Houston Poly Bag I, Ltd v. Ken Kujanek

370 S.W.3d 82, 2012 WL 1856531, 2012 Tex. App. LEXIS 4049
CourtCourt of Appeals of Texas
DecidedMay 22, 2012
Docket14-10-00734-CV
StatusPublished
Cited by6 cases

This text of 370 S.W.3d 82 (Houston Poly Bag I, Ltd v. Ken Kujanek) 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
Houston Poly Bag I, Ltd v. Ken Kujanek, 370 S.W.3d 82, 2012 WL 1856531, 2012 Tex. App. LEXIS 4049 (Tex. Ct. App. 2012).

Opinion

OPINION

KEM THOMPSON FROST, Justice.

A plastic-bag manufacturing company sued a former sales representative for breach of fiduciary duty, breach of contract, and tortious interference with business relations. The sales representative filed a counterclaim asserting breach of contract. The jury found that the evidence did not prove a breach of contract or tortious interference by the sales representative. The jury found that the manufacturer breached its contract but that the breach was excused. As to the breach-of-fiduciary-duty claim, the jury answered the breach and damages questions favorably to the manufacturer, but, under the jury’s discovery-rule finding, this claim is barred by the statute of limitations. The trial court rendered judgment on the jury’s verdict that the manufacturer and sales representative each take nothing. On appeal, the manufacturer challenges the legal and factual sufficiency of the evidence supporting the jury’s discovery-rule finding. The manufacturer also asserts that the trial court erred in denying its request for a new trial based upon its argument that the evidence showed many breaches of fiduciary duty.that occurred within the limitations period. We affirm.

I. Factual and PROCEDURAL Background

Appellant Houston Poly Bag I, Ltd. (“Poly Bag”) is a plastic-bag manufacturing company. In 1990, Poly Bag hired appellee Ken Kujanek to work as an employee serving as a direct sales representative of Poly Bag. Kujanek worked in this position until he resigned his employment *86 in 2007. Evidence at trial showed that, from the beginning of his employment in 1990, Kujanek engaged in transactions in which he would assist a company other than Poly Bag in locating another company other than Poly Bag that sold a product that the first company wanted to buy. In such a transaction, if a product was sold, then Kujanek would receive a commission as a result of the sale (an “Outside Transaction”).

William E. Sumner, Jr. (“Bill Sumner”), founder and longtime president of Poly Bag, testified that, until 2007, he was not aware that Kujanek was engaging in any Outside Transactions. Bill Sumner gave testimony indicating that sales representatives in Kujanek’s position were not supposed to engage in any Outside Transactions. Bill Sumner’s son, William E. Sumner, III. (“Wes Sumner”), became part-owner of Poly Bag in 2005, and from that time forward served as manager of Poly Bag. Wes Sumner also gave testimony indicating that a sales representative in Kujanek’s position was not permitted to engage in Outside Transactions.

Gene Wailes was the Poly Bag sales manager to whom Kujanek reported from the start of Kujanek’s employment until April 1996, when Wailes’s employment at Poly Bag ended. Wailes testified about a conversation that he had with Kujanek when Kujanek began working for Poly Bag. Wailes testified that he told Kujanek that, if Poly Bag could not manufacture a product and one of Kujanek’s clients wanted to buy that product, then Wailes “would have no problem if [Kujanek] sold a couple of items ... through another manufacturer.” Wailes stated that he did not want Kujanek to be making “cold calls on accounts that we could not manufacture the product at our expense.” But, Wailes stated that “it would be a good idea if [Kuja-nek] could, through some means, sell a few of the items that we could not make to his customers that we had the business on.” Wailes also testified that Wailes had “the idea that maybe it would benefit us if we let [Kujanek] on just a ... very limited basis sell products through another manufacturer that we could not make.”

Kujanek testified that when he began his employment with Poly Bag in 1990, Wailes told him he could engage in Outside Transactions if his existing customers sought a product that Poly Bag did not make. According to Kujanek, if one of his customers asked him for help regarding such a product, he was able to engage in Outside Transactions. Kujanek testified that this arrangement was in place from the time he started working at Poly Bag in 1990 forward and that he engaged in Outside Transactions during this entire period; but, Kujanek stated that the extent of these transactions in the 1990s was “pretty limited.” The number of Outside Transactions in which Kujanek engaged increased each year during the period from 2000 through 2005, when Kujanek’s compensation from these transactions exceeded $200,000.

Wailes left Poly Bag in April 1996. Shortly thereafter, he began working for one of Poly Bag’s competitors. Bill Sumner testified that as a result of Wailes’s actions, he had a non-competition agreement (“Agreement”) drafted for Poly Bag’s sales representatives. The Agreement had a proposed effective date of September 1, 1996. Bill Sumner testified that the company eventually decided not to implement the Agreement. Kujanek testified that he never signed a written employment agreement or non-compete agreement during the course of his employment with Poly Bag.

From 1990 through April 1996, Kujanek and James Brent Oden both worked as sales representatives at Poly Bag. Trial testimony indicates that in April 1996, Oden replaced Wailes as Poly Bag’s sales *87 manager, and Oden became Kujanek’s direct supervisor. Oden testified that when he worked as a sales representative at Poly Bag, he knew Kujanek engaged in Outside Transactions.

In September 2007, Oden was contacted by Donald Mower, a purchasing agent for one of Poly Bag’s customers. Mower informed Oden that Kujanek, while employed as a sales representative for Poly Bag, was also working as a representative for Lone Star Plastics, a Poly Bag competitor. Poly Bag asserts that it did not actually learn of Kujanek’s Outside Transactions or the conduct upon which it bases its breach-of-fiduciary-duty claim until September 2007.

Kujanek resigned his employment at Poly Bag in September 2007. Shortly thereafter, in November 2007, Poly Bag sued Kujanek asserting claims for breach of fiduciary duty, breach of contract, and tortious interference with business relations. Kujanek filed a counterclaim in which he asserted that Poly Bag breached its contract with him by not paying him certain commissions. In its live petition, Poly Bag alleged that Kujanek owed Poly Bag a fiduciary duty because of his full-time employment as a sales representative. 1 Poly Bag alleged that Kujanek breached his fiduciary duty by working for competitors while he was working as a full-time sales representative at Poly Bag.

The case proceeded to trial before a jury. The jury found as follows:

• The preponderance of the evidence does not show that Kujanek failed to comply with his employment agreement with Poly Bag.
• Poly Bag failed to comply with its agreement to pay Kujanek commissions.
• Poly Bag’s failure to comply was excused.
• Kujanek failed to comply with his fiduciary duties to Poly Bag.
• $110,560.00 in actual damages and $114,722.00 in lost profits, if paid now in cash, would fairly and reasonably compensate Poly Bag for its damages that were proximately caused by Kuja-nek’s failure to comply.

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370 S.W.3d 82, 2012 WL 1856531, 2012 Tex. App. LEXIS 4049, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houston-poly-bag-i-ltd-v-ken-kujanek-texapp-2012.