. Pat Baker Co. v. Wilson, 971 S.W.2d 447, 450 (Tex. 

1998)(per curiam); Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993). This is 

axiomatic. Here, no one raised an issue of any cap-busting exception. So the 

issue was not on the Court’s table.

At a minimum, if the Court intended to address the exception’s potential 

application, it should have afforded Swinnea notice and a prior opportunity to 

brief the issue (including its preservation). Now, the Court should vacate its 

26
pronouncements about the exception and should instead render judgment that 

the statute does not apply to the conduct at issue or, alternatively, does not apply 

to the punitive damages awarded here because they necessarily relate to conduct 

that does not support any cap-busting exception.

b. There has been no cap-busting offense.

This Court has applied the statutory exception for securing documents by 

deception far too broadly. The legislature painstakingly has limited the 

availability and magnitude of punitive damages, not once, but three times. Bill 

Analysis, SB 25 (April 5, 1995); see Acts of April 11, 1995, 74th Leg., R.S., ch.19, 

1995, 74th Leg., R.S., ch. 19, 1995 Tex. Gen. Laws 108, 108-113 (amended 2003). 

At any of these times, the legislature could have declared fraudulent inducement 

exempt from the statutory cap, but it did not do so. Instead, it enacted Section 

41.008(c), identifying specifically-enumerated criminal offenses. Section 

41.008(c) is a narrow provision, as evidenced by the infrequency in which courts 

have applied it. Conversely, the punitive-damage cap is far-reaching. This court’s 

decision not only contradicts the proper statutory intent but invites others to 

attempt similar end runs at the statutory cap, through other tort causes of action.

Fraudulent inducement and securing a document by deception are 

different, albeit they implicate potentially overlapping conduct. Fraudulent 

inducement is a particular species of fraud arising in the context of a contract 

27
and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 

S.W.3d 795, 798-99 (Tex. 2001). Securing execution of documents by deception 

focuses more sharply on situations where the gist of the culpable activity is an 

undertaking to obtain execution of a document by deceptive means–typically a 

check or authorization for government benefits. See, e.g., TEX. ATTY. GEN. OP.

NO. MW-582 (1983) (fraudulently obtaining food stamps). Here the buyout 

transaction is papered by documents, but they are not the focus of the 

fraudulent-inducement claim.

If Swinnea’s conduct constitutes securing execution of documents by 

deception, then every time a seller omits to disclose a material fact in connection 

with a transaction that happens to be memorialized by a document, it would 

abrogate the statutory cap on punitive damages in such widely-litigated matters 

as statutory fraud in a real-estate transaction. But that is not what prior courts 

have concluded. E.g., Glazener v. Jansing, No. 03-02-00796-CV, 2003 WL 

22207226, *6 (Tex. App.-Austin Sept. 25, 2003, no pet.) (cap applied to statutory 

fraud claim).

Swinnea started a business that competed with an ERI customer and for a 

while kept that fact from Snodgrass. That may perhaps breach a fiduciary duty. 

But, it is a far cry from conduct that criminal offenses takes aim at–hoodwinking 

a victim into signing a check, deed, or the like. The documents in this case were 

freely negotiated, reviewed, and signed in an ordinary closing, after consultation 

28
with counsel. They are incidental to the current issues. The gist of the acts and 

the gist of the plaintiffs’ claims does not focus on the securing of documents. 

This distinction cannot be stressed enough.

If the conduct alleged here---garden-variety fraudulent inducement---

sustains a cap-busting exception, then fraudulent inducement will never be 

subject to the legislative caps on punitive damages. That surely cannot be the 

law.

This court’s decision raises concerns regarding fair notice. It is not at all 

apparent that civil or tort allegations of secretly forming a new 

vendor/contractor would, if proved, make Swinnea guilty of a felony, let alone 

strip away the statutory cap protecting him against punitive damages exceeding 

two times Snodgrass’s individually recoverable economic damages. To afford fair 

notice and procedural due process, a claimant wishing to avoid the statutory cap 

should be required to reveal that intention in a pleading that identifies an alleged 

cap-busting criminal offense. Marin v. IESI TX Corp., 317 S.W.3d 314 

(Tex.App.—Houston [1st Dist.] 2010, pet. denied) (holding it enough to plead 

facts that in retrospect could be said to constitute the criminal elements).

29
c. Because the criminal offense was not the subject 

of findings in the trial court, there is no basis for 

busting the statutory punitive-damage cap.

To bust the statutory cap on exemplary damages, Snodgrass needed to 

secure trial court findings that Swinnea committed the criminal offense—that he 

secured execution of a document by deception. See McCullough v. Scarbrough, 

Medlin & Associates, Inc., 435 S.W.3d 871, 912 (Tex. App.-Dallas 2014, pet. 

denied). It should not be enough that the trial court issued broad findings that 

this Court then sua sponte and ex-post-facto pronounced as supporting the offense. 

In McCullough, in contrast, the Charge actually submitted the offense to the jury 

(theft in that case). Here, however, ERI and Snodgrass failed to request, 

propose, or secure any finding that Swinnea committed the elements of the 

criminal offense.

d. Because no actual damages have been awarded 

in connection with the cap-busting conduct, 

there is no predicate for an uncapped punitivedamage recovery.

The mere existence of one liability theory that is similar to a cap-busting 

offense does not lift the statutory cap for other conduct potentially supporting 

punitive damages, contrary to the Court’s implicit presumption. If a cap-busting 

exception is to be applied, it should govern only insofar as the punitive damages 

actually punish the alleged cap-busting conduct (here, fraudulent inducement of 

the buyout, that is, the loss to ERI/Snodgrass from having been induced into 

30
the buyout). There has been no recovery of any actual damage for such conduct. Rather, the 

lost-profits award arises solely from the formation of the abatement contracting 

company AQA, which caused ERI’s loss of the Merico business relationship. 

Further, a plaintiff asserting a punitive-damage-cap-busting offense 

should secure findings on the amount of damages attributable to the alleged capbusting conduct. Serv. Corp. Int’l v. Guerra, 348 S.W.3d 239, 252 (Tex. App.-

Corpus Christi 2009, pet. granted) (evidence of cap-busting offense could not be 

used to avoid statutory cap unless that conduct caused plaintiff’s actual damage), 

rev’d on other grounds, 348 S.W.3d 221 (2011). Snodgrass failed to do so.

Given that the only actual damages were sustained in connection with 

theories other than fraudulent inducement, it makes sense that most, if not all, 

punitive damages were likewise aimed at redressing other conduct. If the record 

does not conclusively establish the applicability of the statutory cap on punitive 

damages, the Court should consider remand to the trial court, to reassess 

punitive damages and identify which, if any, punitive damages have been 

awarded in connection with the buyout (for which there are no supporting actual 

damages) and which have been awarded for Swinnea’s AQA involvement (which 

is, as a matter of law, subject to the statutory cap). 

31
e. Because the disgorgement awarded is punitive, it 

must be aggregated with any punitive-damage 

recovery and the total subjected to a single 

statutory cap.

As already stated, the law obviously requires that all punitive awards pass 

the same statutory and constitutional muster. This means that if the punitive 

damages in favor of Snodgrass survive, the award must be aggregated with the 

punitive disgorgement award and the combined total must be subjected to a 

single statutory cap. That is, the total of these combined awards cannot exceed 

two times actual damages or approximately $356,000.

C. The awards violate the Krause factors and are excessive in 

relation to due-process limitations. 

Due Process. Exemplary damages are subject to an ultimate federal 

constitutional check for exorbitance. Tony Gullo Motors I, L.P., 212 S.W.3d at 307. 

Even if an assessment of exemplary damages is not deemed excessive under 

governing state law, it may violate a party’s substantive due process right to 

protection from “grossly excessive” exemplary damage awards. Khorshid, Inc. v. 

Christian, 257 S.W.3d 748, 767 (Tex. App.-Dallas 2008, no pet.). 

The United States Supreme Court has concluded that four times the 

amount of compensatory damages is close to the line of constitutional 

impropriety for exemplary damages. Tony Gullo, 212 S.W.3d at 308. Here, both 

punitive damage awards ($1 million punitive damage award and punitive 

32
disgorgement award) exceed the 4:1 ratio ($1 million to $178,000 equals 6 to 1 

ratio; $720,000 to $178,000 equals 4.04 to 1). To push punitive damages past the 

4:1 ratio would “seem[] a [constitutional] stretch” that (1) would “leave[] no 

room for greater punishment in cases involving death, grievous physical injury, 

financial ruin, or actions than endanger a large segment of the public” and (2) 

could not “be squared with [the Texas Supreme Court’s] on-point Tony Gullo 

Motors I, L.P. v. Chapa decision, another ‘scheme of deception’ case” in which the 

Texas Supreme Court held that a ratio of 4.33 to 1 exceeded constitutional 

limits. Tony Gullo, 212 S.W.3d at 308.

While it is true that a rigid ratio of 4:1 is not universally required, the U.S.

Supreme Court has stated that “ratios greater than those we have previously 

upheld may comport with due process where ‘a particularly egregious act has 

resulted in a small amount of economic damages.’” Bennett v. Reynolds, 315 

S.W.3d 867, 879 (Tex. 2010)(quoting State Farm Mut. Auto. Ins. Co. v. Campbell). 

This exception, however, does not apply here because $178,000 is not a small 

amount of economic damages. See Bennett, 315 S.W.3d at 879 (approximately 

$6,000 award was not small amount of exemplary damages for purposes of 

exception).

Here, the harm is purely economic, does not approach the level of the 

punitive award, and was mostly, if not completely, offset by profit obtained 

through the AQA relationship. Properly understood, the case reflects only injury 

33
to the corporation, ERI, a party to which the trial court found no need of 

awarding any express punitive damages at all. If it would have been possible to 

uphold a punitive-damage award to Snodgrass, who has not personally sustained 

a recoverable loss, it would nonetheless be impermissible to sustain any such 

award in the amount of $1 million under the mere guise of the freewheeling 

“reprehensibility exception.” Yet that is precisely what Justice Griffith’s analysis 

on the Court’s behalf does. In the process, it “subvert[s] the constraining power 

of the ratio guidepost.” Bennett, 315 S.W.3d at 879. 

This Court’s Kraus analysis in its 2012 opinion reached the wrong result.

Here, the harm was economic rather than physical. It was limited to dishonesty 

and deceit occurring in a business relationship. And, despite the trial court’s 

contrary findings, there is no evidence of any specific desire to harm the 

plaintiff. Just the opposite. Swinnea, in forming AQA, sought a prosperous, 

mutually beneficial relationship between the two companies, AQA and ERI.

Swinnea’s ERI stock was always worth what was paid for it. Chris Power 

had independent plans to leave ERI, but AQA’s formation prevented his 

departure. Only one ERI customer relationship, with Merico, was affected. 

AQA’s formation created an altogether new customer for ERI, to take Merico’s 

place. ERI had a choice to pick the relationship with AQA or a continued 

relationship with Merico. Merico worked only in the declining industry of 

asbestos remediation, while AQA’s interests and prospects were broader. Power 

34
continued to work for ERI and with AQA. The relationship between ERI and 

AQA was consensual, mutually beneficial, and grew rapidly. By all accounts, 

both companies prospered. ERI’s profits grew immensely after the buyout, with 

the increase in profit being many times larger than the Merico lost profit. And 

the Merico lost profit is fully compensated by the actual-damage recovery.

At bottom, Swinnea is being punished for helping form AQA when it 

appears ERI is pleased to maintain a business relationship with AQA. As 

between the parties, Swinnea is the only one who has not profited from AQA’s 

existence.

These are simply not the sort of conditions that support enormous 

punitive damages in the range of ten times actual damages. See e.g., Hernandez v. 

Sovereign Cherokee Nation Tejas, 343 S.W.3d 1162, 177-78 (Tex. App.-Dallas 2011, 

pet. denied); see also Preston Carter Co. v. Tatum, 708 S.W.2d 23, 25 (Tex. App.-

Dallas 1986, writ ref’d n.r.e.). In such circumstances, “the punishment assessed 

against [the defendant] should not be calamitous or ruinous.” Preston Carter Co., 

708 S.W.2d at 25. Preston Carter Co. is instructive. There, an award of exemplary 

damages of $300,000 was excessive when (i) the appellate court had reduced 

compensatory damages from $165,000 to $40,000 (creating a ratio of punitive 

damages to actual damages of roughly 7 1⁄2 : 1); (ii) the conduct did not spring 

from ill will or any specific desire to do harm to the plaintiff, (iii) the transaction 

35
was purely a business affair, and (iv) the loss was purely financial. Preston Carter 

Co., 708 S.W.2d at 25. 

Importantly, Justice Griffith’s analysis ignored the necessity to reserve room for 

punishment of the most egregious violations – which, unlike this case, involve serious 

personal injury, economic calamity, or actual and grievous harm to great 

numbers of people. Here, the sole harm not only is economic, but it doubtless 

has been offset (likely many times over) by profit ERI has obtained through the 

wildly successful AQA relationship, which ERI has embraced and continues to 

nurture and profit from, handsomely. ERI’s willing, longstanding acceptance of 

AQA and their prosperous long-term relationship together cannot be overemphasized in any excessiveness analysis of punitive damages.

Judge Kent, when she assessed punitive damages, must have thought she 

was acting well within the mainstream, assessing punitive damages at a 1:1 ratio 

(right at the mean of punitive-damage awards). Now, things are vastly different. 

The notion of $1,020,000 in actual damages has been shattered. The punitivedamages and punitive disgorgement approach an amazing 10:1 ratio to actual 

damages. Punishment this big is insupportable statutorily and constitutionally. 

V. The plaintiffs are not entitled to attorney’s fees.

The trial court’s judgment violates the one satisfaction rule. Under this 

rule, a plaintiff is entitled to only one recovery, even when his injury could be 

36
said to result from multiple culpable acts. Crown Life Ins. Co. v. Casteel, 22 S.W.3d 

378, 390 (Tex. 2000). The plaintiff may recover under his one best legal theory--

the one entitling him to the greatest relief. Boyce Iron Works, Inc. v. Sw. Bell Tel. Co., 

747 S.W.2d 785, 787 (Tex. 1988). Here, the plaintiffs’ greatest recovery is under 

a fiduciary-duty claim. Breach of fiduciary duty is not a fee-bearing claim. See W. 

Reserve Life Assurance Co. of Ohio v. Graben, 233 S.W3d 360, 377-78 (Tex. App.-

Fort Worth 2007, no pet.).

VI. The law of the case does not bar this Court from granting any of the 

relief Swinnea requests.

A conclusion reached by an intermediate appellate court does not 

bar reconsideration of the initial conclusion in a subsequent appeal, 

and the decision to revisit the conclusion is left to the discretion of 

the court under the particular circumstances of each case. City of 

Houston v. Jackson, 192 S.W.3d 764, 769 (Tex. 2006).

Under the law-of-the-case doctrine, questions of law decided on appeal

to a court of last resort will govern the case throughout its subsequent states. 

Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986). Under a corollary of the 

doctrine, an intermediate court of appeals will ordinarily follow its original 

decision in later appeals of the same case. Briscoe v. Goodmark Corp., 102 S.W.3d 

714, 716 (Tex. 2003). The point is to “narrow[] the issues in successive stage of 

the litigation,” so as to achieve the goal of “uniformity of decision as well as 

judicial economy and efficiency.” Hudson, 711 S.W.2d at 630. And yet this is not 

a doctrine that requires stubborn adherence, but only a matter of general 

37
practice. “A decision rendered on an issue before the appellate court does not 

absolutely bar reconsideration of the same issue on a second appeal. Application 

of the doctrine is discretionary, depending on the particular circumstances 

surrounding that case.” Briscoe, 102 S.W.3d at 716-17. Because the law of the case 

is required by neither the Constitution nor statute, it in fact “should be 

disregarded when compelling circumstances require redetermination of the point 

of law decided on the prior appeal.” Peden v. State, 917 S.W.2d 941, 956 (Tex. 

App.—Fort Worth 1996, pet. ref’d). Thus, this Court has authority to revisit 

rulings it made in this case on remand from the supreme court. And if on doing 

so the Court determines that its original decision of any issue is erroneous, the 

Court need not adhere to the erroneous ruling. Id. Indeed, the court’s duty “to 

administer justice under the law” is a much higher duty and clearly “outweighs 

[any secondary, minor] duty to be consistent.” Id. at 717, quoting Comm. Gen. Life 

Ins. Co. v. Bryson, 219 S.W.2d 799, 800 (Tex. 1949). 

In Briscoe, the supreme court upheld the appellate court’s discretion, on a 

second appeal, to reconsider and overturn its own prior decision. Briscoe, 102 

S.W.3d at 717 (“Finding clear error in its first decision, [the court of appeals] had 

the power to overturn that first decision on the second appeal. . . . Because its 

first decision was clearly erroneous, the law of the case doctrine did not apply.”).

Thus, this Court has authority to revisit both express and implied rulings from 

the prior appeal--such as its express rulings (a) busting the statutory cap on 

38
punitive-damage award and (b) affirming the $1million amount of punitive 

damages as well as the implied ruling denying Swinnea’s attack on Snodgrass’s 

standing to recover the actual damages necessary to upholding the punitive 

damages in his favor. 

In this case, the Court, upon remand from the Texas Supreme Court and 

without entertaining further briefing, affirmed a $1 million punitive-damage 

award in favor of Snodgrass, a claimant who clearly recovered no actual damages 

of his own and just as clearly lacked the standing to claim the right to recover 

ERI’s corporate lost profit. This has occurred even though Swinnea briefed 

these issues. The resulting error---the award of debilitating punitive damages by 

one who has no basis to recover them---is fundamental and inarguable. In Texas, 

“punitive damages are not recoverable as a general rule in the absence of actual 

damages.” Doubleday & Co., Inc. v. Rogers, 674 S.W.2d 751, 753-54 (Tex. 1984). 

And so far as we know, no American jurisdiction would sustain a punitivedamage recovery in this circumstance. 

So the basis for revisiting the punitive-damage recovery is compelling. 

And, in fact, the matter of Snodgrass’s punitive-damage recovery may not even 

implicate the law of the case, for two reasons: first, to the extent that it addresses 

a matter of Snodgrass’s standing, it is non-waivable and should always be within 

the Court’s reach. Second, it is not clear that law-of-the-case principles address 

issues that have not been expressly decided. 

39
All indications here are that the Court on remand simply failed to address 

Swinnea’s preserved, appellate-briefed attack on Snodgrass’s grounds for 

individually recovering punitive damages. Swinnea was entitled to a decision on 

the issue. TEX. R. APP. P. 47.1 (“the court of appeals must hand down a written 

opinion that . . . addresses every issue raised and necessary to final disposition of 

the appeal.) The Court should decide these issues and throw Snodgrass’s 

recoveries out.

What is more, the supreme court’s denial of Swinnea’s petition for review 

is irrelevant here. See, e.g. Trevino v. Turcotte, 564 S.W.2d 682, 685 (Tex. 1978) 

(holding that a court of appeals’ conclusion was not binding under the law of the 

case doctrine when the petitioner’s first writ of error was denied by the Supreme 

Court “writ refused, no reversible error”); see also City of Houston, 192 S.W.3d at

769 (citing and approving Trevino); accord Hopwood v. State of Texas, 236 F.3d 256, 

274 (5th Cir. 2000) (“within the law of the case framework, it is not clear error for 

a court of appeals to tackle legal questions that the Supreme Court has declined 

to answer: lower courts are bound only by the Supreme Court holdings and not 

by the Court’s election, either express or implied, to leave open particular legal 

questions”).

40
Conclusion and Prayer

Mark Swinnea is not arguing that buyout consideration can never be 

disgorged. But if such disgorgement is to be awarded here, it is a species of 

punitive damage and must be treated as such. Such awards must be subject to 

the principles forbidding duplicative and excessive punitive damages, including a 

review for compliance with constitutional due process. 

The punitive damages to Snodgrass, and the duplicative, punitive 

disgorgement violate the common law as well as the statutory and constitutional 

prohibitions against excessive punitive damages.

WHEREFORE, PREMISES CONSIDERED, the Court should 

eliminate Snodgrass’s recovery of ERI’s lost profit, eliminate both plaintiffs’ 

recovery of attorney’s fees, eliminate or reduce the disgorgement, eliminate or 

reduce the $1 million award of punitive damages, or alternatively remand for a 

trial court evaluation of the aggregate of the punitive recoveries, as may be 

appropriate. Of course, Swinnea prays for all other relief, in whatever form, that 

may be proper under the grounds and arguments in this appeal.

41
Respectfully submitted,

 /s/ Greg Smith

Greg Smith 

State Bar No. 18600600

Nolan Smith

Texas Bar No. 24075632

RAMEY & FLOCK, P.C.

100 East Ferguson, Suite 500

Tyler, TX 75702

Telephone: (903) 597-3301

Facsimile: (903) 597-2413

gsmith@rameyflock.com

nolans@rameyflock.com

Michael E. Gazette

Law Office of Michael E. Gazette

100 East Ferguson, Suite 1000

Tyler, TX 75702

Telephone: (903) 596-9911

Facsimile: (903) 596-9922

megazette@suddenlink.com

COUNSEL FOR APPELLANT,

J. MARK SWINNEA

42
Certificate of Service

The undersigned certifies that a copy of the above and foregoing 

document was served upon counsel for Appellees in accordance with the 

applicable Texas Rules of Civil Procedure on this the 11th day of May, 2015, on 

the following:

Via email drace@icklaw.com

Deborah Race

Ireland, Carroll & Kelley, P.C.

6101 S. Broadway, Suite 500

Tyler, TX 75703

Via email mahatchell@lockelord.com

Mike A. Hatchell

Locke Lord, LLP

100 Congress Avenue, Suite 300

Austin, TX 78701

Via email randerson@gillenanderson.com

Roger W. Anderson

Gillen & Anderson

613 Shelley Park Plaza

Tyler, TX 75701

 /s/ Greg Smith

Greg Smith

43
CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of TEX. R. APP. P.

9.4 because it contains 8,668 words, excluding the parts of the brief 

exempted by TEX. R. APP. P. 9.4(i)(2)(B).

2. This brief complies with the typeface requirements of TEX. R. APP. P.

9.4(e) because it has been prepared in the proportionally spaced 

typeface using Word Perfect X5 in 14 point Times New Roman font.

Dated: May 11, 2015.

/s/ Gregory D. Smith

GREGORY D. SMITH

44
No.12-14-00288-CV

In the Twelfth Court of Appeals

Tyler, Texas

J. MARK SWINNEA

Appellant

v.

ERI CONSULTING ENGINEERS, INC.

AND LARRY SNODGRASS

Appellees

Appealed from the 114th Judicial District Court

Smith County, Texas

APPENDICES

A. Amended Judgment

B. Amended Additional Findings of Fact

C. Excerpt from Appellant’s Original Brief

D. Excerpt from Response to Petition for Review in Cause No. 12-0241