Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-13-00106-CV
Barry BROOKS, Heston C. King, Stefen Douglas Brooks, Johanna Barton,
and Jesse Rodriguez Benavides,
Appellants
v.
EXCELLENCE MORTGAGE, LTD.,
Appellee
From the 224th Judicial District Court, Bexar County, Texas
Trial Court No. 2013-CI-01173
Honorable Cathleen M. Stryker, Judge Presiding 1
OPINION ON MOTION FOR REHEARING
Opinion by: Patricia O. Alvarez, Justice
Sitting: Catherine Stone, Chief Justice, retired (not participating)
Marialyn Barnard, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: April 1, 2015
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
On May 30, 2014, we issued an opinion and judgment in this appeal. On July 14, 2014,
Appellants Barry Brooks, Heston C. King, Stefen Douglas Brooks, and Jesse Rodriguez Benavides
(collectively Brooks Appellants), and Appellant Johanna Barton, filed a motion for rehearing. On
1
The Honorable Cathleen Stryker signed the July 18, 2012 order granting in part Excellence’s traditional motion for
summary judgment. The Honorable Peter Sakai, Presiding Judge of the 225th Judicial District Court, signed the
severance order which made the July 18, 2012 order final.
04-13-00106-CV
October 17, 2014, Appellee Excellence Mortgage, Ltd. filed its response. We grant the motion for
rehearing, withdraw our opinion and judgment of May 30, 2014, and substitute this opinion and
judgment in their stead. We affirm the portion of the trial court’s order granting Excellence’s
motion for summary judgment on Appellants’ breach of contract claims. We reverse the portion
of the trial court’s order disposing of Appellants’ antitrust and interference with prospective
business relations claims, and we remand this cause to the trial court.
BACKGROUND
Appellants worked as loan officers for Excellence during 2010. In September 2010,
Excellence’s owners began restructuring the company. The restructuring included discussions
with Georgetown Mortgage, LLC and ultimately the creation of a new entity, MG Mortgage.
During the last week of September 2010, Excellence loan officers were trained by a
corporate trainer from Georgetown. The loan officers were asked to sign employment applications
for Georgetown. The Brooks Appellants contend the terms of their possible employment at
Georgetown were much less favorable than the terms under which they were employed at
Excellence. The Brooks Appellants each decided not to accept employment at Georgetown.
A. Appellants Leave Excellence
Appellant Johanna Barton was terminated from her employment with Excellence not later
than September 28, 2010. On October 1, 2010, the Brooks Appellants each tendered signed letters
of resignation to Excellence. By October 4, 2010, Appellants had accepted employment as loan
officers at Premier Nationwide Lending. When Appellants left their employment with Excellence,
a “pipeline” of pending interim and permanent residential mortgage loan transactions, in varying
stages of development, had not yet been finalized. None of the ninety-one loans about which
Appellants complain closed and funded before October 1, 2010.
-2-
04-13-00106-CV
Appellants notified at least some of the Excellence pipeline loan customers, with whom
they had been working, of their move to Premier. Appellants contend that each pipeline customer
chose to transfer their files from Excellence to Premier so the customer could work with the same
loan officers to complete their transactions. Some pipeline customers subsequently sent letters to
Excellence asking for their files to be transferred to Premier.
B. Procedural Background
On October 7, 2010, Excellence filed suit for a temporary restraining order, injunction, and
damages against Premier and each appellant. The trial court granted a temporary restraining order
enjoining Appellants and Premier from, among other things, using Excellence’s allegedly
confidential information to contact any of Excellence’s customers served by Appellants while
employed by Excellence. Shortly thereafter, Excellence settled their claims against Premier.
Premier returned the transferred pipeline loan files and agreed not to accept further transfers from
Excellence. Appellants assert Excellence’s actions prevented them from earning commissions on
the pipeline loans and they suffered severe financial losses.
In March 2011, Appellants filed a counterclaim 2 against Excellence asserting various
causes, including breach of contract, unlawful restraint of trade, and interference with prospective
business relations. Excellence moved for traditional and no-evidence summary judgment against
Appellants’ breach of contract, interference, and antitrust claims. Appellants filed a response and
moved for traditional and no-evidence partial summary judgment as to Excellence’s claims: breach
of contract, breach of fiduciary duty, tortious interference with prospective contracts, trade secret
2
In their first amended counterclaim, Appellants added LATD-1, LLC; Grothues Financial, Ltd.; Grothues Brothers
Management I, LLC; and Georgetown Mortgage, LLC as defendants (Grothues defendants). However, Appellants
moved for summary judgment only against Excellence’s claims.
-3-
04-13-00106-CV
misappropriation, breach of contract claim arising out of settlement agreement with Premier, and
fraud.
After a hearing, on July 18, 2012, 3 the trial court granted summary judgment for Excellence
against Appellants’ (1) breach of contract claims for loans closed and funded after October 1, 2010,
(2) interference with prospective business relations claims, and (3) antitrust claims. All the relief
Appellants sought in their traditional and no-evidence summary judgment motions was denied.
The trial court subsequently severed all the issues disposed of by the July 18, 2012 order.
SUMMARY JUDGMENT
A. Jurisdiction Over a Trial Court’s Denial of Summary Judgment
The first issue we address is whether this court has jurisdiction over the denial of
Appellants’ motion for summary judgment.
Appellants contend the motions for summary judgment are competing motions “on the
same issues,” see Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) (permitting
an appellate court to review orders on competing motions on the same issues), and thus the general
rule that a party cannot appeal the denial of a motion for summary judgment is inapplicable, see
Gulley v. State Farm Lloyds, 350 S.W.3d 204, 206 (Tex. App.—San Antonio 2011, no pet.)
(“Generally, an order denying a summary judgment motion is not appealable because it is an
interlocutory order and not a final judgment.” (citing Humphreys v. Caldwell, 888 S.W.2d 469,
470 (Tex. 1994) (per curiam)).
Excellence counters that for the competing motions exception to apply, “both parties must
ordinarily have sought final judgment relief in their cross motions for summary judgment.” CU
Lloyd’s of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998) (per curiam). Excellence argues the
3
In a Rule 11 agreement, the parties agreed the trial court would consider only Excellence’s traditional motion; it
would not consider Excellence’s no-evidence motion.
-4-
04-13-00106-CV
parties only sought partial summary judgment—Excellence sought summary judgment on
Appellants’ counterclaims and Appellants requested summary judgment against some, but not all,
of Excellence’s claims.
The general rule is that a party cannot appeal the denial of a motion for summary judgment.
See Humphreys, 888 S.W.2d at 470; Cont’l Cas. Co. v. Am. Safety Cas. Ins. Co., 365 S.W.3d 165,
172 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). “The party’s remedy is to assign error
to the trial court’s judgment ultimately rendered following trial on the merits.” United Parcel
Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914, 916 (Tex. App.—Houston [14th Dist.] 2000, pet.
denied). We may review such a denial when both parties move for summary judgment on the
same issues and the trial court grants one motion and denies the other. Fed. Deposit Ins. Corp. v.
Lenk, 361 S.W.3d 602, 611 (Tex. 2012) (citing Valence Operating Co., 164 S.W.3d at 661
(reviewing competing partial summary judgment motions)).
We conclude that Appellants’ claims as to breach of fiduciary duty, breach of contract—
confidential information, tortious interference, and misappropriation of trade secrets stem from,
and are based on, the same factual elements and legal analysis as the relief sought by Excellence’s
motion for summary judgment; the competing motions are based on the same issues. Accordingly,
we have jurisdiction over this appeal. See Valence Operating Co., 164 S.W.3d at 661; see also
Lenk, 361 S.W.3d at 611.
We turn to the substance of the summary judgment.
B. Standard of Review
To prevail on a traditional motion for summary judgment, the movant must show “there is
no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of
law.” TEX. R. CIV. P. 166a(c); accord Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.
1985). A defendant movant may make that showing by conclusively disproving at least one
-5-
04-13-00106-CV
essential element of the plaintiff’s claim. Elliott–Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex.
1999); Doe v. Boys Clubs of Greater Dall., Inc., 907 S.W.2d 472, 476–77 (Tex. 1995).
To determine whether the defendant movant met its burden, we examine “the evidence
presented in the motion and response in the light most favorable to the party against whom the
summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors
could, and disregarding contrary evidence unless reasonable jurors could not.” Mann Frankfort
Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (citing City of Keller v.
Wilson, 168 S.W.3d 802, 827 (Tex. 2005)). “We indulge every reasonable inference and resolve
any doubts in the nonmovant’s favor.” Rhȏne-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.
1999); accord Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex. 2007) (per
curiam).
If the defendant movant meets its burden and the plaintiff’s response fails to raise a genuine
issue of material fact on each essential element, the defendant movant is entitled to judgment on
its motion. See Elliott–Williams, 9 S.W.3d at 803; Doe, 907 S.W.2d at 476–77.
C. The Brooks Appellants’ Breach of Contract Claims against Excellence
The trial court granted Excellence’s traditional motion for summary judgment against the
Brooks Appellants’ breach of contract claims for commissions earned on the pipeline loans—those
loans that closed and funded after October 1, 2010. The trial court did not grant summary judgment
on the Brooks Appellants’ breach of contract claims for loans closed and funded on or before
October 1, 2010; those claims are not before us. On the Brooks Appellants’ breach of contract
claims that are before us, the parties disagree on the voluntariness of the Brooks Appellants’
terminations, the effective dates of their terminations, and what compensation Excellence owes
the Brooks Appellants.
-6-
04-13-00106-CV
1. Arguments of the Parties
Each of the Brooks Appellants concedes they submitted a letter of resignation effective
October 1, 2010. They insist that it was not until after their resignations were submitted that they
came to understand Excellence had ceased operations on September 22, 2010—nine days before
their resignations otherwise became effective. The Brooks Appellants argue that when Excellence
ceased operations, their employment with Excellence was involuntarily terminated. They argue
their resignation letters had no effect because they could not have resigned from a company that
did not exist. Thus, they contend, Excellence breached their employment contracts by failing to
pay them commissions they earned including those associated with approximately ninety-one
pipeline loans.
Excellence counters it did not breach the employment agreement because the Brooks
Appellants were not entitled to commissions on loans that closed and funded after they resigned.
Excellence asserts the Brooks Appellants were paid for employment through September 30, 2010,
and they were properly compensated in accordance with the company’s Production Personnel
Compensation Plan. Excellence contends the Brooks Appellants voluntarily terminated or
resigned and were therefore bound by the compensation provisions for voluntary termination.
Excellence moved for summary judgment on the Brooks Appellants’ breach of contract claims.
2. Summary Judgment Evidence
In its traditional motion for summary judgment, Excellence proffered the following
summary judgment evidence.
a. Kevin Sullivan Deposition
In his deposition, Sullivan stated the following. For the period in question, he was the
Chief Financial Officer of Excellence Mortgage. Excellence compensated its loan officers in
-7-
04-13-00106-CV
accordance with the Production Personnel Compensation Plan. The Plan applied to all of its loan
officers including each of the Brooks Appellants.
b. Letters of Resignation
The Brooks Appellants submitted letters of resignation dated October 1, 2010. In their
virtually identical letters, each asked to be paid their “commissions due for August and September
2010 closed loan files” “per my executed compensation plan with Excellence Mortgage.”
c. Employment Contract Documents
Excellence, in its motion for summary judgment, attached copies of Employment
Agreements for Robin C. Morton, Heston C. King, Barry A. Brooks, and Stefen Brooks;
Confidentiality Agreements for January M. Goette and Johanna Barton; and a Production
Personnel Compensation Plan for Heston King.
3. Brooks Appellants’ Breach of Contract Claims
We begin our review by determining whether Excellence met its burden to conclusively
disprove any essential element of the Brooks Appellants’ breach of contract claims. See Elliott-
Williams, 9 S.W.3d at 803.
a. Elements of Breach of Contract
The elements of a breach of contract claim are “‘(1) a valid contract; (2) the plaintiff
performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff
was damaged as a result of the breach.’” McLaughlin, Inc. v. Northstar Drilling Techs., Inc., 138
S.W.3d 24, 27 (Tex. App.—San Antonio 2004, no pet.) (quoting Richter v. Wagner Oil Co., 90
S.W.3d 890, 898 (Tex. App.—San Antonio 2002, no pet.)). Excellence moved for summary
judgment on the ground that the Plan is a valid contract which defines its obligations to the Brooks
Appellants, and it did not breach the Plan.
We turn to the applicability and provisions of the Plan.
-8-
04-13-00106-CV
b. Production Personnel Compensation Plan Applies to Loan Officers
The summary judgment evidence contains a Plan signed by Heston King; no other Plans
were proffered. In the Brooks Appellants’ letters of resignation, each asked for payment in
accordance with “my executed compensation plan with Excellence Mortgage, Ltd.” Consistent
with the letters of resignation, Sullivan’s affidavit states that all the loan officers signed a
Production Personnel Compensation Plan with the same terms as those in Heston King’s plan.
Sullivan’s statement was uncontroverted, “clear, positive and direct, otherwise credible and
free from contradictions and inconsistencies, and could have been readily controverted.” See TEX.
R. CIV. P. 166a(c); Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989); Trico Techs. Corp. v.
Montiel, 949 S.W.2d 308, 310 (Tex. 1997).
Therefore, we conclude that each Brooks Appellant signed a Plan with the same terms as
shown in Heston King’s Plan, and the Plan’s provisions apply to each of the Brooks Appellants.
c. Loan Officers were Involuntarily Terminated
In their affidavits, the Brooks Appellants state they were involuntarily terminated because
Excellence ceased operations sometime before October 1, 2010, and thus their letters of resignation
were ineffective as a matter of law. Although Kevin Sullivan stated that the Brooks Appellants
resigned voluntarily, under the applicable standard of review, we take the Brooks Appellants’
affidavits as true and conclude they raised a genuine issue of material fact on whether they were
involuntarily terminated. See TEX. R. CIV. P. 166a(c); Nixon, 690 S.W.2d at 548–49.
We next examine the Plan to determine which of its provisions apply to the Brooks
Appellants’ terminations.
d. Production Personnel Compensation Plan
In the Plan, section VII, Termination of Employment, addresses a loan officer’s
termination.
-9-
04-13-00106-CV
(1) Voluntary Terminations
Section VII.A provides terms applicable “[i]n the event of voluntary termination.” For
voluntary terminations, the Plan requires Excellence to pay commissions the loan officer earned
“on any loan closed and funded (as provided above in Section IV) up to and including the effective
date of termination.” The Plan also states the “Production Manager has the discretion to pay all,
or a portion of, the commissions on loans that close and fund after the effective date of the Loan
Officer’s termination.”
(2) Terminations for Cause
Section VII.B provides terms applicable “[i]n the event a Loan Officer is terminated by the
Company for cause.” In such a case, the Plan states “[n]o further commissions will be paid to the
Loan Officer.”
(3) Involuntary Terminations by Excellence
Section VII of the Plan states compensation terms for voluntary terminations and
terminations for cause. But the Brooks Appellants assert, and we agree, the Plan is silent on what
terms apply if a loan officer’s at-will employment is involuntarily terminated by Excellence “for
any reason or no reason at all,” including for Excellence’s convenience. 4 See City of Midland v.
O’Bryant, 18 S.W.3d 209, 216 (Tex. 2000) (addressing at-will employment doctrine). In their
brief, the Brooks Appellants suggest that if a contract is silent on an essential term or provision,
courts may infer a reasonable contract term. We agree. We review the law regarding contracts
which are silent on a question that the court must answer.
4
We use the term convenience as a substitute for “any reason or no reason at all,” see O’Bryant, 18 S.W.3d at 216
(addressing at-will employment doctrine), and to distinguish an involuntary termination for convenience from an
involuntary termination for cause.
- 10 -
04-13-00106-CV
e. Supplying a Missing Plan Term
“A court cannot make contracts for the litigants appearing before it. But, there are instances
where it can add to a contract already in existence or supply a missing term or provision.” In re
G.D.H., 366 S.W.3d 766, 770 (Tex. App.—Amarillo 2012, no pet.) (citation omitted); accord
Oakrock Exploration Co. v. Killam, 87 S.W.3d 685, 690 (Tex. App.—San Antonio 2002, pet.
denied) (“In certain situations, a court may uphold an agreement by supplying missing terms.”);
O’Farrill Avila v. Gonzalez, 974 S.W.2d 237, 244 (Tex. App.—San Antonio 1998, pet. denied).
When a valid contract exists, but the “contract is silent on an issue, Texas courts will infer
reasonable terms.” Lidawi v. Progressive Cnty. Mut. Ins. Co., 112 S.W.3d 725, 731–32 (Tex.
App.—Houston [14th Dist.] 2003, no pet.) (inferring a contract term when reviewing competing
motions for summary judgment); accord Woodward v. Liberty Mut. Ins. Co., CIVA 3:09-CV-
0228-G, 2010 WL 1186323, at *5 (N.D. Tex. Mar. 26, 2010) (quoting Lidawi); Tex. Taco Cabana
L.P. v. Taco Cabana of N.M., Inc., CIV.A. SA-02-CV-1209, 2005 WL 1397032, at *8 (W.D. Tex.
June 10, 2005) (quoting Lidawi). We assume the parties intended the contract to operate
reasonably, and we may infer a reasonable term. See Lidawi, 112 S.W.3d at 732 (“‘Where the
precise details of an agreement have not been defined by the parties, the court should assume the
parties implicitly intended the agreement to operate in a reasonable manner.’” (quoting State Farm
Fire & Cas. Co. v. Tan, 691 F. Supp. 1271, 1273 (S.D. Cal. 1988))); O’Farrill Avila, 974 S.W.2d
at 244.
We will not supply a term that contradicts the parties’ intent stated by the contract language.
Oakrock Exploration Co., 87 S.W.3d at 690; Clovis Corp. v. Lubbock Nat’l Bank, 194 S.W.3d
716, 719 (Tex. App.—Amarillo 2006, no pet.). Instead, we look to the contract language for
guidance in inferring a reasonable term. See Lidawi, 112 S.W.3d at 732; see also RESTATEMENT
(SECOND) OF CONTRACTS § 204 (1981) cmt. d (“[T]he probability that a particular term would
- 11 -
04-13-00106-CV
have been used if the question had been raised may be [a] factor[] in determining what term is
reasonable in the circumstances.”); Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966)
(implying a reasonable sale price).
f. Plan’s Termination Compensation Terms
The Plan is silent on what terms should apply if a loan officer’s employment is
involuntarily terminated for Excellence’s convenience. See Lidawi, 112 S.W.3d at 731. To infer
a reasonable term in case of a loan officer’s involuntary termination for Excellence’s convenience,
we look to the employment relationship documents. See id. Under the Employment Agreement,
either the loan officer or Excellence could terminate the employment relationship for their own
convenience. 5 Under the Plan, if the loan officer exercised the officer’s right to terminate the
employment relationship, Excellence must pay the loan officer the “commissions [earned] . . . on
any loan closed and funded . . . up to and including the effective date of termination.” 6
g. Supplying a Reasonable Term
For the following reasons, we conclude that a reasonable term for compensation in the
event of Excellence’s termination of a loan officer’s employment for its convenience is the same
compensation due for the loan officer’s voluntary termination of employment for the loan officer’s
convenience. See In re G.D.H., 366 S.W.3d at 770; Lidawi, 112 S.W.3d at 731–32.
Under the Plan the Brooks Appellants signed, upon the loan officer’s voluntary
termination, the loan officer was entitled to the commissions earned on those loans closed and
funded up to and including the effective date of termination. The Brooks Appellants did not agree
5
The Employment Agreement states “The employment relationship is ‘at-will.’” An at-will employment relationship
“generally can be terminated by either party for any reason or no reason at all.” O’Bryant, 18 S.W.3d at 216; accord
Fed. Exp. Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex. 1993).
6
In its sole discretion, Excellence could “pay all, or a portion of, the commissions on loans that close and fund after
the effective date of termination.” The Brooks Appellants do not assert that Excellence exercised its discretion to pay
them commissions on loans closed and funded after October 1, 2010.
- 12 -
04-13-00106-CV
to receive less compensation, and Excellence did not commit itself to pay more compensation,
than that specified for the loan officer’s voluntary termination. Each party had a symmetrical right
to end the employment relationship for their own convenience. See O’Bryant, 18 S.W.3d at 206
(at-will employment agreements). The Brooks Appellants accepted the Employment Agreement
and the Plan, and the record does not show the Brooks Appellants sought to modify the Plan to
include more favorable terms for termination for Excellence’s convenience than for voluntary
termination for the loan officer’s convenience.
We conclude a reasonable term for compensation for a loan officer’s employment being
involuntarily terminated for Excellence’s convenience is the same compensation due in the event
of a voluntary termination by the loan officer for the loan officer’s convenience: commissions
earned “on any loan closed and funded . . . up to and including the effective date of termination.”
See In re G.D.H., 366 S.W.3d at 770; Lidawi, 112 S.W.3d at 731–32.
We turn now to the question of whether Excellence breached its contractual obligations to
the Brooks Appellants.
h. Loans Closed and Funded After October 1, 2010
The Brooks Appellants claim Excellence breached their employment contract by failing to
pay them the commissions they earned on loans closed and funded before, on, and after October
1, 2010. 7 As we have determined, Excellence had a contractual obligation to pay the Brooks
Appellants the commissions they earned on loans closed and funded up to and including the
effective date of their terminations. However, construing the Employment Agreement and the
Plan, we also conclude Excellence had no obligation to pay the Brooks Appellants commissions
7
Appellants also sued for damages under quantum meruit. Excellence did not move for summary judgment on, and
the trial court’s summary judgment did not dispose of, Appellants’ quantum meruit claims. The quantum meruit
claims are not before us.
- 13 -
04-13-00106-CV
on loans closed and funded after the effective date of their terminations. See Coker v. Coker, 650
S.W.2d 391, 393 (Tex. 1983) (stating courts construe unambiguous contracts as a matter of law).
Regardless of whether the Brooks Appellants were involuntarily terminated before October
1, 2010, or they voluntarily resigned on October 1, 2010, their effective dates of termination were
not later than October 1, 2010. Excellence met its burden to show it is entitled to judgment as a
matter of law on the Brooks Appellants’ breach of contract claims for loans closed and funded
after October 1, 2010. See TEX. R. CIV. P. 166a(c); Nixon, 690 S.W.2d at 548–49. Therefore, as
a matter of law, Excellence did not breach its contractual obligations to the Brooks Appellants by
refusing to pay the commissions for loans that closed and funded after October 1, 2010. Thus, the
trial court did not err by granting Excellence’s traditional motion for summary judgment on the
Brooks Appellants’ breach of contract claims for loans closed and funded after October 1, 2010.
D. Johanna Barton’s Breach of Contract Claims against Excellence
Barton sued Excellence for, inter alia, breach of contract. 8 She alleged Excellence failed
to pay her commissions she earned on loans closed and funded before, on, and after the effective
date of her termination.
The trial court granted summary judgment against Barton’s breach of contract claim for
commissions earned on loans closed and funded after October 1, 2010. 9 As we have already
concluded, under the Plan, Excellence was not obligated to pay commissions to any loan officer
for loans closed and funded after the loan officer’s effective date of termination. In Barton’s case,
8
Because Barton was subsequently hired by Premier, her other claims are properly addressed with the other appellants’
claims, specifically the interference with prospective business relations and antitrust under the Texas Business and
Commerce Code claims.
9
The trial court did not grant summary judgment on Barton’s claim for loans closed and funded on or before October
1, 2010, and that claim is not before us.
- 14 -
04-13-00106-CV
the summary judgment evidence shows Excellence terminated her employment relationship not
later than September 28, 2010.
Without deciding whether Barton was effectively terminated prior to September 28, 2010,
we conclude Barton’s effective date of termination was not later than September 28, 2010. As a
matter of law, Barton was not entitled to any commissions on loans closed and funded after her
termination date. Thus, the trial court did not err in granting summary judgment against Barton’s
claim for commissions on loans closed and funded after October 1, 2010.
E. Appellants’ Antitrust Claims against Excellence
After Excellence sought an injunction to prevent Appellants from contacting pipeline loan
customers, Appellants countersued Excellence and the Grothues defendants. Appellants argued
and proffered evidence that Excellence and the Grothues defendants prevented Appellants from
competing for the pipeline loan customers and their actions comprise an unlawful restraint under
the Antitrust Act. The trial court granted Excellence’s motion against Appellants’ antitrust claims.
1. Summary Judgment Burdens
To be entitled to summary judgment, Excellence had to conclusively disprove at least one
essential element of Appellants’ claims. See Elliott-Williams, 9 S.W.3d at 803; see also G & H
Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (per curiam). It also had to show there
were no genuine issues of material fact and it was entitled to judgment as a matter of law. See
TEX. R. CIV. P. 166a(c); Elliott-Williams, 9 S.W.3d at 803. Excellence was not entitled to judgment
against Appellants’ antitrust claims if, for each challenged essential element, the summary
judgment evidence shows a genuine issue of material fact exists. See Elliott-Williams, 9 S.W.3d
at 803.
- 15 -
04-13-00106-CV
2. Summary Judgment Evidence Requirements
Appellants provided summary judgment evidence in their own motion and in response to
Excellence’s motion for summary judgment. Because both sides moved for summary judgment,
we review all the summary judgment evidence “in the light most favorable to the party against
whom the summary judgment was rendered.” See Mann Frankfort, 289 S.W.3d at 848 (citing
Comm’rs Court of Titus Cnty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997)); see also Gilbert Tex.
Const., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118, 124 (Tex. 2010).
Appellants’ evidence included affidavits showing Excellence’s actions caused an adverse
effect on competition. Although Appellants are interested witnesses, their affidavits—when
examined to determine whether they raise a fact issue sufficient to defeat Excellence’s traditional
motion—are not required to be “clear, positive and direct, otherwise credible and free from
contradictions and inconsistencies.” See TEX. R. CIV. P. 166a(c); Fieldtech Avionics &
Instruments, Inc. v. Component Control.Com, Inc., 262 S.W.3d 813, 827 (Tex. App.—Fort Worth
2008, no pet.); TIMOTHY PATTON, SUMMARY JUDGMENTS IN TEXAS: PRACTICE, PROCEDURE AND
REVIEW § 6.03[9][a] (3d ed. 2013).
In reviewing Appellants’ affidavits, unless an affiant’s statement is entirely conclusory, see
Wadewitz v. Montgomery, 951 S.W.2d 464, 466 (Tex. 1997), we take the statement as true, and
resolve all doubts and make every reasonable inference in the nonmovant’s favor, Nixon, 690
S.W.2d at 548–49.
Before we examine the evidence, we review the elements of an antitrust claim.
3. Texas Antitrust Act
The Texas Free Enterprise and Antitrust Act of 1983 prohibits “[e]very contract,
combination, or conspiracy in restraint of trade or commerce.” TEX. BUS. & COM. CODE ANN.
§ 15.05(a) (West 2011); DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 686 (Tex. 1990); see TEX.
- 16 -
04-13-00106-CV
BUS. & COM. CODE ANN. § 15.01 (Title of Act). “To establish that a defendant contracted,
combined, or conspired in restraint of trade in violation of section 15.05(a), a plaintiff must show
that the alleged contract, combination, or conspiracy is unreasonable and has an adverse effect on
competition in the relevant market.” Marlin v. Robertson, 307 S.W.3d 418, 427 (Tex. App.—San
Antonio 2009, no pet.).
4. Evidence of an Antitrust Violation
Appellants’ summary judgment evidence of Excellence’s alleged antitrust violation
includes affidavits from Robin C. Morton, John H.P. Hudson, and Stefen D. Brooks. To determine
whether Excellence conclusively disproved any essential element of Appellants’ antitrust claims,
we review the summary judgment evidence for each essential element. See Elliott-Williams, 9
S.W.3d at 803; see also G & H Towing Co., 347 S.W.3d at 297.
a. Unreasonable Practice
The first element is an unreasonable practice. Marlin, 307 S.W.3d at 427. To evaluate
reasonableness, courts divide practices into two categories; the first category is those that are
illegal per se. Id. (citing Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 692 (1978)).
The second category comprises those “whose competitive effect can only be evaluated by
analyzing the facts peculiar to the business, the history of the restraint, and the reasons for its
imposition.” Id. To this second category, “courts apply the ‘rule of reason’ under which the fact-
finder weighs all the circumstances of a case in deciding whether a restrictive practice should be
prohibited as imposing an unreasonable restraint on competition.” Id. (citing Cont’l T. V., Inc. v.
GTE Sylvania Inc., 433 U.S. 36, 49 (1977)).
(1) Robin Morton’s Affidavit
Appellant Robin C. Morton was the former president and mortgage broker of Excellence.
In her affidavit, she stated the following. As Excellence’s president, she oversaw all facets of
- 17 -
04-13-00106-CV
Excellence’s operations for approximately nine years. She was responsible to ensure “that all
loans were property and legally handled as per state and federal regulations.” A loan customer
may ask the originating mortgage company to transfer their loan file to another mortgage company,
and the transferring company is legally obligated to transfer the file. Until the transferring
company receives the customer’s signed request, it may not “share, release or disclose the
information contained in a loan file in any way with the transferee mortgage company.”
Georgetown acquired the pipeline loan customer files from Excellence “without any type of
transfer letter.” When Excellence turned over the pipeline loan customer files to Georgetown,
“Georgetown immediately filed an assumed name certificate and continued to do business under
the name of Excellence Mortgage so as to represent to pipeline customers that their mortgage
company had not changed.” The pipeline loan customers, and others, “were intentionally misled
to believe that they were still working with the same originating mortgage company, Excellence
Mortgage, [Ltd.]” Excellence “falsely claimed [it] had the sole right to serve the pipeline
customers,” and it unlawfully compelled Premier to not accept any loan transfers for pipeline
customers. By its actions to prevent Appellants from competing with Georgetown for the pipeline
loan customers, Excellence had an adverse effect on the construction-to-permanent loan market in
the greater San Antonio area.
(2) John H.P. Hudson’s Affidavit
In John Hudson’s affidavit, he stated the following. He is the Area Manager with Premier
Nationwide Lending, and he has over ten years’ experience in the mortgage business. A
prospective borrower is not obligated to remain with the original mortgage company. The
customer may transfer their file at any time, but the transferring mortgage company may not
transfer the file without the prospective borrower’s written request.
- 18 -
04-13-00106-CV
(3) Stefen D. Brooks’s Affidavit
In Stefen D. Brooks’s affidavit, he stated the following. Georgetown transferred all the
pipeline loan customer files from Excellence “to its own computer system without obtaining a file
transfer request from any of the loan customers.” Excellence and Georgetown’s attorneys sent
letters to Appellants “telling us we could not serve [the pipeline] customers” to prevent Appellants
from servicing the loans.
(4) Kevin Sullivan’s Affidavit, Deposition
Excellence moved for summary judgment against Appellants’ antitrust claims on the basis
that, as a matter of law, the employee nondisclosure and confidentiality provisions in Appellants’
employment and confidentiality agreements were not non-compete covenants and could not
unlawfully restrain trade. In Kevin Sullivan’s deposition and affidavit, he stated that Appellants
had violated the nondisclosure and confidentiality provisions by taking and using Excellence’s
confidential information to solicit pipeline customers. Excellence provided copies of an
Employment Agreement and Confidentiality Agreement, and Sullivan stated each Appellant
signed these documents.
(5) Excellence Failed to Meet Its Burden
Considering all the summary judgment evidence, see Mann Frankfort, 289 S.W.3d at 848,
and taking Appellants’ evidence as true, see Nixon, 690 S.W.2dd at 548–49, it shows at a minimum
that Excellence transferred files to Georgetown without first obtaining the pipeline loan customers’
written requests, such transfers are prohibited under state or federal regulations, Georgetown and
Excellence worked together to effect the transfers, and Excellence sought to prevent Appellants
from competing for the pipeline loan customers. Thus, the summary judgment evidence raises a
genuine issue of material fact on whether the complained of actions amount to an unreasonable
practice. See Marlin, 307 S.W.3d at 427. Although Excellence argued and proffered summary
- 19 -
04-13-00106-CV
judgment evidence that it was merely protecting its confidential information under valid
nondisclosure and confidentiality agreements, we conclude Excellence failed to conclusively
disprove the essential element of unreasonable practice. See id.
b. Adverse Effect on Competition in the Market
“To establish a violation under the rule of reason, a plaintiff must prove the restrictive
practice has an adverse effect on competition in the relevant market.” Id. at 429. The plaintiff
must “prove what market it contends was restrained,” prove “that the defendants played a
significant role in the relevant market,” and proffer “evidence of ‘demonstrable economic effect.’”
Id.
(1) Market Restrained, Defendant’s Role
In Morton’s affidavit, she identified the restrained market as the construction-to-permanent
loan market in the greater San Antonio area, and she stated Excellence had about fifty percent of
that market. In Hudson’s affidavit, he similarly described Excellence’s niche market as arranging
interim and permanent financing for new home builders. He stated that Excellence had a
“substantial share” of this niche market in the Bexar County area.
(2) Evidence of Demonstrable Economic Effect
Morton and Hudson stated that Excellence’s actions had an adverse effect on Excellence’s
portion of the residential mortgage market in the San Antonio area. Both affiants had many years’
experience as senior officers for mortgage companies operating in the greater San Antonio area.
Morton identified “loan products offerings, interest rate options, [and] closing cost packages” as
items affected by competition. Accepting Appellants’ evidence as true, we may also reasonably
infer that Excellence’s actions to prevent competition for pipeline loan customers in the greater
San Antonio area would result in a demonstrable economic effect. Although “an inference of
possible effect” is not enough to establish a violation, Coca-Cola Co., 218 S.W.3d at 689, a
- 20 -
04-13-00106-CV
reasonable inference of demonstrable economic effect is sufficient to raise a fact issue, see
Humphrey v. Balli, 61 S.W.3d 519, 523 (Tex. App.—San Antonio 2001, no pet.).
c. Fact Issue Raised
Excellence argued and proffered evidence to attempt to conclusively disprove any
unreasonable practice on its part. See Elliott-Williams, 9 S.W.3d at 803 (conclusively disprove
element); see Marlin, 307 S.W.3d at 429 (antitrust elements). However, taking Appellants’
evidence as true and making reasonable inferences in their favor, we conclude Appellants met their
burden to raise a genuine issue of material fact on each element of their antitrust claims. See Nixon,
690 S.W.2d at 548–49. Thus, Excellence was not entitled to summary judgment on Appellants’
antitrust claims. See Elliott-Williams, 9 S.W.3d at 803; Nixon, 690 S.W.2d at 548–49.
F. Appellants’ Claims of Interference with Prospective Business Relations
Appellants sued Excellence and the Grothues defendants for tortious or unlawful
interference with prospective business relations. Appellants claimed Excellence intentionally
interfered with Appellants’ attempts to compete for the pipeline loan customers and Excellence’s
actions caused Appellants to lose the commissions on the pipeline loans. The trial court granted
Excellence’s motion against Appellants’ interference claims.
1. Summary Judgment Burdens
To prevail on summary judgment, Excellence had to conclusively disprove at least one
essential element of Appellants’ interference claims. See Elliott-Williams, 9 S.W.3d at 803; see
also G & H Towing Co., 347 S.W.3d at 297. We consider the elements of an interference with
prospective business relations claim.
2. Interference with Prospective Business Relations
A tortious or unlawful interference with prospective business relations claim has multiple
elements. Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013)
- 21 -
04-13-00106-CV
(listing five elements); Plotkin v. Joekel, 304 S.W.3d 455, 487 (Tex. App.—Houston [1st Dist.]
2009, pet. denied) (same). One of the essential elements is that “the defendant’s conduct was
independently tortious or unlawful.” Coinmach Corp., 417 S.W.3d at 923; accord Plotkin, 304
S.W.3d at 487.
Here, Excellence moved for summary judgment only on the ground that its conduct was
not independently tortious or unlawful. See Coinmach Corp., 417 S.W.3d at 923. As we have
previously concluded, Appellants raised a genuine issue of material fact on whether Excellence
committed an antitrust violation—an unlawful act. Thus, Excellence did not meet its burden to
conclusively disprove the only essential element on which it moved for summary judgment, and
summary judgment on Appellants’ interference claims was not proper. See Elliott-Williams, 9
S.W.3d at 803.
CONCLUSION
Applying the applicable standard of review, we conclude the Brooks Appellants’
employment relationships were involuntarily terminated by Excellence for its convenience and
Barton’s employment relationship was terminated by Excellence. Having construed the Plan as a
matter of law, we conclude Appellants were entitled to commissions only on loans that closed and
funded on or before their effective dates of termination. Because none were terminated after
October 1, 2010, we conclude the trial court properly granted summary judgment for Excellence
on Appellants’ breach of contract claims for loans closed and funded after October 1, 2010.
However, Excellence failed to meet its burden to conclusively disprove any essential
element of Appellants’ antitrust claims. Taking Appellants’ affidavits as true, and making every
reasonable inference in their favor, we conclude genuine issues of material fact were raised in
Appellants’ antitrust claims.
- 22 -
04-13-00106-CV
Because Appellants raised a genuine issue of material fact on whether Excellence
committed an antitrust violation—an unlawful act—and Excellence moved for summary judgment
only on that element, Excellence was not entitled to summary judgment on Appellants’
interference claims.
We affirm the portion of the trial court’s judgment against Appellants on their breach of
contract claims. We reverse the portion of the judgment on Appellants’ antitrust and interference
with prospective business relations claims, and we remand this cause to the trial court.
Patricia O. Alvarez, Justice
- 23 -