Court administrator’s email stating findings are not findings

D&D

In Baxter & Associates, LLC v. D&D Elevators, Inc., No. 05-16-003300-CV (Feb. 15, 2017), the plaintiff appealed from the denial of a temporary injunction against former employees and the company they formed. The plaintiff alleged that the former employees took trade secrets, namely a list of builders with projects potentially including elevators, in violation of their fiduciary duties and the Texas Uniform Trade Secrets Act (“TUTSA”).

After a two-day hearing, the parties received a signed order denying the request for temporary injunction, which was attached to an email from the court administrator stating, “The Court makes the following rulings: … I do find that trade secret as to existing jobs or bids was obtained… [but] there is an adequate remedy at law….” The plaintiff requested findings of fact and conclusions of law, and filed a motion for reconsideration based on its argument that it did not need to show no adequate remedy at law under TUTSA to obtain injunctive relief. The trial court did not sign any findings of fact or conclusions of law, and the plaintiff appealed without filing a notice of past due findings and conclusions of law.

The first issue addressed by the court was procedural—whether the statement contained in the court administrator’s email stating the existence of trade secrets was a finding of fact. The Court of Appeals held it was not, in part because at a subsequent hearing the trial court stated that it had not made such a finding. Although the plaintiff formally requested findings of fact and conclusions of law, it failed to file a notice of past due findings and conclusions of law pursuant to Rule 297. Thus, the Court of Appeals held there were no findings of fact or conclusions of law, that any error for the failure to make such findings was not preserved, and implied a finding that the plaintiff had not shown the existence of a trade secret.

The Court went on to hold that there was evidence that would have allowed the trial court to conclude that the list of projects was not a trade secret because the information could be publicly identified, and therefore would not “derive[] independent economic value, actual or potential, from not being generally known….”

Baxter & Associates, LLC v. D&D Elevators, Inc., No. 05-16-003300-CV (Feb. 15, 2017)

Mandatory venue for injunctions: what’s your primary purpose?

Alphabet Soup

In In re FPWP GP LLC, et al. (January 25, 2017), the Dallas Court of Appeals conditionally granted a writ of mandamus for the district court’s failure to transfer venue under the mandatory venue provision of Section 65.023 of the Civil Practice & Remedies Code, which provides that “a writ of injunction against a party who is a resident of this state shall be tried in … the county in which the party is domiciled.” Courts have struggled at times to apply Section 65.023 because it does not apply to all suits seeking an injunction, but instead only to suits in which the relief requested is “purely or primarily injunctive.” So, if the primary form of relief is something else, e.g. damages, then the mandatory venue provision does not apply. The opinion gave examples of the exception, such as when injunctive relief is simply to maintain the status quo pending litigation or when there is no request for a permanent injunction. But in the case at hand, the plaintiff sought only a declaratory judgment that was effectively a mirror image of the permanent injunctive relief requested. Holding the injunction “was a means to the same end” as the declaratory judgment, the Court held that the primary purpose of the lawsuit was injunctive and that transfer to the county of domicile of the defendants was mandatory under Section 65.023.

In re FPWP GP LLC, et al. (January 25, 2017)

No temporary injunction against former employee

In the common fact situation of an employee leaving for a new, competing employer, the Fifth Court found no abuse of discretion in denying a temporary injunction when:

  • After his termination, Turner did not have access to any confidential information except for the contents of a laptop
  • Turner testified that he did not access the laptop following his termination except to examine his girlfriend’s resume and his employment agreement and when he took it to the Apple Store to have his personal photographs removed from the computer.
  • Plaintiff had a forensic examination of the computer performed, and it presented no evidence that Turner’s testimony was false.
  • When Turner also testified that when he went to work for Gulfstream, he did not contact any of BM Medical’s clients with whom he had worked while employed by BM Medical (although some contacted him to find out what had happened to him); and
  • Only one client of BM Medical became a client of Gulfstream, who was a good friend of Turner’s whom Turner had known before he went to work for BM Medical, and who still did business with BM Medical.

BM Medical Management Service LLC v. Turner, No. 05-16-00670-CV (Jan. 10, 2017) (mem. op.)

Judges, show your work or it isn’t an injunction

Show your work

In Freedom LHV, LLC v. IFC White Rock, Inc., the Dallas Court of Appeals reversed a temporary restraining order, reminding us yet again that under Rule 683, a trial court must state the specific reasons for issuing a temporary restraining order or temporary injunction, or the order is void. As the Dallas Court of Appeals wrote: “Even if a sound reason for granting relief appears elsewhere in the record, the Texas Supreme Court has stated in the strongest terms that rule of civil procedure 683 is mandatory.”

Practice pointers for those drafting a temporary restraining order or temporary injunction:

DO INCLUDE

  • specific and legally sufficient reasons for granting the TRO or temporary injunction finding all three necessary elements:  (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim; and
  • if it is a temporary injunction, a trial setting.

DO NOT INCLUDE

  • conclusory statements, e.g. “plaintiff will be irreparably injured” without a description of that specific injury and why it is probable, imminent, and irreparable; or
  • statements that merely reference the complaint or other document.

Freedom LHV, LLC v IFC White Rock, Inc.

Temporary injunction appeal, overtaken by events.

seabiscuitIt really can happen in the appeal of a temporary injunction — “If, while on appeal of the granting or denying of the temporary injunction, the trial court renders final judgment, the case on appeal becomes moot.”   Santiago v. Bank of New York (Jan. 25, 2016) (mem. op.) (citing Isuani v. Manske-Sheffield Radiology Group, P.A., 802 S.W.2d 235, 236 (Tex. 1991) (per curiam)).

Bad Fences Make Bad Neighbors

“The parties are owners of adjoining property whose homes overlook a golf course. The Roses built a fence that blocked the view from the Bonvinos’ home. The ensuing legal dispute has lasted almost a decade.” That description begins a memorandum opinion affirming a Collin County trial court’s order enforcing a permanent injunction requiring the Roses to reduce the maximum height of their fence to 6 feet. The case hinged on the trial court’s finding that the “2012 Fence” exceeded 6 feet when measured from the “unaltered and unimproved grade.”

And thus, peace and tranquility were restored to Far North Dallas.

Rose v. Bonvino, No. 05-14-007020-CV

No Forum Shopping for a Favorable Appraisal

The Court of Appeals has dissolved a temporary injunction that would have prevented a court in Bastrop County from continuing to oversee a homeowner’s insurance appraisal process. James and Patricia Barrentines’ home in Bastrop was damaged by one the wildfires that plagued that area in 2011. Their insurer, Safeco, demanded an appraisal of the loss, and both parties appointed their own appraisers pursuant to the policy. When the two party-appointed appraisers were unable to agree on an umpire, Safeco went to court in Bastrop County to have one appointed. The court-appointed umpire issued an appraisal favorable to the homeowners, but the Bastrop County court then appointed a different umpire. The Barrentines then refiled in Dallas and obtained a temporary injunction forbidding any reappraisal. The Dallas Court of Appeals reversed that ruling, holding that it disturbed — rather than preserved — the status quo by interfering with the Bastrop County court’s authority to conduct the appraisal under the insurance contract.

Safeco Lloyds Ins. Co. v. Barrentine, No. 05-13-01011

Court Puts Permanent Plug on Former Halliburton Employee’s Use of Trade Secrets

A former Halliburton employee who had worked at the company designing and manufacturing wellbore plugs left and formed his own company that designed and manufactured wellbore plugs.  Halliburton sued the former employee and his company.  Ultimately, a jury found in Halliburton’s favor, awarding it damages, and the trial court entered an injunction barring the former employee from using Halliburton’s trade secrets for eighteen months.

Not satisfied, Halliburton appealed, seeking a permanent injunction.  The Court of Appeals sided with Halliburton, holding that the trial court erred by refusing to enter a permanent injunction because the former employee failed to show that anything less than a perpetual injunction would protect Halliburton’s rights and “remove the competitive advantage obtained through the misappropriation.”  Halliburton Energy Servs., Inc. v. Axis Tech. LLC, 444 S.W.3d 251 (Tex. App.-Dallas 2014, no pet.)

Inaccurate, But Not Groundless

A Collin County divorce case turned into a temporary injunction proceeding involving claims of assault and terroristic threats by an attorney in the middle of a deposition. The plaintiff, Barry Wells, alleged that his wife’s attorney became angry when Wells told him to calm down and commented that May’s daughter had probably committed suicide due to the attorney’s supposed anger issues. The lawyer allegedly made multiple death threats in the course of throwing Wells out of the building. Five days later, Wells filed a petition seeking injunctive relief to prevent the attorney from coming within 300 feet of him. The trial court granted an ex parte TRO, but the attorney quickly moved to dissolve the order and to impose sanctions for filing a groundless, bad faith pleading. After a hearing, the trial court dissolved the TRO and entered sanctions against Wells by striking his petition and dismissing the case with prejudice.

The Court of Appeals affirmed the dissolution of the TRO, but reversed the sanctions order. The ruling on the TRO was moot, and therefore non-appealable, because the order would have expired after 14 days in any event. As to the sanctions order, the deposition transcript revealed that Wells had been the instigator of the confrontation with the defendant, and that his comment about the attorney’s daughter was outrageous, the transcript also showed that the attorney had indeed threatened to kill Wells if he did not leave or if he ever returned. Thus, even though though Wells’ pleading presented an inaccurate account of what had transpired, the threat of imminent bodily injury meant that the claims of assault and terroristic threat were not groundless. The order striking the petition was therefore reversed, and the case was remanded for further proceedings.

Wells v. May, No. 05-12-01100-CV

I Got 33 Problems, But Reversal Ain’t One

After accepting a $1500 settlement for damage to his truck, David Lynd allegedly began to harass various executives and employees of Bass Pro Shop, threatening them and demanding additional money. Bass Pro responded by filing a motion to enforce the releases in the settlement agreement and seeking injunctive relief. The trial court granted temporary and permanent injunctions, ordering Lynd not to contact Bass Pro personnel and to stay at least 100 feet away from Bass Pro’s locations and the homes of its directors, officers, and employees. Lynd — appearing pro se — asserted an impressive 33 issues on appeal. The Court of Appeals affirmed. The Court was unwilling to consider the errors Lynd claimed from the original lawsuit, which had not been appealed and could only be attacked on bill of review. The Court rejected Lynd’s attempts to argue that the settlement had been procured by fraud, as well as his complaint that he had been “betrayed by own counsel” in that lawsuit. More notably, the Court affirmed the trial court’s injunction, holding that Lynd’s pattern of harassment demonstrated imminent harm that could not be remedied by an award of damages. An injunction was proper, the Court held, because Lynd’s demands for additional money were in violation of his settlement agreement with Bass Pro, in which he had released all his claims concerning his truck, including all claims against the company’s personnel.

Lynd v. Bass Pro Outdoor World, Inc., No. 05-12-00968-CV