Opinion issued March 31, 2026
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-24-00220-CV ——————————— LANCE CHRISTOPHER KASSAB AND LANCE CHRISTOPHER KASSAB, P.C. D/B/A THE KASSAB LAW FIRM, Appellants V. MICHAEL A. POHL AND THE LAW OFFICE OF MICHAEL A. POHL, PLLC, Appellees
On Appeal from the 281st District Court Harris County, Texas Trial Court Case No. 2018-58419
OPINION
This appeal arises from a suit brought by Michael Pohl and his law firm
(collectively, Pohl) against Lance Kassab and his firm (collectively, Kassab). Pohl,
a Texas lawyer, contracted with a marketing firm to help him identify about 11,000 prospective clients in Mississippi for mass tort settlements. After Pohl closed his
Mississippi law office, the marketing firm took the contents of Pohl’s law office,
refused to return them, and sued Pohl for breach of contract in Mississippi.
Kassab, also a Texas lawyer, began investigating whether Pohl’s conduct in
connection with the Mississippi mass tort cases constituted barratry. Kassab entered
an agreement with the marketing firm’s principal to pursue claims against Pohl. As
part of the agreement, Kassab acquired documents from Pohl’s client files, including
attorney fee contracts between Pohl and his clients and a list of Pohl’s actual,
potential, or rejected clients and their contact information (the client materials).
Kassab notified some of these individuals that he suspected Pohl had committed
barratry. Several responded to the notice and, represented by Kassab, pursued civil
barratry claims and grievances against Pohl.
After settling one barratry claim and successfully defending himself against
the other claims and grievances, Pohl sued Kassab, asserting that Kassab had
misappropriated Pohl’s client materials in violation of the Texas Uniform Trade
Secrets Act (TUTSA).1 The jury found in favor of Pohl, and the trial court entered
judgment consistent with the verdict awarding Pohl $1,453,040.00 in damages, $3
million in exemplary damages, and attorney’s fees.
1 TEX. CIV. PRAC. & REM. CODE §§ 134A.001–134A.008.
2 On appeal, Kassab contends, in three issues,2 that the trial court erred in
entering judgment on the jury verdict because no evidence supports the jury’s
findings of liability and damages under TUTSA and other trial court errors require
remand.
We affirm in part and reverse in part.
Background
Pohl becomes involved in mass tort settlements in Mississippi.
In 2012, Pohl participated with a Mississippi attorney in a joint venture to
identify Mississippi clients and file their claims in the BP settlement program formed
after the 2010 Deepwater Horizon oil spill. Pohl opened a Mississippi office for this
purpose. At some point, Pohl also took on motor vehicle rollover accident cases that
were part of a General Motors mass tort settlement.
When Pohl first got involved with the BP claims, he agreed to take on
marketing to identify potential clients and pre-vet them. To assist him in those
efforts, Pohl entered an agreement with a group of marketers, doing business as
Precision Marketing Group, LLC (Precision), to provide public relations services,
gather and preserve evidence, and screen and liaise with his clients and prospective
clients.
2 Kassab raised, but abandoned, a fourth issue related to a civil barratry counterclaim.
3 Pohl spent between $5.5 and $6 million on all the marketing and public
relations involved in the BP litigation. From these efforts, about 11,000 clients
retained Pohl. Pohl had each client sign a fee agreement. Pohl had various client lists
compiled, which included client contact information and other personal and private
information.
Pohl stored the client materials in his Mississippi office. The office was “very
secure.” It had an armed guard and the office required a key to enter. The office was
locked at night and had limited access during the day.
In performing the tasks outlined in its agreement with Pohl, Precision had
access to compilations of documents with the names and contact information for
Pohl’s clients. Pohl instructed Precision and its employees that all the files were
attorney-client privileged and all the information contained in the files and gathered
from the clients was privileged and had to be protected. Precision agreed to maintain
the confidentiality of Pohl’s client materials. Pohl also instructed temporary workers
who had access to the materials that they were privileged and to be kept confidential.
By the summer of 2014, Pohl had closed his Mississippi office. Scott Favre,
the managing member of Precision, took the physical copies of Pohl’s information
and Pohl’s computers.
4 The marketers sue Pohl in Mississippi.
In June 2014, Precision told Pohl that it would not return the equipment and
materials taken from Pohl’s office. Precision and the marketers then sued Pohl in
federal court in Mississippi, claiming breach of contract and seeking quantum meruit
relief for Pohl’s alleged failure to pay for Precision’s services (the “Mississippi
suit”). Precision and the marketers alleged that Pohl contracted with them to provide
public relations and marketing, for which he agreed to pay Precision a percentage of
the attorney’s fees for the legal claims obtained from their efforts, plus their expenses
and a flat fee. Pohl counterclaimed for conversion. He asserted that Precision and
the marketers had breached their contracts with him by providing his proprietary
information and materials to unauthorized third parties and converting his property,
including original client contracts and client personal and claim information, to their
own use.
While the litigation was pending, the marketers assigned their interests in their
individual marketing firms, as well as any claims they had against Pohl, to Precision,
which was sold to Favre.
During a discovery dispute in the Mississippi suit, Precision sought a
protective order to prevent disclosure of its marketing lists and bar Pohl from using
discovery to find out whether Precision sold or disclosed them to Texas lawyers who
might try to contact Pohl’s former clients and pursue barratry claims against Pohl.
5 The federal district court agreed with Pohl that the information was discoverable and
compelled the disclosure.
In April 2017, Pohl, Precision, and the individual marketers, including Favre,
settled the Mississippi suit. In the settlement agreement, Precision and Favre agreed
to return to Pohl all originals and all copies of all documents, records, and other
information that concerned or identified past, current, and prospective clients of Pohl
in their possession, custody, or control and to permanently delete all electronically
stored information that concerned or identified any of Pohl’s past, current, or
prospective clients. The settlement did not disclose that in November 2016, Kassab
entered an agreement with Favre, under which he received from Favre at least some
of Pohl’s client information and property.
Kassab acquires and uses Pohl’s client information to bring barratry claims against Pohl.
Kassab used the information he acquired in the transaction with Favre to send
State Bar-approved letters to Pohl’s former clients, notifying them that they may
have been unlawfully solicited. Hundreds responded and retained Kassab to pursue
barratry and negligence claims against Pohl. Kassab filed four lawsuits against Pohl
on behalf of hundreds of clients. Three of those cases were dismissed. Pohl paid
$150,000 to settle the remaining case.
Kassab and several of his clients also filed grievances against Pohl. All were
dismissed. 6 Pohl brings this suit.
In August 2018, Pohl brought this suit against Kassab, Precision, Favre, and
two others, alleging a conspiracy to “illegally obtain[], maintain[], and use[]
confidential information and property belonging to Pohl.” Pohl alleged that the
marketer defendants stole Pohl’s information and then sold it to Kassab who
“solicited those clients to act as plaintiffs . . . to bring cases against Pohl for alleged
barratry and other claims.” Pohl also sued Favre and Precision for breach of their
settlement agreement, and all defendants for violation of TUTSA and conspiracy.
Pohl sought as damages the attorney’s fees he incurred defending against the barratry
litigation and grievances. Kassab answered, asserting affirmative defenses, and
counterclaimed for civil barratry.
Before trial, certain other defendants Pohl named in the suit agreed to settle
his claims against them for payments totaling $765,000 (the “settlement credit”).
The jury finds in favor of Pohl.
After a seven-day trial, the jury found that Pohl owned, as trade secrets, (1)
“[a]ttorney client fee contracts between Pohl and his clients” and (2) “[a]ny list of
the identities and contact information of Pohl’s actual, potential or rejected clients.”
The jury also found that Kassab, Favre, and two others had misappropriated them
and apportioned 70% of the fault causing the injury to Pohl. And the jury found that
regarding the misappropriation, Kassab was “part of a conspiracy that damaged
7 Pohl” with Favre and the two others. The jury also found that there was clear and
convincing evidence that Kassab engaged in willful and malicious misappropriation.
As damages, the jury found that Pohl was entitled to recover a total of
$1,741,663 for the attorney’s fees he incurred in his defense in the civil barratry and
grievance proceedings; $250,000 for “the price that a willing buyer and a willing
seller would have agreed on, at the time of the misappropriation, as a fair price for
Kassab’s use of the trade secrets”; and $200,000 as “the value of the development
costs that Kassab avoided by misappropriating Pohl’s trade secrets.” The jury also
found that Pohl was entitled to $3,000,000 in exemplary damages for Kassab’s
willful and malicious misappropriation.
The trial court entered judgment on the jury’s verdict.
Evidence of Trade Secret Liability
In his first issue, Kassab challenges the legal sufficiency of the evidence as to
whether Pohl owned the client materials, whether the client materials constituted
trade secrets, and whether Kassab misappropriated them.
This is an evidentiary-sufficiency issue for which Kassab did not have the
burden of proof. When a party challenges the legal sufficiency of the evidence to
support an adverse finding on which it did not have the burden of proof, the party
must demonstrate that no evidence supports the finding. Nguyen v. Hoang, 507
S.W.3d 360, 370 (Tex. App.—Houston [1st Dist.] 2016, no pet.). “When
8 determining whether legally sufficient evidence supports a jury finding, we must
consider evidence favorable to the finding if a reasonable factfinder could and
disregard evidence contrary to the finding unless a reasonable factfinder could not.”
4Front Eng’red Sols., Inc. v. Rosales, 505 S.W.3d 905, 908 (Tex. 2016). “A no
evidence point will be sustained when (a) there is a complete absence of evidence of
a vital fact, (b) the court is barred by rules of law or of evidence from giving weight
to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a
vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes
the opposite of the vital fact.” Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897,
903 (Tex. 2004). “If the evidence offered to prove a vital fact’s existence is so weak
as to do no more than create a mere surmise or suspicion, the record contains less
than a scintilla.” JBS Carriers, Inc. v. Washington, 564 S.W.3d 830, 842 (Tex. 2018)
(citation modified).
A. Elements of proof under TUTSA
Texas Civil Practice and Remedies Code Chapter 134A defines a “trade
secret” as
all forms and types of information, including business, scientific, technical, economic, or engineering information, and any formula, design, prototype, pattern, plan, compilation, program device, program, code, device, method, technique, process, procedure, financial data, or list of actual or potential customers or suppliers, whether tangible or intangible and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if: 9 (A) the owner of the trade secret has taken reasonable measures under the circumstances to keep the information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.
TEX. CIV. PRAC. & REM. CODE § 134A.002(6). The jury instruction was
consistent with this definition. We consider the quantum of evidence on each
element below.
1. Ownership of Trade Secret
Kassab maintains that no evidence supports the jury’s finding that Pohl owned
the client materials. Texas Civil Practice and Remedies Code section 134A.002(3-a)
defines the “owner” of a trade secret as “the person or entity in whom or in which
rightful, legal, or equitable title to, or the right to enforce rights in, the trade secret
is reposed.”
Pohl testified that both he and each of his clients owned their client materials.
But he distinguished between an individual’s ownership right in his or her own file
and the right to own a compilation of his clients’ information, which belonged to
Pohl alone.
The record shows a dispute between Pohl and Precision over who owned the
client materials. Pohl testified he had Precision prepare the client list, and he paid
Precision to do so. Favre, who acquired the client list by acquiring Precision, asserted
10 that he owned the list, but this assertion does no more than create a fact issue about
ownership. It would not prevent a reasonable factfinder from finding that Pohl
owned the client materials. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.
2005).
2. Actual or potential independent economic value
Kassab also asserts that the client materials did not derive independent
economic value because they did not provide Pohl with an economic advantage.
Pohl testified that the client materials derived value from his ability to solicit
existing clients, as permitted by the State Bar rules. His expert explained that
compiling a list of mass tort clients was valuable because it “separated the wheat
from the chaff” and identified individuals who were likely to pursue a claim. The
client materials also identify who had filed suit before, which was valuable for filing
future claims.
Pohl testified to the amount of money he spent on marketing to retain his
clients. Pohl spent 5.5 to 6 million to create “the client base, the customer list, the
trade secrets.” An offer to buy the purported trade secret materials is some evidence
that they had “independent economic value” for purposes of section 134A.002(6).
See Coe v. DNOW LP, 718 S.W.3d 338, 361 (Tex. App.—Houston [14th Dist.] 2025,
pet. filed). This is legally sufficient evidence to support a finding that the client
materials had actual or potential economic value.
11 3. Reasonable measures to maintain secrecy.
Kassab asserts no evidence supports the jury’s finding that Pohl took
reasonable measures under the circumstances to keep the client materials secret.
In FMC Technologies, Inc. v. Murphy, 679 S.W.3d 788 (Tex. App.—Houston
[1st Dist.] 2023, pet. denied), this Court emphasized that the reasonable measures inquiry
was highly fact specific. See id. at 810. This does not mean that whether a party has
used reasonable measures to preserve the secrecy of a purported trade secret is
always a fact issue. In Scientific Machine & Welding, Inc. v. Rose, No.
03-20-00564-CV, 2022 WL 850409 (Tex. App.—Austin Mar. 23, 2022, no pet.)
(mem. op.), the Third Court affirmed summary judgment after concluding that the
company’s information did not meet definition of trade secret. Id. at *2. The Third
Court observed that 1) all work product related to the company’s projects was
available to all its employees and was not password protected; 2) the email of the
owner/president was not password protected; 3) the company’s vendor lists were not
password-protected; 4) third-party vendors were provided drawings without any
restrictions, such as non-disclosure agreements; and 5) after the defendant gave
notice that he planned to work for a client of the company, was allowed to continue
working for three days and continued to have “full access” to company’s design
work as well as customer and vendor lists. Id. at *3.
12 The evidence shows that when Pohl retained Precision, Pohl and Precision’s
own lawyers instructed Precision staff about confidentiality regarding the client
materials and explained the attorney-client privilege to them. Pohl had “firm
confidentiality agreements” with the Precision marketing/public relations group. He
explained to Precision that the information it was collecting was attorney-client
privileged, had “lots of personal data,” including Social Security numbers, and had
to be protected from disclosure.
Pohl testified that to maintain the confidentiality of the client materials, he
kept the client materials in an office that had limited access and was locked at night.
His Mississippi office required a key, and the file cabinets were lockable. The office
computers were password protected. Secretaries and contract workers were advised
from time to time that they were using attorney-client privileged materials and they
were to safeguard the confidences in them. They were told to keep the files under
lock and key and they weren’t allowed to have third parties look through the files
because the files had attorney-client confidential information in them.
After Pohl closed his Mississippi office, Favre, without Pohl’s knowledge or
consent, stole physical copies of Pohl’s information and took possession of Pohl’s
computers. When Pohl became aware the client materials had been taken, he
demanded their return.
13 In the Mississippi litigation, Pohl demanded the marketers return his client
contracts. He was “fighting to get access” to his client materials during the lawsuit.
Without his permission or knowledge, a list identifying Pohl’s clients, though
without addresses or other contact information, was filed in the public record in the
Mississippi suit.
After the settlement of the Mississippi suit in April 2017, Pohl testified that
he had “four to six months of legal wrangling” to enforce the agreement’s
requirement that his client materials be returned.
Kassab counters that Pohl did not seek a temporary restraining order, an
injunction, a protective order, or a written confidentiality agreement to protect the
client materials from disclosure in the Mississippi litigation. Given that Pohl had
impressed on Precision at the outset of their relationship and multiple times during
it that the client materials were confidential and to be protected from disclosure, that
Pohl failed to take certain specific measures to protect them during the litigation
does not negate his other efforts to protect them, nor does it render those efforts
unreasonable. We hold legally sufficient supports the jury’s finding that Pohl took
reasonable measures under the circumstances to maintain the secrecy of his client
materials.
14 B. Kassab’s affirmative defenses
Kassab also asserts that the statute of limitations, public policy, attorney
immunity, and the judicial proceedings privilege bar Pohl’s misappropriation claim
as a matter of law. We consider each in turn.
1. Statute of limitations
Whether a cause of action is barred by limitations is a question of law that we
review de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221
(Tex. 2003). “Causes of action accrue and statutes of limitations begin to run when
facts come into existence that authorize a claimant to seek a judicial remedy.” Exxon
Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011). When a plaintiff
discovers or should have discovered the cause of his injury and whether a plaintiff
exercised due diligence in so discovering are questions of fact. Pirtle v. Kahn, 177
S.W.3d 567, 572 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).
Texas law provides that “[a] person must bring suit for misappropriation of
trade secrets not later than three years after the misappropriation is discovered or by
the exercise of reasonable diligence should have been discovered.” TEX. CIV. PRAC.
& REM. CODE § 16.010(a). The limitations provision also explains that “[a]
misappropriation of trade secrets that continues over time is a single cause of action
and the limitations period described by Subsection (a) begins running without regard
to whether the misappropriation is a single or continuing tort.” Id. § 16.010(b).
15 Pohl filed this suit against Kassab on August 28, 2018. The jury found Pohl,
in the exercise of reasonable diligence, should have discovered the acquisition, use,
or disclosure of his trade secrets by Kassab by August 19, 2017.
Kassab first points to Pohl’s knowledge that the files and computers had been
removed from Pohl’s office in the summer of 2014. But no evidence before the jury
shows that Kassab was involved in the removal. Instead, the evidence shows that
Kassab received Pohl’s client materials from Favre in the fall of 2016—within the
three-year limitations period.
Kassab asserts that the initial misappropriation of a trade secret sets the
limitations clock for all defendants, but the statute does not support this assertion.
The drafters of the uniform trade secret statute explained that its contribution was
“substitution of unitary definitions of trade secret and trade secret misappropriation,
and a single statute of limitations for the various property, quasi-contractual, and
violation of fiduciary relationship theories of noncontractual liability utilized at
common law.” UNIF. TRADE SECRETS ACT, prefatory note at 2 (UNIF. L. COMM’N
1985).
The Texas Legislature approved of these unitary definitions when it enacted
TUTSA. In doing so, it recognized that “misappropriation” can take many forms.
The statute explains that misappropriation means:
16 (A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (B) disclosure or use of a trade secret of another without express or implied consent by a person who: (i) used improper means to acquire knowledge of the trade secret; (ii) at the time of disclosure or use, knew or had reason to know that the person’s knowledge of the trade secret was: (a) derived from or through a person who used improper means to acquire the trade secret; (b) acquired under circumstances giving rise to a duty to maintain the secrecy of or limit the use of the trade secret; or (c) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of or limit the use of the trade secret; or (iii) before a material change of the position of the person, knew or had reason to know that the trade secret was a trade secret and that knowledge of the trade secret had been acquired by accident or mistake.
TEX. CIV. PRAC. & REM. CODE § 134A.002(3).
Pertinent here, TUTSA does not distinguish between direct and indirect
misappropriation. Disclosure or use by a person who owed a duty to the plaintiff to
keep the trade secret confidential (direct misappropriation) and acquisition by a
person “from or through a person who owed a duty to” the plaintiff (indirect
misappropriation) are separate and independent acts of misappropriation under
TUTSA. See id. The applicable statute of limitations identifies discovery of “the
17 misappropriation” as the act that begins the three-year limitations period. See TEX.
CIV. PRAC. & REM. CODE § 16.010(a).
Kassab acquired the client materials from Favre in November 2016, less than
three years before Pohl filed suit in August 2018. Thus, we hold that the statute of
limitations does not bar Pohl’s suit.
2. Privilege and Immunity
Kassab asserts that three types of privilege and immunity bar Pohl’s claims
against it.
When a party attacks the legal sufficiency of an adverse finding on an issue
on which it has the burden of proof, it must demonstrate on appeal that the evidence
establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co.
v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); see also Powell Elec. Sys., Inc. v.
Hewlett Packard Co., 356 S.W.3d 113, 125–26 (Tex. App.—Houston [1st Dist.]
2011, no pet.). In conducting a legal sufficiency review, we review the evidence
presented below in the light most favorable to the jury’s verdict, crediting favorable
evidence if reasonable jurors could and disregarding contrary evidence unless
reasonable jurors could not. Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 770
(Tex. 2010); City of Keller, 168 S.W.3d at 827. Thus, we will sustain Kassab’s legal
sufficiency challenge if the evidence conclusively establishes its entitlement to the
affirmative defense asserted. See Francis, 46 S.W.3d at 241. Evidence is conclusive
18 only if reasonable people could not differ in their conclusions. See City of Keller,
168 S.W.3d at 816.
First, Kassab maintains that he was privileged to use the information in the
client materials to inform Pohl’s former clients about his alleged misconduct and to
report it to the State Bar.3 Second, he claims that attorney immunity bars Pohl’s
claims because he made no commercial use of Pohl’s client materials until Kassab
was in an attorney-client relationship.4 Third, as to the grievances Kassab filed, the
Texas Rules of Disciplinary Procedure prohibit any lawsuit against him based on the
filing of a grievance.5
The flaw in Kassab’s assertions of privilege and immunity is that the jury was
not required to find that Kassab used or disclosed the client materials to find that he
misappropriated Pohl’s trade secrets. Question 2 of the jury charge gave the jury five
3 “[T]rade secret law permits disclosures relevant to public health or safety, commission of crime or tort, or other matters of substantial public concern.” Bartnicki v. Vopper, 532 U.S. 514, 539 (2001) (Breyer, J. and O’Connor, J., concurring) (citing RESTATEMENT (THIRD) OF UNFAIR COMPETITION §40, cmt. c (1995)). 4 Attorneys are immune from liability to nonclients for any conduct within the scope of their representation of their clients. See Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018) (citing Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015). Thus, under the doctrine of attorney immunity, “an attorney does not have a right of recovery, under any cause of action, against another attorney arising from conduct the second attorney engaged in as part of the discharge of his duties in representing a party. . . .” Bradt v. West, 892 S.W.2d 56, 72 (Tex. App.—Houston [1st Dist.] 1992, writ denied). 5 See TEX. RULES DISCIPLINARY P.R. 17.09.
19 options, any of which would support a finding that Kassab misappropriated Pohl’s
trade secrets. Four of the options revolved around disclosure, but one did not. It
required a finding only of acquisition with the specified scienter:
To find misappropriation of a trade secret, you must find that [Kassab]— (a) Acquired the trade secret, and that the party knew or had reason to know that the trade secret was acquired by improper means . . . .
Kassab acknowledges that he had no attorney-client relationships with any of
Pohl’s former clients until after he acquired the client materials in November 2016.
The privilege and immunities Kassab asserts would not protect the act of acquiring
them. Thus, the jury charge supports the finding of liability outside of any of the
protected conduct or status that Kassab identifies.
Kassab argues that attorney immunity may apply even though the conduct at
issue lies outside the litigation context, but the authority he cites does not extend that
far. In Haynes & Boone, LLP v. NFTD, LLC, the supreme court explained that
attorney immunity provides a defense to a non-client’s claims based on an attorney’s conduct that (1) constitutes the provision of “legal” services involving the unique office, professional skill, training, and authority of an attorney and (2) the attorney engages in to fulfill the attorney’s duties in representing the client within an adversarial context in which the client and the non-client do not share the same interests.
631 S.W.3d 65, 78–79, 81 (Tex. 2021) (emphasis in original). Because the attorney’s
conduct must be in furtherance of his duties in representing his client, attorney
immunity does not protect Kassab from liability.
20 For the same reasons, we reject Kassab’s argument that the judicial
proceedings privilege applies to the jury’s misappropriation finding. No judicial
proceedings had been initiated when Kassab acquired Pohl’s client materials.
We overrule Kassab’s first issue.
Damages
In his second issue, Kassab asserts that the judgment should be reformed to
eliminate certain elements of damages that cannot be recovered as a matter of law.
A. Exemplary damages
Kassab argues that Pohl cannot recover exemplary damages because the jury
charge does not show a unanimous answer in response to the predicate liability
question. “We review de novo the statutory standards of recovery for exemplary
damages and the legal effect of a jury’s verdict. Oscar Renda Contracting, Inc. v.
Bruce, 689 S.W.3d 305, 309 (Tex. 2024).
“[A] party seeking exemplary damages bears the burden of securing a
unanimous verdict.” Oscar Renda Contracting, 689 S.W.3d at 309. Texas Civil
Practice and Remedies Code Section 41.003 permits a judgment for exemplary
damages “only if the jury was unanimous” in “finding liability for and the amount
of exemplary damages.” TEX. CIV. PRAC. & REM. CODE § 41.003(d); see also TEX.
R. CIV. P. 292 (“A verdict may be rendered awarding exemplary damages only if the
jury was unanimous in finding liability for and the amount of exemplary damages.”).
21 Question 17 was predicated on the following instruction:
If you unanimously answered “Yes” to any part of Question 2 [misappropriation] with respect to Kassab. [sic] Otherwise, do not answer the following question.
To answer “Yes” to any part of the following question, your answer must be unanimous. You may answer “no” to any part of the following question only upon a vote of ten or more jurors. Otherwise, you must not answer that part of the following question.
Question 17 asked the jury, “Do you find by clear and convincing evidence
that the misappropriation of trade secret was willful and malicious?” The jury
answered, “Yes.”
Question 19 was predicated on the following instruction:
Answer the following question only if you unanimously answered “Yes” to Question No. 17 or Question No. 18.6 Otherwise, do not answer the following question.
You must unanimously agree on the amount of any award of exemplary damages.
Question 19 asked the jury to find an amount of exemplary damages and
contained the prescribed instructions. The jury found exemplary damages of
$3,000,000 should be assessed against Kassab and awarded to Pohl.
Following the liability and damages questions, the trial court gave instructions
for signing the verdict certificate, including the following:
All jurors should deliberate on every question. You may end up with all twelve of you agreeing on some answers, while only ten or eleven
6 The jury did not answer Question 18. 22 of you agree on other answers. But when you sign the verdict, only those ten who agree on every answer will sign the verdict.
There are some special instructions before Question No. 17, 18 and 19 explaining how to answer those questions. Please follow the instructions. If all twelve (12) of you answer those questions, you will need to complete a second verdict certificate for those questions.
In the verdict certificate, the jury certified that the verdict was not unanimous
and that ten jurors “agreed to each and every answer.” Those ten jurors signed the
certificate as instructed.
The second verdict certificate instructed the jury that if it “unanimously
answered Questions No. 2, 10, 15, 16, 17, 18 and/or 19” then the presiding juror was
required to sign the second verdict certificate as to those questions.
The presiding juror signed the second verdict certificate as to Question 2 and
Question 19 only. Her signature appears below a statement for each of those two
corresponding questions stating that she “certif[ied] that the jury was unanimous in
answering [the questions]. The presiding juror has signed the certificate for all
twelve of us.” The presiding juror did not, however, sign the second verdict
certificate for Question 17: the predicate liability finding for exemplary damages.
Pohl points to the jury’s unanimous finding, in response to Question 2, that
Pohl was liable for misappropriation, as support for the finding of exemplary
damages in response to Question 19. But that is not sufficient. Section 41.003(d)
requires a unanimous finding of “liability for . . . exemplary damages.” TEX. CIV.
23 PRAC. & REM. CODE § 41.003(d). This language means that there must be a
unanimous finding that the defendant acted with malice or other qualifying intent in
committing the underlying wrong. See, e.g., Qwest Int’l Comm’cns, Inc. v. AT & T
Corp., 167 S.W.3d 324, 326 (Tex. 2005) (“A corporation is liable for exemplary
damages only if it (1) authorizes or ratifies an agent’s malice, (2) maliciously hires
an unfit agent, or (3) acts with malice through a vice principal.”). That question was
presented to the jury in Question No. 17.
The jury’s “Yes” answer to Question 17 and the unsigned second verdict
certificate for unanimity as to Question 17 are at odds regarding whether the jury
was unanimous in finding Kassab liable for exemplary damages. Pohl invokes the
rule that “[t]he jury is presumed to have followed the court’s instructions” to
maintain that the jury followed the predicate instructions requiring unanimity in its
responses to Questions 17 and 19. See Columbia Rio Grande Healthcare, L.P. v.
Hawley, 284 S.W.3d 851, 862 (Tex. 2009). According to Pohl, Kassab’s position
wrongly requires us to presume that the jury ignored the trial court’s predicate
instructions in responding to Questions 17 and 19. Pohl asserts that we must instead
presume that the presiding juror “inadvertently failed to sign the certificate of
unanimity” as to Question 17 in the second verdict certificate.
Both positions are equally flawed, but together they highlight the underlying
problem: when we apply the presumption that the jury followed the court’s
24 instructions in reviewing the charge as a whole, we cannot construe the disparate
responses in a way that harmonizes them. See USAA Tex. Lloyds Co. v. Menchaca,
545 S.W.3d 479, 509 (Tex. 2018). There is no definitive answer as to whether the
jury’s answer to Question 17 was unanimous.
The next question is which party bears the consequences for this quandary.
The supreme court has answered clearly: “a party seeking exemplary damages bears
the burden of securing a unanimous verdict.” Oscar Renda Contracting, 689 S.W.3d
at 309. “Because the plaintiff bears the burden to secure unanimity, it is the plaintiff
who must seek clarification” when a verdict ambiguously or otherwise “inaccurately
reflects the jury’s vote as to a particular question.” See id. at 311. Pohl sought
exemplary damages but did not ensure that the jury’s findings satisfied the
requirements of section 41.003(d).
Because the record does not definitively show that Pohl secured a unanimous
verdict on liability for exemplary damages, we hold that the trial court erred in
awarding exemplary damages.
B. Actual damages
Kassab challenges the propriety of the jury’s findings supporting the award of
actual damages.
25 1. Attorney’s fees as damages
Kassab argues that Pohl may not recover attorney’s fees incurred in previous
litigation or in defense of grievance proceedings under TUTSA as actual damages.
No contract or statute allows for the recovery of the attorney’s fees incurred by Pohl
in the civil barratry and grievance proceedings. Pohl argues that he is entitled to
recover his attorney’s fees incurred in those proceedings because he was required to
prosecute or defend an action as a result of Kassab’s wrongful conduct.
Texas law permits recovery of attorney’s fees only if allowed by contract or
by statute. Tony Gullo Motors I, LP. v. Chapa, 212 S.W.3d 299, 310 (Tex. 2006);
see Lacore Enters., LLC v. Angles, No. 05-21-00798-CV, 2023 WL 2607562, at *9
(Tex. App.—Dallas Mar. 23, 2023, no pet.) (mem. op.) (concluding that plaintiff’s
allegation that wrongful disclosure of confidential information caused “the
attorney’s fees that have been incurred [which] is evidence of damages” did not
support TUTSA claim because “attorney’s fees incurred in a lawsuit are not actual
damages.”).
TUTSA provides that:
In addition to or in lieu of injunctive relief, a claimant is entitled to recover damages for misappropriation. Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator’s unauthorized disclosure or use of a trade secret. 26 TEX. CIV. PRAC. & REM. CODE § 134A.004. Pohl asserts that the attorney’s fees he
incurred constitute an actual loss caused by misappropriation. We disagree. Pohl
expended the attorney’s fees in the barratry litigation and grievances in defense of
his own professional reputation, not to preserve his right to or recoup any loss caused
by Kassab’s misappropriation of the client materials.
Pohl also claims that the attorney’s fees he incurred in the barratry and
grievance proceedings are recoverable under the “tort of another” exception to the
general rule stated in Chapa.
Section 914 of the Restatement (Second) of Torts states this exception as
follows:
One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action.
RESTATEMENT (SECOND) OF TORTS § 914(2) (1979). The Texas Supreme Court has
discussed this exception but did not address whether the exception should be adopted
as Texas law. See Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Rsch.
Corp., 299 S.W.3d 106, 119 (Tex. 2009); see generally Naschke v. Gulf Coast Conf.,
187 S.W.3d 653, 655 (Tex. App.—Houston [14th Dist.] 2006, pet. denied)
(declining to apply exception because intermediate appellate courts “are bound to
follow the existing laws of the State” and “are not at liberty to adopt a theory of 27 recovery that has not been enacted by the Legislature or adopted by the Texas
Supreme Court”).
Some Texas appellate courts have nevertheless applied the exception
described in Restatement section 914(2), including this one. See Martin-Simon v.
Womack, 68 S.W.3d 793, 797 n.2, 4 (Tex. App.—Houston [14th Dist.] 2001, pet.
denied) (citing cases). In Massey v. Columbus State Bank, this Court affirmed a
default judgment that awarded attorney’s fees incurred by the Bank in responding to
and defending complaints and grievances caused by the appellants’ admittedly false
and defamatory filings with the Texas Department of Banking, the State Bar, the
Texas State Board of Public Accountancy, and the Sheriff’s Department of Colorado
County, Texas. 35 S.W.3d 697, 701–02 (Tex. App.—Houston [1st Dist.] 2000, pet.
denied).
In applying the exception, Massey relied on several cases, including the
Fourteenth Court’s decision in Mattly v. Spiegel, Inc., 19 S.W.3d 890, 898–99 (Tex.
App.—Houston [14th Dist.] 2000, no pet.). See 35 S.W.3d at 701–02. The
Fourteenth Court, however, later pointed out that Massey had misconstrued Mattly.
See Womack, 68 S.W.3d at 798 n.4. It reiterated that neither it nor the supreme court
had adopted the equitable exception and declined to do so in that case. Id. at 798.
Generally, this Court is reluctant to adopt a rule that conflicts with that of our
sister court. “When either the First or the Fourteenth creates a conflict with the other,
28 an inescapable consequence is the loss of uniformity on that point of law within the
shared jurisdiction.” Agar Corp., Inc. v. Electro Cirs. Int’l, LLC, 529 S.W.3d 559,
565 (Tex. App.—Houston [14th Dist.] 2017) (Frost, C.J., concurring in order
denying rehearing en banc). At any rate, this Court has not applied the equitable
exception after Massey, and since then, the supreme court has reiterated the general
rule in Texas without articulating an exception. See Chapa, 212 S.W.3d at 310.
Ultimately, we leave resolution of this conflict for another day. TUTSA
allows for only one form of equitable recovery, that being “the unjust enrichment
caused by misappropriation.” TEX. CIV. PRAC. & REM. CODE § 134A.004.
Because the attorney’s fees incurred by Pohl in the barratry and grievance
proceedings are not an actual loss caused by the misappropriation, are not a
reasonable royalty for use of the client materials, and do not purport to disgorge any
unjust enrichment by Kassab, they are not recoverable under TUTSA. Thus, the trial
court erred in awarding Pohl the attorney’s fees he incurred in the barratry and
grievance proceedings.
2. Other actual damages
Kassab next attacks the legal sufficiency of the evidence supporting the
jury’s two other actual damages findings.
To determine the value a reasonably prudent buyer would pay for a trade
secret requires the plaintiff to show only “the extent of damages as a matter of just
29 and reasonable inference, even if the extent is only an approximation.” Sw. Energy
Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 712 (Tex. 2016) (citation modified).
“[L]ack of certainty does not preclude recovery.” Id. at 711. In evaluating whether
the jury had legally sufficient evidence on which to base its damages award, we
review only the evidence tending to support the jury’’s verdict and disregard all
evidence to the contrary, unless it is conclusive. Id. at 713. “The jury generally has
discretion to award damages within the range of evidence presented at trial.” Id.
Question 7(2) asked the jury “The price that a willing buyer and a willing
seller would have agreed on, at the time of the misappropriation, as a fair price for
Kassab’s use of the trade secret(s).” The jury found $250,000.
Kassab asserts that Pohl’s testimony was no evidence of a fair price for the
client materials. We disagree. As their owner and an experienced attorney with a
mass tort practice, Pohl’s testimony is some evidence of their value. See, e.g.,
Custom Transit, L.P. v. Flatrolled Steel, Inc., 375 S.W.3d 337, 352 (Tex. App.—
Houston [14th Dist.] 2012, pet. denied) (applying property owner rule).
Kassab admitted that he and his joint venture partner paid approximately
$250,000 as an initial payment on the contract with Favre, through which Kassab
acquired the client materials. The contract also provided for continuing payments to
Favre. Pohl estimated the value of his trade secrets as between $250,000 and $5.5 to
$6 million. He arrived at the $6 million figure based on the amount he paid Precision
30 to create the list of potential clients. That amount did not include his expenses or his
office expenses. The jury’s finding of $250,000 for the value of the client materials
is at the lower range of evidence presented at trial.
Kassab next asserts that there was no evidence of the amount that he saved in
development costs. Question 7(3) asked the jury to find “[t]he value of the
development costs that Kassab avoided by misappropriating Pohl’s trade secret(s).”
The jury found $200,000. This is lower than the estimated value of the client
materials, but the evidence showed that Kassab identified some of Pohl’s former
clients using publicly available information, such as court filings and depositions.
Legally sufficient evidence thus supports this finding.
Kassab also maintains that Pohl cannot recover both the value of the trade
secret and the value of the development costs that Kassab avoided because it would
amount to a double recovery. We note that TUTSA expressly allows recovery of
both damages for actual loss and development costs avoided. See TEX. CIV. PRAC. &
REM. CODE § 134A.004 (“Damages can include both the actual loss caused by
misappropriation and the unjust enrichment caused by misappropriation that is not
taken into account in computing actual loss.”) (emphasis added). Development costs
avoided is a type of unjust enrichment, which is based on “the promise implied by
law to pay for beneficial services rendered and knowingly accepted.” Christus
Health v. Quality Infusion Care, Inc., 359 S.W.3d 719, 723 (Tex. App.–Houston [1st
31 Dist.] 2011, no pet.) (citing In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 740
(Tex. 2005)). The sum of both the value of the client materials and the amount of
development costs avoided found by the jury is substantially less than the $5.5 to $6
million dollars that Pohl estimated he spent to create the list of more than 11,000
potential clients. The jury’s findings do not show that the jury failed to take Kassab’s
development costs avoided into account in finding a fair price for Pohl’s client
C. Joint and several liability
Kassab maintains that the trial court erred in finding that Kassab was jointly
and severally liable based on the jury’s civil conspiracy finding because conspiracy
is pre-empted by TUTSA.
Conspiracy is a common law theory of liability that cannot stand without an
underlying tort. See Agar Corp., 580 S.W.3d at 141–42; Coe v. DNOW LP, 718
S.W.3d 338, 355 (Tex. App.—Houston [14th Dist.] 2025, pet. filed). Here, Question
15, which asked whether Kassab was part of a conspiracy that damaged Pohl, was
predicated solely on the misappropriation finding.
We adopt the reasoning of the Fourteenth Court in Coe and its holding that
TUTSA preempts the civil conspiracy theory of liability. See 718 S.W.3d at 355–56.
Our sister court determined that the appellee’s civil conspiracy theory was
pre-empted because it required proof of trade-secret misappropriation and conflicted
32 with TUTSA because it “allows recovery of actual losses from a person who was
found to have no responsibility for causing or contributing to such losses.” Id. at
355.
For this reason, Kassab cannot be held jointly and severally liable with the
three other parties whom the jury found to have conspired to misappropriate Pohl’s
trade secrets. The jury found that Kassab was responsible for 70% of the fault that
caused Pohl’s injury from the misappropriation. Accordingly, Kassab remains liable
for 70% of the $450,000 in damages supported by the evidence, or $315,000. See
TEX. CIV. PRAC. & REM. CODE § 33.012(a). The $765,000 settlement credit exceeds
this amount.
Kassab also argues that Pohl is not entitled to recover his attorney’s fees
incurred in prosecuting this case because his recoverable damages are less than the
settlement credit. TUTSA allows an award of “reasonable attorney’s fees to the
prevailing party if . . . willful and malicious appropriation exists.” TEX. CIV. PRAC.
& REM. CODE § 134A.005(3). For “prevailing party” status, “a plaintiff must prove
compensable injury and secure an enforceable judgment in the form of damages or
equitable relief.” Intercont’l Grp. P’ship v. KB Home Lone Star LP, 295 S.W.3d
650, 652 (Tex. 2009). Pohl obtained liability findings and a finding of willful and
33 malicious misappropriation,7 but if application of the settlement credit leaves no
damages to award, Pohl is not entitled to recover attorney’s fees.8
On remand, the trial court should determine the appropriate application of the
settlement credit, consider the parties’ arguments regarding the settlement credit’s
effect on the remaining damages findings, and render a new judgment.
Conclusion
We affirm the judgment of the trial court as to the liability finding against
Kassab, reverse in part as to damages, and remand the case to the trial court for entry
of judgment consistent with this opinion.
Clint Morgan Justice
Panel consists of Justices Rivas-Molloy, Guiney, and Morgan.
7 This provision does not contain a requirement that the jury finding of willful and malicious misappropriation be unanimous. See TEX. CIV. PRAC. & REM. CODE § 134A.005(3). 8 Because of our disposition of Kassab’s first two issues, we need not reach Kassab’s third issue. See TEX. R. APP. P. 47.1.