Court Opinion

ID: 4070759
Source: CourtListenerOpinion
Date Created: 2016-09-30 01:30:11.38257+00
Date Added: 2024-06-11T14:33:09.675069
License: Public Domain

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

                                                                                                                                       FILED IN
                                                                                                                                4th COURT OF APPEALS
                                                                                                                                 SAN ANTONIO, TEXAS
                                                                                                                                6/2/2015 4:36:48 PM
                                                                                                                                  KEITH E. HOTTLE
                                                                                                                                        Clerk
DARBYRILEY
BOARDCERTIFIED/CIVIL  TRIALLAW                                                                                                                 CHRISRILEY,M A
TEXASBOARDOF LEGALSPECIALIZATION                                                                                                               LEGALASSISTANT
   darbyriley@rileylawfirm
                     com

C H A R L E S AR I L E Y , P C
     charlesriley@rileylalvfirmcom
                                                                        June2, 2015

     FourlhCourtof Appeals
     300 Dolorosa,Suite3200
     San Antonio.Texas 78205-3037

               Re.         Barry Brooks et al. v. ExcellenceMortgage,Ltd. et al.,
                           CauseNo. 04-13-00106-CV

                             JU S T IC ESBARNARDANdALVAREZ:
     T O T H E H ON OR A B L E

               The appellantloan officersrespectfullysubmit this letter,containingadditional

     citationsand succinctcomment,with respectto Appellees'Motionfor Rehearing.

               1.          A N T IT R U S TC L A IMS

                           Motion for SummaryJudgmentlimited to grounds asserfedby the Motion.

               Attached hereto are peftinent excerpts from the mortgage company parties'

              Motionfor SummaryJudgment.The Motionat CR 126-128showsthe grounds
     traditional

     assertedon the loan officers'tortious interferenceand antitrustclaims against the

     mortgagecompanyparties.

                    "Whena motionfor summary   judgmentassertsgroundsA and B, it
               cannotbe upheldon groundsC andD,whichwerenotasserted, evenif the
               summary  judgment proofsupports
                                             themandthe responding partydid not
               exceptto the motion."

                  3 2 0 L e x i n g t o nA v e . S a nA n t o n i o ,T X 7 8 2 1 5 - 1 9 1T3e l : ( 2 1 0 )2 2 5 - 1 2 3 6 F a x :( 2 l 0 ) 2 2 1 - 7 9 0 7
FourthCourtof Appeals
June2, 2015
Page:2

       Roberfsv. SouthwestIexas MethodistHospital,Sl 1 S.W.2d 141,146 (Tex.App-

San Antonio 1991,writ denied),quoted in McConnellv. SouthsidelndependentSchool

District,858S.W.2d 337, 342 (fex. 1993);T. Pnnoru,Suuunnv Juoctuerurs
                                                                    tNTexns:

PnRcrce, PRoceouRE,               (3d ed. 2013).
                 ANDRrvrew,53.06t21

       The mortgagecompanypartiesonly soughtsummaryjudgmenton the antitrust

claim on the ground that their action "merely enforced reasonablenon-disclosure

agreements."(CR 128-129).The Court'sopinionon Motionfor Rehearingfinds a fact

issueon whether"Excellencefalselyclaimedit had the sole rightto servethe pipeline

c u s t o m e rs."Op i n i o np, . 1 8 . T h u s ,havingfoundthatthe mor tgagecompanypar ti esdi
                                                                                              ' d

                                          agreementsgave them exclusiverightto
               provethat the non-disclosure
not conclusively

serve the pipelinecustomers,the Court properlydenied summaryjudgment on the

antitrustclaims.

       B.     The Appel/ees'New Argument on Causation

       The mortgagecompanypartiesgo beyondtheirMotionfor SummaryJudgmentin

arguingthat the panel'sOpinionon Motionfor Rehearing"is inconsistent
                                                                  with appellants

pleadedcausationtheory"on the antitrustclaim. (Appellees'Motionfor Rehearing,p. 7).

They point out that the loan officerspleadedthat the injunctionsuit by Excellence

Mortgage,Ltd. was groundless.(ThirdAmendedOriginalCounterclaim,
                                                              CR 269-270).

(The loan officersalso pleadedthat the moftgagecompanyparties"unlawfully"
                                                                        refused

to transferthe loansas requestedby the pipelineborrowers).ld.
FourthCourlof Appeals
June2, 2015
Page:3

      The mortgagecompany parties cite Houston Mercantile     change Corp. v. Dailey

PetroleumServicesCorp., 1993 WL 322901(Tex. App.-Houston [14thDist.] 1993, no

writ) for the propositionthat a personwho initiatesa lawsuitis generallyimmunefrom

                                     exceptionis where the suit is groundlessand/or
antitrustliability.The well-recognized

broughtfor an anticompetitivepurpose,as allegedhere. See /n re BurlingtonNofthern,

822 F.2d 518,527,529 (sthCir. 1987). (Evena successfullitigantmay be foundto have

abusedthe litigationprocessin orderto effectuatean antitrustviolation).

      Thus,to succeedon this issue,the mortgagecompanypartieshad to first,move

                                                        provethat the suitwas
for summaryjudgmenton that ground,and second,conclusively

                                                      purpose. The mortgage
not groundlessand was not broughtfor an anticompetitive

companypartiesdid neither. The Courthas properlydeniedsummaryjudgmenton the

antitrustclaim.

      2.     T OR T IOU SIN T E R FERENCE

      A.     As the Courtfoundin its Opinionon Motionfor Rehearing,page22, the sole

groundassertedby the mortgagecompanypartiesfor summaryjudgmenton the tortious

           claimis the contentionthatthey"engagedin no tortiousor wrongfulconduct"
interference

that preventedthe pipelinecustomersfromdealingwith the loan officers. CR 126-127.

The Court had previouslyfound that the loan officershad raisedfact issueson each

elementof an antitrustclaim;it thus properlyheldthe antitrustviolationwas an unlawful

act to supportthe tortiousinterferenceclaim. ld.
FourthCourtof Appeals
June2, 2015
Page:4

       B.     The mortgagecompanypartiescontend(Appellees'Motionfor Rehearing,

pp. 9-10)that "appellants'
                        pleadingsdid not basethe tortiousinterference
                                                                    claimuponan

antitrustviolation. See CR 265-66."           However,the loan officers'Responseto the

mortgage company parties' Motion for Summary Judgment clarifiesthe "unlaMul

conduct"complainedof in the ThirdAmendedOriginalCounterclaim.ld. A|CR 281-82,

the loanofficerslaidout the extensiveunlaMulconduct,includingthe antitrustviolations,

and citedthe TexasAntitrustStatute. Where,as here,therewas no objectionto the lack

of a supportingpleading,"[a] movantmay . try by consentan issueraisedby the non-

movantin its summaryjudgmentresponsewhich is not pled in its petition." Pnrrorl,

supra,S 3.06[1],citingGoodyearTireand RubberCo. v. Mayes,236S.W.3d754,756n.

1 (Tex. 2007).

       C.     The mortgagecompanypartiescontend(Appellees'Motionfor Rehearing,

pp 6-7)that the Courtshouldnot haveacceptedthe opinionsof the loanofficers'expert

witnessesthat the pipelinecustomers'privacyrightswere violatedwhen theirfileswere

          to GeorgetownMortgagewithouttheirknowledgeor consent.This objection
transferred

was not preservedfor appellatereview. Moreover,such rightsare spelledout in detailin

t h e F T C ' sS a fe g u a rdasn d P ri va cyRules,16 C.F.R.S 313.1, et seq. See also 15 U .S.C .

$ 6801(a):

              "Privacyobligationpolicy. lt is the policyof the Congressthat each
       financialinstitutionhas an affirmativeand continuingobligationto respect
       the privacyof its customersand to protectthe securityand confidentiality
                                                                              of
       thosecustomers'nonpublicpersonalinformation."
FourthCourtof Appeals
June2, 2015
Page:5

      The mortgagecompanypartieshave not contendedthat they compliedwith this

federalpolicyor the regulations.The affidavitsfrom the two expertsput forth by the loan

officers establishedunlaMul conduct by the mortgage company parties, both in

transferringthe pipelineloan files to Georgetownwithouftransferletters,and in refusing

to transferthe files to Premierwith transferletters.

                                         Respectfullysubmitted,

                                           /D%
                                             ^lJ V'0
                                                T
                                         DarbyRiley
                                         Attorneysfor Appellants

cc.   Samuel V. Houston,
                       lll
      WilliamH. Ford
      GregoryA. Scrivener
      (viae-serve)
Page   1   of       46,

                                                                                                                20 10cI 16e15 -P00067

                                                                         NO. zoro-Cl-r6915

                           EXCELLENCE
                                    MORTGAGE,LTD.                                 F
                                                                                  Y                 IN THE DISTRICTCOURT
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                                                                                  5              zz5TH JUDICI-ALDISTRICT

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                           NTFN, INC. D/B/A PREMIER                                                                     ?
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                           NATIONWIDE LENDING, ROBIN C.                           A
                                                                                  Y

                           MORTON, BARRY BROOKS,HESTON                            5                                      *           /'l

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                           C. KING, STEFENDOUGI.d.SBROOKS,                        5                                          -9             -rr1
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                           JANUARY MAY GOETTE, JOHANNA                            5                                               , - r l - v

                           BARTON,JESSERODRIGUEZ                                                                             !t$r.h
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                           BENAVIDES,AND SANTEX, LTD.                             J

                             GROTIIIIES                    FINANCIAL. LTD.. GROTHUES BROTHERS MANAGEMENT                                    I.
                                                             LLC. AND GEORGETOWN MORTGAGE. LLC'S
                                                                MOTION FOR SUMMARY JUDGMENT

                            TO THE HONORABLEJUDGE 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 arises from a dispute between an employer, Excellence,and its

                            former employees,the Counter-Plaintiffs.,Excellenceis in the mortgage business.

                            Robin Morton was the Presidentof Excellenceuntil her termination on September24,

                            ' 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
                            sectionof the motion below.
                            2 There are no separate affirmative claims against LATD-r, LLC, Grothues Financial, Ltd., Grothues
                            Brothers Management I, LLC and GeorgetownMortgage. Ostensibly,the basis for liability against these
                            Counter-Defendantsis some agency or participatory theory, but the exact nature of such is unclear jn
                            Counter-Plaintiffs'pleading.As such, if Excellenceis not liable, neither are the other Counter-Defendants.

                                                                                        Some pages may not be legible as
                                                                                        per original document.
                             sr6eog.r
                9 9 0 0 6 1 - 11 g r 6 9 l I f , O I O Z
                                                                                        Clerklnitiats:)    "
   lllllffiffiffi,ffillil                                                               ou,"'f-h-,1
(Page   8   of   46)

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

                       allegedly owed. 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."t3 The potential loans at issue are those 9r which were in

                       Excellence's"pipeline."rq Of the 9r pipeline loans, none closed and funded before

                       October1, 2oto.ls

                               Moreover, the documents are extraordinarily clear about whom the customers

                       belong to: Excellence.Counter-Plaintiffshave no right to leave an employer and attempt

                       to strip that employer of its business.There is no basis upon which Counter-plaintiffs

                       couid be legitimately entitled to any commissionsfor work they are not entitled to.

                               The unambiguous language of the Production Personnel Compensation policy

                       provides that the loan officer Counter-Plaintiffs are not entitled to any commission on

                       any loans' Summary judgment for Counter-Defendantsis therefore proper on Counter-

                       Plaintiffs' breach of contract claims.

                       C.      Counter-Plaintiffs'        Interference      with Prospective         Business Relations
                               Claim

                               To establisha causeof action for tortious interferencewith prospectivebusiness

                       relationships,a plaintiff must show that (r) there was a reasonableprobability that the

                       ., Exhibit E.
                       's Id.
                       '+ Those are loans that are in some stage of 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-Defendantsenjoined. They are tle basesof Coun-ter-P1aintiffs'   breach of contract
                       and interferenceclaims.
                       ts Exhibit A. Counter-Defendantshave produced
                                                                          to Counter-Plaintiffs settlement statements for those
                       which have closed;but in the interest of maintaining borrower privacy, have not anached th"*.

                       5r6zo3.r
                       126
(Page   9   of   46)

                       partieswouid have entered into a businessrelationship; (2) the defendant committed an

                       independentlytortious or unlararfulact that preventedthe relationship from occurring;

                       (3) the defendant either acted with a consciousdesire to 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 sufferedactual harm or damagesas a result of

                       the defendant's interference. Rtchardson-Eagle,Inc. u. Willfam M. Mercer, Inc., 2tg

                       S.W'gd 469, 475 (Tex, App.-Houston frst Dist.] z0o6, pet. denied). Independently

                       tortious meansthat the Counter-Plaintiffsmust prove that Counter-Defendants'conduct

                       would be actionable under a recognized tort. WalMaft                     Stores, Inc. u. Sturges, 5z

                       S.W.gdTLL,T26(Tex. zoor).

                               The agreementsbetween the parties clearly define who the customersbelong to:

                       Excellence.There is absolutelynothing unlawful or tortious about Excellenceseekingto

                       retain its customers by enforcing its lawful agreementspreventing Counter-Plaintiffs

                       from taking them. The conduct of using the legal process to prevent the loan officers

                       from taking those customers is neither unlawful nor tortious.r6As is explained below,

                       Counter-Plaintiffs confuse legitimate protection of confidential information contractual

                       provisionswith covenantsnot to compete,

                               BecauseCounter-Defendants engaged in no tortious or wrongful conduct, it

                       cannot be liable for tortious interference. Summary judgrnent is appropriate for

                       Excellenceon Counter-Plaintiffs' tortious interferenceclaims,

                       '6 Indeed, the Employment Agreement (Exhibit C) has a provision
                                                                                       allowing for injunctive relief for failure
                       to return company information, including customerinformation, after leaving employment.

                       5r6eo3,r
                       127
(Paqe 10   of   46)

                      D.    Counter-Plaintiffs'Anti-Trustclaims.

                            Counter-Plaintiffs allege unfair trade restrictions under Tpx. Bus. & Corrru.CooE

                      $ rS'oS.To establishthat 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 unreasonableand has an adverseeffect 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 Texas Antitrust Act does not prohibit all

                      restraints of trade; instead, it prohibits only those that restrain trade unreasonably,

                      DeSanhsu. WackenhutCorp., zgg S.w.zd 67o,687 (Tex. 1990). counter-Defendants

                      did not restrain trade at all, but merely enforcedreasonablenon-disclosureagreemenrs.

                            "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

                      unenforceablenon-competecovenant);see also CRC-EuansFipeline Int'I,Inc. v. Myers,

                  927 S.W.zde59, e65 (Tex.App.-Houston [rst Dist.] 7996,no writ) (affirming the trial

                  court's denial of temporary injunction enforcing non-disclosureatreement, ,clespitethe

                  fact that such agreements do not restrain trade, because trial court could have

                  reasonably found that former employees did not learn any trade secrets during the

                  courseof their employment). While non-competecovenantsare consideredrestraints of

                  trade, non-disclosure agreements are not. McGaughey at it; citing CRC-Euans,g2T

                  S.W.zdat e65; Zep,8z4 S.W.edat 66g. Non-disclosureagreementsdo not necessarily

                  restrict a former employee'sability to compete with the former employer, nor do they

                  5r6ao3.r                                     r.o
                      128
(Page 11   af   46)

                      prohibit the former employeefrom using, in competition with the forrner employer,the

                      generalknowledge, skill, and experienceacquired in the former employrnent.Zep,8z4

                      S.W.edat 663. Rather, such agreementsprevent only the disclosureof trade secretsand

                      confidentialinformation acquiredby the former employee.fd,

                            The agreementsdo not provide, and Excellencehas not asserted,that Counter-

                      Plaintiffs cannot work in the mortgagebusiness.There is no restriction on where, when

                      and for whom that Counter-Plaintiffs can work. There is nothing preventing Counter-

                      Plaintiffs from using their general knowledge, skill, and experience acquired at

                  Excellence.Indeed, Counter-Plaintiffs are using their knowledge and skill and working

                  with a competitor in the same market. What Counter-Plaintiffs cannot d.o is steal

                  Excellence'sexisting customers.Excellence'sefforts to prevent them from doing so are

                  not a restraint of trade. As such, surnmaryjudgment is proper for Counter-Defendants

                  on Counter-Plaintiffs'anti-trust claim,

                  E.        Counter-PlaintiffMorton'sClaim

                            Counter-Plaintiff Morton pleads some ill-defined claim to alleged entitlement to

                  brokerage fees. Without stating any specific cause of action, counter-piaintiff Morton

                  allegesunlessthe 9r pipeline loans were transferred to a licensedbroker after Morton's

                  termination, she is entitled to a brokerage fee.'z There is no authority cited for this

                  position' Summary judgment is proper for Counter-Defendantsfor at least tvvoreasons:

                  1) there is no recognizable cause of action for the alleged harm and z) nothing
                                                                                                  in
                  Morton's ErnploymentAgreemententitles her to compensationafter termination.

                  'z This appears to be what Counter-Plaintiff
                                                               is contending although it is difficult to ascertain.

                 S162o3.1                                               11