Hunter Buildings & Manufacturing, L.P. v. MBI Global, L.L.C.

436 S.W.3d 9, 37 I.E.R. Cas. (BNA) 1818, 2014 WL 1258017, 2014 Tex. App. LEXIS 3407
CourtCourt of Appeals of Texas
DecidedMarch 27, 2014
DocketNo. 14-12-00246-CV
StatusPublished
Cited by25 cases

This text of 436 S.W.3d 9 (Hunter Buildings & Manufacturing, L.P. v. MBI Global, L.L.C.) 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
Hunter Buildings & Manufacturing, L.P. v. MBI Global, L.L.C., 436 S.W.3d 9, 37 I.E.R. Cas. (BNA) 1818, 2014 WL 1258017, 2014 Tex. App. LEXIS 3407 (Tex. Ct. App. 2014).

Opinion

OPINION

KEM THOMPSON FROST, Chief Justice.

The primary issue in this case is the sufficiency of the evidence to support a finding that the corporate appellants’ misappropriation of trade secrets proximately caused appellee/plaintiff to sustain lost-profits damages in the past. The plaintiff company sued two of its former officers and various enterprises related to the officers’ current employment. The jury made liability and damage findings as to claims for breach of fiduciary duty and misappropriation of trade secrets. But, the jury found that each former officer’s percentage of responsibility was zero. Though the appellants moved the trial court to disregard all jury findings adverse to them, the plaintiff sought judgment on the jury’s verdict. The trial court rendered a money judgment on the verdict, holding the former officers and the enterprises jointly and severally liable for lost profits, [12]*12the only damages the jury found. On appeal, we conclude that the only damage finding upon which a money judgment may be based is a finding of lost-profits damages proximately caused by the corporate appellants’ misappropriation of the plaintiffs trade secrets. Because we conclude that the evidence is legally insufficient to support a causation finding, we reverse the trial court’s judgment and render judgment that the plaintiff take nothing against the appellants.

I. Factual and Procedural Background

In the late 1990s, Mark Massey and Sam Lavergne worked at the same company with Fred Gossen. In 1999, after that company ceased operating, Gossen formed MB Industries, L.L.C. (hereinafter, “Industries”), and Massey and Lav-ergne formed appellant/defendant Hunter Buildings & Manufacturing, L.P. (hereinafter, “Hunter Buildings”), whose general partner is appellant/defendant Hunter Buildings, L.L.C. (“Hunter L.L.C.”). Both Industries and Hunter Buildings manufactured and sold blast-resistant buildings.

Appellant/defendant Milo Nickel, a lawyer, started working for Industries in 2006. Appellant/defendant Michael Le-Blanc started working for Industries in 2007. The following year, in April 2008, appellee/plaintiff MBI Global, L.L.C. (hereinafter, “Global”) was formed as a sister company of Industries. Nickel was the first President of Global and a director of Global’s parent company. Leblanc worked as the Vice President of the newly formed Global. LeBlanc helped establish Global’s organizational structure, assisted in the hiring of important personnel, and worked closely with Nickel to direct the company’s marketing and manufacturing operations. Nickel and LeBlanc each signed a “Non-Competition and Trade Secrets Agreement” at the beginning of their employment with Industries.

LeBlanc resigned from his position at Global on July 26, 2009. A few weeks later, on August 20, 2009, Nickel resigned from his position as President of Global. Nonetheless, Nickel was still a director of Global’s parent company, and he continued to work for Global as a consultant, assisting in the obtaining of a $7 million contract.1 On July 30, 2009, appellant/defendant BBG Group, L.L.C. (hereinafter, “BBG Group”), was formed with Nickel and LeBlanc as the two members, each owning a fifty-percent interest. Two days later, on August 1, 2009, BBG Group and Hunter Buildings entered into a Joint Venture Agreement regarding the operation of a limited liability company to be formed in the future. That company, appellant/defendant Hunter Buildings International, L.L.C. (hereinafter, “Hunter International”) was formed on September 17, 2009, with Hunter Buildings and BBG Group as the two members, each owning a fifty-percent interest.

Thus, Nickel and LeBlanc formed BBG Group, and through Hunter International, BBG Group went into business with Hunter Buildings to compete against Global. Nickel and LeBlanc did not tell Global that they were leaving to compete against Global, and they did not tell Global or Gossen about the formation of BBG Group or Hunter International. Even after Nickel resigned his position as President of Global, he continued working for Global for some time on a consulting basis. During this time period, Nickel participated in conversations with people at Global re[13]*13garding Global’s business projects. Global asserts that Nickel passed this information on to LeBlanc and the Hunter entities. Global alleges, and we presume for the sake of argument, that all of the following were Global’s trade secrets: (1) Global’s blast-resistant building drawings, testing data, and FEBR2 certification information, (2) Global’s use of ballistic plate in its building design and information regarding “A/C brackets,” (3) Global’s business proposals, including cost-and-pricing information, and (4) Global’s customer lists and information regarding future developments and markets, including customer contacts and relationships (hereinafter, collectively, the “Trade Secrets”). Global alleged that Nickel, LeBlanc, BBG Group, Hunter International, Hunter L.L.C., and Hunter Buildings (the foregoing companies sometimes collectively referred to hereinafter as the “Corporate Defendants”) misappropriated the-Trade Secrets.

The record reflects that there is a history of “bad blood” between Gossen and Massey. In August 2008, several Hunter entities filed suit in the case under review against Industries, Gossen, and Massey’s ex-wife. In March 2010, Global intervened, and Global and Industries asserted claims regarding the departure of Nickel and LeBlanc. Eventually, the Hunter entities nonsuited their claims for relief. By the time the case proceeded to a jury trial, Global was realigned as the only plaintiff asserting various claims against Nickel, LeBlanc, Massey, Lavergne, the Corporate Defendants, and Hunter Leasing, L.P. In a partial summary-judgment order, the trial court ruled that the non-competition provisions of the agreements Nickel and Le-Blanc signed when they started working at Industries are invalid and unenforceable. The trial court did not set aside this ruling, and no party has challenged this ruling on appeal.

After a fourteen-day trial, the case was submitted to the jury. In response to the questions in the charge, the jury found in pertinent part, as follows: (1) Nickel and LeBlanc each failed to comply with the fiduciary duty he owed to Global; (2) the Corporate Defendants knowingly participated in the breaches of fiduciary duty by Nickel and by LeBlanc; (3) Nickel, Le-Blanc, and each of the Corporate Defendants misappropriated Global’s trade secrets; (4) $4.4 million in past-lost-profits damages, if paid now in cash, would fairly and reasonably compensate Global for its damages, if any, that were proximately caused by the conduct found by the jury to be either a breach of fiduciary duty or misappropriation of Global’s trade secrets; 3 (5) a preponderance of the evidence did not prove that any of the defendants were part of a conspiracy regarding the breach of fiduciary duty by either Nickel or LeBlanc or regarding the misappropriation of Global’s trade secrets; (6) the percentage of responsibility attributable to Nickel is zero percent; and (7) the percentage of responsibility attributable to LeBlanc is zero percent.4

After trial, Global did not challenge any jury finding and sought judgment on the [14]*14verdict. Global argued that Nickel and LeBlanc each should be jointly and severally liable with the Corporate Defendants, despite the jury’s finding that each had a percentage of responsibility of zero.

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Bluebook (online)
436 S.W.3d 9, 37 I.E.R. Cas. (BNA) 1818, 2014 WL 1258017, 2014 Tex. App. LEXIS 3407, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hunter-buildings-manufacturing-lp-v-mbi-global-llc-texapp-2014.