IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-10439

MERRITT HAWKINS & ASSOCIATES, L.L.C., 

 Plaintiff - Appellee Cross-Appellant

v.

LARRY SCOTT GRESHAM; CONSILIUM STAFFING, L.L.C.; BILLY 

BOWDEN;

 Defendants - Appellants Cross-Appellees

Appeals from the United States District Court

for the Northern District of Texas

Before STEWART, Chief Judge, and HIGGINBOTHAM and COSTA, Circuit 

Judges.

CARL E. STEWART, Chief Judge:

This dispute arises out of two employees’ departure from a medical 

staffing company to work for a competitor. Plaintiff-Appellee brought claims 

against Defendants-Appellants based on the alleged breach of non-compete 

and non-solicitation provisions in its employment contracts, tortious 

interference, and theft of computer files. The parties now appeal and crossappeal exemplary damages, evidentiary rulings, allegedly inconsistent 

verdicts, a take-nothing judgment, attorneys’ fees, and the denial of equitable 

United States Court of Appeals

Fifth Circuit

FILED

June 21, 2017

Lyle W. Cayce

Clerk

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remedies. For the reasons that follow, we VACATE the district court’s award 

of exemplary damages but otherwise AFFIRM. 

I. BACKGROUND

Plaintiff-Appellee Merritt Hawkins and Associates, L.L.C. (“MHA”)

recruits physicians to fill permanent positions at hospitals and other 

healthcare organizations. Defendant-Appellant Consilium Staffing, L.L.C. 

(“Consilium”) primarily places physicians in temporary positions, although it 

sometimes fills permanent positions. The companies are both headquartered 

near each other in Irving, Texas, and Consilium’s founder was a former partner 

at MHA. As a condition of employment, MHA requires its employees to sign 

contracts that include non-competition, non-disclosure, and non-solicitation 

clauses. Billy Bowden worked at MHA until September 2010, triggering

Bowden’s non-compete clause for one year and his non-solicitation clause for 

three years. After the expiration of his non-compete clause, Bowden began 

working for Consilium. In 2012, MHA claims that Bowden violated the nonsolicitation provision by recruiting Larry Gresham to leave MHA for 

Consilium. At the time, Gresham worked at MHA as a Search Consultant, and 

his responsibilities included recruiting medical specialists, selling services, 

and account management. Gresham left MHA and immediately took a similar

position at Consilium. Before leaving MHA, Gresham allegedly accessed 

MHA’s computer network and copied over 400 of MHA’s proprietary files. 

MHA claims that Gresham also deleted hundreds of files off his work computer 

in an attempt to hide this alleged theft. 

Litigation ensued, with MHA bringing numerous claims against 

Consilium, Bowden, and Gresham (collectively “Defendants”) for breach of 

contract, tort, and violations of state and federal statutes. The district court 

entered partial summary judgment, finding as a matter of law that the non-

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compete and non-solicitation provisions in the contracts were valid and that 

Gresham had breached his non-compete agreement. 

At trial, Consilium sought to introduce evidence concerning a previous 

breach of contract suit involving MHA, Gresham, and a third party. Another 

medical staffing company, Arthur Marshall, had sued MHA and Gresham for 

breach of Gresham’s non-compete contract when he left Arthur Marshall to 

work for MHA. The district court excluded this evidence.

Over the objection of Defendants, the district court allowed Mark Smith, 

MHA’s president, to testify as a lay witness on damages. While noting the 

difficulty of calculating damages for the missing and stolen computer files, he 

explained that “I attached a value of . . . a hundred dollars for each item . . . . 

A hundred dollars is what I would need to pay someone on an hourly basis to 

have them go in and attempt to create [these files from scratch].” Next, Smith 

stated that the amount MHA would spend to train a new employee was 

$45,000. He based this figure on the number of hours spent training each new 

employee and the continuing training that MHA provides its employees. 

Finally, Smith testified about MHA’s calculation of lost profits, which he 

helped prepare.

After a five-day trial, the jury returned its verdict. It found that 

Gresham was not liable for violating the federal Computer Fraud and Abuse 

Act, misappropriating MHA’s trade secrets, violating the Texas Theft Liability 

Act, or breaching his fiduciary duty to MHA. The jury found that Gresham 

breached his non-compete agreement and failed to return MHA’s property, but 

it awarded no damages for those claims. The jury found Gresham liable, 

however, under Texas’s Harmful Access by Computer statute and awarded 

MHA $50,000. The jury also concluded that Bowden conspired with Consilium 

to tortiously interfere with Gresham’s employment agreement but again 

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awarded no damages. It determined that Bowden breached his non-solicitation 

agreement and awarded $2,000 in damages. Finally, the jury found that 

Consilium conspired with Bowden to tortiously interfere with—and did 

tortiously interfere with—Gresham’s contract, for which it awarded $30,000 in 

damages. Finding that Consilium acted with malice, the jury also imposed 

$124,000 in exemplary damages.

Following the jury’s verdict, Defendants filed a motion for judgment as a 

matter of law, MHA filed a motion to alter or amend the judgment, and both 

parties moved for attorneys’ fees. Concluding that a liquidated damages 

provision in Bowden’s contract provided the only measure of damages for his 

breach of the non-solicitation provision and that MHA had not shown evidence 

of any damages under that clause’s formula, the district court entered a takenothing judgment in favor of Bowden. In MHA’s motion to alter or amend the 

judgment, it requested an injunction against Gresham, an order for Gresham 

to return MHA’s files, and equitable extension of Gresham’s and Bowden’s 

restrictive covenants. Even though the employees’ contracts allowed for such 

remedies, the district court denied the motion because it concluded that MHA 

did not request such relief prior to filing for reconsideration, and it failed to 

demonstrate that equitable remedies were necessary. The district court

further determined that MHA was entitled to attorneys’ fees for its Harmful 

Access by Computer claim, while Gresham was entitled to attorneys’ fees 

under the Texas Theft Liability Act. It denied MHA attorneys’ fees on its 

breach of contract claims because it did not recover any damages for those 

claims. Ultimately, the court awarded each party an identical amount of 

attorneys’ fees, canceling out the awards. 

Defendants appeal, and MHA cross-appeals. 

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II. DISCUSSION

All appealed and cross-appealed claims in this case are brought under 

Texas law. The district court had supplemental jurisdiction over the state law 

claims because they arose out of the same case or controversy as MHA’s federal 

law claims. See 28 U.S.C. § 1367; Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 

224, 233 (5th Cir. 2016). When reviewing the district court’s evidentiary 

rulings, however, we apply the Federal Rules of Evidence. See Fed. R. Evid. 

101; Washington v. Dep’t of Transp., 8 F.3d 296, 300 (5th Cir. 1993).

A. Exemplary Damages

Consilium appeals the award of $124,000 in exemplary damages. It 

argues that the evidence presented by MHA was insufficient to support the 

award of exemplary damages. We agree. 

MHA points to four pieces of evidence to justify the exemplary damages 

award. First, MHA argues that it demonstrated Consilium was aware that 

Gresham had a non-compete contract with MHA but hired him regardless. 

Second, the jury heard testimony that Consilium was founded by a former 

partner at MHA. Third, MHA claims that the close proximity between MHA’s 

and Consilium’s headquarters is circumstantial evidence of malice because it 

shows intent and opportunity to “raid MHA for employees.” Fourth, MHA

claims that Bowden, Consilium’s employee, displayed malice towards MHA 

and that this malice can be imputed to Consilium through vicarious liability. 

Specifically, MHA introduced evidence that Bowden sent Gresham a text 

telling him to “slap [his MHA supervisor] on the back of the head” before 

leaving MHA. Bowden also testified that he had been fired from MHA and 

disliked the company.

We review the district court’s denial of a Rule 50 motion for judgment as 

a matter of law de novo. Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277, 

282 (5th Cir. 2007) (quoting Flowers v. S. Reg’l Physicians Servs., Inc., 247 F.3d 

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229, 235 (5th Cir. 2001)). However, our review is highly deferential to the 

jury’s verdict. See Bagby Elevator Co. v. Schindler Elevator Corp., 609 F.3d 

768, 773 (5th Cir. 2010). We “must review all of the evidence in the record, 

draw all reasonable inferences in favor of the nonmoving party, and may not 

make credibility determinations or weigh the evidence.” Casey v. Toyota Motor 

Eng’g & Mfg. N. Am., Inc., 770 F.3d 322, 326 (5th Cir. 2014). 

To recover exemplary damages, MHA had to prove by clear and 

convincing evidence that Defendants acted with malice. See Tex. Civ. Prac. &

Rem. Code § 41.003(a)(2). Clear and convincing evidence is evidence sufficient 

to “produce in the mind of the trier of fact a firm belief or conviction as to the 

truth of the allegations sought to be established.” Id. § 41.001(2). MHA bears 

the burden of proof, which it cannot meet by showing “ordinary negligence, bad 

faith, or a deceptive trade practice.” Id. § 41.003(b). Rather, “‘malice’ means 

‘a specific intent by the defendant to cause substantial injury or harm to the 

claimant.’” Horizon Health Corp. v. Acadia Healthcare Co., No. 15-0819, ---

S.W.3d ---, 2017 WL 2323106, at *9 (Tex. May 26, 2017) (quoting Tex. Civ. Prac. 

& Rem. Code § 41.001(7)). Importantly, “when a tort requires willful harm as 

a necessary element of liability, that willfulness alone cannot also justify a 

punitive damages award. . . . More is required.” Safeshred, Inc. v. Martinez, 

365 S.W.3d 655, 662 (Tex. 2012). Tortious interference with a contract requires 

“willful and intentional” interference. See Holloway v. Skinner, 898 S.W.2d 

793, 795–96 (Tex. 1995) (listing elements). 

In Horizon, the Texas Supreme Court recently upheld a finding of malice

where each of the defendants, former members of Horizon’s uppermanagement, “specifically intended to cause substantial injury or harm to 

Horizon.” Horizon, 2017 WL 2323106, at *10. These former employees

(1) staggered departure in a way intended to deprive Horizon of leadership and 

funnel information to its competitor, (2) created a business plan predicated on 

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stealing a large number of clients from their former company, and (3) stole 

documents and trade secrets from their former company and immediately used 

them to solicit clients. Horizon, 2017 WL 2323106, at *10–13. Similarly, this 

court has upheld exemplary damages for tortious interference and 

misappropriation of trade secrets under Texas law where one company 

(1) attempted to “‘conquer and dominate’ the market,” (2) strategically hired 

away key employees, such as top managers and technicians, (3) and compelled 

the hired parties to upload and use confidential client contact information. 

Nova Consulting Grp., Inc. v. Eng’g Consulting Servs., Ltd., 290 F. App’x 727, 

730, 741 (5th Cir. 2008); see also Bagby, 509 F.3d at 773 (upholding exemplary

damages for tortious interference where an employee was hired for the express 

purpose of undercutting a competitor’s contract and where the defendant 

deliberately misled a client about its ability to cancel a contract and fabricated 

evidence).

Unlike in those cases, the only argument and evidence that MHA 

presented to the jury on the issue of exemplary damages was that Consilium

intentionally breached the non-compete contract. MHA claimed that “the 

circumstances of this case [were] quite egregious, that everything was 

intentional, [Consilium] knew [MHA] had these agreements . . . and they 

breached them anyway.” However, this is the exact type of argument that the 

Texas Supreme Court explains is insufficient to show malice when an element 

of the underlying cause of action is willful harm. See Safeshred, 364 S.W.3d at 

662; Horizon, 2017 WL 2323106, at *9 (“evidence of the tort itself, with little 

more” is an improper basis for awarding exemplary damages). Even drawing 

all inferences in favor of MHA, see Casey, 770 F.3d at 326, the additional 

evidence MHA points to is insufficient to show that Consilium acted with 

specific intent to cause substantial harm to MHA. The proximity of the two 

businesses, without more, does not lead to the conclusion that Consilium acted 

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with malice towards MHA. And the fact that Consilium’s founder was a 

partner at MHA was not raised for the purpose of showing that MHA engaged 

in a strategic plan of hiring away MHA employees to harm it, but rather to 

show that Consilium was aware that MHA’s employees had non-compete 

agreements. Moreover, MHA has never claimed that Consilium induced 

Gresham to steal or use its proprietary information, and the district court 

granted a motion in limine—not appealed here—that excluded all evidence of 

other MHA employees leaving for Consilium.

Turning to MHA’s vicarious liability argument, Texas will hold an 

employer “liable for exemplary or punitive damages because of the acts of [its] 

agent, but only if: (a) the principal authorized the doing and the manner of the 

act, or (b) the agent was unfit and the principal was reckless in employing him, 

or (c) the agent was employed in a managerial capacity and was acting in the 

scope of employment, or (d) the employer or a manager of the employer ratified 

or approved the act.” Fisher v. Carrousel Motor Hotel, Inc., 424 S.W.2d 627, 

630 (Tex. 1967). MHA, however, neither adduced evidence in support of a 

vicarious liability theory of recovery nor made a vicarious liability argument 

to the jury. Even if the jury concluded that Bowden targeted Gresham because 

of a desire to harm MHA, his personal animus towards MHA cannot support 

vicarious liability because it has not been alleged that he did anything more 

than induce Gresham to leave MHA. Therefore, MHA has failed to articulate 

how Bowden putting Gresham in contact with Consilium’s recruitment staff 

evidences specific intent to cause MHA “to suffer substantial injury that [is] 

‘independent[ly] and qualitatively different’ from the compensable harms 

associated with the underlying causes of action.” Horizon, 2017 WL 2323106, 

at *10 (quoting Safeshred, 365 S.W.3d at 662).

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For these reasons, we conclude that the award of exemplary damages 

must be vacated.1

B. Evidentiary Rulings

Defendants appeal the district court’s decision to allow the lay testimony 

of Mark Smith, MHA’s president of eight years and a twenty-six year employee,

on the issue of damages. Consilium argues that Smith should not have been 

allowed to testify about (1) lost profits, (2) the value of computer files taken or 

deleted by Gresham, and (3) training expenses because “virtually none of [his 

testimony] was based . . . on his personal knowledge” and “none of the matters 

were the subject of his ordinary business responsibilities.”

This court reviews evidentiary rulings for an abuse of discretion. See 

DIJO, Inc. v. Hilton Hotels Corp., 351 F.3d 679, 685 (5th Cir. 2003). Even 

where the district court abuses its discretion, we will not reverse an 

evidentiary ruling absent substantial prejudice. Tex. A&M Research Found. v. 

Magna Transp. Inc., 338 F.3d 394, 403 (5th Cir. 2003). 

Federal Rule of Evidence 701 governs lay witness testimony and requires 

that “testimony in the form of an opinion [be] limited to one that is: 

(a) rationally based on the witness’s perception; (b) helpful to clearly 

understanding the witness’s testimony or to determining a fact in issue; and 

(c) not based on scientific, technical, or other specialized knowledge.” A 

company president may provide “a broader range of testimony than a 

traditional lay witness . . . when testifying to matters concerning [his] 

business.” Versai Mgmt. Corp. v. Clarendon Am. Ins. Co., 597 F.3d 729, 737 

(5th Cir. 2010); accord Fed. R. Evid. 701 advisory committee’s note to 2000 

 

1 Having reversed the award of exemplary damages, we decline to address Consilium’s 

argument that the district court’s decision to exclude evidence of a previous lawsuit where 

MHA was sued by a third party over a non-compete contract prejudiced its defense against 

MHA’s arguments for exemplary damages. 

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amendments (“[M]ost courts have permitted the owner or officer of a business 

to testify to the value or projected profits of the business, without the necessity 

of qualifying the witness as an . . . expert.”). 

1. Lost Profits

Defendants challenge Smith’s testimony that he helped to prepare the 

calculation of lost profits. Generally, company officers can testify about lost 

profits “if the witness has direct knowledge of the business accounts underlying 

the profit calculation.” Miss. Chem. Corp. v. Dresser-Rand Co., 287 F.3d 359, 

373 (5th Cir. 2002) (allowing a corporation’s risk manager to testify about lost 

profits when he had prepared lost profit statements). Moreover, on crossexamination, Defendants had every opportunity to traverse Smith’s figures, 

credibility, and methodology. Id. at 374. Therefore, we do not perceive a “clear 

abuse of discretion” that would warrant reversal. See DIJO, Inc., 351 F.3d at 

685. 

2. Value of Computer Files

We also hold that the district court did not abuse its discretion, as 

Defendants argue, in admitting Smith’s testimony about the value of missing 

computer files. Smith based at least some of this testimony about the computer 

files on personal knowledge, stating that he would have to pay an employee at 

least $100 an hour to recreate every file that was deleted and that it would be 

more expensive to search MHA’s database to see if any files remained. 

However, he noted that it was difficult to calculate damages, and he offered 

modest support for the value he assigned to files that were taken, but not 

deleted. Still, Defendants vigorously cross-examined Smith on his calculation

and the jury was entitled to give such weight to this testimony as it saw fit. 

See Miss. Chem., 287 F.3d at 374. 

Even assuming it was error to admit Smith’s testimony on the value of 

stolen computer files, any error was harmless. A computer forensics expert

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testified that he billed MHA over $60,000 for his work assessing the damage 

to MHA’s computer system, excluding litigation costs. Additionally, MHA’s IT 

employee testified about the expenses he incurred and the hours he worked 

trying to restore the computer files. The jury awarded less in damages than 

these two experts testified that MHA spent because of Gresham’s actions, 

therefore Gresham was not “substantially prejudiced” by Smith’s testimony on 

the value of computer files. See Tex. A&M Research Found., 338 F.3d at 403.2

3. Training Expenses

Neither did the district court abuse its discretion by admitting Smith’s 

testimony about training expenses. Courts regularly allow company officer 

testimony about routine costs incurred. See Versai Mgmt. Corp, 597 F.3d at 

737. Training expenses for employees are the sort of routine matters within 

Smith’s personal knowledge as MHA’s president, and therefore, the district 

court did not abuse its discretion in admitting his testimony on that issue. See 

DIJO, 351 F.3d at 686. 

C. Inconsistent Verdict

Consilium asserts that the jury’s finding that Gresham’s breach of his 

non-compete contract and Bowden’s tortious interference caused no damages 

should have precluded the jury’s conclusion that Consilium’s tortious 

interference caused $30,000 in damages. 

We review a district court’s denial of a motion for judgment as a matter 

of law de novo. Navigant Consulting, 508 F.3d at 282. We view all “evidence 

 

2 Gresham also raises a challenge to the sufficiency of the evidence for the judgment 

against him on the Harmful Access by Computer claim because he asserts there was no 

legally admissible evidence on damages. The testimony of Smith, the computer forensics 

expert, and MHA’s IT employee is also sufficient evidence to justify the district court’s denial 

of Gresham’s Rule 50 motion on this issue. See Casey v. Toyota Motor Eng’g & Mfg. N. Am., 

Inc., 770 F.3d 322, 326 (5th Cir. 2014). 

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in the light most favorable to upholding the jury’s decision by a finding of 

consistency.” Ellis v. Weasler Eng’g Inc., 258 F.3d 326, 343 (5th Cir. 2001). 

“The district judge . . . is in the best position to determine whether the answers 

reflect confusion or uncertainty.” Id. at 342–43 (quoting Smith v. Riceland 

Foods, Inc., 151 F.3d 813, 821 (8th Cir. 1998)).

We agree with the district court that the jury’s verdict was consistent. 

As the district court noted, “[t]he charge made it clear that the jury was free to 

make findings, place blame, and assign damages to Defendants as it deemed 

appropriate. Moreover, Defendants do not argue that the jury was improperly 

instructed or that the charge was faulty.” The jury’s finding of liability is 

consistent and we are not convinced that its assignment of damages somehow 

renders the verdict inconsistent. 

Therefore, we agree with the district court that the jury verdict does not 

“reflect confusion or uncertainty.” See Ellis, 248 F.3d at 343 (quoting Smith, 

151 F.3d at 821).

D. Take-Nothing Judgment

The district court determined that a liquidated damages provision3 in 

Bowden’s employment contract controlled damages, and because MHA failed 

to prove damages under that provision, MHA was not entitled to any damages

from his breach of contract. MHA insists that the district court erred in 

entering a take-nothing judgment on Bowden’s breach of the non-solicitation 

agreement. MHA first argues that the district court’s ruling runs counter to 

 

3 The liquidated damages provision states:

It is agreed that . . . it would be impracticable or extremely difficult to fix the 

actual damages and therefore [Bowden] agrees upon his breach of this 

Agreement [that Bowden] will pay to [MHA] as liquidated damages and not as 

a penalty the sum equal to the standard fee charges to any client for each 

physician who accepts employment or associates with any person or entity as 

a result of a breach of this Agreement.

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the plain language of the provision. Under MHA’s interpretation, since the 

provision only awards damages “for each physician who accepts employment 

or associates with any person or entity as a result of a breach of this 

Agreement,” the provision applies exclusively to breaches of the non-compete 

clause and breaches of the non-solicitation clause involving physicians. MHA 

alternatively alleges that even if it is not entitled to actual or liquidated 

damages, it is nonetheless entitled to nominal damages.

Contract interpretation is a question of law that this court reviews de 

novo. MCI Tel. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999). 

When interpreting a contract, “[n]o single provision taken alone will be given 

controlling effect; rather, all the provisions must be considered with reference 

to the whole instrument.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 

(Tex. 2003). This court should “consider the entire writing to harmonize and 

effectuate all provisions such that none are rendered meaningless.” FPL 

Energy, LLC v. TXU Portfolio Mgt. Co., 426 S.W.3d 59, 63 (Tex. 2014). 

Texas applies a two-prong test when determining whether to enforce a 

liquidated damages provision: “(1) ‘the harm caused by the breach is incapable 

or difficult of estimation,’ and (2) ‘the amount of liquidated damages called for 

is a reasonable forecast of just compensation.’” FPL Energy, 426 S.W.3d at 69

(quoting Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991)). Texas 

recognizes that nominal damages may be awarded for a breach of contract. 

MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660, 664–65 

(Tex. 2009). Still, “in recent decades the rule in Texas has been that nominal 

damages are not available when the harm is entirely economic and subject to 

proof.” Id. at 665. 

Here, the liquidated damages provision states that it applies to “this 

Agreement” without qualification. It is not rendered meaningless simply 

because in some situations its formula may result in no damages. And because 

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the liquidated damages are tied to MHA’s key business concern of protecting 

its client base, the provision appears to be “a reasonable forecast of just 

compensation.” FPL Energy, 426 S.W.3d at 69. Moreover, the district court 

did not err in declining to award nominal damages because the harm is

“entirely economic and subject to proof.” MBM Fin., 292 S.W.3d at 665. 

Although MHA could have introduced evidence of physicians leaving because 

of Bowden’s breach—as the liquidated damages provision called for—it 

provided no evidence to that effect.

For these reasons, we uphold the district court’s take-nothing judgment 

in favor of Bowden.

E. Attorneys’ Fees

MHA argues that the district court erred in three respects in awarding 

and calculating attorneys’ fees: (1) it committed legal error by not awarding 

MHA legal fees on expenses that were intertwined with its Harmful Access by

Computer claim; (2) it failed to award MHA attorneys’ fees on its breach of 

contract claim; and (3) it improperly awarded attorneys’ fees to Gresham. We 

do not agree.

“The standard of review for an award of attorneys’ fees is whether the 

trial court abused its discretion in making the award.” DP Sols., Inc. v. Rollins, 

Inc., 353 F.3d 421, 433 (5th Cir. 2003). Factual determinations are reviewed 

for clear error. Mathis v. Exxon Corp., 302 F.3d 448, 461–62 (5th Cir. 2002).

Texas allows the recovery of attorneys’ fees “only if specifically provided 

for by statute or contract.”4 Epps v. Fowler, 351 S.W.3d 862, 865 (Tex. 2011). 

Gresham’s and Bowden’s employment contracts both contained a provision for 

the prevailing party to recover attorneys’ fees. A prevailing party on a Harmful 

 

4 Because the contract and tort claims at issue on appeal are governed by Texas law, 

Texas law also governs the award and reasonableness of attorneys’ fees. See Mathis v. Exxon 

Corp., 302 F.3d 448, 461 (5th Cir. 2002).

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Access by Computer claim “is entitled” to attorneys’ fees. Tex. Civ. Prac. & 

Rem. Code § 143.002. Likewise, the prevailing party on a Texas Theft Liability 

Act claim “shall” receive attorneys’ fees. Id. § 134.005(b). Attorneys’ fees are 

mandatory under these two statutes. See Bocquet v. Herring, 972 S.W.2d 19, 

20 (Tex. 1998). A prevailing party is one that “receive[s] affirmative judicial 

relief.” Intercontinental Grp. P’ship v. KB Home Loan Star, L.P., 295 S.W.3d 

650, 656 n.27 (Tex. 2009). “A zero on damages necessarily zeros out ‘prevailing 

party’ status.” Id. at 655–56. For purposes of the Texas Theft Liability Act,

however, a prevailing party includes a successful defendant, regardless of his 

success on other claims in the suit. Arrow Marble, LLC v. Estate of Killion, 

441 S.W.3d 702, 705–06 (Tex. App.—Hous. [1st Dist.] 2014, no pet.).

1. Intertwined Attorneys’ Fees

First, MHA asserts that the court erred by only awarding attorneys’ fees 

for those expenses “solely and exclusively attributable” to the Harmful Access 

by Computer claim. MHA submits that the district court applied the wrong 

legal standard because it was entitled to fees that were intertwined with its 

Harmful Access claim, even if they were also incurred advancing unsuccessful 

claims. 

“[I]f any attorney’s fees relate solely to a claim for which such fees are 

unrecoverable, a claimant must segregate recoverable from unrecoverable 

fees.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006). 

However, “when discrete legal services advance both a recoverable and 

unrecoverable claim . . . they are so intertwined that they need not be 

segregated.” Id. at 313–14. “A party requesting attorneys’ fees carries the 

burden of proof and the duty to segregate fees.” U.S. for Varco Pruden Bldgs. 

v. Reid & Gary Strickland Co., 161 F.3d 915, 919 (5th Cir. 1998). 

We conclude that the district court applied the correct legal standard. In 

its order for MHA to segregate fees, the district court quoted Chapa, the 

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controlling Texas Supreme Court case, for the proposition that “it is only when 

discrete legal services advance both a recoverable and unrecoverable claim 

that they are so intertwined that they need not be segregated.” 212 S.W.3d at 

313–14. After requesting that MHA segregate fees, the district court found 

that MHA did “a poor job segregating fees in a meaningful way and [its 

Supplemental Declaration] [was] so heavily redacted and vague that it is not 

possible to segregate fees sua sponte with any degree of certainty.” Because of 

this, the district court cut the fee amount “which [it was] not entirely certain 

[was] only for legal work on only the harmful access claim.” The onus is on the 

party requesting attorneys’ fees to sufficiently prove and segregate fees. Varco 

Pruden, 161 F.3d at 919. The district court cited the correct standard but

concluded that MHA failed to provide adequate documentation on what fees it 

was entitled to recover. Therefore, the district court did not abuse its 

discretion when calculating MHA’s award of attorneys’ fees. DP Sols., 353 F.3d 

at 433.

2. Breach of Contract Attorneys’ Fees

Next, MHA insists that it was the prevailing party on its breach of 

contract claims against Gresham and Bowden and thus entitled to attorneys’ 

fees on those claims. We disagree.

The Texas Supreme Court has explicitly stated that “[a] zero on damages 

necessarily zeros out ‘prevailing party’ status.” KB Home, 295 S.W.3d at 655–

56. Although MHA received a judgment that Gresham and Bowden had 

breached their contracts, MHA was awarded no damages or equitable relief on 

those claims. See Epps, 351 S.W.3d at 866 (a prevailing party is one that 

receives either monetary or equitable relief (citing KB Home, 295 S.W.3d at 

655)). The jury’s verdict against Consilium does not entitle MHA to attorneys’ 

fees because Consilium was not a party to the contracts and because the claim 

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against Consilium was brought in tort, not contract.5 Thus, the district court 

did not abuse its discretion by declining to award MHA attorneys’ fees for 

Gresham’s and Bowden’s breach of contract. DP Sols., 353 F.3d at 433.

3. Gresham’s Attorneys’ Fees

Finally, MHA asserts that Gresham was not entitled to attorneys’ fees

under the Theft Liability Act. Again, we disagree. 

Texas courts have consistently held that a party who successfully 

defends a claim under the Theft Liability Act is a prevailing party, even if he 

loses on all other claims. Arrow Marble, 441 S.W.3d at 705–06; Brinson 

Benefits, Inc. v. Hooper, 501 S.W.3d 637, 642 (Tex. App.—Dall. 2016, no pet.);

Moak v. Huff, No. 04-11-00184-CV, 2012 WL 566140, at *10–11 (Tex. App.—

San Antonio Feb. 15, 2012, no pet.). Because the Theft Liability Act says the 

prevailing party “shall” receive attorneys’ fees, this award is mandatory. See 

Tex. Civ. Prac. & Rem. Code § 134.005(b); Bocquet, 972 S.W.2d at 20. Finally, 

MHA has not challenged the reasonableness of the award, so any argument 

that Gresham’s award should be reduced is waived. See Adams v. Unione 

Mediterranea Di Sicurta, 364 F.3d 646, 653 (5th Cir. 2004) (“Issues not raised

or inadequately briefed on appeal are waived.”).

For these reasons, the district court did not abuse its discretion in 

awarding attorneys’ fees to Gresham as a prevailing party under the Theft 

Liability Act. See DP Sols., 353 F.3d at 433.

F. Equitable Remedies

MHA claims that the district court erred by not granting its motion to 

amend the judgment to include (1) an injunction barring Bowden and Gresham 

from violating their contracts, (2) specific performance requiring Gresham to 

 

5 Consilium also claims that Tex. Bus. & Comm. Code § 15.51(a),(c) precludes the 

award of attorneys’ fees on the breach of contract claims. Because we affirm the district court 

on other grounds, we do not reach this alternative argument. 

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return proprietary information and fill out an affidavit that he has done so, 

and (3) equitable extension of both Bowden and Gresham’s contracts. 

This court reviews a district court’s ruling on a Rule 59(e) motion for 

abuse of discretion, but questions of law are reviewed de novo. Johnston & 

Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 562 (5th Cir. 2013). A Rule 

59(e) motion to alter or amend a judgment “serve[s] the narrow purpose of 

allowing a party to correct manifest errors of law or fact or to present newly 

discovered evidence.” Waltman v. Int’l Paper Co., 875 F.2d 468, 473 (5th Cir. 

1989) (internal quotation omitted). It “cannot be used to raise arguments 

which could, and should, have been made before the judgment issued.” Simon 

v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990) (quoting FDIC v. Meyer, 

781 F.2d 1260, 1268 (7th Cir. 1986)). “Reconsideration of a judgment after its 

entry is an extraordinary remedy that should be used sparingly.” Templet v. 

HydrocChem, Inc., 367 F.3d 473, 479 (5th Cir. 2004). 

1. Injunctive Relief

Despite arguments to the contrary, MHA has failed to show that it is

entitled to injunctive relief. To obtain permanent injunctive relief, a plaintiff 

must demonstrate: “(1) that it has suffered an irreparable injury; (2) that 

remedies available at law, such as monetary damages, are inadequate to 

compensate for that injury; (3) that, considering the balance of hardships 

between the plaintiff and defendant, a remedy in equity is warranted; and (4) 

that the public interest would not be disserved by a permanent injunction.” 

ITT Educ. Servs., Inc. v. Acre, 533 F.3d 342, 347 (5th Cir. 2008) (quoting eBay, 

Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). However, some Texas 

courts have held that when a suit is to enforce a restrictive covenant, a party 

need not show irreparable injury. Jim Rutherford Invs., Inc. v. Terramar 

Beach Cmty. Ass’n, 25 S.W.3d 845, 849 (Tex. App.—Hous. [14th Dist.] 2000, 

pet. denied).

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Although MHA requested injunctive relief in its pleadings and pre-trial 

order, MHA failed to make a showing of the requirements for a permanent 

injunction. See ITT Educ. Servs., 533 F.3d at 347 (listing necessary elements 

for an injunction). Instead, MHA simply argued that it was entitled to a 

permanent injunction as a matter of law because its employment contracts 

granted it the right to injunctive relief. However, MHA cites no law for the 

proposition that a contract can automatically entitle a party to an injunction, 

without first demonstrating that an injunction is necessary.6 Therefore, we 

agree with the district court that MHA failed to make the necessary showing 

for an injunction.

2. Specific Performance

MHA also sought specific performance requiring Gresham to return all 

computer files in its Rule 59(e) motion. Unlike its request for injunctive relief, 

MHA did not request specific performance in its pre-trial motion, even though 

it requested specific performance in its complaint. Its request for specific 

performance is therefore waived. Cf. Valley Ranch Dev. Co. v. FDIC, 960 F.2d 

550, 554 (5th Cir. 1992) (stating that a claim or issue omitted from the pretrial 

order is waived even if contained in the complaint). 

3. Equitable Estoppel

Finally, MHA requested that the district court extend Gresham’s 

contract one year—and Bowden’s two years—from the date of final judgment. 

Under Texas law, a district court may exercise its equitable power to craft an 

 

6 Moreover, MHA likely could not make such a showing because it sought monetary 

damages for all of the conduct for which it now requests an injunction. See Dresser-Rand Co. 

v. Virtual Automation Inc., 361 F.3d 831, 848 (5th Cir. 2004) (“For purposes of injunctive 

relief, an adequate remedy at law exists when the situation sought to be enjoined is capable 

of being remedied by legally measurable damages.” (citing Haq v. Am.’s Favorite Chicken Co., 

921 S.W.2d 728, 730 (Tex. App.—Corpus Christi 1996, writ dism’d w.o.j.)). 

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injunction that extends beyond the expiration of the covenant not to compete. 

Guy Carpenter & Co., Inc. v. Provenzale, 334 F.3d 459, 464 (5th Cir. 2003). 

The district court entered its final judgment on January 30, 2015. More 

than two years have now passed, mooting MHA’s appeal of this issue. See 

Wilson v. Birnberg, 667 F.3d 591, 595 (5th Cir. 2012). Moreover, MHA has not 

demonstrated that equitable extension is warranted because Gresham no 

longer works for Consilium, and there has been no indication that Bowden has 

continued to violate the terms of his non-solicitation provision. 

For these reasons, we affirm the district court’s denial of equitable 

remedies. 

III. CONCLUSION

Because there was insufficient evidence of malice, we VACATE the 

district court’s award of exemplary damages. In all other respects, we AFFIRM 

the judgment of the district court. 

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