EJ Madison, LLC., a Texas Limited Liability Company v. Pro-Tech Diesel, Inc.

ACCEPTED
08-17-00229-CV
08-17-00229-CV EIGHTH COURT OF APPEALS
EL PASO, TEXAS
5/21/2018 11:53 PM
DENISE PACHECO
CLERK

IN THE COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS FILED IN
8th COURT OF APPEALS
_____________________________________________________
EL PASO, TEXAS
5/21/2018 11:53:56 PM
08-17-00229-CV
NO. 08-17-00229-CV DENISE PACHECO
Clerk

EJ MADISON, LLC.

v.

PRO-TECH DIESEL, INC.
_____________________________________________________
TH
Appealed from the 205
205TH Judicial District Court
of El Paso County, Texas
_____________________________________________________

BRIEF OF APPELLANT
_____________________________________________________

Troy C. Brown
Texas Bar No. 00783735
300 E. Main
10th Floor,
10th Floor, Suite
Suite 100
El Paso, Texas 79901
Tel. 915-543-9669
Fax 888-922-3353
troy@tcblegal.com
Attorney for Appellant

ORAL ARGUMENT NOT REQUESTED
IDENTITIES OF PARTIES AND COUNSEL

Appellant Attorneys for Appellant
EJ Madison, LLC Troy C. Brown
300 E. Main
10th Floor, Suite 1000
El Paso, Texas 79901
Tel. 915-543-9669
Fax 888-922-3353
troy@tcblegal.com

Appellee Attorney for Appellee
Pro-Tech Diesel, Inc. Mannie Kalman
Mounce, Green, Myers, Safi,
Paxson & Galatzan, P.C.
1214 Montana Avenue
El Paso, TX
TX 79901
mkalman@manniekalman.com

Additional parties in trial court
(not parties on appeal)

None

Trial Court Judge:
Hon. Guadalupe Rivera
205TH Judicial District Court
205Th
El Paso County, Texas

i
 TABLE OF CONTENTS

IDENTITIES OF PARTIES AND COUNSEL ..........................................................i

TABLE OF CONTENTS .......................................................................................... ii

INDEX OF AUTHORITIES.....................................................................................iv

STATEMENT OF THE CASE ............................................................................... vii

ISSUES PRESENTED ........................................................................................... viii

STATEMENT OF FACTS ........................................................................................ 1

SUMMARY OF THE ARGUMENT ......................................................................13

ARGUMENT AND AUTHORITIES ......................................................................14

I. Standard of review. .............................................................................................. 7

II. There is legally
legally and factually
factually insufficient
insufficient evidenceevidence to support the court's court’s
lack of
lack of finding
finding that
that the
theintroduction
introduction of of EL ELHollingsworth
Hollingsworth to to Pro-Tech
Pro-Tech
constituted disclosure
constituted disclosure of EJ Madison's
Madison’s confidential
confidential information to Pro-Tech. Pro-Tech.
[Amended finding No. 3] ..................................................................................... 17

III. There is legally and factually
factually insufficient
insufficient evidence
evidence to support the court's
court’s
“Project” was the basis of the Agreement. ...... 17
factual finding No. 6 that the "Project"

IV. There is legally and factually
factually insufficient evidence
evidence to support the court's
court’s
factual finding No. 7 that the language of the Agreement does not reflect that
services not related to the conversion process constituted trade secrets ........ 17

There is legally
V. There legally and
and factually
factually insufficient
insufficient evidenceevidence to support support the court's court’s
factual finding No. 8 that that there
there was was no no additional
additional consideration
consideration provided by
Plaintiff to Defendant that would make non-"Project" non-“Project” services covered by the
Agreement ............................................................................................................. 17

V. The
The trial court erred by granting
granting Appellee's
Appellee’s Plea to the the Jurisdiction
Jurisdiction that
Appellant failed to bring suit in time ................................................................. 17

ii
 factually insufficient evidence
VI. There is legally and factually evidence to support the court's court’s
factual finding
factual finding No. that the
No. 9 that theservices
services provided
provided by by Defendant
Defendant E.L. E.L.
Hollingsworth are
Hollingsworth are those
those known
known in the industry,
industry, e.g., oil oil changes,
changes, windshield
windshield
wiper replacements, and
wiper replacements, and do not constitute
do not constitute trade
trade secrets
secrets nor nor confidential
confidential
information as intended by the Agreement ......................................................... 17

VII. There is legally and factually insufficient evidence
evidence to support the court’s
court's
factual finding No. 10 that Plaintiff did not provide Defendant with a written
copy of its customer list and EL Hollingsworth is not a customer of Plaintiff 18

VIII. There is legally and factually insufficient evidence to support the court’s court's
factual finding
factual finding No.
No. 1111 that Plaintiff isis not
that Plaintiff entitled to
not entitled any of
to any of the
the profits
profits
generated by Defendant
generated Defendant for for non-"Project"
non-“Project” services services Defendant
Defendant provided provided to
E.L. Hollingsworth .................................................................................................18

IX. There is legally and factually insufficient evidence to support the court's court’s
attorney's fees ..................................29
finding no. 12 that Plaintiff did not incur attorney’s

legally and
X. There is legally and factually
factually insufficient
insufficient evidenceevidence to support support the court's court’s
finding No. 12 that
lack of finding that Plaintiff
Plaintiff alleged
alleged its entitlement
entitlement to attorney's attorney’s fees,
and the parties
and parties agreed
agreed that
that attorney's
attorney’s fees would be proven
fees would proven in aa separate separate
[Amended No. 12] ..................................................................................30
hearing. [Amended

XI. TheThe court
court erred erred as as a matter
matter of law in its
of law its conclusion
conclusion of of law
law no. no. 1 thatthat
Defendant did not breach the Non-Disclosure Non Circumvention Agreement
..................................................................................................................................30

XII. The
The court
court erred
erred as as aa matter
matter of
of law
law in failing to
in failing to find,
find, or or in its lack lack of
finding, that
finding, Defendant’s failure
that Defendant's failuretoto turn over the
turn over the profits,
profits, benefits
benefits and and
proceeds of
proceeds its commercial
of its commercial relationship
relationship with EL Hollingsworth
with EL Hollingsworth does does not not
constitute breach
breach of of fiduciary
fiduciaryduty. [Additional no. 6] ....................................31
duty. [Additional

court erred
XIII. The court erred as as a matter
matter of law in its conclusion conclusion of of law
law no. 2 that that
there is no
there no language
language in inthetheNon-Disclosure
Non-Disclosure Non NonCircumvention
Circumvention Agreement Agreement
reflecting an intent that services not related to nor arising from the conversion
process constitute
process constitute trade secrets or
trade secrets or confidential
confidential financial financial and and business
business
information .............................................................................................................31

XIV. The court erred as a matter of law in its conclusion of law no. 3 that the
Non-Disclosure Non Circumvention Agreement
terms of the Non-Disclosure Agreement did not prohibit
iii
Defendant from entering into a business relationship with E.L. Hollingsworth
to provide mechanical services unrelated to the conversion process ...............31

XV. The
XV. The court
court erred
erred asas a matter
matter of law in its
of law its conclusion
conclusion of of law
law no. no. 4 thatthat
Plaintiffs’ trade secrets or confidential financial and
Defendant did not utilize Plaintiffs'
business information
business informationin in entering
entering into business relationship
into a business relationship with with E.L. E.L.
Hollingsworth to provide mechanical services ....................................................31

XVI.The court
XVI.The court erred
erred as
as aa matter
matter of
of law
law in conclusion of
in its conclusion of law
law no.
no. 5 that that
Plaintiff’s claim for breach of contract fails for lack of consideration .............31
Plaintiff's

XVII. The court erred as a matter of law in its conclusion of law no. 6 that the
alleged trade secret information was readily ascertainable ascertainable by proper means,
such as availability in trade journals, reference books, or published materials
................................................................................................................................ 34

XVIII.The court erred as a matter of law in its conclusion of law no. 7 that the
alleged proprietary information was not substantially secret ...........................34

XIX.The court
XIX.The court erred
erred as
as aa matter
matter of
of law
law in conclusion of
in its conclusion of law
law no. no. 8 thatthat
Plaintiff is not entitled to any damages, actual or punitive ..............................35
35

XX. The
XX. The court
court erred
erred as
as a matter
matter of law in its
of law its conclusion
conclusion of of law
law no. no. 9 thatthat
Pursuant to
Pursuant to §38.001
§38.001 et
et seq., Tex. Civ.
seq., Tex. Civ. Prac.
Prac. & Rem. Rem. Code, Code, Plaintiff
Plaintiff is not
attorney's fees.........................................................................................
entitled to attorney’s

PRAYER and CERTIFICATE OF SERVICE.........................................................
SERVICE 37

APPENDIX:

Judgment (August 3, 2017) (Ex. A)

iv
 INDEX OF AUTHORITIES

Cases

Nat'l Ins. Co. v. Paul, 927 S.W.2d
American Nat’l S.W.2d 239, 239,245 245(Tex.
(Tex.App.—Austin
App.-Austin 1996,
writ denied) ...........................................................................................................32
32
Ames v. Ames, 776 S.W.2d 154, 158-159 (Tex. 1989), cert. denied, 494 U.S. 1080,
110 S.Ct. 1809, 108 L. Ed. 2d 939 (1990) ...........................................................15
15
14
Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991) .....................14

Austin Hardwoods, Inc. v. Vanden Berghe, 917 S.W.2d S.W.2d 320, 320,322 322(Tex.
(Tex.App.—El
App.-E1
Paso 1995, writ denied) ..................................................................... 16, 17, 18, 31
Besing v. Moffit, 882 S.W.2d
S.W.2d 79,
79, 81-82
81-82(Tex.
(Tex.App.—Amarillo 1994, no writ) ......14
App.-Amarillo 1994, 14
Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) .....................................................16
16
Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994) ...........................................14
14
Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007) ............16
16
City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005) ............................16
16
Estate of Judd, 8 S.W.3d 436
436 (Tex.
(Tex. App.—El Paso 1999,
App.-E1 Paso 1999, no pet.) 14
pet.).........................14

15
Ford Motor Co. v. Castillo, 444 S.W.3d 616, 620 (Tex. 2014) (op. on reh'g)........15

Hydrocarbon Management, Inc. v. Tracker Exploration, Inc., 861 S.W.2d 427, 431
(Tex. App.—Amarillo 1993, no
App.-Amarillo 1993, no writ) ............................................................... 16, 31

(Tex.App.-El Paso 1999, no pet.) ............ 14, 15
In re Estate of Judd, 8 S.W.3d 436 (Tex.App.-E1

King's Estate, 150 Tex. 662, 664-65, 244 S.W.2d 660, 661 (1951)......... 14,16
In re King’s

Kaye/Bassman Intern. Corp. v. Help Desk Now, Inc., 321 S.W.3d 806, 814
(Tex.App.-Dallas 2010, pet. denied) ....................................................................29
29

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 663 n.3 (Tex.
14
2009) .....................................................................................................................14

v
Mclemon v. Dynegy Inc., 347 S.W.3d 315 (Tex. (Tex. App.—
App.—HoustonHouston [14th Dist.] 2011,
no pet.) ..................................................................................................................29
29

Runnels v. Firestone, 746 S.W.2d 845, 849 (Tex.
(Tex. App App—Houston
—Houston [14th Dist.], writ
denied, 760 S.W.2d 240 (Tex. 1988) ...................................................................14
14

Timmons v. Luce, 840 S.W.2d 582, 586 (Tex. App.—Tyler 1992, no writ) ...........14
14

Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert cert.
denied, 526 U.S. 1040 (1999)...............................................................................15
15

Vickery v. Commission for Lawyer Discipline, 5 S.W.3d 241, 254 (Tex.App.—
Houston [14th Dist.] 1999, pet. denied) ........................................................ 20, 33

Watson v. Prewitt, 159 Tex. 305, 305, 320 S.W.2d 815, 816 (1959) ......................16
16

Zac Smith & Co. v. Otis Elevator Co., 734 S.W.2d 662, 666 (Tex. 1987) .............15
15

Statutes

Tex. Civ. Prac. & Rem. Code § 134A.002(6).
134A.002(6) .........................................................28

Rules

Tex. R. App. P. 43.3................................. ................................................................. 16

Tex. R. Civ. Proc. 93(9) ........................... .................................................................29

vi
 STATEMENT OF THE CASE

This aa suit
This suitfor
forbreach
breachofof a Non-Disclosureand
a Non-Disclosure andNon-Circumvention
Non-Circumvention

Agreement. Appellant,
Agreement. Appellant, EJ
EJ Madison,
Madison, LLC,
LLC, alleged
alleged claims
claims for breach
breach of contract,
contract,

breach of fiduciary
breach fiduciary duty and
and misappropriation
misappropriation of trade secrets
of trade secrets under the Texas
Texas

Uniform Trade
Uniform Trade Secrets
SecretsAct
Act(“TUTSA”).
("TUTSA"). (CR
(CR I,I, 22). The parties
22). The parties tried
tried the
the case
case

nonjury on June 20, 2017 and which time the trial court rendered judgment for the

On August
defendant. On August 3,
3, 2017, the trial court entered
entered judgment.
judgment. (CR I, 28).

On August
August 23, 2017, Appellant
Appellant filed
filed its Request
Request for Findings
Findings of Fact and

Conclusions of Law and on August 30, 2017 its Motion for New Trial. (CR I, 29,
Conclusions

31). On
31). OnSeptember
September 19,
19, 2017,
2017, in
in absence
absence of
of findings
findings by the trial
trial court
court (due by

September 12, 2017), Appellant
September Appellant filed
filed its
its Notice
Notice of Past Due Findings of Fact and

Conclusions of
of Law.
Law. (CR I, 33).

On November 1, 2017, Appellant
Appellant filed
filed its
its Notice
Notice of
of Appeal.
Appeal. (CR I, 35).

On March 8, 2018, the trial court filed its Findings of Fact and Conclusions

of Law, and on March 19, 2018, Appellant filed its Request for Amended Findings

Law.1 (CR
of Fact and Conclusions of Law.1 (CR II, 4, 8).

1
1 On January 26, 2018, in the absence of the filing of findings of fact and conclusions of
the trial
law by the trial court,
court, Appellant
Appellant filed
filed its
its Opposed
Opposed Motion
Motion to
to Abate
Abate Appeal,
Appeal, Alternatively,
Alternatively, to
Extend Time
Extend Time to File Appellant’s
Appellant's Brief which this Court granted
granted by order on February 8, 2018
February
(further ordering that the trial court file its findings on or before March 20, 2018).
vii
 ISSUES PRESENTED

Whether here
Whether here is legally and factually insufficient
insufficient evidence
evidence to
to support
support the
the court’s
court's
the introduction
lack of finding that the introduction of EL
EL Hollingsworth
Hollingsworth to
to Pro-Tech
Pro-Tech constituted
constituted
disclosure of EJ Madison’s
Madison's confidential information to Pro-Tech.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
factual finding No. 6 that the “Project”
"Project" was the basis of the Agreement.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
factual finding
factual finding No.
No. 77 that the
the language
language of the
the Agreement
Agreement does not reflect
reflect that
that
services not related to the conversion process constituted trade secrets.

Whether here
Whether here is legally and factually insufficient
insufficient evidence
evidence to
to support
support the
the court’s
court's
factual finding
factual finding No. that there
No. 8 that there was
was no
noadditional
additional consideration
consideration provided
provided by
Plaintiff to Defendant
Plaintiff Defendant that
that would
would make
make non-"Project"
non-“Project” services
services covered
covered by
by the
Agreement.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
the services
factual finding No. 9 that the services provided
provided by
by Defendant
Defendant E.L.
E.L. Hollingsworth
Hollingsworth
industry, e.g., oil
are those known in the industry, oil changes,
changes, windshield
windshield wiper replacements,
replacements,
and do not constitute trade secrets nor confidential information as intended by the
Agreement.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
factual finding No. 10 that Plaintiff did not provide Defendant with a written copy
of its customer list and EL Hollingsworth is not a customer of Plaintiff.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
factual finding No. 11 that Plaintiff is not entitled to any of the profits generated by
non-“Project” services Defendant provided to E.L. Hollingsworth.
Defendant for non-"Project"

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
finding no. 12 that Plaintiff did not incur attorney’s
attorney's fees.

Whether there is legally and factually insufficient
Whether insufficient evidence
evidence to
to support
support the
the court’s
court's
lack of finding No. 12 that Plaintiff alleged its entitlement
entitlement to
to attorney’s
attorney's fees, and
the parties agreed that attorney’s
attorney's fees would be proven in a separate hearing.

viii
Whether the
Whether the court
court erred
erred as
as aa matter
matter of
of law
law in its conclusion
conclusion of
of law
law no. that
no. 1 that
Defendant did not breach the Non-Disclosure Non Circumvention Agreement.

Whether the
Whether the court
court erred
erredas
as aa matter
matter of
of law
law in
in failing
failing toto find,
find, or
or in lack of
in its lack
finding, that Defendant’s
finding, profits, benefits and proceeds of
Defendant's failure to turn over the profits,
commercial relationship
its commercial relationship with Hollingsworth does
with EL Hollingsworth does not constitute
constitute breach of
fiduciary duty.

Whether the court erred as a matter of law in its conclusion of law no. 2 that there
Non-Disclosure Non Circumvention Agreement reflecting an
is no language in the Non-Disclosure
intent that services not related to nor arising from the conversion process constitute
trade secrets or confidential financial and business information.

Whether the
Whether the court
court erred
erred as
as a matter
matter of law in its conclusion
conclusion of law no. 3 that the
terms of the
terms the Non-Disclosure
Non-Disclosure Non
Non Circumvention
Circumvention Agreement
Agreement did not prohibit
did not prohibit
Defendant from
Defendant from entering
entering into a business
business relationship
relationship with E.L.
E.L. Hollingsworth
Hollingsworth to
provide mechanical services unrelated to the conversion process.

Whether the
Whether the court
court erred
erred as
as aa matter
matter of
of law
law in its conclusion
conclusion ofof law
law no. that
no. 4 that
Defendant did
Defendant not utilize
did not utilize Plaintiffs'
Plaintiffs’ trade
trade secrets
secrets or
or confidential
confidential financial
financial and
and
business information
business informationinin entering
entering into
into aa business
business relationship
relationship with
with E.L.
E.L.
Hollingsworth to provide mechanical services.

Whether the
Whether the court
court erred
erred as
as aa matter
matter of
of law
law in its conclusion
conclusion ofof law
law no. that
no. 5 that
Plaintiff’s claim
Plaintiff's claim for
for breach
breach of contract fails for lack of consideration.

Whether the
Whether the court
court erred
erred as
as a matter
matter of law in its conclusion
conclusion of law no. 6 that the
alleged trade secret information was readily ascertainable by proper means, such as
availability in trade journals, reference books, or published materials.

Whether the
Whether the court
court erred
erred as
as a matter
matter of law in its conclusion
conclusion of law no. 7 that the
alleged proprietary information was not substantially secret.

Whether the
Whether the court
court erred
erred as
as aa matter
matter of
of law
law in its conclusion
conclusion of
of law
law no. that
no. 8 that
Plaintiff is not entitled to any damages, actual or punitive.

Whether the
Whether the court
court erred
erred as
as aa matter
matter of
of law
law in its conclusion
conclusion of
of law
law no. that
no. 9 that
Pursuant to §38.001 et seq., Tex. Civ. Prac. & Rem. Code, Plaintiff is not entitled
to attorney’s
attorney's fees.

ix
 STATEMENT OF FACTS

Madison, LLC ("EJ
EJ Madison, (“EJ Madison")
Madison”) is a trucking
trucking company
company formed in 2008.
2008.

Shortly thereafter,
(RR III, 57). Shortly thereafter, itit began
began doing
doing business
business with
with Pro-Tech Diesel, Inc.

(“Pro-Tech”) to perform
("Pro-Tech") perform maintenance
maintenancework
workon
onEJ
EJMadison’s
Madison's two
two trucks.
trucks. (RR III,

57-58, 117).
57-58, Pro-Tech had
117). Pro-Tech had one
one 11 to
to22employees
employees including
including owner
owner Richie
Richie Rivera
Rivera

(“Rivera”). (RR
("Rivera"). (RR III,
III, 57-58;
57-58; 117,
117, 142).
142). The
Thetwo
twocompanies
companies continued
continued to do
to do

business with,
with, and
and grow
grow alongside,
alongside,each
eachother
otherinto
into2014.
2014. (RR
(RR III,
III, 57-58,
57-58, 117).
117). At

Madison had acquired
that time, EJ Madison acquired forty-five
forty-five (45) trucks
trucks and some ninety (90)

trailers. (RR III, 58,
(RR 58, 117-118).
117-118). EJ
EJMadison
Madison was
wasone
oneofofPro-Tech'
Pro-Tech’ss largest
largest

customers. (RR
customers. (RR III, 118).

In late 2012, early 2013, EJ Madison began to explore the use of duel fuels

(diesel and
(diesel and natural
natural gas)
gas) on save fuel
on its trucks to save fuel costs
costs and
and because
because natural
natural gas

burns cleaner. (RR III, 58-59).
cleaner. (RR

EJ Madison's
Madison’s manager,
manager, John
John Warren
Warren ("Warren")
(“Warren”) approached
approached Rivera about

working together
together on
on “dual
"dual fuel
fuel conversion.”
conversion." (RR III, 59). The
The two
two companies
companies had

good business
a good business relationship.
relationship. Nevertheless,
Nevertheless, Warren
Warren requested
requested that Rivera
Rivera enter
enter

non-disclosure non-circumvent
into a non-disclosure non-circumventagreement
agreementon
onbehalf
behalfof
ofPro-Tech.
Pro-Tech. (RR III,

59-60). EJ
59-60). EJMadison
Madison and
and Pro-Tech
Pro-Tech entered
entered into
into the
the Agreement
Agreement on
on February
February 25,

(RRIV,
2013. (RR IV,Plt.'
Plt.’s Ex. 1)
s Ex. 1) (RR
(RR III,
III, 67)
67) ("Non-Disclosure
(“Non-Disclosure and Non-Circumvention

Agreement”) (the “Agreement”).
Agreement") "Agreement").

1
 Warren had used and entered into similar agreements in business for many

years. (RR
years. (RR III,
III, 61-62).
61-62). This
Thistype
typeofofagreement
agreement was
was important
important for
for EJ
EJ Madison
Madison in

because Warren
this instance because Warren wanted
wanted to ensure he protected
protected the development
development of

any intellectual property and, further, to protect the introduction by EJ Madison to

Pro-Tech of EJ Madison's
Madison’s valuable
valuable business
business relationships
relationships which it had developed
developed

considerable expense.
at considerable (RR III, 62). Additionally,
expense. (RR Additionally, Pro-Tech
Pro-Tech stood
stood to benefit not

performing installation
only from performing installation of the technology
technology specifically
specifically but through
through the

introduction to other companies,
introduction companies, including
including trucking
trucking companies,
companies, with whom Pro-

Tech might
Tech might do business, generally.
do business, (RR III,
generally. (RR III, 62-63).
62-63). Finally,
Finally, Rivera
Rivera also
also

participated as
as aa partner.
partner. (RR III, 63).

The Agreement provides in pertinent part:

Pro Tech
Pro Tech and
and EJM
EJM have
have entered
entered into
into discussions
discussions with
with each
each
other in
other in connection
connection with
with prospective
prospective business
business arrangements
arrangements and/or
and/or
opportunities involving
involving the
the following
following commercial
commercial project:
project: conversion
trucks, including
of trucks, including without
without limitation,
limitation, trucks
trucks owned
owned by EJM/its
EJM/its
related companies, from diesel powered operation to dual CNG/Diesel
powered operation (the “Project”).
"Project").

Plt.’ss Ex. 1)
(RR IV, Plt.' 1) (Recitals
(Recitals 91
¶ 1);
1); (RR
(RR III,
III, 65-66). Ultimately, however,
65-66). Ultimately, however, EJ

Madison ruled-out Compressed Natural Gas (“CNG”)
("CNG") in favor of Liquified Natural

Gas ("LNG").
Gas (“LNG”). Warren
Warren explained
explained that such a change
change is typical
typical in the
the course
course of

development of aa project.
project. (RR III, 66-67).

After entering
After entering into
into the
the Agreement
Agreement with
with Pro-Tech,
Pro-Tech, EJ
EJ Madison
Madison began
began

cultivating relationships with
with other
other companies.
companies. (RR III, 67).
2
 significant time and expense
In particular, EJ Madison spent significant expense developing
developing a

relationship with
relationship Hollingsworth and
with EL Hollingsworth and Company
Company ("EL
(“EL Hollingsworth"),
Hollingsworth”), a

“substantial transportation company"
"substantial company” with several hundred trucks nationwide (RR

III, 67;
III, 67; 69-70,
69-70, 139). Onororabout
139). On aboutAugust
August 24,
24, 2013,
2013, EJ
EJ Madison
Madison and
and EL
EL

Hollingsworth entered
Hollingsworth entered into
into aa "Confidentiality
“Confidentiality and
and Non-Disclosure
Non-Disclosure Agreement"
Agreement”

(“ELH Agreement").
("ELH Agreement”). (RR IV, Plt.'
Plt.’ss Ex.
Ex. 2). ELHollinsworth
2). EL Hollinsworth was
was interested
interested in

converting trucks
converting trucks in
in its fleet to duel
duel fuel
fuel and
and purchasing
purchasing conversion
conversion kits from EJ

Madison as its customer. (RR III, 65, 68). ItIt was
was only
only after
after entering
entering into the ELH

Agreement that EJ Madison
Agreement Madison introduced
introduced Pro-Tech to EL
EL Hollingsworth.
Hollingsworth. (RR III,

67). Later,
Later,EL
ELHollingsworth
Hollingsworth became
became interested
interested in being a financial
financial partner. (RR

Warrenwould
III, 68). Warren wouldnot
nothave
haveintroduced
introduced Pro-Tech
Pro-Tech to
to EL
EL Hollingsworth
Hollingsworth had

Pro-Tech not entered into the Agreement. (RR III, 69).

Warren explained
Warren explained that business when
that in business when aa company
company spends
spends considerable
considerable

time and money developing relationships and customers, it must ensure it protects

its investment from being circumvented because the right introduction “quite
"quite often

launches that
launches that business
business and
and makes
makes that
that business
business into
into the
the success
success that
that itit is."
is.” Id.

Therefore, it is imperative
Therefore, imperative to protect
protect customer
customer and
and contractual
contractual relationships.
relationships. Id.

Additionally, the expense of development of business
Additionally, business and
and customer
customer relationships
relationships

often results
often results in
in the
thefurther
furtherintroduction
introduction and
anddevelopment
development of
ofcontractual
contractual

relationships which are lucrative in and of themselves. Id.

3
 Here, EJ Madison, including Warren himself, developed a unique a system,

called a conversion
conversion kit,
kit, which
which displaced
displaceddiesel
dieselfuel
fuelfor
fornatural
naturalgas.
gas. Natural gas is

expensive and
less expensive and burns
bums cleaner
cleaner all
all without
without sacrificing
sacrificing performance.
performance. It did so by

coalescing electronic
coalescing electronic control
control module,
module, fuel
fuel injection
injection and tank technologies
and tank technologies to

become the only high-displacement system (over 50%) to obtain EPA certification.

(RR III, 70-72).

Beginning in
Beginning EL Hollingsworth
in July 2014, EL Hollingsworth began
began operating
operating EJ Madison's
Madison’s

fleet of trucks
fleet trucks out
out of
of Anthony,
Anthony, Texas,
Texas, 35 of
of which
which were
were equipped
equipped with
with the
the

conversion kits.
conversion (RR III,
kits. (RR III, 72-73).
72-73). EL
ELHollingsworth
Hollingsworth operated
operated the
the trucks
trucks on duel
duel

pursuant to contracts
fuel pursuant contracts EJ Madison
Madison had
had developed
developed with
with natural
natural gas
gas provider
provider

Clean Energy.
Clean (RR III,
Energy. (RR III, 73).
73). Additionally,
Additionally,EL
ELHollingsworth
Hollingsworth entered
entered into
into a

business relationship with Clean Fuel Technologies, LLC (“CFT”)
("CFT") and Clean Fuel

Technologies, II,
Technologies, II, LLC
LLC (“CFT II”), successor
("CFT II"), successor companies to EJ Madison,
Madison, whereby
whereby

EL Hollingsworth
Hollingsworth (and/or
(and/orits
its principals)
principals)became:
became: (1) aa buyer
buyer of/customer
of/customer for

conversion kits; (2)
(2) aa financial
financial contributor;
contributor;and
and(3)
(3)including
includingasasaapartner.
partner. (RR III,

74-75). Rivera
74-75). Riveratoo
toobecame
becameaapartner
partner in
inCFT
CFT which
which owned
owned aa portion
portion of CFT
CFT II.

(RR III, 76, 95).

CFT II incurred
CFT incurred significant
significant expenses
expenses for improvements to
for improvements to a property
property in

Anthony, Texas (the "property")
“property”) from which Pro-Tech benefited because it began

4
conducting business
conducting businessfrom
fromthat
thatlocation
locationand
andcontinues
continuestotododoso.
so. (RR III, 72, 73,

75-78).

Beginning on or about August 1, 2014,
2014, Pro-Tech
Pro-Tech began
began performing
performing general

maintenance work
maintenance work for Hollingsworth including
for EL Hollingsworth including on
on the former
former EJ
EJ Madison
Madison

trucks and
trucks those equipped
and those equipped with
with the
the conversion
conversionkits. Rivera never
kits. Rivera never sought
sought EJ
EJ

Madison’s authority,
Madison's authority, written or otherwise,
otherwise, to do
do business
business with
with EL
EL Hollingsworth
Hollingsworth

unrelated to
unrelated to the
the project. (RR III,
project. (RR III, 78).
78).Warren
Warrenneither
neithermade
maderepresentations
representations

beyond the terms of the Agreement prior to it being executed nor did he verbally
verbally

authorize Pro-Tech
authorize Pro-Tech to do business with EL
EL Hollingsworth
Hollingsworth by performing
performing general
general

(RR III,
maintenance. (RR III, 158-160)

On May 11, 2015, EJ Madison
Madison made written demand on Pro-Tech
Pro-Tech pursuant

the terms
to the terms of
of the
the Agreement
Agreement and
and the
the provisions
provisions of
of the
the Texas
Texas Uniform
Uniform Trade
Trade

Secrets Act
Secrets Act (“TUTSA”).
("TUTSA"). (RR
(RR III,
III, 80-81);
80-81);(RR
(RRIV,
IV,Plt.’s
Plt.'s Ex.
Ex. 3). Rivera
3). Rivera

acknowledged receiving the demand letter (RR III, 140).

EJ Madison
Madison maintenance
maintenance records
records reflect
reflect that
that Pro-Tech
Pro-Tech ceased
ceased providing
providing

maintenance for
maintenance for EJ Madison
Madison in mid July 2014,
2014, the
the same
same time
time EL
EL Hollingsworth
Hollingsworth

assumed operations
assumed operationsof
ofthe
theEJ
EJ Madison
Madisonfleet.
fleet. (RR
(RR III,
III, 82);
82); (RR
(RR IV,
IV, Plt.’s
Plt.'s Ex. 4).

Madison maintenance
The EJ Madison maintenance records
records for fleet (of
for the fleet (of approximately
approximately 45 trucks)
trucks)

beginning January
beginning January 1,
1, 2013 through December
2013 through December 2014
2014 (ending
(ending on
on July 2014)
July 19, 2014)

totaled $312,166.04
$312,166.04 for
for an
an average
average of
of$16,429.79
$16,429.79per
permonth. (RR III, 81-82); (RR
month. (RR

5
 Plt.’s Ex.
IV, Plt.'s Ex. 4).
4). Additionally,
Additionally,Pro-Tech'
Pro-Tech’s own invoicing
s own invoicing records
records for
for maintenance
maintenance

provided to EL Hollingsworth,
provided Hollingsworth, beginning
beginning July 2014 and
July 21, 2014 and extending
extending through
through

May 22, 2015, reflect a total of $212,290.09, for an average monthly revenue paid

by EL Hollingsworth
Hollingsworth of
of $21,229.09. (RR III,
$21,229.09. (RR III, 83,
83, 140-141);
140-141); (RR IV, Plt.’s
Plt.'s Ex. 5).

This number
This number is consistent
consistent with
with the amount incurred
the amount incurred by
by EJ Madison
Madison prior
prior to EL

Hollingsworth assuming
Hollingsworth assumingoperations.
operations.(RR
(RRIII,
III,82-83,
82-83,141). Madison, at its
141). EJ Madison,

highest point,
highest compromised 10
point, compromised 10 to 15 percent
to 15 percent of
of Pro-Tech'
Pro-Tech’ss business
business or
or

approximately 2.5 million
million dollars
dollars in
in annual
annual sales.
sales. (RR III, 141-143).

If Pro-Tech
If Pro-Tech had
had approached
approached Warren
Warren about
about doing
doing business
business with
with EL
EL

Hollingsworth, Warren
Hollingsworth, Warren would
would have
have negotiated
negotiated aa "win/win"
“win/win” agreement
agreement to allow
allow

Pro-Tech to
Pro-Tech to profitably
profitably do
do business. (RR III, 87,
business. (RR 87, 165-166).
165-166). Non-disclosure
Non-disclosure non-
non-

circumvention agreements
circumvention agreementsdo
donot
not “spell
"spell out”
out" the terms in advance
the terms advance because
because the

parties need to be free to fully explore
explore any
any future
future opportunities
opportunitiesas
as they
theyoccur.
occur. (RR

III, 167).

Stuart Mitchell ("Mitchell"),
(“Mitchell”), an attorney who primarily consults with young

developing businesses,
businesses, testified
testified as an expert concerning covenants not to compete

and confidentiality and non-circumvention
non-circumvention agreements.
agreements. (RR III, 15-16, 17).

While covenants
While covenants not compete are
not to compete are narrowly
narrowly construed
construed because
because they
they

constrain productive
constrain productive activity, non-circumvention
non-circumvention agreements
agreements and confidentiality
confidentiality

agreements are
agreements broadly construed,
are broadly construed, but narrowly drawn,
but narrowly drawn, to
to protect
protect intellectual
intellectual

6
property and business practices of the protected party against abuse and unethical
unethical

behavior by
by the
the party
party one
oneisisdoing
doingbusiness
businesswith.
with. (RR III, 16-17). Non-disclosure
16-17). Non-disclosure

non-circumvention agreements
and non-circumvention agreements are
are broadly construed because
broadly construed because they protect
protect

things known
things known to parties —
to the parties — the
the protected
protected party's
party’s interest
interest in
in his
his contractual
contractual

agreements, his
agreements, customers, his financing
his customers, financing sources
sources — things considered secret and

(RR III,
proprietary. (RR III, 17, 168-170).

confidentiality provisions
The confidentiality provisions of these agreements
agreements are necessary to protect

against the dissemination
against dissemination of protected
protected information,
information, and
and the
thenon-circumvention
non-circumvention

provisions “establish
provisions "establishaa bond
bond of loyalty between
of loyalty between two parties who
two parties who are
are doing
doing

business”—for example, to prevent one party from
business"—for from doing
doing business
business with
with the
the other’s
other's

customer (RR
customer 18-19). Customers
(RR III, 18-19). Customersare
areuniversally
universallyconsidered
considered confidential
confidential

information. (RR
information. (RR III, 19).

Mitchell reviewed
Mitchell reviewed the Agreement,
Agreement, the ELH Agreement,
Agreement, the depositions
depositions of

Warren and
Warren and Rivera
Rivera and
and the plaintiff’s exhibits.
the plaintiff's In Mitchell's
exhibits. In Mitchell’s opinion,
opinion, the
the

Agreement in the first instance protected EJ Madison against Pro-Tech developing

business with EJ Madison's
Madison’s contacts
contacts and
and customers
customers without
without first negotiating
negotiating with

EJ Madison
EJ Madison as
as to
to how
how that
that should
shouldbe
bedone. (RR III,
done. (RR III, 19-20).
19-20). He
He found
found the
the

Agreement to be “a
"a very standard confidentiality,
confidentiality, non-disclosure
non-disclosureagreement.”
agreement." (RR

III, 20-21).

7
 Additionally, while
Additionally, the Agreement
while the Agreement described
described confidential
confidential information
information

broadly, the categories of confidential
broadly, confidential information
information of particular
particular relevance
relevance to this

transaction were
transaction financing sources,
were financing sources, contractual
contractual relationships
relationships and customers of
and customers

which EL Hollingsworth
Hollingsworth was
was one.
one. (RR
(RR III,
III, 22-24). Madison’s relationship with
22-24). EJ Madison's

EL Hollingsworth, and the subject of the ELH Agreement, represented a protected

“contractual relationship”
"contractual relationship"asasdefined
definedininthe
theAgreement.
Agreement. (RR
(RR III,
III, 24). In fact,
24). In fact, the

mere disclosure
mere disclosure of the identity
of the identity ofofEL
ELHollingworth
Hollingworthconstituted
constituted protected
protected

customer/client information
customer/client information consistent
consistent with
with definitions
definitions and protection under
and protection under the

(RR III, 24-25).
TUTSA. (RR

maintaining the
In addition to maintaining the confidentiality
confidentiality of protected
protected information,
information, the

Agreement restricted
Agreement restricteduse
use of
of the information by
the information receiving party
by the receiving party except
except as

permitted in
permitted in the Agreement. (RRIII,
Agreement. (RR III,25-26);
25-26);(RR
(RRIV,
IV,Plt.'s
Plt.’sEx.
Ex.1)1)(Recitals
(Recitals91¶ 3,

Agreement ¶911).
1). The
The Agreement
Agreement restricted
restricted use
use of the confidential information to

“project-related business,”
"project-related business,"i.e.,
i.e.,Pro-Tech
Pro-Tech“was
"wasnot
notpermitted
permittedtoto use
use the EL
the EL

Hollingsworth contact
Hollingsworth contactfor
foranything
anythingoutside
outsidethe
theproject.”
project." (RR
(RR III,
III, 26); (RR IV,

Plt.’s Ex.
Plt.'s Ex. 1)
1) (Agreement
(Agreement 91
¶ 1(d)).
1(d)). Furthermore, the Agreement provided that Pro-

Tech could
Tech could not
not independently
independently develop
develop business
business with Hollingsworth as
with EL Hollingsworth as its

identity is
identity is itself
itself confidential
confidentialinformation.
information.(RR
(RR III,
III, 26);
26); (RR
(RR IV,
IV, Plt.’s Ex. 1)
Plt.'s Ex.

(Agreement ¶911(e)).
(Agreement 1(e)). A
A non-circumvention
non-circumvention provision
provision isis usual
usual and
and customary
customary in a

non-disclosure non-circumvention
non-circumvention agreement.
agreement. (RR III, 26-27).

8
 Here, Pro-Tech initially did EJ Madison-related business with Hollingsworth

but later went well beyond project-related business without obtaining authorization

from EJ Madison. (RR III,
Madison. (RR III, 31-32).
31-32). In
Indoing
doingso,
so,Pro-Tech
Pro-Tech wrongfully
wrongfully obtained the

profits from doing business with EL Hollingsworth while denying EJ Madison any

benefit for
benefit for having
having made
madethe
theintroduction.
introduction.(RR
(RRIII,
III,32). Mitchell testified
32). Mitchell testified that
that

introductions often
introductions oftenproduce
produce“found
"foundmoney”
money"for
forthe
thereceiving
receivingparty: “When I
party: "When

introduce you
introduce you to somebody
somebody I’m doing business
I'm doing business with,
with, now
now you
you have
have completely
completely

found money
money ifif you
you are
are doing
doing business
businesswith
withthem.
them. And it’s only fair that I would
it's only would

be compensated for having
having brought
brought that
that new
new business
business to
to you.”
you." (RR III, 170).

the event
In the event of
ofunauthorized
unauthorized use
use and
and circumvention
circumvention by
by Pro-Tech,
Pro-Tech, the
the

Agreement provides
Agreement provides an
an assignment
assignment to
to EJ Madison of "the
“the profits,
profits, benefits and/or

proceeds obtained
proceeds obtainedby
byPro
Pro Tech
Tech as
as aa result
result of
of any
any use
use ofofthe
theConfidential
Confidential

information that
information that is not authorized by EJM".
EJM”. (RR
(RRIV,
IV,Plt.'
Plt.’s Ex.1)1)(Agreement
s Ex. (Agreement91
¶

1(e)). Such
Suchaa"damages"
“damages”provision
provisionisisusual
usualand
andcustomary,
customary, and
and reasonable,
reasonable, in this

type of agreement
agreement and is akin
akin to
to the
the availability
availability of
of punitive
punitive damages
damages under the

TUTSA upon a showing of malice because a disclosing party can suffer extensive

damages which
which are not easily calculated.
calculated. (RR
(RR III,
III, 33-34). Proceeds is
33-34). Proceeds is appropriate
appropriate

because it prevents the receiving party from using the
the confidential
confidential information to

make lots of money, then hiding what he’s done, later
he's done, later claiming
claiming there is no money

9
 damages. And,
to pay damages. And, in
inthis
thiscase,
case,Pro-Tech'
Pro-Tech’ss claim of losses belies
belies that it has

remained in business for
for ten
ten years.
years. (RR III, 170-172, 173).

The Agreement further
further provides
provides “that
"that all rights hereunder shall inure to the

successor in interest,"
benefit of any successor interest,” thereby
thereby protecting
protecting the original
original developer as

well as other
well other entities
entities who,
who, as
as business
business is
is developed,
developed, receive
receive an interest
interest in
in

intellectual property
intellectual propertyand
and the
the benefits
benefitsflowing
flowingfrom
fromit.it. (RR III, 34-35);
34-35); (RR IV,

Plt.’s Ex.
Plt.'s Ex. 1)
1)(Agreement
(Agreement917).
¶ 7).

“The project in the Agreement
"The Agreement defines the reason why the parties began to

do business in a confidential
confidential and protected
protected way,
way, but
but itit doesn’t
doesn't define the scope of

all the
all the information
information that’s protected . .. . .[t]he
that's protected [t]heconfidential
confidential information
information that
that is

protected is
protected is listed
listed there
there in the
the first
first part
part of
of the
theagreement
agreement as
as financing
financing sources,
sources,

customers et
customers et cetera.” These agreements
cetera." These agreements are drawn
drawn this
this way for the
the reason
reason the
the

parties simply
parties simply do know the opportunities
opportunities that may arise or the
the introductions
introductions that

may eventually
eventually be
be made. (RR III,
made. (RR III, 36).
36). Confidential
Confidentialinformation
information includes
includes "new
“new

product” development. (RR
product" (RRIII,
III,37)
37)(RR
(RR IV,
IV, Plt.'s
Plt.’sEx.
Ex.1)
1)(Recitals
(Recitals911).
¶ 1).

Agreement were narrowly
The restraints provided in the Agreement narrowly drawn,
drawn, reasonable
reasonable

and consistent with public
public policy.
policy. (RR III, 38-39).

Rivera
Rivera had
had an opportunity
opportunity to
to read
read the
the Agreement
Agreementbefore
beforehe
hesigned
signedit.
it. (RR

117-118). He
III, 117-118). He felt
felt the
theopportunity
opportunity for
for Pro-Tech
Pro-Tech to become
become an installer
installer of the

conversion kits
conversion kitstoto be
be aa good
good one. (RR III,
one. (RR III, 118).
118). Rivera
Rivera and
and Pro-Tech
Pro-Tech had
had not
not

10
performed installations
performed installations of
of this
this type prior to entering
entering into the
the agreement,
agreement, obtained
obtained

perform the installation
the benefit of how to perform installation as the result of the
the Agreement,
Agreement, and

were paid to do installations
installations on
on EJ
EJ Madison
Madison trucks.
trucks. (RR III, 119).

Rivera acknowledged
acknowledged that Pro-Tech
Pro-Tech began
began doing maintenance
maintenance work
work for EL

Hollingsworth on
Hollingsworth on or
or about
about August
August 1,
1, 2014
2014 and
and continued
continued to
to do
do so
so at the time of

trial. Id. Rivera made the decision in December 2014/January 2015 that Pro-Tech

would no longer perform work on the
would the conversion
conversion kits on
on the
the EL
EL Hollingsworth-
Hollingsworth-

operated trucks
operated trucks not because the conversion
conversion kits were not operational
operational but, rather,
rather,

because he felt like this work
because work was
was restricted
restricted by
by the
the terms
terms of
of the
the Agreement.
Agreement. (RR

119-121). Nevertheless,
III, 119-121). Nevertheless, he did
did not
not approach
approach Warren
Warren about
about whether
whether it was
was

appropriate under
appropriate under the
the terms
terms of Agreement, and
of the Agreement, required EJ Madison's
and that required Madison’s

written authorization,
authorization, to
to do
do general
general maintenance
maintenance work
work for
for EL
EL Hollingsworth.
Hollingsworth. (RR

III, 121-122).

Rivera
Rivera understood
understood that
that any
any modification
modification to
to the
the Agreement
Agreement needed
needed to
to be in

writing and, further, that any use of the confidential
confidential information beyond the scope

of the
of the project
project required
required the
the parties'
parties’ signatures
signatures and
and EJ
EJ Madison's
Madison’s written
written

authorization. (RR
authorization. (RR III,
III, 122-123,
122-123, 132-133).
132-133). And,
And, Pro-Tech
Pro-Tech neither
neither knew
knew the
the

identify of nor had done any work for EL
EL Hollingsworth
Hollingsworth prior to entering into the

Agreement and being introduced
introduced to
to them
them by
by Warren.
Warren. (RR III, 124).

11
 Furthermore, Rivera
Furthermore, Rivera agreed
agreed that signed the
that when he signed the Agreement,
Agreement, Pro-Tech
Pro-Tech

was agreeing to keep certain of EJ Madison's
Madison’s information
information confidential
confidential and, more

importantly, that
importantly, that EJ Madison
Madison was providing
providing the information
information only because
because Pro-
Pro-

Tech had entered
entered into
into the
the Agreement. Rivera understood
Agreement. (RR III, 128). Rivera understood Pro-Tech
Pro-Tech

would be provided opportunities that otherwise it would not have had it not entered

into the Agreement.
into Agreement. (RR
(RR III,
III, 128-129).
128-129). Rivera
Riveraunderstood
understood that
that Pro-Tech
Pro-Tech was
was

prohibited from circumventing
prohibited circumventing EJ
EJ Madison
Madison as to its
its confidential
confidential information
information and

the opportunities. (RR III, 128-131).
opportunities. (RR

Rivera acknowledged
acknowledged signing
signing the Agreement
Agreement and that it contained a merger

clause, i.e.,
clause, he signed
i.e., that he signed itit without
without relying
relying on
on any
any prior
priorororcontemporaneous
contemporaneous

representations outside the terms
terms of
of the
the Agreement.
Agreement. (RR III, 132-135).

On June 20,
On June 20, 2017,
2017, the parties tried
the parties tried the
the case
case nonjury. In the
nonjury. In the process
process of

rendering judgment and announcing her decision, Judge Guadalupe Rivera agreed

that EJ
that EJ Madison's
Madison’s introduction
introduction of
of EL
ELHollingsworth
Hollingsworth to
to Pro-Tech
Pro-Tech constituted
constituted

confidential information.
confidential information. (RR III, 192).
(RR III, 192). Nevertheless,
Nevertheless, she
she determined
determined that
that

introduction did not relate to the Project,
introduction Project, i.e., the conversion
conversion process and, further,

Agreement did not
that the Agreement not prevent
prevent Pro-Tech
Pro-Tech from
from "conducting
“conducting its business
business as

usual.” (RR
usual." (RR III,
III, 193).

12
 SUMMARY OF THE ARGUMENT

Madison, LLC and Pro-Tech,
EJ Madison, Pro-Tech, Inc. entered
entered into
into an
an unambiguous
unambiguous Non-
Non-

Disclosure and Non-Circumvention Agreement (the “Agreement”)
"Agreement") which protected

the disclosure,
the disclosure, and limited the
and limited the use
use of,
of, trade
trade secret
secret information
information EJ
EJ Madison
Madison

furnished to
furnished to Pro-Tech
Pro-Tech to
to only
only that
that which
which was
was project-related.
project-related. In reliance on the

Agreement, EJ
Agreement, Madison disclosed
EJ Madison disclosed the identity of
the identity of its
itscustomer/contact
customer/contact EL
EL

Hollingsworth to
Hollingsworth Pro-Tech, and thereafter
to Pro-Tech, thereafter Pro-Tech
Pro-Tech began
began doing
doing non-project
non-project

related business with EL Hollingsworth.

The trial court rendered judgment against EJ Madison finding the disclosure

its relationship
of its relationship with EL Hollingsworth
Hollingsworth was
was not protected because
not protected because itit did not

relate to the Project, i.e., conversion of diesel-powered vehicles to duel fuel.

The Agreement
The Agreement can
can only
only reasonably
reasonablybe
be read
read such
such that protects EJ
that it protects EJ

Madison’s disclosure
Madison's disclosure of its trade secret information pursuant
pursuant to
to the
the Agreement.
Agreement. To

interpret it only to protect information
interpret information used
used to evaluate
evaluate the
the project
project or that can be

said to be related to the conversion
conversion process results in provisions of the Agreement

being rendered meaningless and the Agreement itself rendered worthless.

The trial court’s findings of
court's findings of fact
fact and
and conclusions of law in this regard should

be disregarded, and the case reversed and remanded.

13
 ARGUMENT AND AUTHORITIES

I. Standard
Standard of
of review.
review.

A. Nonjury Trial

Findings of fact may be requested in “any
"any case tried in the district or county

court without
court without aa jury.” Tex. R. Civ. Proc.
jury." Tex. Proc. 296. A case
296. A case is
is "tried"
“tried” when
when there is a

hearing before the court on conflicting evidence. Besing v. Moffit, 882 S.W.2d 79,

App.—Amarillo 1994, no writ). Timmons
81-82 (Tex. App.—Amarillo Timmons v. Luce, 840 S.W.2d 582,

586 (Tex. App.—Tyler 1992, no writ).

Findings of Fact

A trial
A trial court's
court's findings
findings of fact
fact are
are reviewable
reviewable for
for legal
legal and
and factual
factual

sufficiency of
sufficiency of the evidence
evidence by the same
same standards
standards that are
are applied
applied in
in reviewing
reviewing

evidence supporting
evidence supporting a jury's answer.
answer. Catalina
Catalina v. Blasdel, S.W.2d 295, 297
Blasdel, 881 S.W.2d

(Tex. 1994); Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991);

see also MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 663 n.3
v. Woodlands

(Tex. 2009). In
In aafactual
factual sufficiency
sufficiency review,
review, the
the court
court reviews
reviews all the evidence and

may reverse the decision
decision of the trial court only if its ruling is so against the great

weight and preponderance of the evidence as to be manifestly erroneous or unjust.

Estate of Judd,
Estate S.W.3d 436 (Tex.
Judd, 8 S.W.3d (Tex. App.—El
App.—El Paso
Paso 1999, no pet.)
pet.) (citing
(citing In re

King’s 662, 664-65,
Estate, 150 Tex. 662,
King's Estate, 664-65, 244 S.W.2d
S.W.2d 660, 661
661 (1951);
(1951); Runnels
Runnels v.

849 (Tex.
Firestone, 746 S.W.2d 845, 849 (Tex. App—Houston
App—Houston [14th Dist.], writ denied,
denied,

14
760 S.W.2d
760 S.W.2d 240
240 (Tex.
(Tex. 1988). When aa reporter's
1988). When reporter’s record
record is
is part
part of
of the
the appellate
appellate

record, findings
record, findings of fact are not
not conclusive
conclusive on appeal,
appeal, even
even ifif unchallenged.
unchallenged. Zac

Smith
Smith & Co. v. Otis
Otis Elevator
Elevator Co., S.W.2d 662, 666 (Tex.
Co., 734 S.W.2d (Tex. 1987);
1987); Estate of

Judd, 8 S.W.3d at 441.

In reviewing such a point, the court
court considers
considers and weighs all the
the evidence,
evidence,

both the evidence that tends to prove as well as the evidence that tends to disprove

existence. Id. (citing Ames
its existence. Ames v. Ames, 158-159 (Tex. 1989),
Ames, 776 S.W.2d 154, 158-159 1989),

denied, 494
cert. denied, 494 U.S.
U.S. 1080,
1080, 110
110 S.Ct.
S.Ct. 1809,
1809, 108
108 L. Ed. 2d 939
939 (1990);
(1990); Cain v.

Bain, 709 S.W.2d 175, 176 (Tex.
(Tex. 1986). So, considering
1986). So, considering the evidence, if a finding

so contrary
is so contrary to the
the great
great weight
weight and
and preponderance
preponderance of
of the evidence as
the evidence as to be

manifestly unjust,
manifestly unjust, the
the point should be sustained,
point should sustained, regardless
regardless of whether there
of whether there is

some evidence to support it. Id. (citing Watson v. Prewitt, 159 Tex. 305, 305, 320

S.W.2d 815, 816 (1959); In re King's Estate, 244 S.W.2d at 661).

In a legal sufficiency or "no
“no evidence"
evidence” review, the court may sustain a legal

sufficiency challenge
sufficiency challenge only
only when
when (1)
(1) the record discloses
discloses a complete
complete absence
absence of

evidence of a vital fact, (2) the court is barred by rules of law or of evidence from

giving weight
giving weight to the only evidence
evidence offered
offered to prove a vital fact, (3) the
the evidence
evidence

offered to prove
offered prove a vital fact is no
no more
more than
than aa mere
mere scintilla,
scintilla, or (4)
(4) the
the evidence
evidence

establishes conclusively
establishes conclusively the
the opposite
opposite of
of a vital fact. Ford Motor Co. v. Castillo,
Ford Motor Castillo,

S.W.3d 616, 620 (Tex. 2014) (op. on reh'g);
444 S.W.3d reh'g); Uniroyal
Uniroyal Goodrich
Goodrich Tire
Tire Co.
Co. v.

15
Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert. denied, 526 U.S. 1040 (1999). In

determining whether
determining whether there
there is legally sufficient
is legally sufficient evidence
evidence to support the finding
to support finding

under review,
under review, the court must
the court must consider
consider evidence
evidence favorable
favorabletoto the
the finding
finding ifif a

reasonable factfinder could and disregard evidence contrary to the finding unless a

reasonable factfinder
reasonable factfinder could
could not. Cent. Ready Mix
Cent. Ready Concrete Co.
Mix Concrete Islas, 228
Co. v. Islas,

S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827

(Tex. 2005).

When the court sustains a legal sufficiency issue, it has a duty to render

judgment for the appellant because that is the judgment the trial court should have

rendered. Vista Chevrolet, Inc.
Vista Chevrolet, S.W.2d 176, 176 (Tex.
Lewis, 709 S.W.2d
Inc. v. Lewis, (Tex. 1986);
1986); see

Tex. R. App. P. 43.3.

Conclusions of Law

The legal
The legal conclusions
conclusions of
of the trial court
the trial court are not
not binding
binding on
on the
the appellate
appellate

court; appellate
court; appellate courts
courts are
are free
free to draw
draw their
their own
own legal
legal conclusions
conclusions and
and review
review

those conclusions
those conclusions de novo.
de novo. Hydrocarbon
Hydrocarbon Management,
Management,Inc.
Inc. v. Tracker
v. Tracker

Exploration, Inc., 861 S.W.2d 427, 431 (Tex. App.—Amarillo 1993, no writ); see

also Austin Hardwoods, Inc. v. Vanden Berghe, 917 S.W.2d 320, 322 (Tex. App.—

El Paso 1995, writ denied).

16
 Contract Law

When a contract is susceptible
When susceptible to a legal
legal meaning,
meaning, the construction
construction of the

written instrument
instrument is one of law for the court. Id. When parties disagree over the

meaning of an unambiguous
meaning unambiguous contract,
contract, the
the court
court must
must determine
determine the
the intent
intent of the

parties. This
parties. This determination
determination must be based
based on
on the
the objective
objective intent of the
the parties
parties

expressed in
expressed the agreement,
in the agreement, and
and not
not their
theirpresent
presentinterpretation.
interpretation. Austin

Hardwoods, Inc., 917 S.W.2d at 323.

FINDINGS OF FACT

II. There is legally and factually insufficient evidence to support the
court’s lack of finding that the introduction of EL Hollingsworth to Pro-
court's
Tech constituted disclosure of EJ Madison's
Madison’s confidential information to
Pro-Tech. [Amended finding No. 3]

III. There is legally and factually insufficient evidence to support the
court’s factual
court's factual finding
finding No.
No. 66 that
that the "Project"
“Project” was
was the
the basis
basis of the
Agreement.

IV.
IV. There is legally and factually insufficient evidence to support the
court’s factual
court's factual finding
finding No.
No. 7 that the
the language
language of the
the Agreement
Agreement does
not reflect that services not related to the conversion process constituted
trade secrets.

V. There is legally and factually insufficient evidence to support the
court’s factual finding No. 8 that there
court's there was
was no
no additional
additional consideration
consideration
provided by
provided Plaintiff to
by Plaintiff to Defendant
Defendant that
that would
would make
make non-"Project"
non-“Project”
services covered by the Agreement.

VI. There is legally and factually insufficient evidence to support the
court’s factual
court's factual finding
finding No. 9 that
that the
the services
services provided
provided by
by Defendant
Defendant
Hollingsworth are
E.L. Hollingsworth are those
those known
known in the industry,
industry, e.g., oil changes,
changes,
windshield
windshield wiper
wiper replacements,
replacements, and
and do not constitute trade secrets nor
confidential information as intended by the Agreement.
17
 VII. There is legally and factually insufficient evidence to support the
court’s factual finding
court's finding No. 10 that
that Plaintiff
Plaintiff did not
not provide
provide Defendant
Defendant
with a written copy of its customer
customer list and EL Hollingsworth
Hollingsworth is
is not a
customer of Plaintiff.

VIII. There is legally and factually insufficient evidence to support the
court’s factual finding
court's finding No.
No. 11 that Plaintiff
Plaintiff is not entitled
entitled to any of the
profits generated
profits generated by Defendant
Defendant for
for non-"Project"
non-“Project” services
services Defendant
Defendant
2
provided to E.L. Hollingsworth. 2

A. The Agreement

The Agreement provides in pertinent part:

RECITALS:

trucking company
EJM is a trucking company and Pro Tech is in the business of
truck maintenance
truck maintenance and repair, including,
and repair, including, among
among other
other things,
things,
converting trucks from diesel powered operation to dual
converting dual CNG/diesel
CNG/diesel
powered operation.
powered Pro Tech
operation. Pro Tech and
and EJM
EJM have
have entered
entered into
into discussions
discussions
with each other in connection with prospective business arrangements
and/or opportunities
and/or opportunities involving
involving the following
following commercial
commercial project:
project:
conversion of trucks, including
conversion including without
without limitation,
limitation, trucks owned by
trucks owned
EJM/its related
EJM/its related companies,
companies, from
from diesel powered operation
diesel powered operation to dual
to dual
CNG/Diesel powered
powered operation
operation (the
(the‘Project’).
'Project').

IV, Plt.'
(RR IV, Plt.’s Ex.1)
s Ex. 1)(Recitals
(Recitals91
¶ 1).

[I]n order to evaluate
[I]n evaluate the feasibility
feasibility of the Project,
Project, EJM
EJM will
will
provide to Pro
provide Pro Tech
Tech confidential
confidential financial
financial and
and business
business information
information
concerning EJM’s
concerning business plans,
EJM's business plans, financing
financing sources,
sources, sales,
sales, margins,
margins,
profits, customers,
profits, customers, marketing
marketing programs
programs and plans, new
and plans, new product
product
developments, contractual
developments, contractualrelationships
relationshipsasas well
well asas proprietary
proprietary
information concerning
information concerning product technology, software,
product technology, secrets,
software, trade secrets,
product development,
product development, new
new product
product ideas
ideas and new applications
and new applications for

2
2 and factual
The legal and factual sufficiency
sufficiency of Findings of Fact Nos. 6-11
6-11 and
and Amended
Amended Finding
of Fact No. 33 will
will be
be argued
argued together
together as
as they
they depend
depend upon
upon aa review
review of
of Agreement
Agreement for their
their
resolution. Austin Hardwoods, Inc., 917 S.W.2d at 323.
18
 existing products and technology, all of the foregoing being hereafter
referred to as ‘Confidential
'Confidential Information.’
Information.'

Plt.’sEx.
(RR IV, Plt.'s Ex.1)1)(Recitals
(Recitals91¶ 2).

EJM has agreed to furnish such Confidential Information to the
Pro Tech to allow Pro Tech the opportunity to evaluate the feasibility
the Project,
of the Project, but
but only
only on
on the
the condition
condition that
that both
both the
the Confidential
Confidential
Information, and
Information, and all documents derived
all documents derived from containing the
from or containing the
Confidential Information be maintained confidential and used only as
allowed under this Agreement.

(RR IV, Plt.'s
Plt.’sEx.
Ex.1)
1)(Recitals
(Recitals91
¶ 3)
3) (emphasis
(emphasis added).

AGREEMENT:

1. Non-Disclosure, Non-Use
Non-Disclosure, Non-Use andand Non-Circumvention.
Non-Circumvention. Pro
Tech shall:
Tech shall: (a)
(a) keep
keep EJM'
EJM’s Confidential Information
s Confidential Information in strict
in strict
confidence; (b)
confidence; (b) protect
protect itit with
with the
the same
same degree
degree of of care
care as the Pro
own Confidential
Tech treats its own Confidential Information;
Information; (c)(c) not without the
prior written consent of EJM, disclose or permit it to be discloseddisclosed
anyone other
to anyone other than
than Pro
ProTech'
Tech’s directors, officers,
s directors, officers, employees,
employees,
agents or
agents consultants who
or consultants who have
have a legitimate
legitimate need
need to know the
to know the
Confidential Information
Information for the Pro Tech to negotiate, participate
in, or perform services with respect to the Projects; (d) will not use,
and will not
and not permit
permit its
its directors,
directors, officers,
officers, employees,
employees, agents
agents or
consultants to
consultants the Confidential
to use, the Confidential Information
Information for reason
for any reason
other than
other than for
for the
the Project;
Project; andand (e)
(e) not
not circumvent
circumvent EJMEJM in in
connection with the Confidential Information.

IV, Plt.'
(RR IV, Plt.’s Ex. 1)
s Ex. 1)(Agreement
(Agreement91
¶ 1).

Findings of Fact Nos. 3 and 6

In its Finding of Fact No. 3, the trial court found:

After entering into the Agreement, EJ Madison introduced Pro-
Tech to EL Hollingsworth,
Hollingsworth, a Michigan
Michigan company that operates diesel
vehicles in Michigan,
Michigan, with
with subsequent
subsequent operations
operationsin
in Texas.
Texas. Based on
maintenance service on
this introduction, Pro-Tech began providing maintenance

19
 Hollingsworth trucks,
EL Hollingsworth including oil changes, tire and windshield
trucks, including windshield
replacements.

(CR II, 5). InInresponse,
(CR response,Appellant
Appellant filed
filed its
its "Plaintiff's
“Plaintiff’s Request
Request for

Amended Findings
Amended Findings of
of Fact
Fact and
andConclusions
ConclusionsofofLaw.
Law. (CR
(CR II,
II, 8). Appellant
8). Appellant

requested the following amended Finding of Fact No. 3.:

[Amended] 3. After
[Amended] After entering
entering into
into the
the Agreement,
Agreement, EJEJ Madison
Madison
introduced Pro-Tech
introduced Pro-Tech to EL Hollingsworth, a Michigan company that
operates diesel
operates vehicles in Michigan,
diesel vehicles Michigan, with subsequent
subsequent operations
operations in
Texas. The introduction
The introduction of EL Hollingsworth
of EL Hollingsworth to to Pro-Tech
Pro-Tech
constituted disclosure
constituted disclosure of EJ Madison's
Madison’s confidential
confidential information
information to
Pro-Tech. Based this introduction,
Based on this introduction, Pro-Tech
Pro-Tech began
began providing
providing
maintenance service
maintenance service on EL Hollingsworth
on EL Hollingsworth trucks,
trucks, including
including oil
oil
3
changes, tire and windshield replacements.
replacements.'

(CR II, 8). Thus,
Thus,Appellant
Appellant can
can challenge
challenge lack of this finding. See e.g., Vickery v.

Commission for Lawyer Discipline, 5 S.W.3d 241, 254 (Tex.App.—Houston [14th

Dist.] 1999, pet. denied).
denied). Judge
Judge Guadalupe
Guadalupe specifically
specifically found on the record that

the introduction
the introduction of EL
EL Hollingsworth
Hollingsworth constituted
constituted EJ
EJ Madison's
Madison’s confidential
confidential

information. (CR
information. (CR II,
II, 192-193).
192-193). The
Theabove
aboveamended
amended requested
requested finding
finding of fact
fact

conforms the
conforms the findings
findingstoto the
the trial
trial court’s
court's ruling
ruling on
on the record. Moreover,
the record. Moreover, as

discussed below,
discussed below, there
there is
is no question
question but that
that when
when EJ
EJ Madison
Madison introduced
introduced EL

Hollingsworth to Pro-Tech it disclosed confidential information that was protected

and limited in the manner it could be used by Pro-Tech.

In its Finding of Fact No. 6, the trial court found:

33
33 The language in bold is the proposed language amending the finding.
20
 The "Project"
“Project” i.e.,
i.e., the
the conversion
conversion of
of diesel
diesel powered
powered trucks to
dual CNG/Diesel
dual CNG/Diesel powered
poweredvehicles
vehicles waswasthethebasis
basis of the
of the
Confidentiality and Non-disclosure agreement executed by the parties.

(CR II, 5).

A review of the language
language of
of the
the Agreement
Agreement as
as set
set forth
forth above
above reveals:
reveals: (1)

Madison and Pro-Tech
EJ Madison Pro-Tech "entered
“entered into
into discussions
discussions with each
each other
other concerning
concerning

prospective business arrangements and/or opportunities
prospective involving the [Project]"
opportunities involving [Project]”

Plt.’s Ex.
(RR IV, Plt.'s Ex. 1)
1) (Recitals
(Recitals 91
¶ 1)
1)(emphasis
(emphasisadded);
added);(2) “[I]n order to evaluate
(2) "[I]n

the feasibility of the Project,
Project, EJM will
will provide
provide to
to Pro
Pro Tech
Tech confidential
confidential financial
financial

and business
and business information
information concerning
concerningEJM’s
EJM's. . .. . financing sources.. .. . profits,
financing sources

customers . . . plans, new product developments, contractual relationships as well
customers

concerning .. .. . trade
as proprietary information concerning secrets .. .. . all of the
trade secrets the foregoing
foregoing

being hereafter
being hereafter referred
referredtotoas
as ‘Confidential
'ConfidentialInformation’”
Information' (RR
(RR IV,
IV, Plt.’s
Plt.'s Ex. 1)

¶ 2)2)(emphasis
(Recitals 91 (emphasisadded);
added);(3)
(3)“EJM
"EJM has
has agreed
agreed to
to furnish such Confidential

Information to
Information to .. . . Pro
Pro Tech
Tech to
to allow
allow Pro
Pro Tech
Tech the
the opportunity
opportunity to
to evaluate
evaluate the

feasibility of
feasibility of the Project,
Project, but only
only on
on the
the condition
condition that
that both
both the
the Confidential
Confidential

Information .. . .. be
Information be maintained
maintained confidential
confidential and used only as allowed
allowed under this

Agreement” (RR
Agreement" Plt.’s Ex.
(RR IV, Plt.'s Ex. 1)
1)(Recitals
(Recitals91
¶ 3)
3) (emphasis
(emphasis added);
added); and
and (4) "Pro
“Pro

Tech shall: (a)
(a) keep
keep EJM's
EJM’sConfidential
Confidential Information
Information in
in strict
strict confidence . . . [and]

will not use . . . the Confidential Information for any reason other than the Project

21
 [and] not circumvent EJM in connection
. . . . [and] connection with the
the Confidential
Confidential Information."
Information.”

(RR IV, Plt.’s Ex. 1)
Plt.'s Ex. 1) (Agreement911)
(Agreement ¶ 1) (emphasis added).

In the instant case, there is no question but that the parties disagree as to the

meaning of
meaning the Agreement
of the Agreement and
and the scope of the
the scope the protection
protection provided
provided for EJ
for EJ

Madison’s confidential
Madison's confidential information vis-à-vis
vis-à-vis the
the Project. EJ Madison
Project. EJ Madison asserted that

Agreement restricted
the Agreement restricted use of
of the
the confidential
confidential information
information to
to "project-related
“project-related

business,” i.e.,
business," i.e., that Pro-Tech “was
that Pro-Tech permitted to use
"was not permitted use the
the EL
ELHollingsworth
Hollingsworth

contact [or any other protected
protected information]
information] for
for anything
anything outside
outsidethe
theproject.”
project." (RR

IV, Plt.'s
III, 26) (RR IV, Plt.’s Ex.
Ex. 1)
1)(Agreement
(Agreement 91
¶ 1(d)). On the
1(d)). On the other
other hand,
hand, Pro-Tech
Pro-Tech

purported to
purported assert that the
to assert the confidential
confidential information
information was
was protected
protected only
only to
to the

limited extent
limited extent necessary
necessary to evaluate the
the Project,
Project, (RR
(RR III, 41-44), or
III, 41-44), the
or if the

confidential information
confidential information specifically
specifically related the subject
related to the subject of
of the
the project—
project—

conversion of diesel
diesel trucks
trucks to
to duel
duel fuel.
fuel. (RR III, 191-193; see also R III, 9-12 (the

argument of defendant’s
defendant's counsel).

When parties
When parties disagree
disagree over
over the meaning
meaning of an
an unambiguous
unambiguous contract,
contract, the

court must determine
determine the
the intent
intent of
of the
the parties. This determination
parties. This determination must be based
based

the objective
on the objective intent
intent of the
the parties
parties expressed
expressed in the
the agreement,
agreement, and not their
their

present interpretation. The construction
interpretation. The construction of an
an unambiguous
unambiguous contract is a question
question

of law for the court. To
To determine
determine the
the objective
objective intent
intent of the parties, a court should

examine the
examine the entire
entire instrument
instrumentin
in an
an effort
effort to harmonize and
to harmonize and give
give effect
effect to all

22
provisions of
provisions the contract
of the contract so that
that none
none will
will be
berendered
rendered meaningless.
meaningless. Austin

Hardwoods, Inc., 917 S.W.2d at 323.

Pro-Tech’ss interpretation
Here, Pro-Tech' interpretationand
and the
the trial
trial court’s finding wholly
court's finding wholly fails to

recognize, much
recognize, much less
less harmonize
harmonize and
and give
give effect
effect to, all provisions of the contract
contract

such that multiple
such multiple provisions
provisions are
are rendered
rendered meaningless. First, by limiting
meaningless. First, limiting the

Project renders the "non-use"
scope of protection to evaluation of the Project “non-use” and "non-
“non-

circumvention” provisions
circumvention" provisionsineffective.
ineffective. Paragraph
Paragraph33 of
of the
the Recitals
Recitals in first
in the first

instance provides that the confidential information is being furnished on condition

that itit "be
that “bemaintained
maintained confidential
confidential and
and used
used only
only as
as allowed under this
allowed under this

Agreement.” (RR
Agreement." (RR IV, Plt.’s Ex.
IV, Plt.'s Ex. 1)
1)(Recitals
(Recitals 91
¶ 3)
3) (emphasis
(emphasis added). Thereafter,
added). Thereafter,

paragraph 1. "Non-Disclosure,
paragraph “Non-Disclosure, Non-Use
Non-Use and
and Non-Circumvention"
Non-Circumvention” independently
independently

provides that Pro-Tech
provides Pro-Tech "keep
“keep the
the "Confidential
“Confidential Information
Information in strict
strict confidence
confidence

[and] (d) . . . not use . . . the Confidential Information for any reason other than the

Project.. .. . and
Project and (e) not circumvent
circumvent EJM
EJM in connection
connection with
with the
the Confidential
Confidential

Information." (RR IV, Plt.'s
Information.” Plt.’s Ex.
Ex. 1)
1)(Agreement
(Agreement 91
¶ 1(d)(e))
1(d)(e))(emphasis
(emphasisadded).
added). To

Pro-Tech’ss interpretation not only renders the above provisions meaningless
accept Pro-Tech'

but effectively renders
renders the Agreement
Agreement worthless
worthless as Madison
as it would provide EJ Madison

no protection whatsoever. Thus, whether
whatsoever. Thus, whether Pro-Tech
Pro-Tech "evaluates"
“evaluates” the Project in good

pursuant according
faith or continues-on pursuant according to the original purpose of the disclosure
disclosure

the protected
of the protected information,
information, according
according to
to Pro-Tech,
Pro-Tech, itit is thereafter to use
is free thereafter

23
whatever confidential/proprietary/trade
whatever confidential/proprietary/trade secret
secret information
informationitit has
has received
received as long

evaluate the project or did not
as same was not used to evaluate not specifically
specifically pertain to the

subject of the Project—here related
related to
to conversion.
conversion. Thus, it matters not whether the

information is otherwise EJ Madison’s proprietary or trade secret information, i.e.,
Madison's proprietary

Confidential Information
Confidential Informationasas provided
provided in the Agreement.
in the Agreement. Obviously,
Obviously, the

Agreement cannot
Agreement cannot reasonably
reasonably be interpreted to leave
be interpreted leave otherwise
otherwise protected
protected

information unprotected
information unprotectedsimply
simplybecause
becausethe
the receiving
receivingparty
party describes
describes itit as

unnecessary to
unnecessary to evaluation
evaluation of
of the Project and/or
the Project and/or as unrelated
unrelated to what the
the parties
parties

originally described
originally describedasasthe
the Project.
Project. ItIt isisonly
onlynecessary
necessary that
that the
theconfidential
confidential

information was
information was disclosed
disclosed pursuant
pursuant to
to the Agreement
Agreement and be confidential
and that it be confidential

information. IfIf so,
information. so,the
thereceiving
receiving party
party (Pro-Tech)
(Pro-Tech) can
can neither
neither use
use nor
nor circumvent
circumvent

the confidential
the disclosing party (EJ Madison) as to the confidential information and can only

use it for
use for Project-related
Project-related purposes. As Mitchell
purposes. As Mitchell testified, “The project
testified, "The project in the
the

Agreement defines
Agreement definesthe
thereason
reasonwhy
whythe
the parties
partiesbegan
begantoto do business in
do business in a

confidential and
confidential andprotected
protectedway,
way,but
butitit doesn’t
doesn't define
definethe
the scope
scope of all the
of all the

information that’s
information that's protected . . .. [t]he
[t]he confidential
confidential information
information that is protected is

listed there
listed there in the first
first part
part of
of the
theagreement
agreement as
as financing
financing sources,
sources, customers
customers et

cetera.” He
cetera." Hefurther
furtherexplained
explained these
these agreements
agreements are drawn this way for the reason

know the
the parties simply do know the opportunities
opportunities that may arise or
or the
the introductions
introductions

that may eventually be made. (RR III, 36)

24
Findings of Fact Nos. 7-11

In its Finding of Fact No. 7, the trial court further found:

It was
was not
not intended
intended nor
nor is there
there any
any language
language in the
the Non-
Non-
Disclosure
Disclosure Non-Circumvention
Non-Circumvention Agreement
Agreementreflecting
reflecting an
an intent
intent that
services not
services related nor
not related nor arising
arising from
from the
theconversion
conversion process
process
constituted trade
constituted secrets or
trade secrets or confidential
confidential financial
financial and
and business
business
information.

(CR II, 5-6).

In its Finding of Fact No. 8, the trial court further found:

There was no additional consideration provided
provided by Plaintiff to
Defendant
Defendant that would make
that would make non-Project
non-Project services
services covered
covered by the
by the
Agreement.

(CR II, 6).

In its Finding of Fact No. 9, the trial court further found:

The services provided by Defendant to E.L. Hollingsworth
Hollingsworth are
those known
those known in thethe industry,
industry, e.g.,
e.g., oil
oilchanges,
changes, windshield
windshield wiper
wiper
replacements,
replacements, and
and do constitute trade
do not constitute trade secrets
secrets nor
nor confidential
confidential
information as intended by the Agreement.

(CR II, 6).

In its Finding of Fact No. 10, the trial court further found:

Plaintiff
Plaintiff did
did not provide Defendant
not provide Defendant with
with aa written
written copy
copy of its
customer list, and EL Hollingsworth is not a customer of Plaintiff.

(CR II, 6).

In its Finding of Fact No. 11, the trial court further found:

25
 Plaintiff
Plaintiff isis not entitled to
not entitled any of
to any of the
the profits
profits generated
generated by
by
Defendant
Defendant for non-“Project” services
for non-"Project" services Defendant
Defendant provided
provided to E.L.
E.L.
Hollingsworth.

(CR II, 6).

Again, to determine whether there is legally and factually sufficient evidence

supporting the
supporting the above
above findings,
findings, it is necessary to review the entire
entire Agreement,
Agreement, to

harmonize and
harmonize and give
give effect
effect to
to all its provisions
all its provisions so that
that none
none will
will be
be rendered
rendered

meaningless. Austin Hardwoods, Inc., 917 S.W.2d at 323.

contractual language set forth above quite simply does not
A review of the contractual

even refer
even refer to or
or purport
purport to
to address,
address, much
much less
less define,
define, Pro-Tech’s
Pro-Tech's services “not
services "not

related nor arising from the conversion
related conversion process"
process” or that
that same
same "constituted
“constituted trade
trade

secrets” or other protected
secrets" protected information
information of
of EJ
EJ Madison.
Madison. (CR II, 5-6) (FOF No. 7).

Further, it appears the trial court conflated the Agreement’s
Agreement's restrictions in the non-

non-circumvention provisions
use and non-circumvention provisions with traditionally considered non-
with what is traditionally

competition clauses.
competition clauses. As Mitchell
Mitchell made
made clear,
clear, while
while non-competition
non-competition agreements
agreements

are narrowly construed
construed because
because they constrain productive
productive activity
activity (what
(what the trial

court appears
court appears to addressing in
to be addressing in findings
findings 7,
7, 9 and 11),
11), (RR
(RR III,
III, 16-17);
16-17); non-
non-

non-circumvention agreements
disclosure and non-circumvention agreements are broadly construed because they

protect things
protect things known
known to
to the parties —
the parties the protected
— the protected party's
party’s interest
interest in his
in his

contractual agreements,
agreements, his customers,
customers, his financing sources — things considered

secret and proprietary. (RR III, 17, 168-170).
proprietary. (RR

26
 Here, the Agreement
Here, Agreement in no way
way restricts
restricts Pro-Tech'
Pro-Tech’ss ability
ability to perform its

usual services,
usual services, whether
whether they be
be oil
oilchanges/windshield
changes/windshield wiper
wiper replacement,
replacement, it

Pro-Tech’ss unauthorized
simply prohibits Pro-Tech' unauthorized use
use (in
(in whatever
whatever form
form that may take) of

Madison’s confidential
EJ Madison's confidential trade secret information outside of the Project and/or to

circumvent EJ
circumvent Madison. (RR
EJ Madison. (RRIV,
IV,Plt.'s
Plt.’sEx.
Ex.1)1) (Recitals
(Recitals 91¶1-3)
1-3)(Agreement
(Agreement91
¶

TheAgreement
1(d)(e)). The Agreement restricted
restricted use
use of
of the
the confidential
confidential information to "project-
“project-

related business,”
related business," i.e., Pro-Tech
Pro-Tech “was the EL
"was not permitted to use the EL Hollingsworth
Hollingsworth

contact for
contact for anything
anythingoutside
outsidethe
theproject.”
project." (RR
(RR III,
III, 26);
26); (RR
(RR IV,
IV, Plt.’s Ex. 1)
Plt.'s Ex.

(Agreement ¶911(d)(e)).
(Agreement 1(d)(e)). Additionally,
Additionally,Pro-Tech
Pro-Techwas
was free
free to
to do business with EL
do business

Hollingsworth inin whatever
Hollingsworth whateverform
formas
as long
long as it obtained
as it obtained EJ
EJ Madison's
Madison’s written
written

(R III,
authorization. (R III, 87, 165-166).

The record here contains
The contains ample
ample evidence
evidence that EJ
EJ Madison's
Madison’s relationship
relationship

with EL Hollingsworth constituted its valuable trade secret information whether as

a customer, financial partner or contractual
contractual relationship
relationship and that the
the introduction
introduction

was made only after EJ Madison and EL Hollingsworth had entered into their own

confidentiality and
confidentiality and non-circumvention
non-circumventionagreement.
agreement. Further, EJ Madison made the

introduction to Pro-Tech in reliance
introduction reliance on
on Pro-Tech'
Pro-Tech’ss promises in the Agreement—
Agreement—

and would not have made
made itit otherwise
otherwise (RR
(RR III,
III, 65,
65, 67,
67, 68,
68, 69). Again, because of
69). Again,

considerable time
the considerable money aa company
time and money company spends
spends to
to develop
develop relationships,
relationships,

contractual relationships,
contractual relationships, customers
customersand/or
and/or contacts,
contacts,itit is
is imperative,
imperative, and
and was
was to

27
Warren and EJ Madison, that same
same remain
remain protected
protected trade
trade secret
secret information.
information. (RR

III 69).
III 69). Furthermore,
Furthermore, the
theTUTSA
TUTSAprotects
protects broad
broadcategories
categories of
ofinformation
information

(including potential
(including potential customers)
customers)where
wherethe
theowner
ownerof
of the trade secret
the trade secret has taken
taken

reasonable measures
reasonable measures to
to keep
keep the information
information secret
secret and the information
information was not

generally known
generally known to
to the person
person to who is in aa position
position to
to derive
derive economic
economic benefit
benefit

it.44
from it.

There is simply
There simply no
no question
question but
but that
thatEL
ELHollingsworth
Hollingsworth constituted
constituted EJ
EJ

Madison’s trade
Madison's trade secret
secret information
information (as its
its customer
customer or
or potential
potential customer),
customer), which

Madison had taken reasonable
EJ Madison reasonable efforts
efforts to protect
protect (via the Agreement
Agreement and the

timing of the
timing the disclosure),
disclosure), that the
the information
information was
was previously
previously unknown
unknown to Pro-
Pro-

Tech, and from
from which
which itit stood,
stood, and
and did,
did,derive
deriveeconomic
economicbenefit.
benefit. (RR III, 65, 67,

68, 69, 83, 124, 140-141) (RR IV,
IV, Plt.’s
Plt.'s Ex. 5).

Therefore, as
Therefore, as to Findings Nos.
to Findings Nos. 7, 11, reviewing
7, 9 and 11, reviewing the instrument
instrument as a

whole in
whole in an effort
effort to
to harmonize
harmonize and give effect
and give effect to all the
to all the provisions
provisions of
of the
the

4
4 The Texas Uniform Trade Secret Secret Act
Act defines
defines “trade
"trade secret”
secret" as: "Trade secret" means all forms
as: "Trade
types of
and types of information,
information, including
including business,
business, scientific,
scientific, technical,
technical, economic,
economic, or or engineering
engineering
information, and
information, formula, design,
and any formula, design, prototype,
prototype, pattern,
pattern, plan,
plan, compilation,
compilation, program
program device,
device,
program, code, device, method, technique, process, procedure, financial data,
technique, process, procedure, financial data, or or list of actual or
potential customers
potential customers or or suppliers,
suppliers, whether
whether tangible
tangible or
or intangible
intangible and whether or how
and whether how stored,
stored,
compiled, or memorialized physically, electronically, graphically, photographically, or in writing
the owner
if: (A) the owner ofof the
the trade
trade secret
secret has
has taken
taken reasonable
reasonable measures
measures under
under the
the circumstances
circumstances to
keep the information secret; and (B) the information derives independent economic value, actual
potential, from not being
or potential, being generally
generally known to, and and not
not being
being readily
readily ascertainable
ascertainable through
through
proper means
means by, another person
person who can obtain economic
economic value
value from
from the disclosure
disclosure or use of
the information. Tex.
Tex. Civ.
Civ. Prac.
Prac. && Rem.
Rem. Code § 134A.002(6).

28
Agreement, the
Agreement, the restrictions
restrictions relate
relate not Pro-Tech’ss services,
not to Pro-Tech' services, but rather, EJ
but rather, EJ

Madison’s trade
Madison's trade secret information.

Furthermore, as
Furthermore, as to Finding
Finding No. 8, because
because the Agreement
Agreement neither refers to

Pro-Tech’ss ability to provide services outside the Project as
nor purports to restrict Pro-Tech'

long it does
long does not
not violate
violate the
thenon-use
non-use orornon-circumvention
non-circumvention provisions,
provisions, to assert
assert

“additional consideration"
"additional consideration” was required improperly
improperly supplies
supplies terms not contained
contained

within the Agreement and which are outside
outside the record.'5
the record.

Likewise, in regard to Finding No. 10, the Agreement does not require that

Madison provide
EJ Madison provide to
to Pro-Tech
Pro-Tech“a
"a written
writtencopy
copyofofits
its customer
customerlist.” the
list." On the

contrary, the Agreement protects the disclosure, in whatever
whatever form,
form, of
of EJ
EJ Madison’s
Madison's

confidential information.
confidential information.(RR
(RRIV,
IV, Plt.’s
Plt.' s Ex.Ex.
1) 1) (Recitals
(Recitals ¶¶ 2-3;Agreement
9[912-3; Agreement ¶¶ 1-
9191

Furthermore, as
2). Furthermore, as set
setforth
forthabove,
above,even
evenpotential
potential customers,
customers, and
and arguably
arguably EL

Hollingsworth as a contact,
Hollingsworth contact, potential
potential customer,
customer, customer,
customer, contractual
contractual relationship
relationship

and/or financing partner, constitutes protected trade secret information.
information. See n. 3

supra.

IX. There
Thereis islegally
legallyand
andfactually
factuallyinsufficient
insufficientevidence
evidence to
to support
support the
court’s finding no. 12 that Plaintiff did not incur attorney’s
court's attorney's fees.

5
5 The record is devoid of any evidence at trial regarding any failure of consideration and,
thus, the issue
thus, issue was/is
was/is arguably
arguably not before
before the
the trial
trial court
court or
or this
thisCourt.
Court.Moreover,
Moreover, defendant
defendant
although it pled
although pled lack
lack of
of consideration
consideration failed
failed to
to verify
verify its
itspleading.
pleading.LackLackofofconsideration
consideration for a
contract is an affirmative
contract affirmative defense to its
its enforcement.
enforcement. Mclemon
Mclemon v. Dynegy Inc., 347 S.W.3d 315 (Tex.
App.—Houston [14th
App.—Houston [14th Dist.]
Dist.] 2011, no pet.) (See Tex.R. Civ.
Civ. P. 94; Kaye/Bassman
Kaye/Bassman Intern.
Intern. Corp.
Corp. v. Help
Inc., 321
Desk Now, Inc.,
Desk S.W.3d 806,
321 S.W.3d 806, 814 (Tex.App.-Dallas 2010,
814 (Tex.App.-Dallas 2010,pet.
pet.denied).
denied). It must be pleaded
It must pleaded by
verified denial. Tex.
Tex. R.
R. Civ. Proc. 93(9).
29
 X. There is legally and factually insufficient evidence to support the
court’s lack
court's lack of finding
finding No.
No. 12
12 that
that Plaintiff
Plaintiff alleged
alleged its
its entitlement
entitlement to
attorney’s fees,
attorney's fees, and parties agreed
and the parties agreed that attorney's
attorney’s fees
fees would
would be
proven in a separate
separate hearing.
hearing. [Amended No. 12]

The record conclusively proves the parties stipulated
stipulated that
that attorney’s
attorney's fees would

be addressed
be addressed in
in aa separate
separatehearing.
hearing. (RR
(RR III,
III, 103).
103). ItItappears
appears the
the trial
trial court
court

overlooked the
overlooked the stipulation
stipulationof
ofthe
theparties
partiesininthis
thisregard.
regard. In any event, there is no

evidence support the finding (or lack thereof) or the finding (or the lack thereof) is

against the
against great weight
the great weight and
and preponderance
preponderance such
such that
that the matter should
the matter should be
be

remanded for a hearing
hearing on
on Plaintiff’s
Plaintiff's attorney’s
attorney's fees.

such, there
As such, there is
is simply
simply no
noprobative
probative evidence,
evidence, or
or reasonable
reasonable inferences
inferences

therefrom, which
therefrom, supports the above findings.
which supports findings. Hydrocarbon
Hydrocarbon Management, Inc.,

861 S.W.2d
861 S.W.2d at 431. Thus,
at 431. Thus,the
thefindings
findings are
arelegally
legally insufficient
insufficient to
to support
support the
the

judgment, and
judgment, Appellant’s "no-evidence"
and Appellant's “no-evidence” points should be
points should be sustained.
sustained.

Alternatively, viewing
Alternatively, viewing the
the Agreement
Agreement as
as aa whole,
whole, the
the evidence
evidence supporting
supporting the

findings is so weak and against the great weight and preponderance of the evidence

be clearly
as to be clearly and
and manifestly
manifestly wrong such that same
same are
are factually
factually insufficient
insufficient to

support the judgment. Id.

CONCLUSIONS OF LAW

court erred
XI. The court erred as
as a matter
matter of law in its conclusion
conclusion of law no. 1
breach the
that Defendant did not breach the Non-Disclosure
Non-Disclosure Non
Non Circumvention
Circumvention
Agreement.

30
 XII. The court erred as a matter of law in failing to find, or in its lack
Defendant’s failure to turn over the profits, benefits and
of finding, that Defendant's
proceeds of its commercial relationship with EL Hollingsworth does not
constitute breach
breach of
of fiduciary
fiduciaryduty. [Additional no. 6]
duty. [Additional

court erred
XIII. The court erred as
as a matter
matter of law in its conclusion
conclusion of law no. 2
that there
that there is
is no
no language
language in
inthe
theNon-Disclosure
Non-Disclosure Non
NonCircumvention
Circumvention
Agreement reflecting
Agreement reflecting an
an intent
intent that
that services
services not related to nor arising
not related arising
from the
from the conversion
conversion process
process constitute
constitute trade secrets
secrets or
or confidential
confidential
financial and business information.

court erred
XIV. The court erred as
as a matter
matter of law in its conclusion
conclusion of
of law no. 3
that the terms of the Non-Disclosure Non Circumvention Agreement did
not prohibit Defendant from entering into a business
business relationship with
E.L. Hollingsworth
E.L. Hollingsworth to provide mechanical
to provide mechanical services
services unrelated
unrelated to the
to the
conversion process.

court erred
XV. The court erred as
as a matter
matter of law in its conclusion
conclusion of law no. 4
Defendant did not utilize
that Defendant utilize Plaintiffs'
Plaintiffs’ trade
trade secrets
secrets or
or confidential
confidential
financial and
financial business information
and business information inin entering
entering into
into aa business
business
relationship with E.L. Hollingsworth to provide mechanical services.

court erred
XVI. The court erred as
as a matter
matter of law in its conclusion
conclusion of law no. 5
that Plaintiff's
that Plaintiff’s claim
claimforfor breach
breach of contract fails
of contract fails for lack of
for lack of
consideration.

The legal
The legal conclusions
conclusions of
of the trial court
the trial court are not
not binding
binding on
on the
the appellate
appellate

court; appellate
court; appellate courts
courts are
are free
free to draw
draw their
their own
own legal
legal conclusions
conclusions and
and review
review

those conclusions
those conclusions de novo.
de novo. Hydrocarbon
Hydrocarbon Management,
Management,Inc.
Inc. v. Tracker
v. Tracker

Exploration, Inc., 861 S.W.2d 427, 431 (Tex. App.—Amarillo 1993, no writ); see

also Austin Hardwoods, Inc. v. Vanden Berghe, 917 S.W.2d 320, 322 (Tex. App.—

1995, writ denied).
El Paso 1995, denied). When
When aaparty
party requests
requests findings
findings and
and the
the court
court files
files

them, the court of appeals can presume that omitted findings support the judgment

31
only when (1) an element of the ground of recovery was included in the findings of

fact, (2) the
fact, the omitted
omitted element
element was
was not
not properly
properly requested,
requested, and
and (3) the
the omitted
omitted

finding is supported
supported by
by the
the evidence. Tex. R. Civ. Proc. 299; American Nat’l
evidence. Tex. Nat'l Ins.

Co. v. Paul, 927 S.W.2d 239, 245 (Tex. App.—Austin 1996, writ denied.

Conclusions Nos. 1-5 (and Lack of Finding as to Breach of fiduciary Duty)

In its Conclusion of Law No. 1, the trial court found:

Defendant
Defendant did not breach
did not breach the
the Non-Disclosure
Non-Disclosure Non
Non Circumvention
Circumvention
Agreement.

(CR II,
(CR II, 6). For
Forthe
thereasons,
reasons,and
andbased
based on
onthe
theevidence,
evidence, set
set forth
forth above
above (in
(in

Appellant’s argument
Appellant's argument related
related to
to the
the court’s findings of fact), i.e., a review of the
court's findings

provisions of the Agreement,
provisions Agreement, it is clear
clear Pro-Tech
Pro-Tech breached the non-use and non-

circumvention terms
circumvention terms of Agreement when
of the Agreement when it began
began doing
doing non-project
non-project related
related

business with EL Hollingsworth. As aa matter
Hollingsworth. As matter of
of law,
law, harmonizing
harmonizing the terms of the

Agreement, itit is readily
Agreement, readily apparent
apparent the Agreement
Agreement protected
protected the disclosure of EJ
the disclosure

Madison’s confidential
Madison's confidential information
information (here, its relationship
relationship with EL
EL Hollingsworth)
Hollingsworth)

against unauthorized
against unauthorized use
use and/or
and/or circumvention
circumventionby
by Pro-Tech. When Pro-Tech
Pro-Tech. When Pro-Tech

began doing business with EL Hollingsworth without EJ Madison’s authorization,
Madison's authorization,

non-circumvention provisions
it breached the non-use and non-circumvention provisionsof
of the
the Agreement.
Agreement. As

such, Pro-Tech is liable for breach of contract.

The trial
The trial court's
court’s Conclusion
Conclusion of
of Law
Law No. finding no
No. 1 finding no breach
breach does
does not
not

specifically address
specifically addressAppellant’s
Appellant'sbreach
breachofof fiduciary
fiduciary duty
duty cause action.
cause of action.
32
However, after
However, after the trial court
the trial court filed
filed its
its findings,
findings, Appellant
Appellant timely
timely filed
filed its
its

“Plaintiff’s Request
"Plaintiff's Request for Amended Findings
for Amended Findings of Fact and
of Fact and Conclusions
Conclusions of Law”
of Law"

wherein it requested an additional conclusion of law as follows:

[Additional] 6.
[Additional] 6. Defendant’s
Defendant's failure
failure to
to turn the profits,
turn over the profits, benefits
benefits and
and
proceeds of its
proceeds its commercial
commercial relationship
relationship with Hollingsworth does
with EL Hollingsworth does not
constitute breach of fiduciary duty.

(CR II, 8-11). Thus,
Thus, Appellant
Appellant can
can challenge
challenge lack of this finding. See e.g., Vickery

Commission for Lawyer
v. Commission Lawyer Discipline, S.W.3d 241,
Discipline, 5 S.W.3d 241, 254
254 (Tex.App.—Houston
(Tex.App.—Houston

[14th Dist.] 1999,
1999, pet.
pet. denied). Thesame
denied). The samefacts
factsand
andreasoning
reasoning which
which evidence
evidence and

Pro-Tech’ss failure to turn over the
support breach of contract likewise support that Pro-Tech'

proceeds constitutes breach of its fiduciary duty.

In its Conclusion of Law No. 2, the trial court found:

There is no language in the Non-Disclosure Non Circumvention
Agreement reflecting an intent that services not related to nor arising
conversion process constitute trade secrets
from the conversion secrets or
or confidential
confidential
financial and business information.

(CR II, 6).

In its Conclusion of Law No. 3, the trial court found:

The terms ofofthethe
The terms Non-Disclosure Non
Non-Disclosure NonCircumvention
Circumvention
Agreement did
Agreement Defendant from entering
did not prohibit Defendant entering into a business
business
relationship
relationship with E.L. Hollingsworth to provide
provide mechanical
mechanical services
services
unrelated to the conversion process.

(CR II, 6).

In its Conclusion of Law No. 4, the trial court found:

33
 Defendant
Defendant did not utilize
did not utilize Plaintiffs'
Plaintiffs’ trade
trade secrets
secrets or
or confidential
confidential
financial and
financial business information
and business information in entering into
in entering into aa business
business
relationship with E.L. Hollingsworth to provide mechanical services.

(CR II, 7).

In its Conclusion of Law No. 5, the trial court found:

Plaintiff’s
Plaintiff's claim for breach of contract fails for lack of consideration.

(CR II, 7).

Furthermore, the
Furthermore, the Agreement
Agreementdoes
does not
not address
address nor
nor purport
purport to restrict, or
to restrict,

Pro-Tech’ss non-project
classify as protected trade secrets, Pro-Tech' non-project related
related services
services so as to

somehow act
somehow act as a "non-competition"
“non-competition” clause. Conclusions of law Nos. 2-4 which
clause. Conclusions

Pro-Tech’ss “competition”
are premised on a non-existent provision prohibiting Pro-Tech' "competition" are

manifestly wrong as a matter of law and should be reversed.

Finally, for
Finally, for the reasons
reasons forth
forth in the argument
argument related
related to the finding of fact

trial court's
no. 8, the trial court’s conclusion
conclusion of law no. 5 that
that EJ
EJ Madison's
Madison’s claim
claim fails for

lack of consideration is without basis as a matter of law and should be reversed.

XVII. The court erred as a matter of law in its conclusion of law no. 6
alleged trade
that the alleged trade secret
secret information
information was readily
readily ascertainable
ascertainable by
proper means, such as availability in trade journals, reference books, or
published materials.

XVIII. The court erred
erred as a matter of law in its
its conclusion
conclusion of law
no. 77 that
that the
thealleged
allegedproprietary
proprietary information
information was
was not
not substantially
substantially
secret.

34
 The alleged trade secret information was readily ascertainable
proper means,
by proper means, such
such as
as availability
availability in
in trade
trade journals,
journals, reference
reference
books, or published materials.

The alleged proprietary
The alleged proprietary information
information was not
not substantially
substantially
secret.

(CR II, 7). First,
First, there
there is
is no
no evidence in the record to support
support these
these conclusions.
conclusions. In

fact, as noted above, Rivera admitted he did not know of EL Hollingsworth prior to

the introduction
the introduction by
by Warren. (RR III,
Warren. (RR III, 124).
124). Moreover,
Moreover,such
suchinformation
information fits
fits

squarely into the definition
squarely definition of what constitutes
constitutes a protected trade secret under the

Tex. Civ. Prac.
TUTSA. See Tex. Prac. & Rem.
Rem. Code
Code § 134A.002(6).
134A.002(6). These
These findings
findings are

unsupported as a matter of law and should be reversed.

The court
XIX. The court erred as a matter
matter of law in its
its conclusion
conclusion of law no. 8
that Plaintiff is not entitled to any damages, actual or punitive.

In its Conclusions of Law No. 8, the trial court found:

Plaintiff is not entitled to any damages, actual or punitive.

(CR II, 7). The
The trial
trial court's
court’sconclusion
conclusionin
in this
this regard
regard is
is necessarily
necessarily premised on its

factual findings
findings of
of no breach
breach and no misappropriation
misappropriation of
of trade
trade secrets. Appellant
secrets. Appellant

would submit the court’s factual findings on the elements of breach of contract and
court's factual

fiduciary duty,
fiduciary duty, as well as
as well as misappropriation
misappropriation of trade secrets,
of trade secrets, are legally
legally and
and

factually sufficient such that they should be reversed and, alternatively, remanded.

Additionally, EJ
Additionally, EJ Madison
Madison proved
proved itit was
was damaged
damaged pursuant
pursuant to
to the terms of

the Agreement in the amount of the proceeds it provided that Pro-Tech had a duty

35
 turnover in
to turnover the event
in the event of
of aabreach.
breach. Pro-Tech'
Pro-Tech’s owninvoicing
s own invoicing records
records for
for

maintenance provided
maintenance providedtoto EL Hollingsworth, beginning
EL Hollingsworth, beginningJuly
July 21, 2014 and
21, 2014 and

extending through
extending through May
May 22,
22, 2015,
2015, reflect
reflect a total of
of $212,290.09,
$212,290.09, for an
an average
average

monthly revenue
revenue paid
paid by
by EL
EL Hollingsworth
Hollingsworthof
of$21,229.09. (RR III,
$21,229.09. (RR III, 83, 140-141);

Plt.’ss Ex.
(RR IV, Plt.' Ex. 5). This number
5). This number isis consistent
consistent with
with the
the amount
amount incurred
incurred by EJ

Madison prior
Madison prior to
to EL
EL Hollingsworth
Hollingsworthassuming
assumingoperations.
operations.(RR
(RRIII,
III,83,
83,141).
141). EJ

Madison, at
Madison, highest point,
at its highest point, compromised
compromised 10 15 percent
10 to 15 percent of
ofPro-Tech'
Pro-Tech’ss

business or
business approximately 2.5
or approximately 2.5 million
million dollars
dollarsin
in annual
annual sales. (RR III,
sales. (RR III, 141-143,
141-143,

Riveraacknowledged
163). Rivera acknowledged that
that Pro-Tech
Pro-Tech began
began doing
doing maintenance
maintenance work for EL

Hollingsworth on
Hollingsworth on or
or about
about August
August 1,
1, 2014
2014 and
and continued
continued to
to do
do so
so at the time of

(RR III,
trial. (RR III, 119).

Pro-Tech’ss invoicing, the proceeds represent $212,290.09 through
Based on Pro-Tech'

May 2015
May 2015 and
and $21,229.09
$21,229.09 each
each month
month thereafter
thereafter through
through time
time of trial
of trial

($504,498.16)6 and ongoing.
($504,498.16)6 ongoing. (RR
(RR 153).
153). This
Thisfinding
findingshould
should be
be reversed
reversed and
and the

issue remanded
issue remanded to
to the trial court for
for aa determination
determination as to
to future
future damages,
damages, i.e.,

beyond the date of trial.

XX. The court erred erred as a matter of law in its conclusion
conclusion of law no. 9
that Pursuant to §38.001 et seq., Tex. Civ. Prac. & Rem. Code, Plaintiff
is not entitled to attorney’s
attorney's fees.

In its Conclusions of Law No. 9, the trial court found:

6
6 $21,229.09 multiplied
$21,229.09 multiplied by
by the number of months
the number months (24)
(24) beginning
beginning June
June 2015
2015 and
and
extending through May 2017.
36
 Pursuant
Pursuant to to §38.001
§38.001 et seq., Tex.
et seq., Tex. Civ. Prac.
Prac. &
& Rem.
Rem. Code,
Code,
Plaintiff is not entitled to attorney’s
attorney's fees.

(CR II, 7). The
Therecord
record conclusively
conclusively proves
proves the parties stipulated that attorney’s
attorney's

fees would be addressed
addressed in
in aa separate
separatehearing.
hearing. (RR III, 103). As set
103). As set forth above, it

appears the
appears the trial
trial court
court overlooked
overlooked the
the stipulation
stipulationof
ofthe
theparties
partiesininthis
thisregard.
regard. In

conclusion is contrary the parties stipulation and
any event, as a matter of law this conclusion

should be reversed.

PRAYER

For these
For these reasons,
reasons, Appellant
Appellant respectfully
respectfully requests
requeststhat
that the trial court's
the trial court’s

judgment be
judgment reversed, alternatively,
be reversed, alternatively, remanded
remandedtotothe
the trial court for
trial court for further
further

proceedings and that Appellant be awarded its costs of court.

TROY C. BROWN
Attorney at Law
300 E. Main
10th Floor, Suite 1000
El Paso, Texas 79901
Phone: (915)
(915) 543-9669
543-9669
Fax: (888)
(888) 922-3353
922-3353
E-mail: troy@tcblegal.com
troy@tcblegal.com

/s/Troy
IslTroy C. Brown________________
Brown
TROY C. BROWN
State Bar Number 00783735
Attorney for Appellant

37
 CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing instrument was
served on the 21st day of May
May 2018,
2018, to:
to: Mannie
Mannie Kalman,
Kalman, 1214
1214 Montana
Montana Avenue,
Paso, Texas
El Paso, Texas 79902,
79902, pursuant
pursuant to the
the Court's
Court’s Notice
Notice of
ofElectronic
Electronic Procedures
Procedures
established
established forforthethe El El Paso
Paso County
County Courts
Courts via via e-mail:
e-mail:
mkalman@manniekalman.com.

/s/Troy
IslTroy C. Brown________________
Brown
Troy C. Brown

CERTIFICATE OF COMPLIANCE

I hereby certify that the foregoing Appellant’s
Appellant's Brief contains 8,209 words.

/s/Troy
IslTroy C. Brown________________
Brown
TROY C. BROWN

38
 IN THE COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
_____________________________________________________

08-17-00229-CV
NO. 08-17-00229-CV

EJ MADISON, LLC.

v.

PRO-TECH DIESEL, INC.
_____________________________________________________
TH
Appealed from the 205
205TH Judicial District Court
of El Paso County, Texas
_____________________________________________________

APPENDIX
_____________________________________________________

Judgment (August 3, 2017) (Ex. A)

Tex. Govt. Code §554.002 (Ex. B)

Excerpts from Tea.texas.gov (Ex. C)
El Paso County - 205th District Court Filed 8/11/2017 3:16 PM
Norma Favela Barceleat
District Clerl,
El Paso Count
2015DCV247E
IN THE DISTRICT COURT OF EL PASO COUNTY, TEXAS
205TH JUDICIAL DISTRICT

El MADISON, LLC., a Texas
limited liability company,
SOUTHWEST TRUCK LEASING,
a Texas Limited liability company, and
LIM LEASING, LLC, a Texas
limited liability company
Plaintiffs,

v. Cause No. 2015-DCV2479

PRO-TECH DIESEL, INC.,
Defendant.

FINAL JUDGMENT

On the date set forth below, came on to be heard the above entitled and numbered cause;

Plaintiffs EJ MADISON, LLC, SOUTHWEST TRUCKING LEASING, and RIM LEASING,

LLC, appeared through its attorney of record; Defendant PO-TECH DIESEL, INC., appeared

through its attorney of record. All matters in controversy, legal and factual, were submitted to

the court for its determination. The court heard the evidence and arguments of counsel and

announced its decision for the Defendant.

The court orally RENDERED judgment for Defendant on June 20, 2017. This written judgment

memorializes that rendition.

IT IS accordingly ORDERED, ADJUDGED AND DECREED that the Plaintiff take nothing by

its suit.

All relief not expressly granted herein is denied.

Signed on this 3.- day o , 2017.

14