Court Opinion

ID: 3194951
Source: CourtListenerOpinion
Date Created: 2016-04-18 07:20:19.59375+00
Date Added: 2024-06-11T14:47:05.794909
License: Public Domain

In The

                               Court of Appeals
                    Ninth District of Texas at Beaumont
                             ____________________

                              NO. 09-14-00482-CV
                             ____________________

GEORGE E. RHYMES JR. AND RHYMES INDUSTRIAL FILTRATION &
              CONSULTING, L.L.C., Appellants

                                        V.

                 FILTER RESOURCES, INC., Appellee
__________________________________________________________________

                On Appeal from the 136th District Court
                       Jefferson County, Texas
                      Trial Cause No. D-194,154
__________________________________________________________________

                          MEMORANDUM OPINION

      Filter Resources, Inc. (“Filter”) sued George E. Rhymes Jr. (“Rhymes”) and

Rhymes Industrial Filtration & Consulting, L.L.C. (“Industrial”) for breach of

contract, breach of fiduciary duty, and tortious interference. A jury found in favor

of Filter. In eight appellate issues, Rhymes challenges the jury’s verdict, the

                                         1
admission of evidence, and the injunctive relief award. 1 Filter presents two cross-

issues regarding damages and attorney’s fees. We affirm the trial court’s judgment.

                                  Factual Background

      According to the record, Rhymes first became employed with Filter in 1998.

James Metcalf Jr., Filter’s chief executive officer and president, testified that

Rhymes was a branch manager and salesman for Filter. There was testimony that

Rhymes had access to confidential information, such as products, prices, contracts,

and financial, vendor, and customer information. In 2000, Filter asked Rhymes to

sign a contract that contained the following clause:

      The Employee shall not for a period of one year immediately
      following the termination of his employment with the Employer,
      either directly or indirectly:

            1. Make known to any person, firm, or corporation the names and
               addresses of any of the customers of the Employer or any other
               information pertaining to them; or

            2. Call on, solicit, or take away, or attempt to call on, solicit, or
               take away any of the customers of the Employer on whom the
               Employee called or with whom he became acquainted during
               his employment with the Employer, whether for himself or for
               any other person, firm, or corporation.

The contract also stated:

      The Employee during the term of employment under this agreement
      will have access to and become familiar with various trade secrets,
      1
          We group Rhymes’s complaints into eight issues.
                                            2
      consisting of formulas, patterns, devises, secret inventions, processes,
      and compliance [sic] of information, records, and specifications,
      customer lists, vendor lists, marketing strategies, pricing strategies,
      financial information, and specifications, which are owned by the
      Employer and which are regularly used in the operation of the
      business of the Employer. The Employee shall not disclose any of the
      aforesaid trade secrets, directly or indirectly, nor use them in any way,
      either during the term of this agreement or at any time thereafter,
      except as required in the course of his employment. All files, records,
      documents, drawings, specification, [sic] equipment and similar items
      relating to the business of the Employer, whether prepared by the
      Employee or otherwise coming into his possession, shall remain the
      exclusive property of the Employer and shall not be removed from the
      premises of the Employer under any circumstances whatsoever
      without the prior written consent of the Employer.

Rhymes testified that he did not want to sign the contract. According to Rhymes,

his boss stated that it was just paperwork and not to worry; thus, Rhymes believed

he was not bound by the contract. Rhymes admitted knowing that he might be sued

if he competed with Filter.

      Bridges testified that Rhymes told him he planned to leave Filter to go into a

different business. Rhymes’s last day of work with Filter was August 17, 2012, but

Rhymes remained on Filter’s payroll through the end of August. Bridges testified

that Rhymes’s Industrial business card listed the same cell phone number that he

used while employed with Filter. Cheryl Rhymes, Rhymes’s wife, testified that this

was Rhymes’s personal phone that he also used for business and that she paid

Rhymes’s phone bill, which Filter reimbursed. Rhymes testified that Filter paid his

                                         3
phone bill and that he still uses the same phone number, but that he had the phone

number before his employment with Filter. Bridges admitted that Rhymes brought

the phone number and a cell phone with him when he began working for Filter. He

testified that Filter subsequently paid for Rhymes’s new cell phone and the cell

phone bill.

      Metcalf testified that Rhymes also used a planner to record business

information but that Filter owned the information Rhymes recorded in the planner.

Rhymes admitted taking his planner and some business cards when he left Filter,

but he claimed to have had the planner before he went to work for Filter. Metcalf

opined that Rhymes should not have taken the planner when he left Filter because

the planner contained information that belonged to Filter.

      Bridges testified that, within six weeks of leaving Filter, Rhymes was selling

to five of Filter’s customers. He and Metcalf testified that Rhymes’s customers

were all Filter customers. Cheryl testified that Industrial sells the same products as

Filter and is a competitor of Filter. She was unaware that Industrial had any

customers outside of those Rhymes served during his employment with Filter, but

she claimed that each of those customers first contacted Rhymes. Rhymes also

admitted that Industrial is in direct competition with Filter, that all of his customers

are former Filter customers, and that Industrial sells almost all the same products

                                           4
as Filter. He further admitted to calling on, soliciting, and selling products to

Filter’s customers. Rhymes explained that he did not believe he had violated the

non-compete agreement because Filter’s customers contacted him first.

      Joshua Crookshank, an area manager for Filter, testified that before Rhymes

left Filter, Rhymes took Crookshank to meet some of Filter’s customers and

Rhymes told the customers he was starting his own business. Alan Clarke testified

that he is the president of Jonell, a company that manufactures filter elements.

Rhymes told Clarke that he intended to go into the distribution business with a

concentration on the natural gas market, which Clarke believed to be different from

Filter’s business. Rhymes told Clarke that he chose a different market because he

had a non-compete agreement with Filter. At some point, Clarke became aware

that Rhymes was ordering parts from Jonell on behalf of some of Filter’s

customers. Rhymes told Clarke that he spoke with an attorney and that the non-

solicitation clause was not worth a “s---.”

      Harold Doucet, Filter’s account manager, testified that Filter has a

consignment agreement with Total Refining and that he learned of Rhymes’s

attempts to circumvent that agreement. He explained that a part Filter provides to

Total, through the consignment agreement, had not been replenished by Filter but

                                          5
had been replaced by Rhymes. He also testified that he saw Rhymes’s business

card on the desk of another one of Filter’s customers.

      According to Metcalf and Bridges, after Rhymes left, Filter’s sales

decreased by over a million dollars. Doucet testified that sales declined monthly

and he could not recoup all the lost sales. Clarke testified that Filter does more

business with Jonell than Rhymes but that Jonell’s sales to Filter were “continually

sliding[.]” Jeffrey Compton, a certified public accountant, testified that Filter’s lost

profits total $622,800.

      The jury found that: (1) Rhymes failed to comply with the non-solicitation

clause, the confidentiality and non-disclosure provisions, and his duties “not to

compete with Filter Resources by establishing his own new, competing business,

while still employed at Filter Resources[,]” “not to misuse Filter Resources’

materials and resources to establish his own new, competing business, while still

employed at Filter Resources[,]” and “to refrain from using Filter Resources’

confidential and proprietary information, disclosed during employment with Filter

Resources;” (2) appellants intentionally interfered with Filter’s prospective

contractual or business relations; (3) appellants did not have a good faith belief that

their conduct was prohibited by the employment contract; (4) Filter was entitled to

$620,000 in damages; (5) the harm caused to Filter resulted from malice; (6) Filter

                                           6
was entitled to $0 in exemplary damages; and (7) Filter was entitled to $125,000 in

attorney’s fees. The trial court granted Rhymes’s motion for judgment

notwithstanding the verdict regarding attorney’s fees, disregarded the jury’s

answer to question seven in light of the zero award for exemplary damages,

conditionally granted injunctive relief requiring Rhymes to return the cell phone

and SIM card, and denied additional injunctive relief.

                                 Legal Sufficiency

      In issues one through six, Rhymes challenges the legal sufficiency of the

evidence to support the jury’s verdict. Under legal sufficiency review, we consider

whether the evidence “would enable reasonable and fair-minded people to reach

the verdict under review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.

2005). We view the evidence in the light most favorable to the verdict, credit

favorable evidence if a reasonable factfinder could, and disregard contrary

evidence unless a reasonable factfinder could not. Del Lago Partners, Inc. v. Smith,

307 S.W.3d 762, 770 (Tex. 2010).

      Rhymes’s first, second, and third issues challenge the jury’s findings that he

breached the contract’s non-solicitation provision, violated the contract’s

confidentiality and non-disclosure provisions, and breached his fiduciary duties.

The one-year non-solicitation clause prohibited Rhymes from directly or indirectly

                                         7
calling on, soliciting, or taking away, or attempting to call on, solicit, or take away

any of Filter’s customers on whom Rhymes had called or with whom he became

acquainted during his employment with Filter. Additional provisions prohibited

Rhymes from (1) making known to any person, firm, or corporation the names and

addresses of Filter’s customers or any other information pertaining to those

customers; and (2) directly or indirectly disclosing or using any trade secrets

during or after his employment.

      An at-will employee may properly plan to go into competition with his

employer and may take active steps to do so while still employed, and the

employee has no general duty to disclose his plans to his employer. Johnson v.

Brewer & Pritchard, P.C., 73 S.W.3d 193, 201 (Tex. 2002). An employee may not

appropriate his employer’s trade secrets, solicit his employer’s customers during

his employment, carry away employer information, such as customer lists, or act

for his future interests at his employer’s expense by using the employer’s funds or

employees for personal gain or by a course of conduct designed to hurt the

employer. Id. at 202.

      In this case, the jury heard evidence that, before leaving Filter, Rhymes

incorporated Industrial and contacted Kim Jackson at RBF, one of Filter’s

customers, to obtain a new vendor form. Rhymes told Jackson that he was thinking

                                          8
of leaving Filter and asked Jackson about the procedures for getting set up as a

vendor. Rhymes also spoke with Jerry James at Koch Pipeline, another Filter

customer, and provided James with Industrial’s information. Rhymes testified that

James called him for the purpose of helping him get set up with Koch. Rhymes’s

telephone records indicate that, while still on Filter’s payroll, he initiated calls to

some of Filter’s customers.

      The jury heard Cheryl and Rhymes testify that Industrial made sales to

Filter’s customers only after those customers first contacted Rhymes. Rhymes

admitted that Industrial is a competitor of Filter, Industrial sells almost all the same

products as Filter, and that he called on, solicited, and sold products to Filter’s

customers. Additionally, the record demonstrates that Industrial made sales to five

of Filter’s customers within the first six weeks of Rhymes leaving Filter and that

within the first year of business, all of Industrial’s customers were former Filter

customers. Rhymes visited BASF, a Filter customer, on numerous occasions, filed

a vendor application with BASF, took BASF employees shooting and hunting, and

discussed BASF filters with Jonell before making a sale to BASF. The jury also

heard Doucet testify that Rhymes circumvented a consignment agreement between

Filter and Total.

                                           9
      Moreover, the jury heard Metcalf and Bridges testify that Rhymes had

access to confidential information. Rhymes testified that he protected Filter’s

financial information during his employment and did not use it for his own

purposes. He denied using any of Filter’s pricing information. The jury heard

Rhymes testify that, despite his access to Filter’s pricing information and his

disclaiming use of such information, he represented to his insurance company that

Industrial’s projected annual sales would be at least $750,000. Although Rhymes

denied formulating this number based on sales to Filter’s customers, the jury heard

evidence that Industrial generated annual sales of $732,914.80.

      As sole judge of the weight and credibility of the evidence, the jury was

entitled to decide which evidence to believe and, therefore, could reasonably

conclude that Rhymes violated the non-solicitation clause by directly or indirectly

calling on, soliciting, or taking away Filter’s customers on whom Rhymes had

either called or become acquainted with during his employment. See Wilson, 168
S.W.3d at 819. The jury was entitled to reject Rhymes’s testimony that he did not

use Filter’s confidential information, such as customer information and pricing

lists, to further Industrial’s business. See id. In doing so, the jury could reasonably

conclude that Rhymes breached the contract’s confidentiality and non-disclosure

                                          10
provisions. See id. Additionally, the jury was asked if Rhymes violated any of the

following fiduciary duties, to which the jury answered “yes:”

         Duty not to compete with Filter Resources by establishing his own
         new, competing business, while still employed at Filter Resources;

         Duty not to misuse Filter Resources’ materials and resources to
         establish his own new, competing business, while still employed at
         Filter Resources[;]

         Duty to refrain from using Filter Resources’ confidential and
         proprietary information, disclosed during employment with Filter
         Resources[.]

Although Rhymes was entitled to begin planning to compete with Filter during his

employment, at the very least, the jury could reasonably conclude that Rhymes

breached his fiduciary duty by engaging in a course of conduct designed to harm

Filter, such as misusing Filter’s resources to contact and obtain Filter’s customers. 2

See Johnson, 73 S.W.3d at 201-02. Accordingly, we conclude that the evidence is

legally sufficient to support the jury’s findings. We overrule issues one, two, and

three.
         2
       With regard to breach of the duty to refrain from using Filter’s confidential
and proprietary information, Rhymes argues that “Question 2 [regarding breach of
non-disclosure provisions] submits a breach of contract theory based on the
contractual provisions in the Employment Contract which prohibit ownership in a
competing corporation and disclosure of Filter Resources’ confidential and
proprietary information, the identical fiduciary duties submitted in Question 3
under a tort theory.” According to Rhymes, “[t]he contractual provisions foreclose
any tort liability for breach of fiduciary duty.” However, as previously noted, the
charge asked the jury whether Rhymes violated any of three fiduciary duties.
                                          11
      In issue four, Rhymes maintains that the evidence is legally insufficient to

support the jury’s finding that he and Industrial tortiously interfered with Filter’s

prospective contractual or business relations. To prevail on a claim for tortious

interference, a plaintiff must prove the following:

      (1) there was a reasonable probability that the plaintiff would have
      entered into a business relationship with a third party; (2) the
      defendant either acted with a conscious desire to prevent the
      relationship from occurring or knew the interference was certain or
      substantially certain to occur as a result of the conduct; (3) the
      defendant’s conduct was independently tortious or unlawful; (4) the
      interference proximately caused the plaintiff injury; and (5) the
      plaintiff suffered actual damage or loss as a result.

Coinmach Corp. v. Aspenwood Apt. Corp., 417 S.W.3d 909, 923 (Tex. 2013).

According to Rhymes, Filter failed to demonstrate an independent tort that

proximately caused actual damage to Filter.

      Intentional breach of fiduciary duty is a tort. Brosseau v. Ranzau, 81 S.W.3d
381, 396 (Tex. App.—Beaumont 2002, pet. denied). As previously discussed, the

evidence is legally sufficient to support the jury’s breach of fiduciary duty finding.

When “a third party knowingly participates in the breach of duty of a fiduciary,

such third party becomes a joint tortfeasor with the fiduciary and is liable as such.”

Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942).

According to Rhymes, the jury charge does not include a separate question

regarding knowing participation. The jury was asked if “Rhymes and/or Rhymes
                                         12
Industrial intentionally interfere[d] with Filter Resources’ prospective contractual

or business relations[.]” The trial court instructed the jury that tortious interference

occurs, in part, when the party “acted with a conscious desire to prevent the

relationship from occurring or knew that the interference was certain or

substantially certain to occur as a result of his conduct[.]”

      To find that Industrial knowingly participated in Rhymes’s breach, the jury

would have to determine that (1) Industrial knew that Rhymes owed a duty to

Filter and (2) Industrial was aware of its participation in the breach. See DeYoung

v. Beirne, Maynard & Parsons, L.L.P., No. 01-13-00365-CV, 2014 Tex. App.

LEXIS 2965, at *15 (Tex. App.—Houston [1st Dist.] Mar. 18, 2014, no pet.)

(mem. op.). Such findings are subsumed within the jury’s conclusion that

Industrial knew that interference with Filter’s relationships was certain or

substantially certain to occur as a result of Rhymes’s conduct. The trial court was

not required to submit a separate question on knowing participation. See Tex. R.

Civ. P. 277 (“In all jury cases the court shall, whenever feasible, submit the cause

upon broad-form questions.”); see also Hyundai Motor Co. v. Rodriguez, 995
S.W.2d 661, 665-66 (Tex. 1999) (“While trial courts should obtain fact findings on

all theories pleaded and supported by evidence, a trial court is not required to, and

                                           13
should not, confuse the jury by submitting differently worded questions that call

for the same factual finding.”).

      Rhymes also contends that knowing participation cannot support tortious

interference by Industrial because it is a derivative tort rather than an independent

tort. “Independently tortious” does not mean that the plaintiff must prove an

independent tort; rather, it means that the “defendant’s conduct would be

actionable under a recognized tort.” Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d
711, 726 (Tex. 2001). The jury heard evidence that Industrial relied on Rhymes’s

knowledge, sales, and solicitation of business. Cheryl testified that Industrial was

formed with the knowledge that, if Rhymes solicited Filter’s customers, he would

be violating his employment contract. The record also indicates that Industrial

knew that its customers were all previous customers of Filter. The record contains

evidence supporting a conclusion that Industrial’s conduct would be actionable

under a recognizable tort, which is all Filter was required to show. See id. The jury

could reasonably conclude that Industrial knew of the fiduciary duties Rhymes

owed to Filter and knew that it was participating in Rhymes’s breach of those

duties. See Coinmach Corp., 417 S.W.3d at 923; see also Kinzbach Tool Co., 160
S.W.2d at 514.

                                         14
      “The classic proximate-cause tests for cause-in-fact and forseeability apply

to claims of tortious interference.” Richardson-Eagle, Inc. v. William M. Mercer,

Inc., 213 S.W.3d 469, 474 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).

“Establishing causation requires that the plaintiff bring forth sufficient facts so that

the evidence, and logical inferences drawn from the evidence, support a reasonable

probability that the defendant’s acts or omissions were a substantial factor in

bringing about injury.” Id. The record contains evidence demonstrating that, after

Rhymes’s departure, Jonell’s sales to Filter began declining, Filter’s sales

substantially decreased, Filter’s lost sales could not all be recouped, Filter lost

several customers to Rhymes and Industrial, and Rhymes interfered with an

existing consignment agreement. The jury was entitled to conclude that Filter

presented sufficient facts to support a reasonable probability that Rhymes’s

conduct was a substantial factor in bringing about actual damage to Filter. See id.

We overrule issue four.

      In issue five, Rhymes contends that Filter failed to show damages

proximately caused by breach of the non-solicitation clause, breach of the non-

disclosure and confidentiality provisions, breach of fiduciary duty, and tortious

interference. “Proximate cause comprises two elements: cause in fact and

foreseeability.” Smith, 307 S.W.3d at 774. The test for causation in fact is “whether

                                          15
the defendant’s act or omission was a substantial factor in causing the injury and

without which the injury would not have occurred.” Id. “Foreseeability requires

only ‘that the injury be of such a general character as might reasonably have been

anticipated; and that the injured party should be so situated with relation to the

wrongful act that injury to him or to one similarly situated might reasonably have

been foreseen.’” Ryder Integrated Logistics, Inc. v. Fayette Cty., 453 S.W.3d 922,

929 (Tex. 2015) (quoting Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 551

(Tex. 1985)).

      Again, the record contains evidence demonstrating that Rhymes’s breaches

and tortious interference led to the loss of customers and, consequently, the loss of

substantial profits that otherwise would have gone to Filter. As previously

discussed, the jury heard evidence by which it could reasonably conclude that

Rhymes’s conduct was a substantial factor in causing harm to Filter. See Smith,
307 S.W.3d at 774. The jury could also reasonably conclude that Filter’s injury, the

loss of customers and profits, would not have occurred absent Rhymes’s conduct.

See id. That Filter would lose customers and sales is an injury that Rhymes should

reasonably have anticipated would result from his conduct. See Ryder Integrated

Logistics, Inc., 453 S.W.3d at 929. We overrule issue five.

                                         16
      In issue six, Rhymes argues that the evidence is legally insufficient to

support the jury’s damages award. “[T]he jury has discretion to award damages

within the range of evidence presented at trial.” Gulf States Utils. Co. v. Low, 79
S.W.3d 561, 566 (Tex. 2002). “[T]he evidence need not correspond to the precise

amount found by the jury.” Jefferson Cnty. v. Nguyen, No. 09-13-00505-CV, 2015

Tex. App. LEXIS 8052, at *60 (Tex. App.—Beaumont July 31, 2015, no pet.)

(mem. op.). “When the evidence at the trial supports a range of damages, ‘an

award within that range is an appropriate exercise of the jury’s discretion, and a

reviewing court is not permitted to speculate on how the jury actually arrived at its

award.’” Id. (quoting Drury Sw., Inc. v. Louie Ledeaux # 1, Inc., 350 S.W.3d 287,

292 (Tex. App.—San Antonio 2011, pet. denied)).

      The jury awarded Filter $620,000 in damages for the period from August 18,

2012, to August 17, 2013. According to Compton, during this time frame, Rhymes

generated $234,787 in profits from Filter’s clients. Compton deducted $28,020

from this number to represent the amount of money Filter saved as a result of not

having to pay Rhymes’s salary. Accordingly, during the first year after Rhymes’s

departure, Filter lost $206,767 in profits. Compton further testified that, because of

the actions that Rhymes took in that first year, Filter lost net profits of $622,800

over a five-year period. Additionally, Bridges testified that Industrial’s total

                                         17
income in year one ranged from $638,745 to $732,914, which was all generated

from Filter’s clients. Bridges testified that these profits would have remained with

Filter but for Rhymes’s actions. Based on this evidence, the jury could reasonably

conclude that, because of Rhymes’s breaches and tortious interference committed

in the year following his departure from Filter’s employ, Filter suffered $620,000

in damages. See Nguyen, 2015 Tex. App. LEXIS 8052, at **59-60 (“For a jury’s

damage award to survive a legal sufficiency challenge, there must be some

evidence that a substantial loss occurred which affords a reasonable basis for

estimating the amount of that loss.”). Because the jury’s award falls within the

range of evidence presented at trial, we overrule issue six. See Low, 79 S.W.3d at

566; see also Nguyen, 2015 Tex. App. LEXIS 8052, at **59-60. We need not

address Filter’s first cross-issue. 3 See Tex. R. App. P. 47.1.

                                Evidentiary Challenge

      In issue seven, appellants argue that any evidence of damages sustained after

the contract’s one-year non-solicitation term was improperly admitted as

speculative. “We review a trial court’s evidentiary rulings for abuse of discretion.”

Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 906 (Tex. 2000). We will
      3
       In its first cross-issue, Filter asks this Court to, in the event we disagreed
with Filter’s arguments supporting the jury’s damages award, set aside the
damages award and enter judgment awarding damages apportioned for each of the
three damages periods, totaling $620,000.
                                           18
not reverse unless the error probably caused the rendition of an improper judgment.

Tex. R. App. P. 44.1(a)(1).

      In his expert report, Compton provides three periods of lost profits. “Case 3”

estimated lost profits assuming Filter suffered indefinite damage. Rhymes moved

to exclude Case 3 on grounds that the one-year non-solicitation clause covers the

period August 18, 2012, to August 17, 2013, but Case 3 attempts to recover

$622,845.00 for the five-year period August 18, 2012, to August 17, 2017. Rhymes

argued that that Case 3 was “irrelevant, unreliable, speculative and contrary to the

terms of the Employment Contract.” The trial court overruled Rhymes’s objection

to admission of testimony regarding Case 3. On appeal, without citation to record

references, Rhymes argues that:

         The lost sales that comprise the future damages sought by Filter
      Resources for the 4 years after the expiration of the non-solicitation
      covenant are attributable to customers who had no contractual
      agreements with Filter Resources and who were free to stop sending
      business to Filter Resources at any time for any reason. This renders
      the damages sought by Filter Resources for the four years after the
      expiration of the non-solicitation covenant speculative and no
      evidence as a matter of law.

      “Recovery for lost profits does not require that the loss be susceptible of

exact calculation.” Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.

1992). “The amount of the loss must be shown by competent evidence with

reasonable certainty.” Id. “What constitutes reasonably certain evidence of lost
                                        19
profits is a fact intensive determination.” Id. “As a minimum, opinions or estimates

of lost profits must be based on objective facts, figures, or data from which the

amount of lost profits can be ascertained.” Id. “The evidence must show that the

lost profit damages are not uncertain or speculative.” Lamont v. Vaquillas Energy

Lopeno, Ltd., 421 S.W.3d 198, 225 (Tex. App.—San Antonio 2013, pet. denied).

      At trial, Compton explained that he reviewed Rhymes’s and Filter’s

financial information and actual sales, lawsuit documents, and depositions. He

testified that there are Texas guidelines that he must follow when formulating a

calculation and that he followed these guidelines. Compton testified that he

assumed that Rhymes’s leaving Filter caused the loss of business and that Filter

was damaged indefinitely by Rhymes’s actions, which he defined as a five-year

period. He described in detail the formula he used to determine Filter’s lost profits.

The record does not demonstrate that Compton’s opinion was based on anything

other than objective facts, figures, or data from which Filter’s lost profits could be

reasonably ascertained. See Heine, 835 S.W.2d at 84; see also Lamont, 421
S.W.3d at 224-225. Because the trial court did not abuse its discretion by admitting

the complained-of evidence, we overrule issue seven.

                                         20
                                  Injunctive Relief

      In issue eight, Rhymes contends that there is no basis for the trial court’s

award of injunctive relief. In its final judgment, the trial court conditionally

granted Filter’s request for injunctive relief requiring Rhymes to return his cell

phone and SIM card should Rhymes fail to do so voluntarily. The trial court denied

Filter’s request for additional injunctive relief. On appeal, Rhymes maintains that

the cell phone and SIM card are his personal property, Filter did not submit the

issue of ownership to the jury, and without a jury finding on the issue, Filter has

waived a right to relief.

      “The jury does not determine the expediency, necessity, or propriety of

equitable relief.” State v. Tex. Pet Foods, Inc., 591 S.W.2d 800, 803 (Tex. 1979).

“The determination of whether to grant an injunction based upon the ultimate

issues of fact found by the jury is for the trial court, exercising chancery powers,

and not the jury.” Id. “Injunctive relief is recognized as a proper remedy to protect

confidential information and trade secrets.” Rugen v. Interactive Bus. Sys., Inc.,

864 S.W.2d 548, 551 (Tex. App.—Dallas 1993, no writ.). “An injunction is

appropriate when necessary to prohibit an employee from using confidential

information to solicit his former employer’s clients.” Id.

                                         21
      The record indicates that Rhymes brought a particular cell phone number

along with him when he began working for Filter. Filter proceeded to purchase a

new cell phone, using this same number, for Rhymes and Filter paid at least a

portion of Rhymes’s cell phone bill during his employment. After leaving Filter,

Rhymes took the cell phone, which contained information regarding Filter’s

customers, and used that cell phone to solicit Filter’s customers. The jury found

that Rhymes breached his employment contract with Filter, breached his fiduciary

duties, and tortiously interfered with Filter’s prospective business relations; thus,

the trial court was entitled to conclude that Rhymes had engaged in a settled course

of conduct and to assume that such conduct would continue. See Tex. Pet Foods,

Inc., 591 S.W.2d at 803-04. In so doing, the trial court could reasonably conclude

that an injunction requiring Rhymes to return the cell phone and SIM card was

necessary to prevent Rhymes from continuing to use Filter’s confidential

information to solicit Filter’s customers. See id. at 803; see also Rugen, 864
S.W.2d at 551. We overrule issue eight.

                                  Attorney’s Fees

      In its second cross-issue, Filter argues that the trial court abused its

discretion by finding that Filter was not entitled to attorney’s fees as awarded by

the jury. The jury awarded Filter $125,000 in attorney’s fees for representation in

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the trial court based on its conclusion that Rhymes breached the non-solicitation

clause. Rhymes filed a motion for judgment notwithstanding the verdict, in which

he contended that the Texas Covenants not to Compete Act (the “Act”) prohibited

an award of attorney’s fees. The trial court granted Rhymes’s motion on this issue.

On appeal, Filter argues that it is entitled to injunctive relief under section

38.001(8) of the Civil Practice and Remedies Code because: (1) the jury found that

Rhymes breached the contract’s non-disclosure provision; and (2) the trial court

awarded injunctive relief. 4

      In response, Rhymes argues that Filter’s request for attorney’s fees under

section 38.001 is barred by a lack of presentment. “A person may recover

reasonable attorney’s fees from an individual or corporation, in addition to the

amount of a valid claim and costs, if the claim is for . . . an oral or written

contract.” Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2015). To recover

such fees, “the claimant must present the claim to the opposing party or to a duly

authorized agent of the opposing party[]” and “payment for the just amount owed
      4
        Rhymes contends that Filter has waived its complaint with regard to breach
of the non-disclosure provision. According to the record, in response to Rhymes’s
motion for judgment notwithstanding the verdict, Filter argued that Rhymes’s
argument ignored the fact that Filter requested injunctive relief. On appeal, Filter
maintains that attorney’s fees are authorized by section 38.001(8) because Filter
received something of value in the form of injunctive relief because of Rhymes’s
breach of contract. Accordingly, we conclude that Filter’s complaint is preserved
for appellate review.
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must not have been tendered before the expiration of the 30th day after the claim is

presented.” Id. § 38.002(2), (3). Presentment is “required to allow the person

against whom the claim is asserted an opportunity to pay the claim within thirty

days of receiving notice of the claim, thereby avoiding the obligation to pay

attorney’s fees.” Note Inv. Grp., Inc. v. Assocs. First Capital Corp., 476 S.W.3d
463, 485 (Tex. App.—Beaumont 2015, no pet.). “All that is necessary is that the

party seeking attorney’s fees show that it made an assertion of a debt or claim and

a request for compliance to the opposing party, and that the opposing party refused

to pay the claim.” Id. Although a particular form of presentment is not required,

“neither the filing of suit, nor the allegation of a demand in the pleadings can,

alone, constitute presentment of a claim or a demand that a claim be paid.” Id.

      Filter maintains that it satisfied the presentment requirement because: (1)

during his deposition, Rhymes “was confronted with evidence of his breach of the

Employment Contract[]” and denied any breach, “thereby indicating his intention

to continue operating his competing business[;]” (2) during mediation, Filter

informed Rhymes’s counsel that “Filter considered Rhymes to be in breach of the

Employment Contract and demand[ed] that he stop[;]” and (3) “Filter made several

demands far in advance of trial in this case, and it is undisputed that [Rhymes] did

not respond or make any tender of payment within 30 days of any of the demands.”

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Filter does not cite this Court to any record references to substantiate its contention

regarding mediation or any other demands made before trial. See Genender v. USA

Store Fixtures, LLC, 451 S.W.3d 916, 927 (Tex. App.—Houston [14th Dist.] 2014,

no pet.) (“Evidence that the parties participated in settlement negotiations, without

more, is no evidence of presentment.”); see also Tex. R. App. P. 38.1(g),

38.2(a)(1). Moreover, “presentment” refers to a request or demand for payment or

performance. Note Inv. Grp., Inc., 476 S.W.3d at 485. Filter does not direct this

Court to any request or demand for payment or performance arising out of the

breach. See id.; see also King v. Wells Fargo Bank, N.A., 205 S.W.3d 731, 734-35

(Tex. App.—Dallas 2006, no pet.) (It is the party’s burden to direct the appellate

court to evidence in the record that supports the party’s contention; it is not an

appellate court’s duty to conduct an independent search of the record for evidence

to support a party’s position.). Robert Alan Black, Filter’s attorney’s fees expert,

testified that he had not seen any presentment “one way or the other.” Our review

of the record has not revealed any evidence of presentment upon which the trial

court could enforce the jury’s attorney’s fee award under section 38.001. We

overrule Filter’s second cross-issue and we affirm the trial court’s judgment.

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      AFFIRMED.

                                           ______________________________
                                                  STEVE McKEITHEN
                                                      Chief Justice

Submitted on November 16, 2015
Opinion Delivered April 14, 2016

Before McKeithen, C.J., Horton and Johnson, JJ.

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