H.E. Butt Grocery Co. v. Moody's Quality Meats, Inc.

951 S.W.2d 33, 1997 WL 269416
CourtCourt of Appeals of Texas
DecidedAugust 28, 1997
Docket13-95-038-CV
StatusPublished
Cited by14 cases

This text of 951 S.W.2d 33 (H.E. Butt Grocery Co. v. Moody's Quality Meats, 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
H.E. Butt Grocery Co. v. Moody's Quality Meats, Inc., 951 S.W.2d 33, 1997 WL 269416 (Tex. Ct. App. 1997).

Opinion

OPINION

FEDERICO G. HINOJOSA, Jr., Justice.

Appellees, Moody’s Quality Meats, Inc. and Henry Moody (“Moody”), sued H.E. Butt Grocery Co. (“HEB”) for misappropriation of a trade secret — Moody’s process for making premarinated beef fajitas. After a jury found for appellees, the trial court entered a judgment against HEB for $3,139,263.87. HEB complains, by four points of error, that the evidence is legally and factually insufficient to support the jury’s findings, that the trial court gave the jury improper instructions, and that the trial court improperly allowed a patent into evidence. We reverse and remand.

In January 1988, Moody began selling pre-marinated fajitas. The recipe and process for marinating beef fajitas was developed by Henry Moody in late 1987. 1 In 1989, Moody was interested in selling the process and asked to meet with someone from HEB. In May 1989, Charles Hendryx, HEB’s vice president of meat marketing, met with Henry Moody to discuss the marinating process. Appellees alleged that the five-element process 2 is a trade secret and that during the meeting, Henry Moody disclosed this secret to Hendryx in confidence. HEB began processing and selling its own premarinated fajitas in September 1989. Believing that Moody’s trade secret process was being used to produce HEB’s premarinated fajitas, ap-pellees sued HEB for misappropriation of a trade secret. HEB generally denied the allegations. A jury found that HEB misappropriated Moody’s trade secret after it was communicated to HEB in confidence. The trial court denied HEB’s motions for directed verdict and judgment non obstante veredicto. The trial court also denied HEB’s motion for new trial.

In order to bring a successful claim for misappropriation of a trade secret, a plaintiff must prove: 1) that there was a trade secret, 2) that the secret was disclosed to another person in confidence, and 3) that the other person used the secret without authorization. Hyde Corp. v. Huffines, 158 Tex. 566, 314 S.W.2d 763, 777, cert. denied, 358 U.S. 898, 79 S.Ct. 223,3 L.Ed.2d 148 (1958). A person is liable for misappropriation of a trade secret when (a) he discovers the secret through improper means or (b) his use constitutes a breach of confidence reposed in him by the one disclosing the secret. Id. at 769.

Legal Sufficiency of the Evidence

By the first part of its first point of error, HEB complains that the evidence is legally insufficient to support the jury’s finding on liability. HEB contends that appellees failed to show that the marinating process was a trade secret, that it was communicated to Charles Hendryx in confidence, and that HEB used it without authorization.

When we review a “no evidence” or legal sufficiency of the evidence point, we consider *35 only the evidence and reasonable inferences that tend to support the jury’s finding, and we disregard all evidence and inferences to the contrary. Responsive Terminal Sys. Inc. v. Boy Scouts of Am., 774 S.W.2d 666, 668 (Tex.1989). We sustain a “no evidence” point of error when the record discloses: 1) a complete absence of evidence of a vital fact, 2) that the court is barred by the rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, 3) that the evidence offered to prove a vital fact is no more than a mere scintilla, and 4) that the evidence established conclusively the opposite of the vital fact. Juliette Fowler Homes, Inc. v. Welch Assoc., 793 S.W.2d 660, 666 n. 9 (Tex.1990). We overrule the point and uphold the finding if there is more than a scintilla of evidence to support the finding. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex.1987). The test for this no evidence/scintilla rule is that if reasonable minds cannot differ from the conclusion that the evidence offered to support the existence of a vital fact lacks probative force, it will be held to be the legal equivalent of no evidence. Id.

A. Was there a trade secret?

A trade secret is any formula, pattern, device, or compilation of information which is used in one’s business and presents an opportunity to obtain an advantage over competitors who do not know or use it. Computer Assocs. Int'l Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex.1996); Hyde Corp., 314 S.W.2d at 776. To be accorded the court’s protection, proprietary information must be more than merely of a kind and character encompassed by the definition. Numed, Inc. v. McNutt, 724 S.W.2d 432, 435 (Tex.App.—Fort Worth 1987, no writ); Richardson & Assocs., Inc. v. Andrews, 718 S.W.2d 833, 837 (Tex.App.—Houston [14th Dist.] 1986, no writ). The key part of the definition of trade secret is secrecy. Luccous v. J.C. Kinley Co., 376 S.W.2d 336, 338 (Tex.1964); Wissman v. Boucher, 150 Tex. 326, 240 S.W.2d 278, 280 (1951); Stewart & Stevenson Servs., Inc. v. Serv-Tech, Inc., 879 S.W.2d 89, 98 (Tex.App.—Houston [14th Dist.] 1994, writ denied); Gonzales v. Zamo ra, 791 S.W.2d 258, 264 (Tex.App.—Corpus Christi 1990, no writ).

The word “secret” implies that the information is not generally known or readily available by independent investigation. Zamora, 791 S.W.2d at 264; Richardson & Assoc., Inc., 718 S.W.2d at 837. The procedure or device may be based on a previously existing idea in the industry and still be entitled to protection, so long as the procedure or device is not generally known. K & G Oil Tool & Serv. Co. v. G & G Fishing Tool Serv., 158 Tex. 594, 314 S.W.2d 782, 785 (1958).

After reviewing the record, we find the following evidence in support of the jury’s finding that a trade secret existed. Henry Moody was in the meat business for thirty years and he always tried to stay ahead of his competitors. Several months after Norman Cunningham, an Archer-Daniels-Midland (“ADM”) sales representative, suggested the use of isolated soya protein, Moody created a five-element process for beef fajitas. Moody’s process combined beef skirt, water, isolated soya protein, and sodium triphosphate in a vacuum tumbler.

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Bluebook (online)
951 S.W.2d 33, 1997 WL 269416, Counsel Stack Legal Research, https://law.counselstack.com/opinion/he-butt-grocery-co-v-moodys-quality-meats-inc-texapp-1997.