DARBY RILEY

BOARD CERTIFIED/CIVIL TRIAL LAW TEXAS BOARD

OF LEGAL SPECIALIZATION darbyriley@rileylawfirm com C H A R L E S A R I L E Y , P C charlesriley@rileylalvfirm com 

### Fourlh Court of Appeals 300 Dolorosa,

Suite 3200 SanAntonio. Texas 78205-3037 CHRIS RILEY, M A LEGAL ASSISTANT


### June 2, 2015

Re. Barry Brooks et al. v. Excellence Mortgage, Ltd. et al., CauseNo. 04-1 3-001 06-CV TO THE HONORABLE JUSTICES BARNARD ANd

ALVAREZ: The appellant loan officers respectfully submit this letter, containing

additional citations and succinct comment, with respect o Appellees' Motion for Rehearing. 1. ANTITRUST CLAIMS Motion for Summary Judgmentlimited to groundsasserfed by the Motion. Attached hereto are peftinent excerpts from the mortgage company parties' traditional

Motion for Summary

Judgment. The Motion at CR 126-128 shows the grounds asserted on the loan officers' tortious interference and antitrust claims against the mortgage

company

parties. 

### "When a motion for summary

judgment

asserts grounds A and B, it cannot be upheld ongrounds C and D, which were not asserted, even if the summary judgment

proof supports them and the responding party did not except to the motion."

320 Lexington Ave. San Antonio, TX 78215-1913 Tel: (210) 225-1236 Fax:

(2l0)221-7907 ACCEPTED 04-13-00106-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 6/2/2015 4:36:48 PM KEITH HOTTLE CLERK

### Fourth

Court ofAppeals June 2,2015 Page:2

Roberfs v. Southwest

Iexas Methodist

Hospital,

Sl 1 S.W.2d 141,146 (Tex.AppSan Antonio 1991,

writ denied),

quotedin McConnell

v. Southside

lndependent

School District,858

S.W.2d 337, 342 (fex. 1993); T. Pnnoru,

SuuunnvJuoctuerurs

tN Texns: PnRcrce

, PRoceouRE,

AND Rrvrew, 53.06t21 (3ded. 2013). The mortgage

company

parties only sought

summary

judgment

on the antitrust claim on the ground that their action "merelyenforced reasonable non-disclosure agreements."

(CR 128-129).

The Court's

opinion on Motion

for Rehearing

findsa fact issue on whether

"Excellence

falsely claimed it had the sole right

to serve

the pipeline customers."

Opinion,

p. 18. Thus,

having found that the mortgage

company

parties' did not conclusively

prove thatthe non-disclosure agreements

gavethem exclusive

right to
serve the pipeline

customers,

the Court properly

denied summary

judgmenton the antitrust claims. B. TheAppel/ees'

New Argumenton Causation The mortgage

company

parties go beyond

theirMotion

for Summary

Judgment

in arguing that the panel's

Opinion on Motion

for Rehearing

"is inconsistent

withappellants pleaded causation

theory" on the antitrust

claim. (Appellees'

Motion for Rehearing,

p. 7). They point out that the loan officers pleaded that the injunction

suit by Excellence Mortgage,

Ltd.was groundless. (Third Amended

Original Counterclaim,

CR 269-270). (The loanofficers

also pleaded

thatthe moftgage

company

parties "unlawfully"

refused to transfer

the loans

as requested

by the pipeline

borrowers).

ld.

### Fourth

Courl ofAppeals June 2,2015 Page: 3

The mortgage

company partiescite Houston Mercantile change Corp. v. Dailey Petroleum

Services

Corp., 1993WL 322901 (Tex.App.-Houston [14th Dist.] 1993,no writ) for the proposition that a person

who initiates

a lawsuitis generally

immune from antitrust liability. The well-recognized

exception

is wherethe suit is groundless and/or brought for an anticompetitive purpose,

as alleged

here. See /n re Burlington Nofthern, 822 F.2d518,

527 ,529 (sth

Cir. 1987). (Even

a successful

litigant may be found

to have abused the litigation

process in order to effectuate

an antitrust

violation). Thus, to succeed

on this issue,

the mortgage

company

parties hadto first,

move for summary

judgment

on that ground,

and second,

conclusively

prove thatthe suit

was not groundless

and was not brought for an anticompetitive purpose. The mortgage company

parties did neither.

The Court

has properly

denied summary

judgment

on the antitrust claim. 2. TORTIOUS

INTERFERENCE A. As the Court

found in itsOpinion

on Motion

for Rehearing,

page 22,thesole ground asserted

bythe mortgage

company

parties for summary

judgment

on thetortious interference

claim isthe contention

that they"engaged

in notortious

or wrongful

conduct" that prevented

the pipeline

customersfrom

dealing withthe loanofficers.CR 126-127. The Court had previously found that the loan officers had raised

fact issues

on each element of an antitrust

claim; it thus properly

held the antitrust

violation

was an unlawful act to support

the tortious

interference

claim. ld.

### Fourth

Court ofAppeals June 2,2015 Page:4

B. The mortgage

company

parties contend (Appellees'

Motion for Rehearing, pp. 9-10)

that"appellants'

pleadings

did not base

the tortious

interference

claim upon an antitrust violation. See CR 265-66." However, the loan officers'

Response

to the mortgage

company parties' Motion for Summary Judgment clarifies the "unlaMul conduct"

complained

of in the Third

Amended

Original Counterclaim.

ld. A|CR 281-82, the loan officers laid outthe extensive

unlaMul conduct,

including

the antitrust

violations, and cited

the Texas

Antitrust

Statute.Where,

as here, there was no objection

to the lack of a supporting

pleading,

"[a]movant

may . try by consent an issueraised

by the nonmovant in its summary

judgment

response

which is not pled in its petition." Pnrrorl, supra, S 3.06[1],

citing Goodyear

Tire and Rubber

Co.v. Mayes,236

S.W.3d754,756

n. 1 (Tex. 2007). C. The mortgage

company

parties contend (Appellees'

Motion for Rehearing, pp 6-7) that the Court

should not have

accepted

the opinions

of the loan

officers' expert witnesses

thatthe pipeline

customers'

privacy rights wereviolated

whentheir

files were transferred

to Georgetown

Mortgage

without theirknowledge

or consent.

Thisobjection
was not preserved

for appellate

review.Moreover,

such rights

arespelled

out in detail

in the FTC's

Safeguards

and Privacy

Rules, 16C.F.R.

S 313.1 , et seq. See

also 15 U.S.C. $ 6801(a): "Privacy

obligation

policy. lt is the policy

of the Congress

thateach financial

institution

has an affirmative

and continuing

obligation

to respect the privacy

of its customers

and to protect

the security

and confidentiality

of those customers'

nonpublic

personal

information."

### Fourth

Court ofAppeals June 2,2015 Page: 5

The mortgage

company

parties have not contended

that they complied

withthis federal policy or the regulations.

The affidavits

fromthe two experts

put forth by the loan officersestablished

unlaMul conduct by the mortgage company parties, both in transferring

the pipeline

loanfilesto Georgetown withouf transfer letters, and in refusing to transfer

the filesto Premier

with transfer letters. Respectfully

subm itted, 

# D^ lJ V'0 

# /%T Darby Riley Attorneys

for Appellants



### cc. Samuel

V. Houston,

lll William H. Ford Gregory A. Scrivener (via e-serve)Page 1 of 46,



### EXCELLENCE MORTGAGE,

LTD.
V. NO. zoro-Cl-r6915 -P00067

IN THE DISTRICT

COURT 

### zz5THJUDICI-AL

DISTRICT F Y 

## 5 R Y F 5 NTFN, INC. D/B/A PREMIER NATIONWIDE LENDING, ROBIN C. MORTON, BARRY BROOKS, HESTON C. KING, STEFENDOUGI.d.S BROOKS, JANUARY MAY GOETTE, JOHANNA BARTON,

JESSERODRIGUEZ BENAVIDES,

AND SANTEX, LTD.
GROTIIIIES FINANCIAL. LTD.. GROTHUES BROTHERS MANAGEMENT I.

LLC. AND GEORGETOWN MORTGAGE. LLC'S MOTION FOR SUMMARY JUDGMENT TO THE HONORABLE JUDGE OF THE COURT: Counter-Defendants, Excelience Mortgage Ltd., LADTD-r, LLC, Grothues Financial, Ltd., Grothues Brothers ManagementI, LLC, and GeorgetownMortgage, LLC, file this Motion for Summary Judgment on Counter-Plaintiffs' Counter-Claims, and in support thereof,wouid show the Court the following:

I. Introduction and Statement of Factst This lawsuit arisesfrom a dispute between an employer, Excellence, and its former employees,

the Counter-Plaintiffs., Excellence

is in the mortgage business. Robin Morton was the President of Excellence

until her termination on September 24,

' This recitation of facts is intended to give the Court an overview of the lawsuit and the issues in this motion. Material facts relied upon as summary judgment evidenceare specifically cited in the relevant section of the motion below. 2 There are no separate affirmative claims against LATD-r, LLC, Grothues Financial, Ltd., Grothues Brothers Management I, LLC and Georgetown Mortgage. Ostensibly, the basis for liability against these Counter-Defendants

is some agency or participatory theory, but the exact nature of such is unclear jn Counter-Plaintiffs'pleading. As such, if Excellence is not liable, neither are the other Counter-Defendants.

Some pages may not be legible as per original document. Clerklnitiats:

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# lllllffiffiffi,ffillil 20 10c I 16e1 5(Page 8 of 46)

The Counter-Plaintiffs' breach of contract claim seeks commissions they are

allegedlyowed. Counter-Plaintiffs are not contractually entitled to any commissions. The Production PersonnelCompensation Policy unambiguously provides that a voluntarily terminated employee is not entitled to a commission that closed cnd funded after October 1, 2olo.r2 An employee who is terrninated by Excellence is entitled to "no further commissions."t3The potential loans at issue are those 9r which were in Excellence's

"pipeline."rq Of the 9r pipeline loans, none closed and funded before October 1,2oto.ls Moreover, the documents are extraordinarily clear about whom the customers belongto: Excellence. Counter-Plaintiffshave no right to leavean employer and attempt to strip that employer of its business. There is no basis upon which Counter-plaintiffs couid be legitimately entitled to any commissions for work they are not entitled to. The unambiguous language of the Production Personnel Compensation policy providesthat the loan officer Counter-Plaintiffsare not entitled to any commission on any loans' Summaryjudgment for Counter-Defendants is therefore proper on CounterPlaintiffs' breachof contract claims. C. Counter-Plaintiffs' Interference with Prospective Business Relations Claim To establisha cause

of action for tortious interference with prospectivebusiness relationships,

a plaintiff must show that (r) there was a reasonable probability that the

., Exhibit E. 's Id. '+Those are loans that are in some stageof the process starting from initial customer contact but which have not yet closed.

The 9r loans are tlose which Counter-Plaiitiffs sought to take with them when they left but which Counter-Defendants enjoined.They are tle bases of Coun-ter-P1aintiffs' breach of contract and interference

claims. ts Exhibit A. Counter-Defendants have produced to Counter-Plaintiffs settlement statements for those which haveclosed;

but in the interest of maintaining borrower privacy, have not anached th"*. 5r6zo3.r 126(Page 9 of 46)

parties wouid have enteredinto a business relationship; (2) the defendantcommitted an independently

tortious or unlararful

act that prevented

the relationship from occurring; (3) the defendant either actedwith a conscious desireto prevent the relationship from occurring or knew the interference was certain or substantially certain to occur as a result of the conduct; and (+) the plaintiff suffered actual harm or damages as a result of the defendant'sinterference. Rtchardson-Eagle,Inc. u. Willfam M. Mercer, Inc., 2tg S.W'gd 469, 475 (Tex, App.-Houston frst Dist.] z0o6, pet. denied). Independently tortious means

that the Counter-Plaintiffs must prove that Counter-Defendants'conduct would be actionable under a recognizedtort. WalMaft Stores, Inc. u. Sturges,5z S.W.gd TLL,T26 (Tex.zoor). The agreements

betweenthe parties clearly define who the customersbelong to: Excellence.

There is absolutelynothing unlawful or tortious about Excellence seeking to retain its customers by enforcing its lawful agreements preventing Counter-Plaintiffs from taking them. The conduct of using the legal processto prevent the loan officers from taking those customers is neither unlawful nor tortious.r6 As is explained below, Counter-Plaintiffsconfuselegitimate protection of confidential information contractual provisions

with covenants

not to compete, BecauseCounter-Defendants engaged in no tortious or wrongful conduct, it cannot be liable for tortious interference. Summary judgrnent is appropriate for Excell ence on Cou nter-Plaintiffs' tortious interference cl aims,

'6 Indeed,the Employment Agreement (Exhibit C) has a provision allowing for injunctive relief for failure to return company information, including customerinformation, after leavingemployment. 5r6eo3,r 127(Paqe 10 of 46)

D. Counter-Plaintiffs'Anti-Trustclaims. Counter-Plaintiffsallegeunfair trade restrictions under Tpx. Bus. & Corrru. CooE $ rS'oS. To establish

that a defendantcontracted, combined, or conspired in restraint of trade in violation of section 1S.oS, a plaintiff must show that the alleged contract, combination,or conspiracyis unreasonable and has an adverse

effect on competition in the relevant market. winston u. Am. Med. Int'L,93o s.w.z d g4s, gsr-s2 (Tex. App.- Houston [rst Dist.] 1996, writ denied). The TexasAntitrust Act does not prohibit all restraints of trade; instead, it prohibits only those that restrain trade unreasonably, DeSanhs

u. Wackenhut

Corp., zgg S.w.zd 67o,687 (Tex. 1990).counter-Defendants did not restrain trade at all, but merely enforcedreasonable non-disclosure

agreemenrs. "Non-disclosure agreements are different than non-compete covenants." shoreline Gcs, rnc. u. McGaughev, g-o7-964-cv, zooS wL t747624 (Tex, App.- corpus christi Apr. 17, zoo8, no pet.); citing zep Mfg. c,o. u. Harthcock, gz4 s.w.ed 654, 663 (Tex. App.-Dallas rgg2, no writ) (affirming the trial court's summary judgment enforcing a non-disclosure clause despite being accompanied by an unenforceable

non-compete

covenant);

see also CRC-Euans

Fipeline Int'I,Inc. v. Myers, 927 S.W.zde59, e65 (Tex. App.-Houston [rst Dist.] 7996, no writ) (affirmingthe trial court's denial of temporary injunction enforcing non-disclosure atreement, ,clespite

the fact that such agreements do not restrain trade, because trial court could have reasonablyfound that former employeesdid not learn any trade secrets during the course of their employment).While non-compete covenants

are considered

restraintsof trade, non-disclosure agreementsare not. McGaughey at it; citing CRC-Euans, g2T S.W.zd at e65; Zep,8z4 S.W.ed at 66g. Non-disclosure agreements

do not necessarily restrict a former employee's ability to competewith the former employer, nor do they
5r6ao3.r 128 

### r.o(Page 11 af 46)

prohibit the former employee from using, in competition with the forrner employer, the generalknowledge,skill, and experience acquired in the former employrnent.Zep,8z4 S.W.edat 663. Rather, such agreements prevent only the disclosure of trade secrets

and confidentialinformation acquiredby the former employee. fd, The agreements

do not provide, and Excellence has not asserted,

that CounterPlaintiffs cannot work in the mortgagebusiness. There is no restriction on where, when and for whom that Counter-Plaintiffs can work. There is nothing preventing CounterPlaintiffs from using their general knowledge, skill, and experience acquired at Excellence.

Indeed, Counter-Plaintiffs are using their knowledgeand skill and working with a competitor in the same market. What Counter-Plaintiffs cannot d.o is steal Excellence's

existing customers.Excellence's efforts to prevent them from doing so are not a restraint of trade. As such, surnmary judgment is proper for Counter-Defendants on Counter-Plaintiffs'

anti-trust claim, E. Counter-PlaintiffMorton'sClaim Counter-Plaintiff Morton pleadssome ill-defined claim to alleged entitlement to brokeragefees. Without stating any specific causeof action, counter-piaintiff Morton alleges unless the 9r pipeline loans were transferredto a licensedbroker after Morton's termination, she is entitled to a brokerage fee.'zThere is no authority cited for this position' Summary

judgment is proper for Counter-Defendants for at leasttvvoreasons: 1) there is no recognizablecause of action for the alleged harm and z) nothing in Morton's Ernployment Agreemententitlesher to compensation after termination.

'zThis appearsto be what Counter-Plaintiff is contending although it is difficult to ascertain.
S162o3.1 11