Ginn v. NCI Building Systems, Inc.

472 S.W.3d 802, 2015 Tex. App. LEXIS 8531, 2015 WL 4760501
CourtCourt of Appeals of Texas
DecidedAugust 13, 2015
DocketNO. 01-12-00502-CV
StatusPublished
Cited by34 cases

This text of 472 S.W.3d 802 (Ginn v. NCI Building Systems, Inc.) 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
Ginn v. NCI Building Systems, Inc., 472 S.W.3d 802, 2015 Tex. App. LEXIS 8531, 2015 WL 4760501 (Tex. Ct. App. 2015).

Opinion

OPINION

Terry Jennings, Justice

Appellants/cross-appellees, Kelly R. Ginn, Green-Span Profiles, L.P., Green-[810]*810Span Management, L.L.C., Green-Span Enterprises, Inc., and BKG Investments, L.L.C. (collectively, “Ginn”), challenge the trial court’s judgment, entered after a jury trial, awarding appellee/cross-appellant, NCI Building Systems, Inc. (“NCI”), damages in NCI’s suit against Ginn for fraud, breach of fiduciary duty, and unjust enrichment. In thirteen issues, Ginn contends that insufficient evidence supports the jury’s findings in favor of NCI on its claims for fraud, breach of fiduciary duty, and unjust enrichment and the trial court erred in charging the jury, disregarding the jury’s finding of zero damages on NCI’s stock claim, not disregarding the jury’s finding that he “did not prove that h[is] [employment] was terminated for cause,” granting rescission of the parties’ contract, awarding NCI restitution damages, and not awarding him his attorney’s fees.

In its cross-appeal, NCI, in two issues, contends that the trial court erred in not awarding it attorney’s fees and granting Ginn partial summary judgment on its breach-of-contract claims.

We affirm.

Background

In its fifth amended petition, NCI, “a publicly-traded company ... headquartered in Houston, Texas,” alleged that “[i]t designs, manufactures, markets, and sells metal building systems and eomponents[, including insulated metal panels,] that are used in the construction of metal buildings.” Ginn worked for NCI for “over 20 years,” serving in the later years of his employment as its executive vice president of operations. “In this role, Ginn, among other things, was closely involved in NCI’s development of new business [and marketing] strategies to expand its insulated metal panel products lines,”- and he was “tasked with locating and purchasing new equipment that would allow NCI to make insulated metal panels faster and with less labor.” By virtue of his position, Ginn received NCI’s confidential and proprietary information, including “sales information, pricing data, ... financial records, ... [and] customer lists.”

During Ginn’s employment with NCI, it “periodically awarded [him] unvested restricted stock,” and the Restricted Stock Agreements, signed by Ginn in conjunction with the awards, contained non-competition, non-solicitation, and nondisclosure provisions: According to NCI, when Ginn accepted the unvested restricted stock, “he agreed he would not, for five years, engage in a competing business within 250 miles of NCI’s manufacturing facilities^] ... solicit NCI’s employees!,] ... [or] call upon or solicit NCI’s customers or vendors.” He also agreed to not disclose or use any of NCI’s “confidential” or “proprietary information” or “trade secrets.”

On March 27, 2008, Ginn resigned from NCI, effective March 31, 2008, and he and NCI negotiated and entered into a “Separation Agreement.” NCI agreed to “retain Ginn as a consultant for one year,” from March 31, 2008 through March 31, 2009, and continue to pay him his normal salary, plus medical benefits. In return, Ginn agreed to “five-year non-compete and non-solicitation agreements” and a nondisclosure agreement. And, “[a]s consideration for the Separation Agreement,” NCI “agreed to give Ginn immediate vesting of all of his [unvested] restricted stock,” which was valued at $1,582,167.

NCI further alleged that Ginn, prior to signing the Separation Agreement, and without NCI’s knowledge, “accessed and copied a large amount of highly confidential [company] information” to an external hard drive. “The information downloaded by Ginn would [have] be[en] valuable .[to] a competitor of NCI,” and Ginn “had no [811]*811reason to copy this information, unless he intended, from the outset[,] to violate the terms of [the] Separation Agreement.”

NCI also alleged that during the time that .Girin served as a consultant, he developed a business plan for “a new competing business” and created several business entities, including Green-Span Profiles, L.P., Green-Span Management, L.L.C., Green Span Enterprises, Inc., and BKG Investments, L.L.C. (collectively, “Green-Span”). Ginn created Green-Span “to manufacture, market, and sell insulated metal panels,” and as asserted by NCI, he solicited NCI employees, customers, and vendors, “us[ing] and diselos[ing] NCI’s confidential information” that he had retained following his resignation.

NCI brought claims against Ginn for breach of contract, fraud, breach of fiduciary duty,.and unjust enrichment,2 seeking damages, injunctive relief, and attorney’s fees.3 Ginn counterclaimed, seeking attorney’s fees4 and alleging that NCI “knew at the time that [the Separation Agreement] was executed that it did not contain limitations as to time, geographical area and scope of activity that were reasonable, and the limitations in th[e] [Separation] Agreement imposed a greater restraint than necessary to protect the goodwill or other business ’ interest of [NCI].”5

Temporary Injunction

NCI filed an application for temporary injunction, seeking to enjoin Ginn from competing with NCI, soliciting NCI customers and employees, and using NCI’s confidential information. On September 15, 2009, the trial court denied NCI’s application to the extent that it sought enforcement of the Separation Agreement’s non-competition provision. But, it granted NCI’s request for a temporary injunction to the extent that it sought to enjoin Ginn from soliciting NCI employees and one of NCI’s vendors, PUMA. The trial court also enjoined Ginn from using or disclosing any of NCI’s confidential information.

Summary Judgment Motion

Prior to trial, Ginn sought summary judgment on several of NCI’s claims. In regard to NCI’s breach-of-contract claims, Ginn argued that the non-competition and non-solicitation provisions in the Separation Agreement were unenforceable as a matter of law because NCI did not provide him consideration in the form of new confidential information or trade secrets after its execution. He asserted that the financial incentives that NCI provided to him, pursuant to the Separation Agreement, did not constitute valid consideration for the non-competition and nonsolicitation provisions. Ginn further argued that the non-competition and nonsolicitation provisions were unenforceable because they were “[o]verbroad in the scope of activities they s[ought] to restraint,] • • • [u]nreasonable in duration[,] ... [and] [Unreasonable in the geographic scope they s[ought] to cover.” He also argued that because NCI was seeking to enforce provisions of the Separation Agreement,'which were unenforceable, NCI was unable to recover the attorney’s fees that it incurred in pursuing enforcement.6

The trial court partially granted Ginn summary judgment, concluding that the [812]*812non-competition provision and the no'n-solicitation provision, to the extent that it prohibited the solicitation of NCI customers, were “unenforceable for lack of consideration.” Accordingly, the trial court dismissed NCI’s breach-of-contract claims, including its claim for injunctive relief, to the extent that they were based on Ginn’s alleged breaches of the Separation Agreement’s non-competition provision and non-solicitation provision, as far as it related to NCI customers. Following the trial court’s ruling, NCI nonsuited its remaining breachrof-contract claims.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Betty Rathbun Ligon v. Judith D. Casey
Court of Appeals of Texas, 2023
Melinda Herrera v. Wendell Legacy Homes, LLC
Court of Appeals of Texas, 2021
Michael Spradley v. Michael E. Orsak, L.P.
Court of Appeals of Texas, 2020
Texas Black Iron, Inc. v. Arawak Energy International Ltd
566 S.W.3d 801 (Court of Appeals of Texas, 2018)
William M. Walls v. Harris County
Court of Appeals of Texas, 2018

Cite This Page — Counsel Stack

Bluebook (online)
472 S.W.3d 802, 2015 Tex. App. LEXIS 8531, 2015 WL 4760501, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ginn-v-nci-building-systems-inc-texapp-2015.