## In the Court of Appeals Second Appellate District of Texas

at Fort Worth

___________________________ No. 02

- 2 0

- 00009

- CV

____________________ ____ ___

On Appe al from the 141st District Court Tarrant County, Texas Trial Court No. 141

- 314043

- 19
Before Sudderth, C.J .; Womack and Wallach, JJ. Mem o ra ndum Opinion by Justice Womack 

### R EX 

### P ERFORMANCE 

### P RODUCTS 

### , LLC , Appellant

V


### . J AMES 

### D ONALD 

### T ATE AND 

### M ICHAEL 

### C UFFIA 

### , Appellees2 MEMORANDUM OPINION
I. I NTRODUCTION Appellant Rex Performance Products, LLC (RPP) sue d Appellees James Donald Tate (RPP ’ s president and chief executive off icer) and Michael Cuffia (RPP ’ s dire ctor of ope rations) and alleged that (1) Tate negotiated the sale of RPP ’ s assets t o another company , (2) unknown to RPP, Tate negotiated a separa te r etention bonus (or “ s uper bonus ” ) agreement bene fitting Tate and Cuffia at the expense of RPP ’ s sales pric e, and (3) Tate deliberately downloaded a v irus onto his RPP computer to destroy evidence of his reducing RPP ’ s sales price in a tradeoff for his and Cuffia ’ s

“ super bonus. ” A ft er the trial court granted T a te and Cuffia ’ s traditional and no

evidence motio n for summar y judgment and di smissed RPP ’ s claims, RPP broug h t this appeal. We affirm the portion of the summary judgment dismissing the claim
th at T ate breached his common law fiduciary duty by downloading a vi rus on RPP ’ s computer . We reverse th e remai ning portions and remand th ose matters for trial.
II. B ACKGROUND A. The Parties RPP is a Michigan l

imited liability company that manufacturers p olye thy lene foam, the mat er

ial used to protect good s du ring sh ipping. Pregis Performance
Products 1 ( Pregis) i s a provid e r of protective pack aging material s and systems

1 Pregis Perform anc e Pr odu cts LLC was newl y created just befo re the transaction closed. Pregis LLC was t he entit y whic h negotiated the asset sale.3

headquartered in C h icago that operates multiple North American manufacturing and

war ehous ing facil itie s devoted to pro tective packaging solutions. On February 23, 2018, RPP c ompleted it s asset sal e to Pregis

. At the time of the asset sale, RPP ’ s equity was held as follows:

• Williamette Holdings, LLC , a Ne braska li mite d l iabil ity co mpany

— 6 3. 12%

• Tate , RPP ’ s President and Chief Executive Of ficer

— 21 .33 %

• Cuffia , RPP ’ s Director of Ope rations

— 9.55 %

• J ef f Smith , RPP ’ s Director of Engineering

— 5 %

• Emerald Peak Group, LLC, a South Dakota limited liabil ity company

— 1%.
W illiamette is owne d equally by John Ballinger, Rob Story , and Rex Hansen , and each
of the Williamette membe rs personally gu a rant eed the deb ts of RPP and personally funded financing to RPP

. 2 Emerald Peak is owned equally by Rex Hans en and Heidi
Hansen. Hansen 3 also owns and controls an entity by the name of Maxwell Morgan,
L LC, which ha d lent s ign if icant amoun ts of money to RPP. While neith er Hansen , Bal linger , nor Story ever received a salary from RPP , both Tat e and Cuffia receive d salaries while employed by RPP

.

2 A c cording to Hansen, neith er Tate n or Cuffi a ever signed a personal guara nty of any of the debts of RPP.

3 All references to “ H ans en ” in this opinion re fer to Rex Hansen rather than He id i Hanse n.4

B. The Asset Sale Negotiations According to Han s en , d is cussion of the asset sale began in No vemb e r 201 6
when Manu Bettegowda , a member of the Pregis board of directors , app roached RPP
reg ardi ng the possib ility of purchas ing all of RPP ’ s assets. A formal letter of intent
was submit t ed arou nd January 5, 2017

. Nego tiat i ons o n behalf of RPP were l ed by
Hansen before the letter of i ntent and by Tate ther eafter

. In Hansen ’ s opinion , t he propo sed price to pu rchase all of R PP ’ s assets w as $24 mi l lion before the parties terminated discussio ns i n February 2017. Bettegowda
also testified in his deposition that the first round of negoti ations invol ved a letter of intent at $24 million, bu t that deal fell apart. As early as Oct o ber 2 1, 2017, Tate was communicating to Cuffia t o “ [t]hink
about cre ative ways to craf t this deal so that M[axwell] M[organ] doesn ’ t derail it and
the added valu es go to the RPP team. ” Negotiations st a r ted again in December 2017 when, according to Hansen, Pre gis contacted Tate , who was entru s ted with th e responsib il ity of neg otiating the sa le on behalf of RPP and was autho rized to sell
RPP ’ s as sets to Pre gis for $20 mi llion. 4

4 In his dep os ition, Hansen admitted that he “ had no direct communication from Pregis [t hat

] th ey would pay [$20 million ]. ” Hansen also testified tha t h e had n o direct com munic ation with a ny body who told him th at they w o uld pay $20 mi l l i on for RPP in this t ime period and that ther e was no v aluati o n analysis completed by a thir d p arty th at in dicated that th e company was worth $20 milli on.5

By Janu ary 15, 20 1 8, it was clear that Tate was unhappy with the deal. On that
date , Tate emailed Ha nsen : I look at [the de al] and say, hm mm are the ow nership p ercentage s [in RPP] representative of the time, effor t, s acrifices and c ommitme nt put forth by s uch in d ividuals? Easy for me to rank accordingly , but I ’ d ran k #1 D Tate #1A R Hansen #3 M Cuffi a # 4 Jeff Smith # 5 J Balli nger #6 Rob . . . . I ’ m very dissatis fied with less than $2 m illion ; rather pitiful showi ng f or all the comm itment, effort, time and sacri f i ces. Hansen responded, “ Unfortunately thi s has not en ded in the pop we a ll wanted.

. . . Let ’ s drag it across the l ine, and fin[d] the next deal that costs less an d makes us

more ! ”
After Tate met with Pregis personne l on Janua r y 15, 2018 , Hansen contends
that Tate advi s ed the RPP members th at Pr egis would offer no m o re than $18 mi llion
fo r the RPP asset s. Hansen say s that “ [s]hortly thereafter, Tate lowered the price
aga in, and advised th e other RPP memb ers that Preg i s was onl y willing to pay $17
million. ” 5 After consultation, the RPP members ag r eed to the purchase price because, in
Hansen ’ s words, “ Tate was ad aman t that $17 million was the best price RPP was goi ng to receive an d pressured the other RPP mem b ers to accept the offer

. ” O n e da y later, Tate texted Bettegowda, “ In case Rex ca l ls you randomly I ’ ve communicated to him 2 days ago you ’ ve offered $16.5

- 17 with $17 as max. ”

5 Bett egowd a later testified at his deposition that Ta te did not suggest redu cing the purcha se p rice fr om over $ 18 million to $17 mil lion.6

C. The “ Su p er Bonus ”
Much of t he dispute in this case centers around what the parties have r eferred

t o as a “ super bonus. ” In his deposition, Tate testi fied that the ide a for the “ s up er b onus ” originated with Bettegowda. In a January 18 , 2018 email to C uffia, Ta te discussed the
compens atory pla n payable to the RPP Executive Team : The Purc h ase P rice of $ 17 [ ] mi l lion would be paid to Rex Owners hip and a sepa rat e and add iti onal bucket of $1.5 million would be set aside and pay able as a
“ su per bonus ” to th e Ex ecuti ve Te am for their commitme nt to the Pregis Team.
The “ s uper b o nus ” wou l d be paid s e p arately from any salary/bonus package a nd paid
in thr ee installme nts over a one

- year period. Bettegowda confirmed the deal in a n internal Janu ary 18, 201 8 email : “ We have agreement on Rex. 17 mln pp at close. 750 in six mon ths to m a nagement and
anothe r 750 k at 12 months. Please kee p the retentio n p ayments c on f idential a s this
will not be in the contract. ”
O n the same day, T a te sent an e mail to Bettegowda “ intended to summar ize
our last phone call regarding our di scussion [ .] Our last conversation c o n firmed your purchase pr ice offer as a ca sh asset p ur chase price of $17 million, plus inventory with a quick close; approximately 2/15/20 18

. ” The email included details about himself

— described as the “ Execut ive Team Leader: Don Tate ”

— as well as hi s state m e nt , “ I ’ m hap py to cash in my equity po sit ion and super bonus from RPP and take an opportunity outsid e the Packagin g World if that bet ter serves you and the Pregis7

Team

. ” The email concluded with T ate ’ s pr o mi se, “ My commitment is, as yours, to
stay engag e d a s the prim ary RPP contact to ass ure w e don ’ t get derailed; we ’ ll not
allow Rex/John nor Kevin/Keith, nor anyone e lse from ei ther side to derail the project. ”
On January 19, 2018 , Tate s ent anot h e r email to Bettegowda setting out the

terms of the agre e m ent : Those of us who are equity o wners get the money up front from the sale and felt that some part of the supe r bonus should also be paid up front to off set the lower price for the business. Rex h as been adam ant a [b]ou[t] getting $20 milli on for the bu s i ness, but us e quity own ers have pe rs uaded him to consider $18 and then we put a bit more pressure on him fo r th e $17 with knowledge that there would be emplo y me nt bon uses for those staying with the sa l e. Two days later, Tate sent Cuffia an email notin g , “ If t hey ’ ll ag ree with 30% superbonus up front, it ’ s a l il more than the difference between $17 an d $1 8. ” Tate
then confirmed with Bettegowda on the same day that the pur chase offe r was for

“ $17 mi llion plus inv entory , ” with a “ s up er b onus ” program t ha t is “ s eparate and independent of this pur chase a greement and will remain totally confident ial and
separ ated from the LOI [letter o f intent] , APA [asset purchase agreement] a nd /or any
of the other purchase sell docum ents
. ”
On J anuary 22, 2018 , Be tte g o wda e mailed Ke vin Baudhuin, P regis ’ s p resident and CEO, saying,
I don ’ t th ink they a re lea ving at cl ose . The reason the 1.5 m ln isn ’ t mentioned anywhere is that he doesn ’ t want R ex to know about it as they ar e getting no thing on the 17. The pri ce w as 18 and c hange and h e8

suggested m ov

ing it to 17 and using a million to pay the te am and to kee p them on board.
Bau dhuin respon ded, Feels like with this being separate the y could get the [ir] $17m m and le a v e[.] [ D ] o you agree? Without them sta ying on b oard I l o s e a bit of interest at the price and the current profit level.
A ddi tiona ll y, to incentivize the Executive and Local Team, a Super Bonus program has been offered and wi ll be s eparate and independent
o f this purch ase agreement and will re main tota lly conf i d ential and separated f

rom the LOI, APA and/or any of the other pu rch ase s el l documents.
Hansen contends that there was never an offer presented to him for a ny thing greater than $17 million. In his words, “ Instead o f discuss ing a potent ial $18.5 mill i o n that was available for the sales p rice, Tate wove a t ale of woe, advi sing the RPP team that they should count their blessings that Pre gis was willin g to offer $17 million. ”
D. RPP ’ s Discovery of the “ Super Bonus ” According to Hansen, he first learn e d of the “ sup er bonus ” a fter the weekend of Jan ua ry 2 0

– 21, 2018, when he “ met with the RPP executive team to discuss T ate ’ s suggestion that we f

ir e on e of RPP ’ s employees, John McMillan, for cause. To support that po tential te rmi nation, Tate agreed to a l l ow RPP ’ s IT specialist to search
his emails for c om mu n ications concerning McMillan

. ” Han sen , Ba llinger , and
another person then conduc t ed a review of emails on J a n uary 24, 201 8 , “ in order to9

collect informat ion R PP mi g ht need f ollowing the trans action wi t h Pregis. ” 6 In
Hansen ’ s words , T he reviews resulted in the startling discovery that Tat e had negoti ated a secret deal with Pr eg

is, through Bettegowd a, whereby Tate and others would receive a “ Su p er Bonus ” of $1. 5 mill ion (separate and apart f ro m job

- r el a ted compensation ) in exchange for dr iving the sales price of RPP ’ s assets down from $20 m illion to $1 7 million.
I n ad di tion to the earlier e mails, Hansen says that he discovered a J anuary 23,
2018 em a il from T ate to B e t tegowda which inc luded the foll ow i n g chart s that , in
Tate ’ s w ords, showed a “ summary of the ownership pay out and [ hi s] thi nking around

t he ret ention bonus pa yments. ” 7

6 Hansen testified i n his d epositio n that Tate au tho rized the ema il r eview because Tate felt tha t RPP “ could fire John McMillan f or cause , becau se he was not livin g up to the expectations he set for hi msel f. ”

7 J eff Smith is RPP ’ s D irector of Engin eering who was t o receiv e a 2% e quity posit ion in RPP profi t s as of June 1 , 2016. In add ition, he was to r eceive an additional 1% eq uit y position in RP P each year from Decem ber 31, 2016 , th roug h Dec em ber 3 1, 2 0 18. Smith an d Nilesh Amrutiya , a p r ocess engi n e er, a r e desc r ibed as

“ management employees of RPP ” in “ D efendants ’ Tr ad itional and No

- Evidence Motion for Summary Jud gment. ”10

After discovering the emails, Hansen did not conta ct Tate to ask hi m about the

“ s uper b onus. ” Rather , Han sen b el ie v ed that “ our best opti o n was g oing forw ard
with the sale. ” A t his deposition, Hansen explained his thought process: [O]ur discussions were r e all y we w ere concentrating on what w ere our options , what could w e do right now. And one of the opt ions was, h ey , c al l Manu [Bettegowd a], confr on t him on this. Call D [o] n Ta te , confront him on this. The other option was to , hey, let ’ s figure out what our rig hts wo uld be if we close the deal

. The one thi ng that we fel t absolutely was that Do n Tate wo uld, if
we co n fr onted Don Tate, he wo uld walk out the door, and our backup pl an for management in c as e something happened to Don Tate was al ways Michael Cuf

f i a. But i t beca me pretty ap parent Mi c hae l Cuf f ia was complicit in the super bonus arrangement, so we f elt we di d n ’ t have a good managem ent back u p program. And the company, wh ile finally hitting some sales targets, was losing money really fast.
So our u l tim ate an alysis was we have to close this deal as it is and maint ain our rights as best we can to get any fai rn e ss out of this when it is all ov er. E. Letter o f Int ent and Continued Negotiations
A letter of in t ent , which was sign ed by Bettegowda on behalf of Pregis and by Hansen on behalf of RPP, was ent ered into on Januar y 29, 2018. In addition to other11

agr ee m en ts, it set out the $17 million purcha se price but did not reference the
retention bonus agre em ents
. Tate said th at he, Story, and Ballinger (the Williamette m embers) cont inued to
discus s their o p tio ns from Ja nuar y 24 up until Feb ruary 23. Ballinger w a s worried
about w hat Pregis would do: “ In a negotiation, each side kee ps its cards close to the vest. In our negotiation, non e of our cards were close to the vest be cause our

ne gotiat or was sha ring th e da ta, our side dat a wit h the other side, so that c a u se d us a hug e proble m . ” Despite the knowledge of the “ super bo nus , ” H ansen continued to push for
the sale. A fter r eceiving a Febr uary 7, 20 18 em ail from T ate saying t hat he was

“ t r yi ng as h ard as [he could] to get thi s deal with Pregis across the f in i sh line but [was]

st ruggling big time to commit to sta ying and working fo r them, ” Hansen ’ s response

was, “ You can do it!! ”
On Februar y 13, 2018 , Bettegowda sent Tate th e retention b onu s ag r eement. Two days later, the email containing the retention b on u s ag reement was obtained and
forwarded to Hansen

. H owever, ac cording to Hansen, he did not receive an executed copy of the r etention bonus agreement until after this l awsu it was filed. In his deposition, Bettegowd a testified that Pre gis would not ha ve “ d one t he
deal ” without the management t e am . T here were two separate compo nents associated with the pur ch ase price o f $ 17 mi llion

— o ne was the purchase o f th e assets , and t h e s econd was a series of retention bonus agreements. In this “ second ” round12

of ne g ot iations with RPP, B ettegowda stated th at Pregis never agreed to pay more than $17 million an d th at Tate did not sugges t reducin g the purcha se p rice fro m over $ 18 m illion to $ 17 mil lion. F. Request for Release s As the dea l ap proached closing, Tate so u gh t to ge t release s before sign ing the
agreement. A ccording to Hansen, “ Over the course of Febru ary 22, 201 8, until the
deal wa s clo sed on February 23, 2018, Ta te, either h ims elf or through his lawyer,
made 13 demands for full re leases before Tate woul d s ig n the A P A

. ” Despite the demands, Hansen said that “ [e]ach of Tate a nd Cuffia ’ s demands for releases of
liab ility we re ex plicitly an d un equiv ocally refus e d. ”
RP P ’ s counsel in the underlying transactions , Stephen Gross, te stified at his deposition th at Ta te told him the following about why he wanted a re lease : [W]hat Don Tat e told me was I don ’ t want to be held responsible for th ings I didn ’ t k now about. I was not in control of the cas h, the r e c ould hav e been finan cial ir regularities, et cetera. Whi ch is why my thought in a way to bridge the gap was to give Don what he want ed, which is the discretion o f a limited release. . . .
How ever, accord ing to Gross , when Tate was given a l i m it ed re lease, “ he didn ’ t want
it , he wanted a complete release. Whi ch is w h y I surmised that his real issue was the potential claims that you guys are now having fun with. ” Gross ’ s “ interpretation was [Tate] wanted a release because he was aware o f t he a ctions that are th e subje ct matter of this complain t and he was t r y i ng to use his signature as leverage to get that. ”13

As Hansen noted in his declara tio n, wi thout Tate ’ s and Cuffi a ’ s signatures, the
entire s ale was at an impasse: “ It is important to recall that Tate and Cuffi a are both equity owners of RPP and officers an d e mployees of RPP. As equity owners, the sale
of the assets of RPP to Pregis co uld not consumma te without the signatures of Tate
and Cuffia. ” Han sen asserted that Tate and Cuffia attempted to barter their signatures for full releases: “ Tate and Cuffi a d ec ided to expl oit this fact when, on February 22

– 23, 2018, they . . . att empted to with hold their signatures on the APA in exchange for full releases from any and all acts. ”
G. Com puter Virus and Closing

“ Then, ” recounted Hansen, “ conveni ently, on Fe br u a r y 21, 201 [8] , the day
before T a te attempted to hold t he enti re tr ansaction hostage for a full release from RPP, a virus infected Tate ’ s computer and attac [k]ed his email. No one else ’ s emails
were attacked b y the []virus. ” Even though “ [e]ach of T at e a nd Cuffia ’ s demands for r el eases of liability were expli citly and unequivocally refused, ” the closing went forward on February 23, 2 0 18

. When the closing took place, Hansen was “ aware that a super bonus may be paid or may not be paid. ” Howe ver , he t h o u ght it would occur.
Acc ording to Be tte gowda, there were four p eople

— two o f whom were Tate
and Cuffia

—

who received retention bonus agreements from Pr egis

. Tat e an d Cuffia went to work for Pregis and earned the bonu ses in install ments over t i me. I n14

H an s en ’ s words, “ T ate received a bonus four times the size of his annual s alary for
be traying RPP. ” H. Litigat ion
Th e closing occurre d on Friday, February 23, and t wo lawsuit s
— one in Texas
and one in Michigan

—

were filed on Mon day, Februar y 26

. I n t his su i t, R PP or iginally sued Tate, Bettegowda, Pregis , and Olymp us Partners, LP

. 8 The trial court gran ted the special appearance filed by Pregis and Bette gowda , which we affirmed. Rex Performance Products

, LLC v

. Bet

te go wda , No. 02

- 18

- 00171

- CV, 201 9 W L 3955 20 5 ( Tex. App.

— Fort Worth Aug. 22, 2019, no pet. ) ( mem. op. ). Later, Cuff

i a was added to the
la wsu it

. I n its pleadings, RPP a lleged ( 1) breach of common l aw fid uciary duty against
Tat e and Cuffia on several g rou nds , ( 2) breach o f comm on law fid uci ar y du ty against
Tate for destroying RPP elec t ronic info rmation b y all egedly downloading a vi rus on his compu ter , ( 3) liability of all defendants as joint tortfeasors based on the “ super bonus ” agreement , an d ( 4) con sp ir acy agai nst a ll d ef endants for “ d riv [i ng] do w n the purchase price for the as sets of RPP in exchange for a ddi tional secret compensa tion
to Tate [ and] Cuffia

. ” Tate and Cuffia filed a general den ial and asserted numerous aff irma tive def

ense s , inc luding w aiv er and ratific ation.

8 In it s pleadings, RPP stated that Olympus P ar t ner s, LP , a p rivat e equity firm, acqu ire d Pregis in May 2014. H an sen asserted in his d eclaration that Oly mpu s Pa rtners , LP owned Pregis a t all times r el evant t o this d ispute.15

A f ter di s cov er

y, Ta te and Cuffia f

i led their traditional an d no

- evidence motion for summary judgment. I n their motion for summary judgment, Tate and Cuffia sought summary judgment b ecaus e : ( 1) R PP kn ew of the ret ention bonuses before the
sale ; ( 2) RPP waived or ra tif ie d any a l leged breach ; ( 3 ) there is no evidence of damages , or RPP ’ s damages are waived or ratified ; and ( 4) there is no evidence Tate
download ed a virus on to his com pute r , or there is evide nc e that t he virus was due to a
ransomware demand. RPP respon ded t o the m o tion.
After a hea ring, the m otion for summary judgment was grante d , and the claim s against Tate and Cuf

fia wer e severed

. This appe al fo l lowed

.

III. D IS CUSSION
A. Standard of Review We review a summary judgment de novo. Travelers Ins. Co. v . Jo a ch i m , 315 S.W.3d 860, 862 (Tex. 2010) . We consider the evidenc e presented in the lig ht

most favorable to the nonmovant, credit ing ev idence f av orable t o the non movant if reasonable jurors could, and disregarding e vidence con trary to t he non movant un le ss

r e as o n able j urors could not. Mann Frankfort St ein & Lipp Advi

sor s , Inc. v. Fielding

, 2 89 S.W. 3d 844, 848 (T ex. 2009). We indulg e ev er y reason ab le infer ence and resolve any doubts in the nonmovant ’ s favor. 2080 1 , Inc. v. Par ker , 249 S.W.3d 392, 3 99 (T ex.
2 00 8 ). When a party moves for both traditional and no

- evidence summary judgments,
we first cons ider the no

- evidence motion. F irst Uni ted Pent ec ostal Ch urch of Beaumont v.16

Parker , 514 S.W.3d 214, 219 (Tex. 2017). If the non

- movant fails to meet i ts bu rden

un d er the no

- evidence motion, ther e is no need to address the challenge to the traditional motion as it necessarily fails. Id. A par ty may m ov e for a no

- evidence summary judgment “ on the ground that
there is no evidence of one or more essential ele me nt s o f a claim or defense on which an adverse party would have the burden of proof at trial. ” Tex. R. Civ. P. 166a(i). The court must gr ant the mo tion unl ess the respon dent produces summary ju dg ment evidence raising a genuine issue of material fact. I d. Th e n o nmovant may raise a genuine iss u e of material fact by producin g “ more than a scintilla of evidence

esta blishing the existence of t he chall en ged elem ent. ” Ford Motor Co. v. Ridgway , 135 S.W.3d 598, 600 (T ex. 2004).
To ob tain a traditional summ ary j udgme nt , a movant must produce evidence showing that no genuine issue of material fact e xists and that i t is entitled to judgment

as a mat ter of l aw . Town of Shady Shores v. Swanson , 590 S.W.3d 544, 551 (Tex. 2019) ; see T ex. R. Civ. P. 166a(c)

. A de fen da nt th at conclusively negates at least one essent i al element of a plain tif

f ’ s cause of action is entitled to summary judgment on that claim

. Fro st N a t ’ l Ban k v. Fernandez

, 315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ.
P. 166a(b), (c)

. A def

endant is e ntitl ed to summary judgment on an affirmative
de f ense if th e defendant pre sen t s summary judgment evid ence that conclusive ly
establishes ea ch eleme nt of the affirmative defens e . See Chau v. Riddle , 2 54 S .W.3d 453, 455 (Tex. 2008). Once the defendant mee ts its bu r den, the burden shifts to the17

nonmo vant to raise a gen uine issue of material fact precluding summary judgment on
the affirmative d efense. S e e Cente q Realty, Inc. v. S iegler , 899 S.W.2d 19 5, 197 (Tex.
1995 ).
B. Applicable Law
1. Breach of F i du ciary D u ty Generally, the elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary duty, (2) breach of the duty, ( 3) ca usati on, and (4) damages.
F irst United Pentecost

a l Church , 514 S.W.3d at 220

. The law d oes not recog niz e a fid uc i ary relationship lightly. Lundy v. Masson , 260 S.W.3d 482, 501 (Tex. App.

— Hou ston [1 4th Dist.] 2008, pe t. denied). Whether suc h a duty e xists de pends on the
circumstances. Id. Corporate offic e rs and directors owe a fiduciary duty to the c o r por at ion t ha t the y serve. Int ’

l Bankers Life Ins

. Co. v. Holloway , 368 S.W.2d 567, 576 (Tex. 1963) ; Grinnell v. Muns on , 137 S .W.3d 706, 718 (T ex . Ap p.

— Sa n Ant onio 2004, no pet.)

. A
corp orate fiduciary is u n der an obli gation not to usurp corporate oppor t u nit ie s for
p e rson al gain, and equity will hold hi m accountable to the corporation for his profits
if he does so. Int ’

l Bankers , 36 8 S.W.3d a t 577

. Th e r espon sibility of the corpo rate fiduciary includes the dedication of his uncorrupted business judgmen t for t he so le
b ene fit of the co rporation. Id.
As this court has noted before, it is without question that corporate officers
and fiduciaries are “ held ‘ in offi cial action, to the e xtreme measure of candor,18

un selfishness, and good fa ith

. ’ ” Car dwell v. Wils on Tr

ophy Co

. of Fort Worth

- Dallas, Inc. , 622 S.W.2d 651 , 653 (Tex. App.

— Fort Worth 1981, writ re f ’ d n.r.e.) (citing Int ’

l
Bankers , 368 S.W.2 d at 577)

. T h e du ty of loyalty dictates that a corporate officer or
di rector must act in good faith and must not a llo w his p er s onal inter est to prevail over
that of the c orporation. Loy v. Harter , 128 S.W.3d 397 , 407 (Tex. App.

— Texarkana 2004, pet. denie d).
D ire ct ors and officers of a co rporation must make full di s closure of their personal interest in a transa c t ion t hat t hey a re negotia ting for the corporat ion. Gen

. Dynamics v. Torres , 915 S. W.2d 45, 49 (Tex. App.

— El Paso 199 5, writ den ied). A
transacti on in whic h a corp orat e fid uciary derives personal profit is subject to the

c lose st examination , and the form of th e t ra nsact io n will give way to the substance of what actually occurred

. I

nt ’ l Bankers , 368 S.W.2d at 577

. 2. Waiver and R ati fication
Waive r is defin e d a s “ a n intentional rel i nquishment of a known right or
intentional c on d u ct inconsistent with claiming th at ri ght. ” S un Expl

. & Prod. Co. v.
Benton , 72 8 S.W.2d 35, 37 (Tex. 1 987 ). The elements of waiver include : ( 1) an existing

r ight, benefit, or ad vant ag e h eld by a party; ( 2) the party ’ s actual knowledge of its
existen c e ; and ( 3) the party ’ s actua l i ntent to re linqu is h the right or intentional conduct inconsistent with the right. Ulico Ca s . Co. v. Allied Pilots Ass ’ n , 262 S .W. 3d 773, 778 (Tex . 2008). Bei ng la rg ely a m atte r of intent, w aive r is ordinarily a question
of fact, but when the surround ing facts and c ircu m st a nces are undisputed , t he19

question bec omes one of law. Motor Vehicle Bd. of Tex. Dep ’ t of Transp. v . El Pas o Indep

. Auto. Deale rs Ass ’

n, Inc

. , 1 S.W.3d 108 , 111 (Tex. 19 99).
Ratificat i on occurs when a person who knows all the mate r ia l facts co nfi rm s or ad o pt s a prior act that did not legally bind hi m a nd which he could have repudiated.
Samms v. Autum n Run C

mty. Impro vement Ass ’

n, Inc. , 23 S.W .3d 3 98, 403 (T ex. App.

— Ho uston [ 1 st Di s t. ] 2000, p et. denied ) (cit ing K.B. v. N.B. , 81 1 S.W. 2d 634, 63 8 ( Te x. Ap p.

— San Antonio 1991, writ denied)) . The ele men ts of the affirmative defense of
ratification are : (1) appro val by act , word, or co nduct; (2) wi th fu ll knowledge of the
fact s of the ea r lier act ; and (3) with the intention of giving valid ity to the ea rl ier a ct
. Id. (citing Motel Enter

s. Inc. v. Nob ani

, 7 84 S.W.2d 545, 547 (T ex. App.

— Houston [1 st
Dis t
. ] 1990 , no writ

) ).
I t is the general rule i n T exas that transac tions between corp o rate fiduciaries and their corporation are cap a ble o f ratification by th e sha re h olders or the board of
directors ’ spe cifi c approval or acquiescence, lache s , or acceptance of benef it

. Wiber g v. Gulf Coa st Land & Dev

. C o. , 360 S.W.2d 563, 567 (

Tex. Ci v. App.

— Beaumont 1 962,
writ ref ’ d n.r. e.) ; Pruitt v. Westb rook , 11 S.W.2d 56 2 , 565 (T e x. Civ. App.

— Fort Worth
1928 , no writ)

. H owever, ratification by any means is effective onl y when the office r has fully d isclosed all of the mat erial facts of the tran s actions to the board of directors
or sharehold e rs. See Ves sels v. Anschut

z C or p. , 8 23 S.W.2d 762 , 7 64 (Tex. App.

— Texarkana 199 2, w ri t denied).20

C . App lication of Law to Facts On appe al, RPP contends gene rally tha t th e trial c ou r t erred in grant ing Tate
and C u ffia ’ s tr aditional and no

- evidence motion for s ummary judgm ent becau se th e

s um ma r y judgment evi dence created a genuine issue o f material fact on its claims for breach of a fiduciary duty

. Tate and Cuffia ma in t ain tha t summary judgme nt was
p roper because ( 1) “ a fiduciary 9 cannot be held liable for fa iling to disclose
infor mation t ha t i s known by the other party ” ; ( 2) RPP either waived or ratified the
bonu ses after discovering all mater ial facts , closing on the sal e, an d accepting benefits
ther e from ; ( 3) there is no admissible evidenc e that the bonus agr eements “ drove
down t he price ” of RPP ; and ( 4) ther e is either no evidence that Tate intentionally
downloaded a virus on RPP ’ s computer or the only evidence con cl us ive ly establishes
that the virus w as the resul t of a ransomware demand by an un known third pa rty.

9 Ta te and Cuf

fia have not disput e d th e existence of a fiduci ary duty

. H owe ver , in his deposition, Tat e equivocated on the ex tent of tha t duty :

Q: Do you have an obligation to

- - to not work against the interests of your company ? A: In t otal , no .

. . . . Q: So you b elieve you have certain ethi cal obliga tions to your
co m pa ny?
A : I hav e an ethical obligation to myself and the peopl e .21

I n support o f their mo ti o n, Tate and Cu ffia relied on the following summary judgment evidence: the declaration of Han sen ; exce r pts of d epos itio n t e stimony of Hansen, Bettegowda , Baudhuin, Nathan Barber , and Ballinger ; emails date d Janua ry 18, 19, and 21, 2018 , and Fe b ruary 16 , 2 0 1 8 ; text mess age dated Jan u ary 24, 2018; letter of intent between RPP and Pregis dated January 29, 201 8 ; interrogat ory a nsw ers of Hansen and Ballinger in the Michigan litigation; retention bonus agreements ; and
af fidavit of Tate and Cuffia ’ s a t torney, W i ll i am L. Kirkman. In response, RPP relied
upon a 472

- page appendix containing forty

- si x exhibi ts, including depo sit ion exc erpts, text messages, e m ails, Hansen ’ s dec laration, the asset purchase agree ment be tween RPP and Pregis , and the retention b onus ag re em e nts between Pre gis and Tate and
Cuffia. 1. Duty of Disclosure
Tate a nd Cuffia sta rt th eir argument with the contention t hat they “ cannot b e held liable for failing to disclos e in f ormation that RPP already knew. ” See Lund y, 260 S.W. 3d at 50 1 ( “ L u nd y c annot be held liable for failing to disclo s e a fact th e company knew thro ugh one of its officers. ” ) ; Pfeiffer v. Ebby Halliday Real Estate , Inc. , 747 S.W.2d 887, 890 (

Tex. App.

— Dallas 1988, no w rit) ( “ [W]e fail to see how Ebby Halliday can be ch arged wi th a ‘ failure to disclose information ’ whi ch the P feiffers
alre ady kn ew . ” )

. We dis agree for two reasons. First, RPP did not have full knowledge of all information about the retention bonus agreements until after this lawsuit was filed. Conside r i ng the e vi d ence in the22

light most favorable to RPP, w hatev er informatio n RPP kn ew was learned only a fter the conduct by Tate and Cuffia had occurred and before the ret e ntion bonus
agreements had been finalized

. It is undisputed that RPP first learned of t he “ supe r b on us ” when examining emails on January 24, 20 18. The agre ements w ere not signed
and effective un til February 23, 2018. In his declaration, Hansen asserted that he di d

not see an executed copy of a retention bonus agreement until after fili ng this su it :
I didn ’ t have the full picture of Tate ’ s breac hes of h is d uties to RPP until af ter discovery in this matter fully reve aled his conduct. [RPP] on ly had a suspicion. Neither I nor any oth er equity owner of RPP ever had actual, certain, knowle dg e that T a te a nd Cuf fi a were rec eiving a super bonus until after th is l awsuit was filed. And, e ven assuming that RPP had some knowledge of the retention bonus
agreements before it signed the asset purchase agreement, such knowledge does not
bar a claim f

or b reac h of fiduciary duty. An after

- the

- fact di sclos ure of the facts that
form the basis of a breach

- of

- fidu ciary duty cla im does not restore th e parties to a position as if there had been no bre ach. McCullough v. Scarbrough, Medlin & Assoc s. , Inc. , 43 5 S.W.3d 871 , 903 (Tex. App.

— D allas 2014, pet. den ied).
Second , even if th ere was knowledge regarding some facts of the failure to
disclose claim , t he failure to disclose is not the only b reach of fiduc iary duty that RPP

a sserted in its pleadings . In it s third amen d ed petition , RPP ’ s alleg ations under the
h ead ing “ breach of com mon law fiduciary duty against def endants James Donald Tate

an d Michae l Cuffia ” includ ed the foll owi n g:23

Tate and Cuffia owed a duty not to usurp corpo rate opportunities for perso na l gain; a du t y of utmost good faith in the officer [s ’ ] re l ations with the c orp or ation; a duty of full disclosure of any personal interest the officer or director has in the subje c t matter of a contract the officer or director negotiates with the corporat io n; a dut y of loyalty; and a duty to use uncorrupte d busin e ss judgment for the co rporation.

. . . . Tate and Cuffia are currently working on behalf of a competing company without disclosure or approval and used their position and d ece ption to give a com pe ti tor an adv a nta ge.

. . . . Tate and Cuffia are fu r ther liable for self

- deal ing through negotiating a side

- deal for themselves to the detriment of RPP. Defendants Tate and Cu ffia failed to us e u ncor rupted business j udgme nt to a ct in the best interest of RPP.

. . . . In stead of acting as a proper fidu ciary t o RPP, Def endants Tat e and Cuffia engaged in a conspiracy with competit ors of th eir company, and negotiated a secret deal f or payme n t of $1.5 million in exchange for driving down the price of the a ss ets of t heir own empl oy er by $3 [m]illion.
T a te and Cuffia did not move for summary judgment on all of the alleged br eache s of their fiduciary duty. Rather, t heir motion concentrated on the “ failure to disclose ” allegations.
It is fundamental that a m otion fo r su m ma ry judgment must stand or fall o n the grounds it specifically and expre ssly sets fort h. McConnell v. Southside Indep. Sch.
Dist. , 8 58 S.W.2d 337, 339 (T ex. 1993). As a general rule, granting a summary24

judgment on a cl aim not addressed in t he summa ry j u dg ment motion is reversible

error. G & H Towing Co. v. Magee , 347 S.W.3d 293, 297 (T ex. 2011).
A fter a pplying these rules to the summary judgment motion in this case , it is
clear tha t the par t of Tate and Cuffia ’ s motion that is based on th e failure to d i sc lose
claims did not addre ss the m yriad of other alleged breaches of fiduciary du ty
. And as regards these other alleged breache s, RPP ’ s knowledge of the “ super bonus ” is not dispositive. I n addition, c onsidering the evidence in the light mo st favor ab le to RPP , RPP did not know th at the r etention bonus agreements were executed until after it
closed on the a sset purchase agreement and after litigation commen ced

. For all of these reasons, summary judgment cannot be affirmed on t h is g round

. 2
. W aiver a nd R atification By relying on th eir a ffirmati ve defenses of waiver and ratification , Tate and
Cuffia h ad the burden of es tablish ing all the elements of each defen se. I n re State Farm Lloyds , In c. , 170 S.W.3d 629, 634 (T ex. App

. — El Paso 2005, orig. pr oc e edi n g) ; Centeq Realty, Inc

. , 899 S.W. 2d at 19 7. C ent ral to the inquiries concerning both affirmative
defen ses is the question whet h er RPP had “ full knowle dge ” of th e fact s surrounding
the transaction. See Spangler v. Jones , 797 S.W.2d 125 , 131 (Tex. A pp
. — Da l las 1990,
writ den ied)

. Second a r

y to thi s inqui ry is whet her Tate ’ s and Cuffia ’ s signing the retention agreements acted as a waiver o r ratifica tion o f th e breach.
Because w aiver is largely a matter of intent , intent must be show n by the
surround in g fact s a nd circumsta nces of RPP ’ s beha v i or. Va n Indep. Sch. Dist. v.25

McCarty , 165 S.W.3d 351, 353 (Tex. 2005). The b urden was on Tate and Cu ffia to
pr ove knowledge of the breach and to prove a voluntary, intentional choi c e to rati f y

t he contra ct despi te t hat k nowledge

. Spangler , 797 S.W.2d a t 131. RPP ’ s conduct
must be “ unequivocally inconsistent ” with claiming it s rights. Shi elds Ltd. P ’

ship v. Bradberry , 526 S.W.3d 471, 485 (Tex. 2017) (citing Van Indep. Sch. Dist. , 165 S.W.3d at
353 ).
With re gard t o t he f irst inqui r y

— whether there was fu ll knowl edge

— Hansen
stated that he did not learn a bout the “ super bonus ” until around January 24, 2018,
wh e n he and two other s conducted a review of Tate ’ s emails

. RPP contends that it
was p ossible th at Tate, C u ff i a , or P r egis would h ave a “ cha nge of h e ar t ” prior to the closing and back out of the retention bonus agreemen t. Even as la te as the date of closing on Februa ry 23, 2018, Hansen was only aware that a s upe r bonus “ m ay be paid or may not be paid

. ”
With re ga rd to t he se cond inquiry, Tate and Cuff ia confuse the signing of the asset sale agreement with the sign ing of the retention bonus agreement. Unlike the

as set sale agreement, t he agreements w hich set out t he “ super bon us ” w ere not si gned by either H a ns en o r anyb o d y else on behalf of RPP . Rather, they were between Pregis and Tat e and Cu ffia , and they were circulated between them on February 22,
20 18 , and s ig ned by them on Feb ruary 2 3 , 2018

. As is evident from t he e mails, t he re t ention and asset sale agreem ents w er e , a s d escri b ed by RPP, “ two paralle l transactions separate and apart f rom one another. ”26

Even Bettegowda , when de posed, test ified that ther e were “ two separate components ” o f the pu rch ase price

— the asset purchase agr eement and th e re tention bonus agreem en ts

— a nd he “ t r ied to negotiate t hem separately

. ” Similarly, in his deposition, Ta te te sti fied that the “ super bonus was a separate deal. It was not par t of
the s ale. ” Pregis , not RPP, h ad the obli g ation t o pay the ret ention b onus agreements. Going forw ar d wi th the a s set purchase agreement did not preclude RPP f rom recovering on their breach of fiduciary duty claim. See Fortune Prod

. Co. v. Con oco, Inc. , 52 S.W. 3d 671 , 680 (T ex. 2000) ( “ For tune and Tu ck er are not prec luded from recovering fraud damages si mp ly because they continued to perform c ontracts th at were binding for a stated term after they learned of the fraud tha t induced those

contracts
. ” ).
The burden was on Tate an d C uffia to pr ove an actual inte nt to reli nquish or a voluntary, intentional c ho ic e to ratif y the “ super bonus

. ” I f the acts of ratification are

controv ert ed, the question is one of fact. Id. Tate and Cuffia presented no summary judgment evidence of any p ositive act, repre senta ti on , or affirmat iv e d eed s howing RPP intentionally w ai

ve d its righ t to seek damages against them f or breach of fiduciary duty. See generally Sun Expl

. & P rod. Co. , 728 S.W.2d at 37. In fac t, the
evidence shows the contrary. Desp i te numerous requ ests b y T a te, RPP re fuse d to sign a release . Proceeding wit h th e asset sa l e closing is no ev idence o f conduct

“ unequivocally inconsistent ” with RPP ’ s rights to s ee k damages for breach of
f iduciary du ty. Van I

ndep. Sch. Dist. , 165 S.W.3d a t 353

.27

Rati fication can be effectu al be tw een the part ies only w hen the ag en t ’ s to rtious

a c t is openly and admittedly on behalf of the principal. Spangler v. Jones , 861 S.W.2d 392, 396 (

Tex. App.

— Dallas 1 993, writ d enied ) (citing Herider Farms

-

El Paso, I n c. v. Criswe ll , 519 S.W.2 d 473, 477 (Tex

. Civ. App.

— El Paso 1975 , writ ref ’ d n .r .e . ) ) . Wh e n the agent ’ s tortious act is for th e benefit of the agent or some third party, then the principal does not ratify the acts of the agen t by accepting the agreement purported l y

e ntered into o n its behalf by the agen t. Herider Farms

- El Paso, I n c. , 519 S.W. 2 d at 47 7

– 78

. Here , th e r etention bonus agree ments were solely for the b enefit of Tate, Cuffia , and two others. RPP ne ither agreed to n or accepted these agree ments. In addition, only Pregis was responsible for p aying the bon uses. Therefor e, sig n in g o f t he agreements by Tate, Cu ffia , and Pregis cannot act as a waiver or ratification of RPP ’ s rights.
Tate and Cuffia cite to a number of ca ses in which they say that “ Texas courts
have not hesi tated to find waiver a n d ratifica ti o n as a matter of law

. ” Se e T enneco Inc. v.
Ente r . P ro ds. Co. , 925 S.W.2d 640, 643 (T ex. 1 996); A g a r wal v. Villavaso , No. 03

- 16

- 00800

- CV, 2017 WL 3044545 , at *5 (Tex. Ap p.

— Aus tin July 13, 2017 , no pet.) (mem. op.); B & R Dev., Inc. v. Rogers , 56 1 S.W.2d 63 9 , 643 (Te x. C iv. A pp.

— Texa rk an a 1978,
wri t r e f ’ d n.r.e. ); Tri

n h v. Lang Va n Bui

, No. 1 4

- 11

- 00442

- CV, 2012 WL 5378112 , at *7 (T e x. App

. — Houston [14 th Dis t
. ] Nov. 1, 2012, pet. denied) (mem. op.) ; Meyer Farms , Inc. v . Texaco Producing, In c. , No. 07

- 01

- 034 4

- CV, 20 02 WL 31 26116 3 , at *2

– 4 (Tex. App.

— Amarillo O ct. 2, 2002 , pet. denied ) (not designated for publication) ; see a lso28

R & L Inv. Prop., L.L.C. v. Hamm , 715 F.3d 145 , 146

– 49 (5 th Cir. 2013)

. However,
none of thes e cases i nvolve two separate agreements involving diffe r ent p arties a nd thus do not apply to this case. We con clude th a t the defen ses of waiver and ratification re l i e d up on by T a t e and Cuffia have not been esta blished as a matter of law so as to entitle them to
summary judgment on the claims for br e ach of fidu ciary duty

. Th er efore, w e sustain that po rtion of RPP ’ s first issue.
3
. Damages
Tate and Cuffia also mov ed f or traditional and no

- ev

idenc e summary j udgm ent

on the d amages portion of RPP ’ s claim for breach of fiducia ry duty

. In their no

evidence portio n of the mo ti on for summary ju dgment, Tate a nd Cuffia contend t hat
the re is no evidence that (1) Pr e gis ever a greed to pay RPP $20 million for its assets , (2) Pregis ever agreed to pay RPP anything more tha n $17 million for its assets , or (3) the retention bonu ses had an y effect whatso ever on the $ 17 million purc hase price
p aid by Pregis to RPP for its a ssets
. Fo r the traditional par t of the ir motion, Tate and
Cuffia contend that the claims are barred by the ir affirmative defenses o f ratification
and waive r , bo th of wh ic h we have pr eviou sly addressed

. RPP argues that there is

“ a mple p roof that Tat e and Cuffia ’ s s ide deal reduced [th e] price , ” and it is also
entitled to e quitable reli ef in the form of profit disgorgement or fee f orfeiture , both of
which do not r equire p ro of of dam ages . We ag re e with RPP.29

Generally, t o re cov er for breach of fiduciary duty, the e vi dence mu st prove

“ the exi stence of a fiduciary duty, brea ch of t he duty, causation, and damages. ”
Abetter Truckin

g Co. v. Ari z

pe , 113 S.W.3d 50 3, 508 (Tex. Ap p.

— Houston [1 st D ist. ]
2 00 3, no pet.)

. However, a party see king forfeiture and equitable disgo rg ement nee d

not prove damag es as a resul t of the breach of fiduciary duty. Ramin ’ Corp. v. Wills , No. 09

- 14

- 00168

- CV, 2015 WL 6 1216 02 , at * 9 (T ex. App.

— Beaumon t Oct. 15, 2015,
no pet. ) (mem. op.) (citing Burrow v. Ar ce , 997 S.W.2d 22 9, 240 (T ex. 1999) ). T o remedy a breach of fiduc iary duty, courts may fas h ion equitable reme dies such as profit disgorgement and fee for f eiture

. ERI Consu lting Eng ’ rs , Inc. v. Swin ne a , 3 18 S.W. 3d 867, 87 3 (Tex. 2010)

. As explained by th e Texas Supreme Court: A fiduciary can no t say to the one to who m he bears such relationship: You have sustained no loss by my misconduct in receiving a co mmission from a party oppo site t o you , and th er efore you a re witho ut remedy. It would be a dangerous preceden t for us to say that unless so me affir mative loss can b e shown, the person who has violated his fiduciary relationship with another may hold on to any sec ret g ain or benefi t he
m ay ha ve there by acquired. Johnson v . Brewer & Pr

itchard, P.C. , 73 S.W .3d 193, 200 (Tex. 2002) (cit ing Kinzb ac h Tool
Co. v. Cor bett

- W allace Corp. , 160 S.W.2d 509, 51 4 (Tex. 1942 ) )

. Courts may disgorge all
ill

- gotten profits from a fiduc iary when a f id ucia ry ag ent usur p s an opportu nity
pro pe rly belonging to a principal or co mpe tes wit h a principal. ERI Consulti ng Engi neers, Inc. , 3 18 S.W.3d at 873. Even if a fiduciary does not obt ain a benefit from a third party by violatin g his duty, a fiduciary m ay be r equir ed to fo rf eit the ri ght to

c om pensation for the fiduciary ’ s work. Id. “ The main purpose of f orfeiture i s not to30

compensate an injured principal , even though it may have that effect. Rather, the central purpose . . . is to protec t relationshi ps of t rust by disco ur aging ag en ts ’
disl oy alty. ” Burrow , 997 S.W.2d at 238

. I n its third amended petition, RPP pl ed for profit disgor g eme nt or fee
f orfeit ure due to Tate ’ s and Cuffia ’ s “ many breaches of their fiduciary duties. ” By
rel ying on these equitable th eorie s , RPP w as not re quire d to show actual damages. However, e ven wh ere it sought actual damages for b r eac h of fiduciary duty , RPP prese nted more than a scintilla of evidence showing that it had been damage d.
In response to th e no

- evid enc e po rtion of Ta te an d Cuffia ’ s mo ti on , RP P point ed to various emails to show that th e pri c e offered for R PP decreased from a t least $18
milli on to $17 m illio n . 10 In his Ja nuary 19, 2018 email to Bettego w da, Tate stated ,

“ Rex has bee n ad am ant a [b] o u [t] getting $20 million for his bu si ne ss , but us equity owners have persuaded hi m to cons ider $18 and then we put a bit mor e pressu re on him for the $1 7 with knowled ge that there woul d be employment bonuses for those staying w ith the sale. ” Bett egowda , i n h is January 22, 2018 e mail to B audh ui n stated

10 I n a foo tnote in its response t o the motion for summary judgment, “ RPP concedes th at there may be a ge nuin e iss ue o f m ateria l fact reg arding the exact extent of the damage caused by Pregi s ’s f r aud, but the re is no genuin e dispute regarding the existence of RPP ’ s d amages. ” RPP goes on to state that “ the evidence is not conclusive whether the price was d e presse d f rom $ 20 m illion, $18.5 million, or even $18 mil lion. T he ev

idence, h owe ver, is conclusive th at the pr ice was depressed from at least $1 8 mil l

i on to $17 million. ”31

that “ [t]he price was 18 and cha nge and [Tate] sug g ested moving it to 17 and using a

m illion t o pay the te am a nd keep them on board. ” Even the charts in the Ja n uary 23, 2018 em ail from Tate to B e ttegow da appea r to show an analysi s of a purchas e price of both $17 an d $18 .5 million and the amount

e ach equit y owner wou ld rec eive under the tw o s cenarios

. According to the charts, the cash pro ceeds payab le to W illiamette decrease by $946,8 00 if the p urchase price
d ecreases f

rom $18 .5 to $17 millio n wh ile the payments to Tate and Cuffia
substanti ally incre ase when the “ super bonus ” is ad ded to t heir equity shares

. The e mails of

fer mo re than a scinti lla of ev idence that R PP sustained damages
based on th e retent io n bonus agreements. 11 In addit ion t o a ct ual damages, as noted above, RPP sought fee forfeiture and profit dis gorgement. Fee forfei tu re and disgorgement were not the subject of Tate and Cuffia ’ s motion for summary judgment. See Padua v. Jason A. Gib son, P .C. , 608 S.W.3d 842, 84 5 (Tex. App.

— Ho us ton [14 t h Dis t. ] 2020, no pet .) (holding that because dis gor g ement and imposition of a construc ti ve trust were not the subject of a ground in the motion f or

s ummar y judgment , th e o rder did not dispose of the m ) ; see al s o First United Pentecos t

al
C hurch , 5 14 S.W. 3d at 221 ( hol ding that to de feat “ a no

- evi dence motion for summary

11 RPP makes an additional argument, which we do not need to address here, that i t had a d uty to m itig ate its damages by closing on th e asset purc ha se tran saction

. See E

. L. & A s

soc s. , Inc. v. Pabon , 525 S. W.3d 764 , 772 (Tex. App.

— Houston [14 th Dis t.] 2017, no pet.) (holding that a mitig ation of damages instruc t ion was war ranted
on a cor p oration ’ s c laims tha t two forme r directors breached t heir fiduciary d uty and that the s on a ss i sted in breach of fiduciary duty ).32

judgment a s to a claim for actual damages, the church must have provi ded evide nce that Parke r ’ s actions were causally relate d to the loss of its money

. . . . [T] he chu rch

w as not r eq

uired to show causa tion and actual damages as to an y equitable remedies it

sou ght. ” ). For these reasons , summa ry judgment for Tate and Cuffia on th e g roun d
that RPP did not suffer damages was im pr oper , an d w e accordingly sustain this part

o f RPP ’ s issue

. 4
. Vi rus T ate also moved for t raditional and no

- evidence summary judgment on t he
cla im against him fo r breac h of common law fiduciary dut y for dow nlo adi ng a vir us on RPP ’ s computer. In supp or t of his traditional motion, Tate atta ched p ortio ns of

t h e depositi on t es timon y of Bar ber , who m Hansen d escribes as RPP ’ s “ IT guy . ”
After b ei ng told that Tate ’ s co mputer had been infected w ith a virus, Barbe r inspec ted the computer and did an anal ysis to s ee what was wrong. Barber conc luded that t he
vi rus g ot on to Tate ’ s computer by ransomware.
For the no

- evi dence portion of his mot ion, Tat e c ont ended tha t there was no
compe tent summ ary ju dgment e vidence that he “ know ingly downl oaded a v

iru s on RPP ’ s computer in an effort to d estroy electronic i nfo rm ation st or ed therein

. ” In its

one

- paragraph summary ju dgment resp onse , RPP point ed general ly to the “ chain of

events ” that it c ontends “ creat es a ge nuine issue of material f act re ga r ding the actions
of Tat e and calls into q uestion whether he int entio nal ly attem pt ed to destroy evidence33

by taking steps to ensur e a virus wa s infected on his comput er . ” Ho wever, RPP
attache d no summary jud gm ent evidence in support of it s content i ons. 12 When a pa rty moves for sum mary judgment unde r both Rules 166a (c) and
1 66a (i ), we wi ll first review the trial court ’ s judgment unde r the standa rds of Rule
166 a( i). For d Mo tor Co. v. Rid

gway , 135 S.W.3d 598, 6 00 (Tex. 2004)

. Once a motion

u nder Rul e 166a(i) is filed, the burden shi fts to the nonmo vi ng p arty to present

e vid en ce ra ising an i ssue of material fact as to the elements spec ifi ed in the motion

. M ack Trucks, I

nc . v . Tame z , 206 S .W.3d 572 , 582 (Tex. 20 06 ). As stated above, RPP
faile d to att a ch any summary judgment evidence in response to thi s part of Tate ’ s moti on fo r s um mary jud gm ent. Because on this record t here is a compl ete absence of
evidence of a vital fac t

— t hat T a te infec ted his compute r with a virus

— we susta in the

no

- evid ence point as to this cause of action

. See Kin g Ra nc h , Inc. v. Chapman , 118 S.W.3d 742, 751 (

T ex. 200 3 ) ( citing Merrell Dow Ph arms ., I nc. v. Havner

, 953 S.W.2d 706, 711 (Tex. 1997)) ( “ A no evidence poin t will be sustai ned when (a) there is a

co mplete ab sence of evide n ce of a vital fact, (b) the court is ba r red by rules of law or
of evidence from g

i ving w ei gh t to the only evidenc e offere d to prove a v ital fact, (c) the evidence offered to pr ove a vi tal f a ct is no more th an a mere scintilla, or (d ) the
evi dence conclusi vel y establishes the opposite of t he vit a l fact. ” ). Th erefore, we

12 I n it s brief, RPP admits that “ Appellants [ ’ ] argument regarding Tate ’ s de str uction of RPP P roperty was mor e f or the purpose of seeking a spoliati on instruct ion at trial. ” We do not address the spo liation issue here.34

overrule t h at part of RP P ’ s issue complaining of the summar y judgme nt that was granted on the cause of acti on against Tate f or breach of his common law fidu ciary duty by down loading a vir us onto R PP ’ s computer.
IV. C ONCLUSION
W e affirm the p a rt of t he trial court ’ s ju dgment g ra nting summary judgment on
the clai m against T ate for breach of common law fi ducia ry du ty for downloa ding a
virus on RPP ’ s computer. We reverse the re mainder of th e t rial c ourt ’ s judgmen t granting Tate and Cuffia ’ s mot i o n for s ummary judgmen t and remand th ose matter s for trial.

/s/ Dan a Womack
Dana Womack Justice
Deli v ere d: De cember 31, 2020