Creole Production Services, Inc. v. Harper

640 S.W.2d 727, 1982 Tex. App. LEXIS 5057
CourtCourt of Appeals of Texas
DecidedAugust 12, 1982
DocketA2788
StatusPublished
Cited by2 cases

This text of 640 S.W.2d 727 (Creole Production Services, Inc. v. Harper) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Creole Production Services, Inc. v. Harper, 640 S.W.2d 727, 1982 Tex. App. LEXIS 5057 (Tex. Ct. App. 1982).

Opinion

OPINION

J. CURTISS BROWN, Chief Justice.

This is an appeal from a judgment entered against appellant, plaintiff below, in a suit involving alleged appropriation of trade secrets. The jury found that the material appropriated by appellee did not constitute trade secrets and, because of a conditional submission, did not answer an issue concerning whether such material was used with knowledge that it constituted trade secrets. The questions presented are (1) whether the fact that the appropriated material constituted trade secrets was proved as a matter of law; (2) whether the jury’s failure to find that the material constituted trade secrets was against the great weight and preponderance of the evidence; (3) whether trial counsel for appellees engaged in improper jury argument; and (4) whether material misconduct occurred in the jury room. Finding no reversible error, we affirm.

Creole Production Services, Inc. (Creole or appellant) is in the business of servicing certain large engines and compressors used in the oil and gas industry. Creole’s objective is to perform as much of the service as possible on a “turn-key” basis. This means that Creole analyzes a service opportunity and prepares a bid to perform the job within a set amount of time for a fixed fee. Most servicing of this type of equipment by others is performed on a “time and materials” or “cost-plus” basis.

The “Creole process” of “turn-key” bidding involves keeping detailed records on jobs performed. By organizing this information, Creole can estimate the resources needed to accomplish a maintenance or overhaul task for the same or similar equipment. The “Creole process” also involves a determination of the optimum crew size and *729 a determination of the tools the crew will need. Creole thus attempts to keep expenses to a minimum while providing the customer with a definite time for completion and a predetermined cost of the work.

Creole claims a considerable amount of time and money has been invested in developing its process to a profitable status. The development involved a start-up time during which the historical information was collected. The crew composition and tool list were determined by a trial and error approach. Initially many jobs resulted in a loss.

Jimmy Harper (Harper) was employed as a salesman for Creole until August of 1979. Upon his termination he went to work for Energy Services Corp. (Energy Services), a newly formed subsidiary of Production Operators, Inc. (P.O.I.). During an exit interview his supervisor told him that no company information was to leave with him. Harper exhibited an empty brief case. Creole was unaware of the formation of Energy Services and did not think Harper’s new endeavor would involve competition in Creole’s market. Actually, Harper was employed to work with a company that would compete with Creole. Harper was extended a 20% equity interest in Energy Services.

After Harper’s departure Creole learned that he had given confidential information about Creole’s operations and financial position to P.O.I. and that he had taken many internal Creole documents. Creole contends the purpose of these actions was the use of the “Creole process” to compete with it. Creole also alleges that Harper and Energy Services attempted to attract many key Creole employees to become employees of Energy Services.

Creole filed suit and obtained a Writ of Sequestration. Pursuant to an order of the court, constables seized 10,722 pages of Creole documents from the offices of Energy Services and Harper’s home. Creole also requested and was granted temporary in-junctive relief concerning competition on certain jobs, the contacting of Creole employees, the copying of any Creole data, and any representations that a service similar to Creole’s could be offered due to possession of Creole’s information.

The appeal before us arises out of the trial on the merits in which Creole claims Harper appropriated trade secrets consisting of the documents sequestered and used them in competition with Creole. Energy Services, P.O.I. and other related companies and individuals were also named as defendants. Creole claims it was damaged because (1) jobs were lost to Energy Services; (2) Creole was required to bid less for the jobs which they did procure because Energy Services’ competing bid was developed using the “Creole process”; and (3) salaries had to be raised and management time spent to counsel employees and persuade them to remain with Creole.

After weeks of trial in which Creole presented its case, the defense rested without putting on any evidence and the case was submitted to the jury on special issues. The jury failed to find that Harper appropriated material from Creole that contained trade secrets. Judgment was entered that Creole take nothing. Appeal was perfected to this Court.

In its first two points of error, appellant takes the position that it proved the material taken by Harper constituted trade secrets as a matter of law. Appellee notes the rule that when affirmative findings are required to two or more issues, at least one of which, without objection by the complaining party, is conditioned upon the other and a party makes an attack upon a failure to find affirmatively to the noncon-ditioned issue on the ground that it was established as a matter of law, he has thereby waived the right to a jury finding on the conditioned issue and that issue is deemed found in favor of the trial court’s judgment. Tex.R.Civ.P. 272; Little Rock Furniture Manufacturing Co. v. Dunn, 148 Tex. 197, 222 S.W.2d 985, 989-90 (1949); Bell v. Aetna Casualty and Surety Co., 394 S.W.2d 830, 833 (Tex.Civ.App.-Houston 1965, writ ref’d n.r.e.); Lee v. Howard, 483 S.W.2d 922, 924 (Tex.Civ.App.-Eastland 1972, writ refused, n.r.e.).

*730 A plaintiff has the burden of alleging and proving by a preponderance of the evidence his cause of action. McCormick v. Rhoades, 357 S.W.2d 595 (Tex.Civ.App.-Austin 1962, writ ref’d n.r.e.). As a corollary to this rule, a plaintiff must reduce his pleadings and proof to jury findings supporting each element of his cause of action to be entitled to a judgment in his favor. Dittberner v. Bell, 558 S.W.2d 527 (Tex.Civ.App.-Amarillo 1977, writ ref’d n.r.e.). It is incumbent upon the plaintiff in a trade secrets case to show that material constituting trade secrets was appropriated, that such material was used with knowl edge that it constituted trade secrets and that damages resulted from the appropriation. Lamons Metal Gasket Co. v. Traylor, 361 S.W.2d 211 (Tex.Civ.App.-Houston 1962, writ ref’d n.r.e.). Appellant, by Special Issue No. 1, requested a finding as to whether Harper appropriated documents which constituted trade secrets. In Special Issue No.

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Bluebook (online)
640 S.W.2d 727, 1982 Tex. App. LEXIS 5057, Counsel Stack Legal Research, https://law.counselstack.com/opinion/creole-production-services-inc-v-harper-texapp-1982.