Fourth Court of Appeals

San Antonio, Texas

OPINION

No. 04-14-00606-CV

ARGO GROUP US, INC., Colony Management Services, Inc., Colony Insurance Company, 

Colony National Insurance Company, Colony Specialty Insurance Company, Colony Agency 

Services, Inc., and Argo Group International Holdings, Ltd.,

Appellants

v.

Louis D. Levinson, International Specialty Group, Inc., Guilford Insurance Company, 

Louis D. LEVINSON, International Financial Group, Inc., Guilford Specialty Group, Inc., 

Guilford Insurance Company, and The Burlington Insurance Company,

Appellees

From the 224th Judicial District Court, Bexar County, Texas

Trial Court No. 2014-CI-09550

Honorable Antonia Arteaga, Judge Presiding

OPINION ON REHEARING

Opinion by: Sandee Bryan Marion, Chief Justice

Sitting: Sandee Bryan Marion, Chief Justice

Karen Angelini, Justice

Patricia O. Alvarez, Justice

Delivered and Filed: June 10, 2015

AFFIRMED

This is an appeal from the trial court’s denial of appellants’ request for a temporary 

injunction. On January 14, 2015, we dismissed the appeal as moot. Appellants filed a motion for 

rehearing. In an order dated April 27, 2015, this court granted the motion for rehearing, withdrew 

our opinion and judgment of January 14, 2015, and submitted the appeal for oral arguments. After 
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considering the merits of the appeal, we cannot conclude the trial court abused its discretion; 

therefore, we affirm.

BACKGROUND

Argo Group US, Inc. and other entities wholly-owned by Argo Group US, Inc. 

(collectively, “Argo”) are in the business of underwriting excess and surplus lines insurance, as 

well as other types of insurance. Argo employed Louis Levinson as president of Argo’s excess 

and surplus division. Levinson’s employment agreement with Argo contained a restrictive 

covenant that prohibited him from being employed, engaged, or otherwise interested in the 

business of a competing insurance company for one year after leaving Argo. Levinson resigned 

from Argo effective August 25, 2013. 

The day after Levinson left Argo, International Financial Group, Inc. (“IFG”), which 

competes with Argo in the excess and surplus market, issued a press release stating Levinson 

agreed to become president of an IFG affiliate upon expiration of Levinson’s noncompetition 

period. On June 16, 2014, Argo sued Levinson and others asserting Levinson violated the 

restrictive covenant, raising several causes of action, and requesting temporary and permanent 

injunctive relief. Following a hearing on Argo’s request for a temporary injunction, the trial court 

denied the request for injunctive relief on August 18, 2014. The one-year restriction contained in 

the covenant not to compete expired on August 25, 2014, the same day appellants filed their notice 

of appeal in this court.

In a single issue on appeal, Argo asserts the trial court erred in denying its request for a 

temporary injunction.

STANDARD OF REVIEW

In this interlocutory appeal, our review is limited to determining whether the trial court 

abused its discretion in denying Argo’s request for a temporary injunction. Davis v. Huey, 571 
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S.W.2d 859, 861-62 (Tex. 1978). The merits of the underlying litigation are not presented for our 

review. Id. at 861. A clear abuse of discretion occurs when the trial court’s decision is so arbitrary 

and capricious that it amounts to clear error. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) 

(orig. proceeding). Because a trial court has no discretion in determining what the law is or 

applying the law to the facts of the case, the failure to analyze or apply the law correctly constitutes 

an abuse of discretion. Id. at 840. 

When reviewing the evidence in the context of an abuse-of-discretion standard, we engage 

in a two-pronged inquiry: (1) whether the trial court had sufficient information on which to 

exercise its discretion; and if so, (2) whether the trial court erred in the application of discretion; 

that is, whether based on the evidence, the trial court made a decision that was neither arbitrary 

nor unreasonable. In re Rogers, 370 S.W.3d 443, 445 (Tex. App.—Austin 2012, orig. proceeding); 

see Zeifman v. Michels, 212 S.W.3d 582, 588 (Tex. App.—Austin 2006, pet. denied). 

With regard to factual matters, an abuse of discretion occurs if the record establishes that 

the “trial court could reasonably have reached only one decision.” Walker, 827 S.W.2d at 840. 

We review the evidence in the light most favorable to the trial court’s order and indulge all 

reasonable inferences in favor of the decision. Center for Econ. Justice v. American Ins. Ass’n, 39 

S.W.3d 337, 344 (Tex. App.—Austin 2001, no pet.). When, as here, the trial court does not file 

findings of fact or conclusions of law, we will uphold the order on any legal theory supported by 

the record. Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 577 (Tex. App.—Austin 

2000, no pet.).

ANALYSIS

Ordinarily, to obtain a temporary injunction, a plaintiff must plead and prove (1) a cause 

of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, 

imminent, and irreparable injury in the interim. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 
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204 (Tex. 2002). On appeal, Argo asserts it was not required to show irreparable injury because 

it showed a violation of a statute that authorizes injunctive relief.

Argo sued pursuant to Texas Business and Commerce Code section 15.51, which provides 

that “a court may award the promisee under a covenant not to compete damages, injunctive relief, 

or both damages and injunctive relief for a breach by the promisor of the covenant.” TEX. BUS. &

COM. CODE ANN. § 15.51(a) (West 2011). The criteria for enforcing a covenant not to compete 

are contained in section 15.50:

Notwithstanding Section 15.05 of this code, and subject to any applicable provision 

of Subsection (b), a covenant not to compete is enforceable if it is ancillary to or 

part of an otherwise enforceable agreement at the time the agreement is made to the 

extent that it contains limitations as to time, geographical area, and scope of activity 

to be restrained that are reasonable and do not impose a greater restraint than is 

necessary to protect the goodwill or other business interest of the promisee.

Id. § 15.50(a).

The criteria for enforceability of a covenant not to compete provided by section 15.50 “and 

the procedures and remedies in an action to enforce a covenant not to compete provided by Section 

15.51 of this code are exclusive and preempt any other criteria for enforceability of a covenant not 

to compete or procedures and remedies in an action to enforce a covenant not to compete under 

common law or otherwise.” Id. § 15.52.

Based on the preemption language contained in section 15.52, Argo asserts that to obtain

a temporary injunction it was only required to establish the criteria set forth in section 15.50(a), 

which does not include a showing of irreparable harm. Argo relies on three opinions from the 

Dallas Court of Appeals to support its argument that section 15.52 applies to both temporary and 

permanent injunctions. See McNeilus Cos. Inc. v. Sams, 971 S.W.2d 507 (Tex. App.—Dallas 

1997, no pet.); Hilb, Rogal & Hamilton Co. of Tex. v. Wurzman, 861 S.W.2d 30 (Tex. App.—
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Dallas 1993, no writ); Recon Exploration, Inc. v. Hodges, 798 S.W.2d 848 (Tex. App.—Dallas 

1990, no writ).

However, in 2012, the Dallas Court of Appeals noted that although these cases “do contain 

dicta suggesting the Act’s enforceability requirements supercede those under the common law for 

injunctive relief, we have never held the Act eliminates the requirement that an applicant show 

irreparable harm to obtain a temporary injunction based on a covenant not to compete.” Primary 

Health Physicians, P.A. v. Sarver, 390 S.W.3d 662, 664-65 (Tex. App.—Dallas 2012, no pet.). 

The Sarver court then joined its sister courts in holding that “the Act does not preempt the 

requirements for obtaining temporary injunctive relief.” Id. at 665 (citing EMSL Analytical, Inc. 

v. Younker, 154 S.W.3d 693, 695 (Tex. App.—Houston [14th Dist.] 2004, no pet.); Cardinal 

Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230, 239-40 (Tex. App.—Houston [1st Dist.] 

2003, no pet.); NMTC Corp. v. Conarroe, 99 S.W.3d 865, 867-68 (Tex. App.—Beaumont 2003, 

no pet.)). The Sarver court agreed “with the reasoning of these cases that the Act governs only 

final remedies and does not supplant the common law requirements for a pretrial temporary 

injunction.” Id. Since Sarver issued in 2012, other Texas courts of appeals have agreed that 

evidence of a probable, imminent, and irreparable injury in the interim is a necessary element for 

a temporary injunction. See Tranter, Inc. v. Liss, No. 02-13-00167-CV, 2014 WL 1257278, at *7 

(Tex. App.—Fort Worth Mar. 27, 2014, no pet.) (mem. op.) (section 15.52 does not apply to 

temporary injunctions); Down Time-South Texas, LLC v. Elps, 13-13-00495-CV, 2014 WL 

1464320, at *7 (Tex. App.—Corpus Christi-Edinburg Mar. 20, 2014, no pet.) (mem. op.) 

(requiring proof of injury). We join these courts and hold that a plaintiff seeking a temporary 

injunction under section 15.51 must show a probable, imminent, and irreparable injury in the 

interim before trial. Therefore, we next turn to an examination of the evidence in support of the 
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trial court’s order, specifically whether Argo showed a probable, imminent, and irreparable injury 

in the interim before trial. 

Argo points to a covenant contained in Levinson’s Executive Employment Agreement, 

which states Argo has 

[t]he right and remedy to have such provisions [of the Agreement] specifically 

enforced by any court having equitable jurisdiction. The Employee specifically 

acknowledges and agrees that any breach or threatened breach of the provisions of 

Sections 8 or 9 hereof may cause irreparable injury to the Company and that money 

damages will not provide an adequate remedy to the Company.

Section 8 of the Agreement concerns the use of confidential information, and Section 9 

contains the restrictive covenant not to compete.

Argo relies on Wright v. Sport Supply Group, Inc., 137 S.W.3d 289 (Tex. App.—Beaumont 

2004, no pet.), to argue the above covenant is unrebutted evidence of irreparable harm. In Wright, 

the court addressed an agreement that contained a provision that remedies at law for any breach or 

attempted breach of the agreement would be inadequate and waived as a defense that either party 

had an adequate remedy at law. Id. at 293-94. The court noted it was “unaware of any Texas case 

holding that such agreements alone establish, for injunction purposes, that remedies at law will be 

inadequate, [but] the Texas Supreme Court long has recognized ‘a strong public policy in favor of 

preserving the freedom of contract.’” Id. at 294 (quoting Lawrence v. CDB Serv., Inc., 44 S.W.3d 

544, 553 (Tex. 2001)). The court considered the language of the agreement together with other 

evidence established by the record, including testimony that the plaintiff’s damages would have 

been difficult to calculate. Id. at 293-94. The court concluded, after viewing the evidence in the 

light most favorable to the trial court’s grant of the temporary injunction, that the trial court did 

not abuse its discretion in determining the plaintiff had no adequate remedy at law. See id. at 294.

We first note that Wright involved an appeal from the granting of a temporary injunction, 

whereas here, we must view the evidence in the light most favorable to the trial court’s denial of 
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the temporary injunction. Although the language in the agreement in this case may be some 

evidence that Levinson’s violation of the noncompete clause “may cause irreparable injury,” we 

must review the entire record, and we must do so in the light most favorable to the trial court’s 

order denying the temporary injunction.

On appeal, Argo relies on the testimony of two witnesses to establish a probable, imminent, 

and irreparable injury before trial. Arthur Davis, Argo’s current President of Excess and Surplus 

lines business, named several key Argo employees who left to work for IFG. When asked whether 

he “observed any harm . . . that has occurred to Argo’s E&S division” since Levinson left, Davis 

answered “absolutely.” When asked to describe the harm he observed, Davis replied as follows:

I think the - - the immediate harm is the departure of the employees themselves. 

These are talented, experienced people, which are difficult to acquire, who have a 

lot of industry and institutional knowledge that - - that they left - - that they took 

with them.

Reputationally, it creates some dissidence in the entire marketplace when a large 

number of people leave an individual market. And in that marketplace, I would say 

our retailers become concerned, retailers become concerned about placing business 

with us. Ultimately, policyholders become concerned, and our reinsurers are 

concerned. They’re all concerned because there’s a talent drain that happens.

. . . 

When asked if business had been lost, Davis replied, “yes.” On voir dire, Davis was asked 

the following:

Q. Mr. Davis, name one customer that Argo has lost as a result of the so-called 

dissidence in the market?

A. I think by customer I’m referring to policyholders and we have significantly 

less business now than we did before they left.

. . .

[The trial court asked:] Do you know the name of any policyholders?

A. I do not.

The trial court asked Davis to list the harms he observed so that the attorneys could then 

“delve into” them. Davis responded: loss of people, reputation, and confidential information; 
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concern and anxiety among Argo employees; and loss of business and potential loss of business. 

As to the loss of key employees, Davis said five senior managers left to work for IFG within the 

last twelve months, all during Levinson’s noncompete period. The loss of the employees caused 

harm to Argo’s reputation; a loss of experience, talent and institutional knowledge; a potential loss 

of confidential information; and loss of revenue, with premiums in the property department 

dropping by twenty to thirty percent. However, Davis admitted he did not know definitively 

whether the drop in revenue was due to the loss of a key employee. Davis said Argo has been 

unable to replace some of the employees, despite working with recruiters. He said this has caused 

the company to be more “inwardly focused,” instead of interacting with clients. In terms of Argo’s 

reputation, Davis stated customers, both wholesalers and reinsurance intermediaries, have become 

“alarmed at the significant number of departures wondering if there’s something underlying and 

causing these things to happen.” Davis testified the employee departures caused dissidence in the 

market because doubts about a company’s continued stability can result when large numbers of 

people leave an organization. Davis did not know whether any of the employees that left Argo 

had noncompete agreements with Argo, with the exception of one employee who had only a sixmonth noncompete agreement.

Regarding the harm from loss of confidential information, Davis admitted he was not aware 

of any specific confidential Argo information being provided to IFG. However, he testified that 

some of the employees who left and were now working for IFG had access to “the highest levels 

of confidential information, to the highest levels of a [sic] strategic plans and initiatives.” Davis 

said that because IFG is a competitor “transferring our confidential information into theirs would 

appear to be relatively straightforward.” Davis characterized the type of confidential information 

as the type of business Argo tries to attract or not attract, how it prices its business, and how it uses 

reinsurance relationships to mitigate potential losses.
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As evidence of Levinson using Argo’s confidential information in presentations with third 

parties in the past, Argo presented the testimony of Oleg Ilichev, the chief financial officer of 

Argo’s US Operations. Ilichev said that, in the fall of 2012, he attended a meeting with Levinson 

and a partner with the investment firm, Pine Brook Partners. The purpose of the meeting was to 

discuss a possible partnership with Pine Brook to start or acquire an insurance company. At the 

meeting, Levinson made a presentation to Pine Brook that included information about Argo’s E&S 

business. A chart prepared as part of the presentation showed various Argo employees—by their 

titles and not their names—to whom Levinson would look for the purpose of starting a new 

venture. Ilichev testified a similar meeting was held in May 2013 with another investment 

company named Crestview Partners.

Levinson admitted he was provided with confidential information while employed by 

Argo. He also admitted he understood he was prohibited from providing any services to IFG that 

were of the same or similar type that he provided to Argo for a period of one year after leaving 

Argo’s employment. He acknowledged that Argo would pay him $400,000 in exchange for his 

concessions under the agreement. Levinson denied he participated in hiring decisions at IFG after 

he left Argo or in preparing for the operation of IFG once he began his employment with IFG. 

Brett Reynolds, President of David Brooke Executive Search Firm, testified that in late 2013, Bob 

Linton, Chairman of IFG, retained him to recruit people to fill certain positions at IFG. He said 

he was first asked to call “someone at IFG property and communicate the fact that [Michael] 

Denton had [left Argo and] gone to IFG.” He testified he spoke to Greg Roblek, Dennis Doyle, 

and Tom Poland—all Argo employees—about an opportunity for a senior position in the property 

business of an unidentified company. He stated IFG did not tell him to call Roblek or Doyle. 

Linton later hired all three men to work for IFG. Reynolds said he was aware that Janice Coe, 

who had never been an Argo employee, had met with Levinson before she accepted a position with 
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IFG, but he did not set up her interview with Linton. Reynolds stated his only contact with 

Levinson was a brief exchange as he was leaving Linton’s apartment and Levinson was entering 

the apartment with several other IFG employees. Reynolds denied he sent Levinson to Linton’s 

apartment.

Argo also asserts an employee’s breach of a noncompetition covenant creates a rebuttable 

presumption that the plaintiff will suffer irreparable injury. Proof of a continued breach of a 

noncompetition agreement by a highly trained employee constitutes prima facia evidence of 

probable injury. Martin v. Linen Sys. for Hosp., Inc., 671 S.W.2d 706, 709 (Tex. App.—Houston 

[1st Dist.] 1984, no writ); Hartwell’s Office World, Inc. v. Systex Corp., 598 S.W.2d 636, 639 

(Tex. Civ. App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.); Beasley v. Hub City Tex., L.P., No. 

01-03-00287-CV, 2003 WL 22254692, at *7-8 (Tex. App.—Houston [1st Dist.] Sept. 29, 2003, 

no pet.) (mem. op.). Here, the trial court was aware that, at the time of the hearing, which ended 

on August 18, 2014, the covenant not to compete would expire on August 25, 2014. Thus, the trial 

court was entitled to draw a reasonable inference that any alleged “breach of a noncompetition 

agreement by a highly trained employee” would continue for only another seven days. 

Nevertheless, at the hearing and on appeal, Argo asserts the trial court should have granted an 

equitable extension of the covenant not to compete. 

Even if Texas law allows a court to equitably extend the time period of a covenant not to 

compete, the plaintiff must still establish the elements necessary to obtain the temporary 

injunction. We believe the entirety of the evidence, viewed in a light most favorable to the trial 

court’s order, supports the trial court’s denial of Argo’s request for a temporary injunction based 

on Argo’s failure to establish a probable, imminent, and irreparable injury before trial. 
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CONCLUSION

When reviewing a trial court’s ruling for an abuse of discretion, we may not substitute the 

trial court’s judgment for our own. Schlager v. Clements, 939 S.W.2d 183, 191 (Tex. App.—

Houston [14th Dist.] 1996, writ denied). We are limited to determining whether the trial court 

abused its discretion by acting arbitrarily and unreasonably, without reference to guiding rules or 

principles, or misapplying the law to the established facts of the case. Id. In this case, we must 

conclude the trial court did not abuse its discretion in denying Argo’s request for a temporary 

injunction. Accordingly, we affirm the trial court’s denial of the request for a temporary 

injunction.1

 

Sandee Bryan Marion, Chief Justice

 1 The merits of appellants’ underlying causes of action remain pending.