Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

JONATHAN VILLAREAL, 

individually and derivatively on behalf 

of ZROBLACK, LLC. 

Plaintiffs, 

v. 

JOHN SAENZ, MIGUEL

VILLARREAL, JR., and GUNN, LEE, 

& CAVE, P.C.

Defendants

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CIVIL ACTION NO. 5:20-cv-00571-OLG

PLAINTIFFS’ RESPONSE TO DEFENDANT JOHN SAENZ’S RULE 12(b)(6) 

MOTION TO DISMISS

____________________________________________________________________________

TO THE HON. ORLANDO GARCIA, UNITED STATES CHIEF DISTRICT JUDGE:

Plaintiff, JONATHAN VILLAREAL, individually and derivatively on behalf of

ZROBLACK, LLC, (collectively the “Plaintiffs”), by and through their undersigned counsel, file

this Response to Defendant John Saenz’s Rule 12(b)(6) Motion to Dismiss (Doc. 8). 

I. SUMMARY

1. Defendant John Saenz’s Motion should be denied because the Release only releases 

claims that existed at the time the release was signed, not claims that arose or accrued in the future,

and because Defendant Saenz has executory obligations under the Release that he has not fulfilled.

The Court should also deny Defendant’s Motion because Plaintiffs’ have alleged facts on each of 

their causes of action showing they are entitled to relief.

II. RULE 12(B)(6) STANDARD

2. Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint “for 

failure to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). Motions to 

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Dismiss are disfavored and will only be appropriate in rare circumstances. Sosa v. Coleman, 646 

F.2d 991, 993 (5th Cir. 1981). A Rule 12(b)(6) motion “is not a procedure for resolving contests 

about the facts or the merits of a case.” Askanase v. Fatjo, 828 F. Supp. 465, 469 (S.D. Tex. 1993); 

Mahone v. Addicks Util. Dist. of Harris Cty., 836 F.2d 921, 926 (5th Cir. 1988).

3. “To survive a 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to 

state a claim to relief that is plausible on its face.’” In re Katrina Canal Breaches Litigation, 495 

F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), 

(cert. denied, 552 U.S. 1182 (2008))). The court must construe the complaint in favor of the 

plaintiff, taking all facts pleaded as true, no matter how improbable. In re Katrina Canal, 495 F.3d 

at 205. “A complaint should not be dismissed for failure to state a claim unless it appears beyond 

a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him 

to relief.” See Vander Zee v. Reno, 73 F. 3d 1365, 1368 (5th Cir. 1996); Conley v. Gibson, 355 

U.S. 41, 45-46 (1957). Even where a court finds the pleadings insufficient, leave to re-file under 

Rule 15(a) is preferred, unless it is clear the defects are incurable. See Great Plains Trust Co. v. 

Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002). Therefore, to the extent 

this Court may find that any claim is not sufficiently pled under the Federal Rules of Civil 

Procedure, Plaintiff respectfully requests leave to amend its Complaint.

III. ARGUMENT & AUTHORITY

A. The Release does not bar future claims upon which Plaintiffs’ claims are predicated.

4. The Fifth Circuit foreclosed this issue of when a release bars future claims. In 

Starcraft Co., A Div. of Bangor Punta Operations, Inc. v. C.J. Heck Co. of Tex., Inc., the Court 

construed a release containing the following language:

The parties hereby mutually release, discharge, and acquit one 

another of any and all claims, demands and causes of action, 

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whether or not asserted in the above-referenced litigation, and 

whether known or unknown. 

748 F.2d 982, 988 n. 1 (5th Cir. 1984) (emphasis added). The court held that this language did 

not release claims arising in the future. Id. at 988 n. 6 (5th Cir. 1984).

1

5. Importantly, the difference between this Release and the cases relied upon by Saenz 

is in the words—“all claims or demands, known or unknown.” The cases cited by Saenz all address 

releases with language such as “future,” “hereafter,” or “arising hereafter.” For example, White v. 

Grinfas, 809 F.2d 1157 (5th Cir. 1987), quoted by Saenz for the proposition that “settlement 

agreements and releases are a complete bar to any later action based on matters included therein”,

dealt with parties who released each other from “any and all claims ... or losses ... now ... or 

hereafter.” Id.

2

at 1160 (emphasis added). The use of the phrase “or hereafter” indicates the release 

is to include claims arising in the future. This comports with Texas law that generally a release

applies to claims existing when it is executed, but if the parties choose, a release may encompass 

claims and damages that develop in the future. Keck, Mehin, & Cate v. Nat’l Union Fire Ins. 

Company of Pittsburgh, 20 S.W.3d 692, 698 (Tex. 2000). Furthermore, “a release does not 

necessarily or automatically include future claims without evidence of such intent.” Williams v. 

Glash, 789 S.W.2d 261, 264 (Tex. 1990) (discussing application of the defense of mutual mistake 

to a release).

6. In New York Pizzeria, Inc. v. Syal, also relied upon by Saenz, the release language 

specifically contemplated future claims:

1

In Starcraft—a three-sided dispute between a (1) business (Heck) and it owners, (2) a creditor

(Starcraft), and (3) the business’ bank—the Court held that a release between the business, its 

owners, and the creditor did not bar the creditor’s claim against the bank under then UCC § 4-

302(1) for missing a deadline to return a check. Starcraft, 748 F.2d at 989.

2 Saenz attempts to parse the language of the Grinfas release but omits the language cited above.

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NYPI ... hereby irrevocably and unconditionally waives, releases, and forever 

discharges HEMBREE ... from any and all claims, charges, demands, sums of 

money, actions, rights, promises, agreements, cause of action [sic], obligations 

and liabilities of any kind or nature whatsoever, at law or in equity, whether 

known or unknown, existing or contingent, suspected or unsuspected, foreseen 

or unforeseen, apparent or concealed ... which NYPI now or in the future may 

have or claim to have against HEMBREE.”

53 F. Supp. 3d 962, 965 (S.D. Tex. 2014) (emphasis added). Thus, the specific holding in the 

New York Pizzeria case was “In Texas, ‘a valid release may encompass unknown claims and 

damages that develop in the future.’” Id. at 965-966 (quoting Keck, Mahin & Cate v. Nat'l Union 

Fire Ins. Co. of Pittsburgh, Pa., 20 S.W.3d 692, 698 (Tex. 2000)) (emphasis added). 

7. Saenz’s argument notwithstanding, the Release by its own language reveals it 

applies only to claims existing on the date it was signed:

8. The first sentence, “Each party hereby fully releases the other Parties from all 

claims and demands, known or unknown” frames the claims covered by the release—those claims 

that are “known and unknown.” The Release is silent as to “future” claims or claims “arising 

hereafter” or even claims “arising later.” The second sentence waives any statutory limits that 

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would otherwise apply to “claims that are known ... when the release is signed.” Finally, the third 

sentence applies specifically to claims that “are not known at the time [the] release is signed”—

limiting the release to unknown claims on the date the release was signed. Thus, the very language 

of the release limits it to claims known or unknown that exist at the time the release is signed.

Again, the Release is silent as to future claims or claims that might arise “hereafter” and further 

limits released claims to those existing (whether known or unknown) at the time the release is 

signed.

9. Additionally, Saenz’s argument focuses solely on the language of the Release but 

ignores the Unanimous Consent and the First Amendment to the Professional Services Agreement 

with ZroBlack’s Foreign Customer. In so doing, Saenz disregards Texas’ well-established rules of 

contract construction. Key among those rules is that documents pertaining to the same transaction 

may be read together even if they are executed at different times and do not reference each other.

Courts may construe all the documents as if they were part of a single, unified instrument. City of

Houston v. Williams, 353 S.W.3d 128, 137 (Tex. 2011); In re Laibe Corp., 307 S.W.3d 314, 317 

(Tex. 2010); 1464-Eight, Ltd. v. Joppich, 154 S.W.3d 101, 105 n. 1 (Tex. 2004); Fort Worth Indep. 

Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex.2000).3

10. The express provisions of the Unanimous Consent of ZroBlack’s members support 

the conclusion that the Release intended to release only present existing claims:

3 The rules of contract construction apply to releases. See URI, Inc. v. Kleberg City, 543 S.W.3d 

755, 763 (Tex. 2018); Nat'l Union Fire Ins. Co. of Pittsburgh, PA. v. Ins. Co. of N. Am., 955 

S.W.2d 120, 127 (Tex.App.-Houston [14th Dist.] 1997), aff'd, 20 S.W.3d 692 (Tex.2000).

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11. Thus, part of the Release, as shown by the Unanimous Consent, required John 

Saenz to assign all his ownership in ZroBlack to Jonathan Villareal—which includes all personal, 

real, and intellectual property owned by the ZroBlack. Furthermore, Saenz released any claim he 

might presently have personal, real, or intellectual property owned by ZroBlack.

12. The First Amendment to the Professional Services Agreement between ZroBlack 

and its Foreign Customer also shows the Release only applied to existing claims. The PSA states:

13. After acknowledging that Saenz is transferring all his ownership interest in 

ZroBlack to Villarreal, Plaintiff’s Foreign Customer released Saenz from all obligations under the 

PSA except for those obligations under Sections 7 and 9 thereof, to wit, the obligation to not use 

or disclose the Foreign Customer’s trade secrets, which are defined to include those licensed from 

ZroBlack, and that are in Saenz’s possession. See Exhibit 17 to the Complaint. Contrary to 

Defendant’s argument, Saenz’s return of ZroBlack’s property, including the trade secrets, is 

contemplated by the Release. Had the parties intended for Saenz to retain any rights in these trade 

secrets separate from ZroBlack, they would have provided differently in the First Amendment to 

the PSA. To the contrary, Saenz obligates himself to not use or disclose these items; the polar 

opposite of an indication of any right of possession or ownership by Saenz.

14. Finally, courts must give effect to a contract’s clear terms as they are written. Sacks 

v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (“An unambiguous contract will be enforced as written 

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. . .”); Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994) (“When construing a 

contract, the court’s primary concern is to give effect to the written expression of the parties’ 

intent.”); see also Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); R & P Enterprises v. 

LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex. 1980). The court must examine the 

entire writing to harmonize and give effect to all the provisions of the contract so that none are 

rendered meaningless. Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 

158 (Tex. 1951). All provisions must be considered with reference to the whole instrument and no 

single provision will be given controlling effect. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).

15. By holding that the release extinguished Plaintiffs’ claims for return of the laptop, 

domain name and webpage, proprietary computer code, and the money taken from ZroBlack, the 

assignment in the Unanimous Consent is rendered meaningless, as are the confidentiality 

provisions contained in the 1st Amendment to the PSA. Saenz’s argument that the release bars all 

claims for the return of ZroBlack’s property cannot be harmonized with these two provisions.

Because these provisions would be rendered meaningless and cannot be harmonized with Saenz’s 

construction of the Release, Defendant’s argument fail.

B. The Release imposed executory obligations on Saenz, including assignment of his interest 

in ZroBlack to Jonathan Villarreal; thus, the claim for failure to return ZroBlack’s 

property had not accrued at the time the Release was signed.

16. A “cause of action does not exist until facts exist that authorize a person asserting 

the claim to seek relief in a court of competent jurisdiction.” Aviall Services, Inc. v. Cooper Indus., 

LLC, 694 F. Supp. 2d 567, 576–77 (N.D. Tex. 2010). On the date the release was signed, Saenz 

had executory obligations—to wit, assignment of his ownership interest in ZroBlack to Jonathan.

The Unanimous Consent executed on the same date as the Release fulfilled that obligation but 

carried with it the obligation to return any property owned by ZroBlack. After all, assignation of 

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ownership of ZroBlack is assignation ZroBlack’s ownership of property. As shown by sec. 6 of 

the Release, the duty to assign property to ZroBlack doesn’t arise until the Release is executed:

17. It states the parties “will” execute the Unanimous Consent. Thus, execution of the 

Unanimous Consent is an executory obligation under the terms of the Release. A claim for failure 

to return that property cannot arise prior to the Release being signed. It can only arise after Saenz 

obligates himself to assign his ownership interest in ZroBlack to Jonathan and fails or refuses to 

do so. Claims for return of the property did not exist prior to execution of the Release and were 

not within the scope of claims released. See Starcraft, 748 F.2d at 988 n. 6 (5th Cir. 1984)

(“although the release discharged all claims whether known or unknown, it did not purport to 

release claims that might arise in the future”). Therefore, execution of the Unanimous Consent and

return of all ownership interest in ZroBlack and all property owned by ZroBlack is not within the 

scope of the claims released.

C. The Release is Void or Voidable.

18. Saenz cites Wright v. Sydow, 173 S.W.3d 534, 549 (Tex. App.—Houston [14th

Dist.] 2004, pet. denied) is support of his argument that a violation of the Disciplinary Rules does 

not void a release contracted for outside the attorney-client relationship. However, as pleaded by 

Plaintiffs, the Release was not contracted for outside of the attorney-client relationship. Defendants 

Gunn, Lee, & Cave, P.C. and Miguel Villarreal, Jr. represented all the parties—Saenz, Jonathan 

Villarreal, and ZroBlack—in the negotiation and execution of the Release. Wright involved a 

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violation of DRPC § 1.08(g) pertaining to a lawyer making a contract with a client limiting the 

lawyers’ liability to the client. Those facts do not exist here. As cited in Plaintiffs’ Complaint, ¶

112, courts can and do set aside settlement agreements when an attorney violates the Rules of 

Disciplinary Conduct. Quintero v. Jim Walter Homes, Inc., 709 S.W.2d 225 (Tex. App.—Corpus 

Christi 1985, writ ref’d n.r.e.). Plaintiffs’ allegations regarding Gunn, Lee, & Cave, P.C. and

Villarreal, Jr. support setting aside the Release.

19. Saenz’s argument that the Release should not be set aside because of mutual 

mistake also fails. He argues that Plaintiffs’ subjective belief is not a basis for mutual mistake. 

While correct as to subjective intent, the Texas Supreme Court, in Williams v. Glash, 789 S.W.2d 

261 (Tex. 1990), further stated:

... whether the parties to a release intended to cover an unknown 

injury cannot always be determined exclusively by reference to the 

language of the release itself. It may require consideration of the 

conduct of the parties and the information available to them at the 

time of signing. In a subsequent suit for an unknown injury, once 

the affirmative defense of release has been pleaded and proved, the 

burden of proof is on the party seeking to avoid the release to 

establish mutual mistake. The question of mutual mistake is 

determined not by self-serving subjective statements of the parties' 

intent, which would necessitate trial to a jury in all such cases, but 

rather solely by objective circumstances surrounding execution of 

the release, such as the knowledge of the parties at the time of 

signing concerning the injury, the amount of consideration paid, the 

extent of negotiations and discussions as to personal injuries, and 

the haste or lack thereof in obtaining the release.

Id. at 264. ZroBlack pleaded facts, not just subjective belief, supporting their claim that the Release 

should be set aside for mutual mistake. The objective evidence attached to the Complaint shows 

the parties had different understandings of the effect of the Release, as shown by ZroBlack’s 

repeated requests for return of the money, laptop, trade secrets, and domain name. It is further 

shown by the Release section titled “Compensation” describing the consideration for the 

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Release—not including the $750,000—and the terms of the PSA. Because a Rule 12(b)(6) motion 

“is not a procedure for resolving contests about the facts or the merits of a case” Askanase, 828 F. 

Supp. at 469, the issue of mutual mistake cannot be decided here.

D. Plaintiffs state causes of action for violation of the DTSA and TUTSA because Saenz 

acquired the trade secrets unlawfully.

20. Saenz contends that Plaintiffs failed to state a claim upon which relief can be 

granted on their DTSA cause of action because they have not alleged Saenz acquired the trade 

secrets by “theft, bribery, misrepresentation, breach or inducement of breach of a duty to maintain 

secrecy, or espionage through electronic or other means.” Mtn. to Dismiss, p. 11 (Doc. 8). Saenz 

further contends that Plaintiffs’ pleadings show he acquired the trade secrets lawfully.

21. A person commits theft if “he unlawfully appropriates property with intent to 

deprive the owner of the property.” TEX. PEN. CODE ANN. § 31.03(a). Furthermore, appropriation 

is unlawful if “it is without the owner’s effective consent”. TEX. PEN. CODE ANN. § 31.03(b)(1). 

Deprive means “to withhold property from the owner permanently or for so extended a period of 

time that a major portion of the value or enjoyment of the property is lost to the owner”. TEX. PEN.

CODE ANN. § 31.01(2)(A). “Appropriate,” in the Penal Code, means “to acquire or otherwise 

exercise control over property other than real property”. TEX. PEN. CODE ANN. § 31.01(4)(B).

22. Plaintiffs pleaded that after Saenz parted ways with ZroBlack he refused requests 

to return the laptop and code, and that his continued possession was unauthorized. Compl. § 58.

These pleadings sufficiently state a claim for theft under the Texas Penal Code and sufficient to 

state a claim under the DTSA and TUTSA for trade secret misappropriation.

23. Thus, Saenz’s argument that he acquired the trade secrets by lawful means while 

still CEO and a member of ZroBlack is without merit. Once he left ZroBlack and was no longer 

CEO, he had no legal right to retain the trade secrets. See Complete Logistical Services, LLC v. 

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Rulh, 350 F. Supp. 3d 512, 520 (E.D. La. 2018). By refusing to return them, Saenz misappropriated

them within the meaning of the Texas Penal Code and, hence, the DTSA and TUTSA.

E. Plaintiffs state a cause of action for violation of the CFAA because Saenz’s authorization 

to access the laptop and domain were automatically revoked upon execution of the 

Release.

24. Saenz contends that the allegations regarding the deletion of ZroBlack’s webpage 

and email server are not actionable under the CFAA because they have nothing to do with 

unauthorized access to a specific computer. He also contends that the Complaint does not allege 

how access was revoked, who revoked Saenz’s right of access, and who had the right to revoke 

his access. He is wrong on both counts.

a) The CFAA will support a claim where a web-based account was accessed without 

authorization or where authorization was exceeded.

25. Courts have held that under the CFAA’s broad language that access to web-based 

accounts can form the basis of a CFAA violation, even if the defendant had permission to use the 

physical computer in question. Hill v. Lynn, No. 17-C-06318, 2018 WL 2933636, at *3 (N.D. Ill 

June 12, 2018) (unauthorized/exceeded authorization to access to GitHib account supported CFAA 

claim);4 Estes Forwarding Worldwide LLC v. Cuellar, 239 F. Supp.3d 918, 921, 926-27 (E.D. Va. 

2017) (plaintiff sufficiently pled access to a “protected computer” when it alleged that defendant 

accessed a confidential Google Drive).5

4 Citing Brown Jordan Int'l, Inc. v. Carmicle, 2016 WL 815827, at *3, *40-41 (S.D. Fla. Mar. 

2, 2016) (liability when defendant accessed fellow employees' email through a web portal from 

his personal iPad) and Hedgeye Risk Mgmt., LLC v. Heldman, 2017 WL 4250506, at *7 

(D.D.C. Sept. 23, 2017) (plaintiff pled access to a “protected computer” by alleging defendant 

accessed electronically stored emails and documents via computer connected to the internet).

5 Additionally, a court in this district allowed a CFAA claim to proceed (with amendment) 

where the allegations involved access to an Apple iCloud account—without questioning 

whether unauthorized access to a web-based account could support a violation of the CFAA. 

Hovanec v. Miller, No. SA-17-CV-766-XR, 2018 WL 1221486 (W.D. Tex. March 7, 2018).

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26. The Estes case is on point. Cuellar, an Estes employee, created a Google Drive 

account for Estes. He performed that work in the course and scope of his employment. Cuellar

later quit his job and went to work for a competitor. He accessed the Google account, downloaded 

all the data, and then erased the data. In defending against a CFAA claim, he argued that he could 

not violate the CFAA because he created the account; he also argued that Google, not Estes, owned 

the account. The Estes court rejected both arguments. Estes, 239 F. Supp. 3d at 924.

27. Saenz’s circumstances are no different. He created the GoDaddy account in the 

course and scope of his work for ZroBlack, and to further ZroBlack’s business. Like Cuellar in 

Estes, Saenz took data or deleted data from the account. 

b) Where employment is ended, authorization is ended.

28. Plaintiffs pleaded that Saenz and Villarreal agreed to do business together and to 

form ZroBlack. Compl. ¶¶ 12, 14. Plaintiffs pleaded Saenz was CEO and his duties included client 

engagement and company promotion. Compl. ¶¶ 12, 14. Thus, Plaintiffs’ pleading establishes the 

scope of Saenz’s duties as CEO (though those weren’t his only duties at CEO).

29. Plaintiff also pleaded that Saenz purchased the “zroblack.com” domain name from 

GoDaddy and set up the ZroBlack web page and email server. Plaintiffs further pleaded that when 

ZroBlack requested return of the laptop, trade secrets, and GoDaddy domain, Saenz (1) accessed 

ZroBlack’s GoDaddy account without authorization or exceeded his authorized access and deleted 

ZroBlack’s webpage and email server and (2) accessed the ZroBlack laptop without authorization 

and misappropriated ZroBlack’s trade secrets. Compl. ¶¶ 13, 40, 41, 64, 65.

30. “[A]n employee is authorized to access a computer when his employer approves or 

sanctions his admission to that computer.” Id. at 926-27 (citing WEC Carolina Energy Sols., LLC, 

687 F.3d 199, 204 (4th Cir. 2012)). “Therefore, ‘he accesses a computer ‘without authorization’ 

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when he gains admission to a computer without approval.’” Id. (citing WEC Carolina Energy Sols., 

LLC, 687 F.3d 199, 204 (4th Cir. 2012) (citing LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 

1133 (9th Cir. 2009)). Here, ZroBlack sanctioned Saenz’s access to the computer and GoDaddy 

account so that he could carry out his duties as CEO—client engagement and company promotion. 

When he was no longer CEO and a member of ZroBlack those duties ended; thus, he was no longer 

approved to access the computer or GoDaddy account.

31. In U.S. v. John, the Fifth Circuit held authorization “may encompass limits placed 

on the use of information obtained by permitted access ... when the user knows or reasonably 

should know that he or she is not authorized to access a computer and information obtainable from 

that access in furtherance of or to perpetrate a crime.” 477 F.3d 263, 271 (5th Cir. 2010).

32. Texas federal courts have followed this rule in civil disputes. Absolute Energy 

Solutions, LLC v. Trosclair, No. H-13-3358, 2014 WL 360503 (S.D. Tex. Feb. 3, 2014) is a good 

example and has facts similar to this case. In Trosclair, the plaintiff owned an oilfield services and 

consulting business. The defendant was employed by the business but was terminated. The plaintiff

alleged that upon termination, defendant’s authorization to access plaintiff’s computer systems 

was revoked. The plaintiff alleged that the defendant accessed plaintiff’s computer systems 

without authorization and received and forwarded emails belonging to plaintiff and engaged in a 

directly competing business endeavor using plaintiff’s computer systems. Id. at *1. The defendant

countered that the plaintiff failed to state a CFAA claim because his access to the plaintiff’s 

computer and email system was authorized even after his termination, and the plaintiff did not 

promulgate guidelines that prohibited employees from emailing plaintiff’s documents to other 

personal computers, that access was authorized because even after termination the defendant

employee retained an ownership interest in the business and had a right to access its emails, and 

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finally that the defendant employee had no reason to believe that he was not authorized to continue

using plaintiff’s email system and that the plaintiff could have deactivated the email account but 

did nothing. Id. at *2. The district court rejected all these arguments, stating that plaintiff had 

plausibly alleged a violation of the CFAA.6

33. Even if Saenz were authorized to access the GoDaddy account after he parted ways 

with ZroBlack and ceased to be CEO, his deletion of the webpage and email server clearly 

exceeded his authorized access—his authorization was defined by the scope of his duties—client 

engagement and company promotion. Deleting a webpage and email server he created for those 

purposes runs counter to the scope of his authority. As noted by the Fifth Circuit in U.S. v. Phillips, 

“[c]ourts have ... typically analyzed the scope of a user’ authorization to access a protected 

computer on the basis of the expected norms of intended use or the nature of the relationship 

established between the computer owner and user. 597 F.3d at 271. Applying that rationale here, 

on the facts pleaded, Saenz exceeded his authorized access by accessing the GoDaddy account and 

deleting the webpage and email server. Thus, Plaintiffs have stated a claim upon which relief can 

be granted. Saenz’s motion to dismiss should be denied.

F. Plaintiffs state a cause of action for violation of the ACPA because use of ZroBlack’s 

domain is the same as using an identical or confusingly similar name under the ACPA.

34. The ACPA provides a civil remedy for the owner of a trademark if a person has a 

bad faith intent to profit from that mark and registers, traffics in, or uses a domain name that at the 

time of registration of the domain name is identical or confusingly similar to or dilutive of the 

trademark. Nothing in the language of the ACPA suggests that hijacking an original domain name 

6 The court also held that defendant was attacking the factual underpinning of plaintiff’s claim, 

specifically, whether defendant was authorized to access plaintiff’s email system after 

termination, which could not be decided on a motion to dismiss. Id. at *3.

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does not fall within its scope, or that bad faith intent must exist at the time of registration, as Saenz 

contends. Instead, his argument grafts onto the ACPA requirements contrary to its plain meaning. 

Statutory construction must begin with the language employed by Congress and the assumption 

that the ordinary meaning of that language accurately expresses the legislative purpose. Park ‘N 

Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 194, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985). As 

ably stated by Chief Justice Marshal two-hundred years ago, “[T]he intention of the legislature is 

to be collected from the words they employ. Where there is no ambiguity in the words there is no 

room for construction. The case must be a strong one indeed, which would justify a court in 

departing from the plain meaning of words ... in search of an intention which the words themselves 

did not suggest.” United States v. Wiltberger, 5 Wheat. 76, 95–96, 5 L.Ed. 37 (1820). Saenz’s 

argument is precisely that—a search for legislative intent that does not exist.

35. Saenz’s parting shot, that Plaintiffs’ pleading of bad faith in ¶ 69 is conclusory and 

is without merit. Plaintiffs alleged that he intended to divert customers to himself, and further, that 

he tried to sell the domain back to ZroBlack. The Fifth Circuit has already determined that intent 

to sell a domain name to the rightful owner of a mark is a bad faith attempt to profit from the 

registration. E. & H. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 275-276 (5th Cir. 2002) 

(citing Panavision Intern., L.P. v. Toeppen, 141 F.3d 1316, 1325 (9th CIR. 1998)).

G. Plaintiffs state a cause of action for breach of contract because Saenz had an obligation 

to return ZroBlack’s property after the release was signed.

36. Saenz argues that because Plaintiffs admit the Release does not have an express 

provision requiring the return of ZoBlack’s return property to ZroBlack, including domain name, 

webpage, and email server, it has failed to state a claim upon which relief can be granted. Mtn. to 

Dismiss, p. 13-14 (Doc. 8). Simply because the Release may not expressly provide for the return 

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 15 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 16 of 22

of property, however, does not mean he is not required to return the property. To pass title to 

property, a release must expressly state title is to be passed to a released party.

37. As argued extensively in paragraphs III.A and III.B above, assignment of Saenz’s 

“entire interest” in ZroBlack to Jonathan carried with it any claim to owning any of ZroBlack’s 

personal property—including the laptop computer, domain name, webpage, email server, and trade 

secrets. Plaintiffs pleaded that they demanded return of the property and Saenz refused. This is 

enough to state a claim for breach of contract.

H. Plaintiffs state a cause of action for breach of fiduciary duty because the claim did not 

accrue until after the execution of the Release.

38. Under Texas law, a “cause of action does not exist until facts exist that authorize a 

person asserting the claim to seek relief in a court of competent jurisdiction.” Aviall Services, Inc. 

v. Cooper Indus., LLC, 694 F. Supp. 2d 567, 576–77 (N.D. Tex. 2010) (citing W.K. v. M.H.K., 719 

S.W.2d 232, 236 (Tex. Civ. App.—Houston [14th Dist] 1986, writ ref'd n.r.e.)). Plaintiffs alleged 

that Saenz held ZroBlack’s domain name on behalf of ZroBlack, and that so long as he did not act 

against ZroBlack’s interests while holding the domain name, he was not in breach of his fiduciary 

duties. As CEO Saenz owed a duty to ZroBlack not to act against its interests. General Dynamic 

v. Torres, 915 S.W.2d 45, 49 (Tex. App.—El Paso 1995, writ denied) (duty of loyalty); see also 

General Dynamic v. Torres, 915 S.W.2d 45, 49 (Tex. App.—El Paso 1995, writ denied) (corporate 

officers owe fiduciary duties). His obligation not to act against the company’s best interest did not 

cease to exist upon the signing of the release. Rather, per the terms of the Unanimous Consent, he 

had an obligation to return ZroBlack’s property. Instead, he destroyed it, acting against the 

company’s best interests. Because he destroyed that property after execution of the Release, and 

because he refused to return other property, the cause of action accrued at that time, not prior to 

execution of the Release.

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 16 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 17 of 22

I. Plaintiffs state a claim for tortious interference.

39. Saenz argues here that Plaintiffs were required to allege facts supporting a 

reasonable probability that that the plaintiff would have entered into a business relationship but for 

defendant’s conduct, and that instead Plaintiffs offered only a conclusory speculation.

40. Defendant is in error, however, because “it need not be absolutely certain that the 

prospective contract would have been made were it not for such interference” Verkin v. Melroy, 

699 F.2d 729, 732 (5th Cir. 1983). Furthermore, Plaintiffs alleged facts supporting their claim, 

including that Saenz knew withholding of the website and email server would interfere with 

ZroBlack’s prospective clients and knew that his actions were certain or substantially likely to 

cause interference. Compl. ¶ 94. Plaintiffs also pleaded that Saenz withheld the laptop containing

login information for the domain, and destroyed emails and documents pertaining to ZroBlack’s 

business and that ZroBlack needed to fulfill existing contractual obligations. Compl. ¶¶ 95, 96.

This is not conclusory and is enough to state a claim for tortious interference.

J. Plaintiffs have stated a cause of action for conversion.

41. Saenz contends that Plaintiffs’ Complaint fails to identify any damages stemming 

from Saenz’s alleged conversion of the laptop, and that no alleged facts support the essential 

element of damages. Mtn. to Dismiss, p.16. Plaintiffs pleaded that Saenz purchased the laptop as 

part of his duties as CEO and using ZroBlack’s debit card, that ZroBlack owned a laptop, that 

Saenz refused to return it and exercised dominion and control over the laptop to the exclusion of 

ZroBlack. Compl. ¶¶ 17, 39, 40, 41. 42, 43, 100. Attached to the Complaint as Exhibit 5 is the 

receipt for the purchase of the laptop using ZroBlack’s debit card, along with the corresponding 

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 17 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 18 of 22

bank statements showing the charge. In considering a motion to dismiss for failure to state a claim, 

a district court must limit itself to the contents of the pleadings, including attachments thereto. 

Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). Under Texas law, a 

plaintiff can seek damages equal to the value of the property converted, or have the property 

returned and recover damages for loss of use during the property’s detention. Winkle Chevy-OldsPontiac, Inc. v. Condon, 830 S.W.2d 740, 746 (Tex. App.—Corpus Christi 1992, writ dism’d.); 

see also United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147-48 (Tex. 1997) (damages 

for conversion is fair market value of the property). Exhibit 15 shows the value of the property. 

Additionally, Plaintiffs pleaded that Saenz detained the property, refused to return it, and that 

Plaintiff’s lost use of the property because they could not access the domain hosting the webpage 

and email server.

K. Plaintiffs state a cause of action for civil theft under the TTLA because the receipt for 

purchase of the laptop is proof of damages.

42. As above, so below. Saenz contends that Plaintiffs did not properly plead damages

to support its TTLA claim. Mtn. to Dismiss, pp.16-17. Actual damages in the context of a TTLA 

claim mean those recoverable at common law. In re TXCO Resources, Inc., 475 B.R. 781, 834

(Bankr. W.D. Tex. 2012) (citing Beaumont v. Basham, 205 S.W.3d 608, 619 (Tex. App.—Waco 

2006, pet. denied)). Under the common law theory of conversion, damages are generally the 

market value of the property at the time of the conversion. Id. (citing Soto v. Sea–Road Int'l, Inc., 

942 S.W.2d 67, 74 (Tex. App.—Corpus Christi 1997, writ denied)). Thus, this argument fails for 

the same reason it fails for Plaintiffs’ conversion claim.

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 18 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 19 of 22

L. Plaintiffs’ request for seizure and/or injunction relief does not fail because Plaintiffs 

showed (a) that relief per Rule 65 would be inadequate, (b) Plaintiffs did include the Rule 

65(b)(1)(B) certification, (c) Plaintiffs did show irreparable harm, and (d) Plaintiffs 

showed a likelihood of success on the merits.

a) Plaintiffs showed that relief per Rule 65 would be inadequate.

43. Saenz first argues that Plaintiffs have failed to show that an order pursuant to Rule 

65 would be inadequate. They contend that if copying were all that was required for civil seizure 

than any electronic data of any kind would be subject to seizure. Mtn. to Dismiss, p. 17. They cite 

no case law. Plaintiffs, however, do cite case law supporting that very proposition. Blue Star land 

Services v. Coleman, No. CIV-17-931C, 2017 WL 11309528, *1 (W.D. Okla., August 31, 2017). 

In Blue Star, the plaintiff alleged that defendants downloaded trade secrets before leaving their 

employment and started a competing business. In its seizure order, the court specifically noted 

“Defendants could easily copy the information onto another computer or other storage media 

without the knowledge of Plaintiff or the Court.” The court further stated, “Defendants’ prior 

actions demonstrate a willingness to evade or ignore the law.” Here, Saenz has demonstrated a 

similar disregard for the law by deleting ZroBlack’s webpage and email server. Thus, Plaintiffs 

have shown that Rule 65 relief is inadequate.

b) Plaintiffs included the Rule 65(b)(1)(B) certification.

44. Plaintiffs’ Rule 65(b)(1) certification is found in ¶ 79 of the Application for Seizure, 

Temporary Restraining Order, and Temporary Injunction. It is supported by the affidavit of 

Jonathan Villarreal which sets out the facts also set forth in the Application, which “clearly show 

that immediate and irreparable injury, loss, or damages will result to the movant before the adverse 

party can be heard in opposition. Furthermore, ¶ 79 states the reasons why notice should not be 

required, namely the risk that Saenz will copy or destroy the trade secrets on the laptop computer. 

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 19 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 20 of 22

Plaintiffs’ also contend that counsel’s signature to the Complaint is enough to “certify” within the 

meaning of Rule 65.

c) Plaintiffs showed irreparable harm.

45. Plaintiffs have alleged and shown that Saenz is in possession of trade secrets and 

in a position to use them. As explained in Plaintiffs’ Application, Defendants' prior actions 

demonstrate a willingness to evade or ignore the law. Daniel Health Sciences, L.L.C. v. Vascular 

Health Sciences, L.L.C., 710 F.3d 579, 585 (5th Cir. 2013). State law determines whether harm is 

irreparable. Heil Trailer Intern. Co. v. Kula, 542 Fed. Appx. 329, 336 (5th Cir. 2013). When a 

defendant is in possession of trade secrets and in a position to use them, state courts have presumed 

irreparable harm will result absent injunctive relief. Id. As observed by the Fifth Circuit in Heil 

Trailer, Texas courts have frequently found irreparable harm in such cases, further noting that the 

Fifth Circuit itself had upheld similar findings by federal district courts. Id. at 336 (and cases cited 

therein). Because Plaintiffs have shown that Saenz has previously destroyed ZroBlack’s data and 

is in possession of ZroBlack’s trade secrets, Plaintiffs have demonstrated irreparable harm.

d) Plaintiffs showed a likelihood of success on the merits.

46. Saenz appears to contend that his prior arguments in his Motion to Dismiss show 

Plaintiffs have not demonstrated likelihood of success on the merits. Plaintiffs respectfully 

disagree, citing to their arguments in response, above. Furthermore, Plaintiffs extensively briefed 

likelihood of success on the merits in their Application, breaking down the elements of each claim 

for trade secret misappropriation, violation of the Computer Fraud and Abuse Act, AntiCybersquatting Consumer Protection Act, with citation to documentary evidence provided in 

support. Plaintiffs need only present a prima facie case to show likelihood of success on the merits. 

Janvey v. Alguire, 647 F.3d 585, 505-596 (5th Cir. 2011). Plaintiff has done so.

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 20 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 21 of 22

IV. CONCLUSION AND PRAYER

47. Based on the foregoing argument, Plaintiffs respectfully ask the Court to deny 

Defendant Saenz’s Motion in its entirety. Should the Court conclude any of Defendant’s arguments 

have merit, Plaintiffs respectfully request leave to amend their pleading. Plaintiffs further pray for

all such other relief to which they may show themselves justly entitled at law or in equity. 

Respectfully submitted,

THE VETHAN LAW FIRM, PC

By: /s/ Joseph L. Lanza

Charles M. R. Vethan 

Attorney-in-Charge

Texas Bar No. 00791852

Steven A. Costello

Texas Bar No. 24062677

VETHAN LAW FIRM - HOUSTON

Two Memorial City Plaza

820 Gessner, Suite 1510

Houston, Texas 77024

Tel: (713) 526-2222

Fax: (713) 526-2230

Email: edocs@vwtexlaw.com

Joseph L. Lanza

Texas bar No. 00784447

VETHAN LAW FIRM – SAN ANTONIO

11459 Huebner, Suite 101

San Antonio, Texas 78230

Tel: (210) 824-2220

Fax: (713) 526-2230

Email: edocs@vwtexlaw.com

Attorneys for Plaintiffs

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 21 of 22
Plaintiffs’ Response to Defendant Saenz’s Motion to Dismiss

Page 22 of 22

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing was electronically filed with the Court 

on the 14th day of July 2020, and electronically served on the date reflected in the ECF 

system upon all parties registered to receive notice pursuant to the Court’s CM/ECF 

system.

David A. Vanderhinder

State bar No. 24070787

DVanderhinder@dykema.com

Ryan J. Sullivan

State Bar No. 24102548

RSullivan@dykema.com

DYKEMA GOSSETT PLLC

112 East Pecan St., Suite 1800

San Antonio, Texas 78205

Attorney for Defendant John Saenz

George R. Spencer, Jr.

State Bar. No. 18921001

gspencer@langleybanack.com

Natalie F. Wilson

State Bar. No. 24067769

nwilson@langleybanack.com

Attorneys for Defendants Gunn, Lee & Cave, P.C.

And Miguel Villarreal, Jr.

/s/ Joseph L. Lanza

 Joseph L. Lanza

Case 5:20-cv-00571-OLG Document 12 Filed 07/14/20 Page 22 of 22