IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

AMERICA’S HOME PLACE, INC.,

Plaintiff,

vs. 

CRAIG FLORES, INDIVIDUALLY, and

D/B/A CA FLORES CONSTRUCTION

Defendant.

NO. 1:23-CV-00196-MAC

REPORT AND RECOMMENDATION 

GRANTING MOTION FOR SUMMARY JUDGMENT

This case is assigned to United States District Judge Marcia Crone and referred to the 

undersigned United States Magistrate Judge for all pretrial proceedings, to enter findings of fact 

and recommend disposition on case-dispositive matters, and to determine non-dispositive matters. 

See 28 U.S.C. § 636; E.D. TEX. CIV. R. 72. Doc. No. 18. Currently pending before the court is 

Plaintiff, America’s Home Place, Inc.’s (“AHP”) Motion for Summary Judgment. Doc. No. 

30. Defendant Craig Flores (“Flores”), Individually, and D/B/A CA Flores Construction, 

proceeding pro se, did not file a response.

A. Factual and Procedural Background

On May 19, 2023, AHP filed its complaint alleging that Flores breached his employment 

contract. Doc. No. 1. Flores worked as a project manager for AHP in constructing custom 

residential homes. Doc. No. 1, ¶9. His employment contained a “Sole Employment” provision

which prevented him from engaging in business that directly competed with AHP and disallowed 

him from involvement in outside business interests that might be a conflict of interest, including 

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building speculative homes and acting as an advisor to outside construction projects. Doc. No. 1, 

¶13.

AHP alleged that in July 2022, while still the project manager for AHP, Flores began 

negotiations with two individuals, Ronald McCormick and Ron Chorman, to build an AHP home 

on property in Cleveland, Texas. Doc. No. 1, ¶18. However, about a month later, Flores agreed 

with those individuals to build a non-AHP home under Flores Construction. Doc. No. 1, ¶19. This 

occurred without AHP’s knowledge and consent. Doc. No. 1, ¶20. Construction was completed 

on the home while Flores was employed by AHP or shortly after he was separated. Doc. No. 1, 

¶21.

In his Answer, Flores explained that AHP told him that they would not be building a house 

for McCormick due to a “falling out,” but he was not made aware of the details. Doc. No. 21. A 

few weeks later, Flores’s cousin reached out to him about building a home for a man who was 

terminally ill for his son as his last wish. After he agreed to meet with him, that person 

coincidentally was McCormick. Flores stated that “Mr. McCormick asked me if I could build him 

this home for his son as his last dying wish. So as a Christian man I felt a responsibility to help 

him out. I told Mr. McCormick that I could only do this for him as a side job because I have an 

obligation to AHP. So, I could only help him out after hours and on weekends when I had free 

time which he obviously agreed to.” 

B. Summary Judgment Standard

On January 10, 2024, AHP filed its Motion for Summary Judgment. Doc. No. 30. Flores 

has not responded, and the time for doing so has passed. E.D. TEX. CIV. R. CV-7(e). Under the 

Local Rules, “[a] party’s failure to oppose a motion . . . creates a presumption that the party does 

not controvert the facts set out by movant and has no evidence to offer in opposition to the motion.” 

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Id. CV-7(d). Accordingly, the court must decide the motion without the benefit of argument on 

Flores’s behalf. However, the court may not grant summary judgment for the sole reason that the 

nonmoving party fails to respond to the motion. John v. Louisiana (Bd. of Trs. for State Colls. and 

Univs.), 757 F.2d 698, 708 (5th Cir. 1985). Rather, the court grants summary judgment “where the 

movant’s summary judgment evidence does establish its right to judgment as a matter of law.” 

McDaniel v. Sw. Bell Tel., 979 F.2d 1534, 1534 (5th Cir. 1992). 

Summary judgment is proper if the movant shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). A 

genuine dispute about a material fact exists if the evidence is sufficient for a reasonable jury to 

return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986). A fact is material when it is relevant or necessary to the outcome of the case. Id. The 

moving party bears the initial burden of demonstrating that there are no genuine disputes of 

material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Harvill v. Westward Commc’ns, 

LLC, 433 F.3d 428, 433 (5th Cir. 2005). The movant must support its assertion by “citing to 

particular parts of materials in the record . . . or showing that the materials cited do not establish 

the . . . presence of a genuine dispute, or that an adverse party cannot produce admissible evidence 

to support the fact.” FED. R. CIV. P. 56(c)(1)(A)-(B). 

“If the moving party fails to meet this initial burden, the motion must be denied, regardless 

of the nonmovant’s response.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). “If 

the movant does, however, meet this burden, the nonmovant must go beyond the pleadings and 

designate specific facts showing that there is a genuine issue for trial.” Id. at 1075. The nonmovant 

cannot satisfy its burden with conclusory allegations, unsubstantiated assertions, or only a scintilla 

of evidence. Id. If the nonmoving party fails to make a showing sufficient to establish the 

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existence of an element essential to its case and on which it will bear the burden of proof at trial, 

summary judgment must be granted. Celotex, 477 U.S. at 322-23. 

The court resolves any doubts and draws all reasonable inferences in favor of the 

nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); 

United States ex rel. Longhi v. United States, 575 F.3d 458, 465 (5th Cir. 2009). But the court 

“may not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing 

Prods., 530 U.S. 133, 150 (2000); Anderson v. Liberty Lobby, 477 U.S. at 255. 

1. Breach of Contract

AHP argues that Flores breached the employment contract’s (1) sole employment 

provision; (2) covenant not to compete; and (3) covenant not to solicit. Doc. No. 30, p.7. For 

reasons that will be explained below, AHP has only established Flores’s breach regarding the sole 

employment provision of his employment contract.

a. Sole Employment Provision

Flores’s employment contract with AHP states:

Sole Employment. Employee agrees to devote his full and undivided time and 

attention and best efforts to the business of Employer, and that he will at all times 

faithfully, industriously and to the best of his ability, experience and talents, 

perform all of the duties that may be required of and from him to promote, develop, 

manage and operate the Business in a successful and profitable manner. During 

Employee’s employment with Employer, Employee agrees not to engage in any 

activity which is or may be harmful to the business interests or the reputation of 

Employer. During Employee’s employment with Employer, Employee will not 

personally, nor as an employee, officer, director, agent, contractor or sales person, 

engage in any business which directly or indirectly competes with Employer’s 

Business or assist any other person in doing so. To that end, Employee agrees that 

he shall not provide to individuals (other than customers of Employer) services of 

the nature provided to customers of Employer. Employee further agrees not to 

involve himself/herself in outside business interests that may be deemed as a 

conflict of interest, such as, but not limited to, building of speculative homes, acting 

as advisor to outside construction projects, construction of a personal residence, 

land development, real estate sales, etc. Employee further agrees not to take 

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compensation from any other source or business unless approval is granted in 

writing by the President of Employer. Employee agrees not to accept gifts or other 

favors of value which are offered as a result of carrying out his duties with 

Employer. 

Doc. No. 1, Ex. 1, ¶2.

The employment agreement states that it is governed by and construed in accordance with 

the laws of the State of Georgia.1 Doc. No. 1, Ex. 1, ¶16. “The elements for a breach of contract 

claim in Georgia are (1) breach and the (2) resultant damages (3) to the party who has the right to 

complain about the contract being broken.” Song v. eGPS Sols. I, Inc., No. A23A1458, 2024 WL 

1067130, at *9 (Ga. Ct. App. Mar. 12, 2024), reconsideration denied (Mar. 28, 2024) (citing 

Kuritzky v. Emory Univ., 294 Ga. App. 370, 371 (1), 669 S.E.2d 179 (2008)).

Flores entered into the employment agreement on November 29, 2021. Doc. No. 30, Ex.1; 

Doc. No. 1, Ex. 1, p.11.2 In June of 2022, Flores began negotiations with Chorman and 

McCormick for construction of an AHP home in Cleveland, Texas. Doc. No. 30, Ex. 1, 13. 

1

“Although Texas courts permit choice-of-law agreements, and the default position is that they are 

enforceable, it is not uncommon for a party to overcome them.” Cardoni v. Prosperity Bank, 805 F.3d 573, 581 (5th 

Cir. 2015) (collecting cases holding choice-of-law provisions of foreign states unenforceable and applying Texas law). 

The elements for breach of contract under Texas law are (1) the existence of a valid contract; (2) performance or 

tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the 

plaintiff as a result of the breach.” Smith Intern., Inc. v. Egle Group, LLC, 490 F.3d 380, 387 (5th Cir. 2007), (citing 

Valero Mktg. & Supply Co. v. Kalama Int’l, L.L.C., 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.], 2001)). 

Under those elements, AHP would still establish it is entitled to summary judgment on the breach of contract claim 

even if the court applied Texas law.

2 Flores did not respond to AHP’s requests for admission, thus most of the factual matters in this paragraph 

derive from Flores’s “deemed admissions.” See FED. R. CIV. P. 36(a)(3) (“A matter is admitted unless, within 30 days 

after being served, the party to whom the request is directed serves on the requesting party a written answer or 

objection addressed to the matter and signed by the party or its attorney.”); Murrell v. Casterline, 307 F. App’x 778, 

780 (5th Cir. 2008) (“[T]he failure to respond to requests for admission can lead to a grant of summary judgment 

against the non-responding party) (citing Dukes v. South Carolina Ins. Co., 770 F.2d 545, 548-49 (5th Cir. 1985)).

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However, Flores did not build an AHP home, but agreed to build a non-AHP home for Chorman 

and McCormick a month later without AHP’s knowledge or consent. Id., p.14-15. During 

construction, Flores placed a “Flores Construction” sign in the front yard. Id., p. 15; Doc. No. 1, 

Ex. C. Flores completed the home in January or February of 2023. Id., p.15. Flores himself even 

admitted to building the home as a “side job,” although he had the best intentions in doing so in 

order to fulfill McCormick’s “last wish” to build a home for his son. Doc. No. 21, pp. 1-2. 

Nevertheless, AHP terminated his employment on February 8, 2023, for breach of the Employment 

Agreement. Doc. No. 1, Ex. D; Doc. No. 30, Ex. 1, p. 17.

These actions constitute a breach of the Employment Agreement, specifically the Sole 

Employment provision. Flores engaged in a business which directly or indirectly competed with 

AHP. He also provided Chorman and McCormick the same construction services AHP provided 

its customers. Therefore, AHP has established that there is not a genuine dispute of material fact 

that Flores violated the Sole Employment provision of the Employment Agreement.

b. Covenant Not to Compete or Solicit

The Employment Agreement also contains a covenant not-to-compete or solicit. That 

provision states that within “the Restricted Period,” the employee agrees not to provide similar 

services within sixty miles to someone who was a client or customer of AHP at the time of 

termination, or who was a customer during the twelve-month period prior to the termination of 

their employment. Doc. No. 1, Ex. 1, ¶6. The “Restricted Period” is defined as a one-year period 

immediately following Flores’ termination. Doc. No. 1, Ex. 1, ¶6(ii). AHP terminated Flores on 

February 8, 2023. Doc. No. 1, Ex. D. AHP has cited to no summary judgment evidence that Flores 

violated the covenant not to compete or solicit within a one-year period after his termination. All 

of the summary judgment evidence focuses on Flores’s pre-termination conduct. Therefore, AHP 

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has not met its summary judgment burden to show Flores violated the covenant not-to-compete or 

solicit provision in the Employment Agreement.

2. Breach of Fiduciary Duty

To establish a breach of fiduciary claim under Texas state law,3the Plaintiff must show (1) 

the existence of a fiduciary duty, (2) breach of the duty, (3) causation, and (4) damages. First 

United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017). “When a 

fiduciary relationship of agency exists between employee and employer, the employee has a duty 

to act primarily for the benefit of the employer in matters connected with his agency.” Abetter 

Trucking Co. v. Arizpe, 113 S.W.3d 503, 510 (Tex. App.—Houston [1st Dist.] 2003, no pet.), 

(citation omitted). This includes not competing with the principal on his own account in matters 

relating to the subject matter of the agency and the duty to deal fairly with the principal in all 

transactions between them. Id. An employee has a duty to deal openly with the employer and to 

fully disclose to the employer information about matters affecting the company’s business. Id. An 

employee may not solicit for himself and accept compensation for doing the very same type work 

that was salaried to perform by his employer. Salas v. Total Air Services, LLC, 550 S.W.3d 683, 

692 (Tex. App.—El Paso 2018, no pet.).

Flores acted as AHP’s agent when he began negotiating with McCormick and Chorman to 

build an AHP home in July of 2022. Doc. No. 30, Ex. 1, p. 16. He also admitted that he received 

specialized training on site plans, permitting, administrative work, home building and home 

warranting from AHP during his employment. Doc. No. 30, Ex. 1, p. 13. While he was an AHP 

employee, he built the non-AHP home for McCormick and Chorman without their knowledge and 

3 By the terms of the contract, Georgia law only applies to the breach of contract claim. Doc. No. 1, Ex. 1, 

¶16.

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consent as Flores Construction. Doc. No. 30, Ex. 1, pp. 15-16. Flores knew he was in violation 

of the Employment Agreement by doing so. Doc. No. 30, Ex. 1, p.17; see also Answer (“I told 

Mr. McCormick that I could only do this for him as a side job because I have an obligation to AHP. 

So, I could only help him out after hours and on weekends when I had free time which 

[McCormick] agreed to.”). Given these undisputed facts, AHP has met its summary judgment 

burden on its breach of fiduciary duty claim.

3. Damages

AHP argues it is entitled to $36,507.00 in damages from Flores: an amount which 

presumably represents a pro-rated portion of his $85,000 annual salary while he was building the 

non-AHP home for Chorman and McCormick from July 1, 2022 to November 13, 2022.4 Doc. 

No. 30, Ex. 1, pp. 9, 12; Ex. 3, p. 2.

In Georgia, the measure of damages for breach of contract is the amount which will 

compensate the injured person for a loss which a fulfillment of the contract would have prevented 

or the breach of it entailed. Caldwell v. Church, 836 S.E.2d 594, 600 (2019) (citation omitted). 

AHP specifically bargained for Flores’s agreement not to directly compete with AHP’s business or 

provide other individuals services akin to the services he provided to AHP’s customers. Doc. No. 

1, Ex. A ¶2. Had Flores disclosed to AHP he was providing building services to a 

prospective/former customer, AHP would not have paid his salary and terminated his employment. 

Doc. No. 30, p. 10; Doc. No. 1, Ex. D.

In Texas, the court may fashion an appropriate equitable remedy when it finds a breach of 

fiduciary duty. Orbison v. Ma-Tex Rope Co., Inc., 553 S.W.3d 17, 30 (Tex. App.—Texarkana 2018, 

4 The deemed admission states that Flores actually completed building the home in January or February 2023. 

Doc. No. 30, Ex. 1, p.15.

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pet. denied) (citations omitted). This may include disgorgement of the salary paid to an employee 

while he was willfully breaching his fiduciary duties to his employer. Id., citing ERI Consulting 

Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 872-73 (Tex. 2010). 

AHP asks for the same measure of damages for both its breach of contract and breach of 

fiduciary duty claims—the prorated salary amount Flores earned from July 1, 2022 to November 

13, 2022. Noting no response from Flores to this motion, and under the case law set forth above, 

the court finds $36,507 is an appropriate amount of damages.

4. Attorneys’ Fees

The Employment Agreement states that in the event Flores breached the employment 

agreement, AHP shall be entitled to the recovery of its reasonable attorneys’ fees, interest, court 

costs and other costs reasonably incurred by AHP in exercising its rights under the contract. Doc. 

No. 1, Ex. A, ¶9c. Under Georgia law, this court does not have the authority to alter this provision 

unless it is prohibited by statute. Summit at Scarborough Homeowners Ass’n, Inc. v. Williams, 807 

S.E.2d 63, 64 (2017). The court cannot find an attorney fee-shifting provision in an employment 

contract prohibited by a Georgia statute. Similarly, if AHP’s breach of contract claim were 

governed by Texas law, AHP would still be entitled to reasonable attorneys’ fees under TEX. CIV.

PRAC. & REM. CODE ANN. § 38.001(8).

The undersigned has reviewed the attorney invoices attached to the Motion for Summary 

Judgment to justify AHP’s request for awarding $26,000 in attorneys’ fees. Doc. No. 30, Ex. 2, 

pp. 57-65. All of the fees and expenses were reasonable and necessary to prosecute this lawsuit.

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C. Recommendation

AHP’s Motion for Summary Judgment (Doc. 30) should be granted for claims 

against Flores for breach of contract and breach of fiduciary duty. Accordingly, the court should 

issue a Final Judgment in favor of AHP for $36,507.00 in damages and $27,176.36 pursuant to 

the fee-shifting provision in the Employment Agreement, for a total of $63,683.36.

D. Objections

Under 28 U.S.C. § 636(b)(1)(c), each party to this action has the right to file objections to 

this report and recommendation. Objections to this report must (1) be in writing, (2) specifically 

identify those findings or recommendations to which the party objects, and (3) be served and filed 

within fourteen (14) days after being served with a copy of this report. See 28 U.S.C. § 

636(b)(1)(c); FED. R. CIV. P. 72(b)(2). A party who objects to this report is entitled to a de novo 

determination by the United States District Judge of those proposed findings and recommendations 

to which a specific objection is timely made. See 28 U.S.C. § 636(b)(1)(c); FED. R. CIV. P. 

72(b)(3). 

A party’s failure to file specific, written objections to the proposed findings of fact and 

conclusions of law contained in this report, within fourteen (14) days of being served with a copy 

of this report, bars that party from: (1) entitlement to de novo review by the United States District 

Judge of the findings of fact and conclusions of law, see Rodriguez v. Bowen, 857 F.2d 275, 276-

77 (5th Cir. 1988), and (2) appellate review, except on grounds of plain error, of any such findings 

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of fact and conclusions of law accepted by the United States District Judge. See Douglass v. United 

Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996).

_________________________

Zack Hawthorn

United States Magistrate Judge SIGNED this 1st day of May, 2024.

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