Oak Mortgage Group, Inc. Michael H. Nasserfar Michael E. Task And Tycord R. Gosnay v. Ameripro Funding, Inc.

Opinion

ACCEPTED 03-15-00416-CV 7644704 THIRD COURT OF APPEALS AUSTIN, TEXAS 11/2/2015 3:35:32 PM JEFFREY D. KYLE CLERK CASE NO. 03-15-00416-CV ________________________________________ FILED IN IN THE COURT OF APPEALS 3rd COURT OF APPEALS AUSTIN, TEXAS FOR THE THIRD DISTRICT OF TEXAS AT AUSTIN TEXAS 11/2/2015 3:35:32 PM ________________________________________ JEFFREY D. KYLE Clerk OAK MORTGAGE GROUP, INC., MICHAEL H. NASSERFAR, MICHAEL E. TASK, AND TYCORD R. GOSNAY

Appellants

V.

AMERIPRO FUNDING, INC. Appellee Appeal from the 345th Judicial District Court of Travis County Texas ________________________________________

APPELLANTS’ REPLY BRIEF ________________________________________ Wm. Charles Bundren, Esq. Attorney-in-Charge State Bar No. 03343200 2591 Dallas Parkway Suite 300 Frisco, Texas 75034 Telephone:214.808.3555

NOVEMBER 2, 2015 ORAL ARGUMENT REQUETSED TABLE OF CONTENTS

PAGE

TABLE OF CONTENTS 1

INDEX OF AUTHORITIES 3

REPLY STATEMENT OF FACTS 6

SUMMARY OF THE REPLY ARGUMENT 6

NO DISAGREEMENT REGARDING STANDARD OF REVIEW 12

ARGUMENT AND AUTHORITIES 12

I. AMERIPRO FAILS TO OFFER JUSTIFICATION FOR THE TEMPORARY INJUNCTION ORDER WHICH IS VOID BECAUSE IT DOES NOT COMPLY WITH THE REQUIREMENTS OF RULE 683 AND THERE IS NO EVIDENCE IN THE RECORD TO SUPPORT THE ELEMENTS NECESSARY TO OBTAIN A TEMPORARY INJUNCTION. 12

II. REPLY TO AMERIPRO ARGUMENT APPLYING THE NON-SOLICITATION PROVISIONS OF THE CONTRACTS TO REAL ESTATE HOMEBUILDERS AND CONDOMINIUM DEVELOPERS, REAL ESTATE SALES AGENTS, AND OTHER REAL ESTATE PROFESSIONALS INVOLVED IN THE REAL ESTATE INDUSTRY BECAUSE THEY ARE NOT "CUSTOMERS" OF AMERIPRO 20

III. REPLY TO AMERIPRO ARGUMENT THAT APPELLANTS CAN BE BARRED FROM SOLICITING AMEREIPRO CUSTOMERS FOR A COMPETITOR IN BREACH OF FIDUCIARY DUTIE 24

IV. REPLY TO AMERIPRO BRIEF PART IV. 27

V. REPLY TO AMERIPRO BRIEF PART V. 30 1 VI. REPLY TO AMERIPRO ARGUMENT THAT THE TEMPORARY INJUNCTION IS NOT OVERBROAD AND THAT THERE IS A DIRECT NEXUS BETWEEN THE ENJOINED CONDUCT AND IMMINENT AND IRREPARABLE INJURY TO AMERIPRO. 34

PRAYER 37

CERTIFICATE OF SERVICE 37

CERTIFICATE OF WORD COMPLIANCE 38

2 INDEX OF AUTHORITIES

PAGE

CASES

Adust Video v. Nueces County, 996 S.W.2d 245(Tex. App.--Corpus Christi 1999, no pet.) 13

Amalgamated Acme Affiliates, Inc. v Minton, 33 S.W.3d 387 (Tex. App. -- Austin 2000, no pet) 19

Conley v DSC Commun. Corp., 199 WL 89955 *5 (Tex. App. -- Dallas February 24, 1999, no pet.) 18

Correa v. Houston Surg. Asst. Serv., Inc. , 2013 WL 3958499 (Tex App. -- Houston [14th Dist.] July 30, 2013, no pet.) 35

ERI Consult. Engrs., Inc. v. Swinnea, 318 S.W.3d 867 (Tex. 2010) 24

Flake v. EGl Eagle Global Logistics, L.P., 2002 WL 31008136 *4 (Tex. App. -- Houston [14th Dist. ] September 2, 2002, no pet.) 32

Frequent Flyer Depot, Inc. v American Airlines, Inc. 281 S.W.3d 215 (Tex. App. -- Fort Worth 2009, pet. denied) 32

Garth v Staktek Corp., 876 S.W.2d 545 (Tex. App. -- Austin 1994, writ dism'd w.o.j.) 31

Hill v. McLane Co., Inc. 2011 WL 56061 *5 (Tex. App. -- Austin January 5, 2011, no pet) 18

Hunter v. Bldgs. & Mfg. LP v. MBI Global, LLC, 436 S.W.3d 9 (Tex. App. -- Houston [14th Dist] 2014, pet. denied) 25

Inex Indus., Inc. v. Alpar resources, Inc., 717 S.W.2d 685 (Tex. App. -- Amarillo 1986, no writ) 19

3 IAC, Ltd. v. Bell Helicoptor Textron, Inc. 160 S.W.3d 191 (Tex. App.-- Fort Worth 2005, no pet.) 17

Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593 (Tex. App. -- Amarillo 1995, no pet.) 30

Rugen v Interactive Business Systems, Inc., 854 S.W.2d 548 (Tex. App. -- Dallas 1993, no pet.) 18

Texas Tech University Health Sciences Center v. Rao, 105 S.W.3d 763 (Tex. App. -- Amarillo 2003, pet. dismissed) 19

Tranter, Inc. v. Liss, 2014 Tex. App. LEXIS 3398, 2014 WL 1257278 at *7 (Tex. App. -- Fort Worth, March 27, 2014 no pet.) 18

Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993) 32

STATUTES

TEXAS FINANCE CODE, Title 3, Chapter 180 (2015) (Residential Mortgage Loan Originators) 32

TRUTH IN LENDING ACT, 15 U.S.C. §1601, et seq. 32

THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT 124 Stat. 1376 (2010) 32

THE EQUAL CREDIT OPPORTUNITY ACT, 15 U.S.C. 1691 et. seq. 32

THE FAIR CREDIT REPORTING ACT (FCRA), 15 U.S.C. 1861, et seq. 32

THE S.A.F.E. MORTGAGE LICENSING ACT, 12 U.S.C. § 5101, et seq. 32

THE REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA), 12 U.S.C. § 2601, et. seq. 32 Rules

TEX. R. CIV. P. 683 Passim 4 OTHER AUTHORITIES

BLACK'S LAW DICTIONARY 348 (5th ed. 1979) 22

5 REPLY STATEMENT OF FACTS

There is no evidence in the record that Nasserfar, Task or Gosnay "secretly

solicited customers on behalf of Oak Mortgage." (See, Ameripro Brief (hereinafter

referred to as "A. Brief") at 3). There is no evidence that homebuilders, residential

developers or residential real estate agents are "customers" as that term is defined

in the employment agreements. There is no evidence that Brohn Home, Clark

Wilson builders or Seaholm Residences were ever "customers" of Ameripro as

explained in the employment agreements. There is also no evidence that

Appellants possessed any information of Ameripro after May 15, 2015 and that by

the time of the temporary injunction hearing on May 26, 2015 all information of

Ameripro was returned.

II.

SUMMARY OF THE REPLY ARGUMENT

The cornerstone to Ameripro's application for temporary injunction,

arguments in its brief, and the validity of the temporary injunction is Ameripro's

erroneous factual argument that Appellants destroyed property of Ameripro and it

was imminent that Appellants would continue to destroy additional property of

Ameripro if the temporary injunction was not granted thus causing Ameripro

irreparable injury because the property would be forever lost. This factual

argument is without merit. There is no evidence from the temporary injunction

6 record that any property of Ameripro that was ever destroyed by Appellants or that

any property of Ameripro was in danger of being destroyed by Appellants if the

district court did not grant the temporary injunction. Although challenged to cite

to such evidence, Ameripro's Brief fails to do so. Not one place in the record is

there any evidence that Ameripro lost any property or electronic files except from

Ameripro's own spoliation of the electronic files from the computer turned into

Ameripro by Nasserfar. The complete absence of any evidence of destruction or

imminent future destruction of Ameripro's property by Appellants speaks loudly of

the complete absence of the clearly established legal requirement that the

temporary injunction be entered because of imminent and irreparable injury to the

applicant.

Ameripro fallaciously turns backed up copies of electronic files from

computers (done so pursuant to the policies and procedures of Ameripro) to

external backup files into a theory of destruction of property and imminent future

destruction of property. Not so. At best, the evidence only supports the conclusion

that Appellants, as they were required to do by Ameripro's policy, backed up and

copied electronic files from their Ameripro computers onto external drives owned

by Nasserfar and Task, and then failed to remove the backed up copies of the

electronic files from their personal external drives after they ceased being

employed by Ameripro. However, prior to the temporary injunction hearing which

7 began on May 26, 2015, Appellants returned all backed up copies of the electronic

files from their personal external drives, and then, as required by the May 12, 2015

temporary restraining order, deleted the backed up copies of the electronic files

from their personal electronic storage devices. Nothing was destroyed. Ameripro's

arguments have no merit.

Past conduct is irrelevant to imminent and irreparable future injury.. For

purposes of the temporary injunction, the only relevance is the prevention of future

imminent and irreparable injury. Consequently, Ameripro's Brief and its

arguments miss the mark. They do not address the evidence in the record

necessary to establish future imminent and irreparable injury and the nexus

between the specific actions that are enjoined in the order and the evidence of

probable future imminent and irreparable injury. Instead, as it did at the temporary

injunction hearing, Ameripro focuses only on past conduct -- not imminent future

and irreparable actions. Ameripro does not address its failure to offer evidence at

the temporary injunction hearing of any imminent injury that would cause

Ameripro irreparable injury.

Ameripro fails to rebut the fact that Ameripro swore that it was entitled to

recover nearly $2 million in damages for various claims against Appellants. And,

does not dispute that Texas law does not permit a temporary injunction to enforce a

contract where the applicant for the injunction has an adequate remedy at law to

8 recover damages. Ameripro simply cannot identify evidence from the record that

there is probable imminent and irreparable injury that will occur if the injunction is

not granted, Ameripro mischaracterizes the past conduct and offers no argument,

evidence or explanation of any imminent future conduct of Appellants that is likely

to cause Ameripro irreparable injury.

Ameripro's Brief fails to sustain its burden of establishing imminent and

irreparable injury which would probably occur and would necessitate the entry of a

temporary injunction. And, Ameripro completely fails to respond to or rebut the

failure of the temporary injunction order and the record to establish any nexus

between any imminent or irreparable injury, and the specific acts of the order that

are enjoined. What imminent and irreparable injury would Ameripro suffer if the

temporary injunction order was not entered? Where in the record is there any

evidence establishing a nexus between imminent and irreparable injury and the

specific actions enjoined by the district court?

Ameripro failed to rebut Texas law which requires that the temporary

injunction order explain why the injunction is necessary in order to prohibit

imminent and irreparable injury to Ameripro. Ameripro merely restates the

applicable legal standard from the Texas rules and statutes but fails to provide any

reasoning or justification for the injunctive relief and why the injunctive relief is

necessary to prevent imminent and irreparable injury. Texas law clearly requires

9 that the temporary injunction order must state specifically why the specifically

enjoined acts are necessary in order to prevent imminent and irreparable injury,

and Ameripro's brief fails to address the connection between the evidence in the

record and the need to prevent imminent or irreparable injury.

Neither the temporary injunction order, nor the evidence in the record, nor

Ameripro's Brief identifies the elusive "trade secret" which forms the basis of

Ameripro's trade secret misappropriation claim. What is the trade secret?

Ameripro cannot articulate the secret and has never stated what the information is

within the alleged trade secret that is the basis for the trade secret protection claim.

Ameripro offers no argument or legal authorities to rebut the clear evidence that

the identity and contact information of publicly known residential builders and

developers, and residential real estate brokers can never be a trade secret and,

therefore, as a matter of law, the district court erred in finding that public

information is a trade secret and in enjoining the use of public information.. Since

the trade secret is never identified by the district court or Ameripro, and Ameripro

does not identify the trade secret in its brief, the district court erred in referencing

any trade secrets in the injunction order and in finding a likelihood of recovery on

a trade secret that does not exist.

Ameripro offers no rebuttal argument regarding the failure of the contract to

define the term "customer", and agrees that Ameripro's President admitted that

10 Ameripro provides loans to residential borrowers and that the residential borrowers

are the "customers" of the Ameripro. Ameripro offers no rebuttal to the testimony

or argument disputing its President's testimony that Ameripro has no contracts,

agreements or business relationships with residential homebuilders and developers.

Ameripro's only rebuttal is that one of the loan officers might construe the contract

to refer to "referral sources." That is insufficient. Although given the opportunity

to do so in its response brief, Ameripro failed to offer valid arguments and law to

support the district court's erroneous conclusion that public information regarding

residential builders, developers, real estate agents and referral sources are the

equivalent of "customers" of Ameripro. And, consequently, the district court

abused its discretion in restraining Appellants from soliciting the homebuilders.

Ameripro offered no valid arguments why the temporary injunction order is

not overbroad. Ameripro posits no arguments and no evidence establishing a

nexus between the acts restricted in the temporary injunction order and the need to

protect Ameripro from imminent and irreparable injury. There must be a nexus

and Ameripro offers none.

Ameripro offers no valid argument or evidence why the temporary

injunction order is not erroneous because it fails to limit the restrictions on

solicitation to one (1) year after the termination of the employment contracts --

January 19, 2016. Ameripro offers no argument or response, and no evidence from

11 the record to establish a nexus between imminent and irreparable harm probable to

occur and the injunction order compelling Appellants to turn over there forensic

images of their electronic devices and to cease and desist from using their

electronic devices including cell phones, hard drives and laptops which they had

used in their ordinary and daily business practices.

NO DISAGREEMENT REGARDING STANDARD OF REVIEW

Ameripro does not dispute that a trial court abuses its discretion when it acts

arbitrarily and unreasonably, without reference to guiding rules or principles, or

misapplies the law to the established facts of the case and that there is no particular

deference to legal conclusions of the trial court and a de novo standard of review

applies when the issue turns on a pure question of law. Ameripro does not dispute

that a trial court abuses its discretion by entering an overly-broad' injunction which

grants 'more relief' than a plaintiff is entitled to by enjoining a defendant from

conducting lawful activities or from exercising legal rights. 1

REPLY ARGUMENT AND AUTHORITIES

I.

AMERIPRO FAILS TO OFFER JUSTIFICATION FOR THE TEMPORARY INJUNCTION ORDER WHICH IS VOID BECAUSE IT DOES NOT COMPLY WITH THE REQUIREMENTS OF RULE 683 AND THERE IS NO EVIDENCE IN THE RECORD TO SUPPORT THE ELEMENTS NECESSARY TO OBTAIN A TEMPORARY INJUNCTION.

1 See authorities cited in Appellants' Opening Brief at 20-21.

12 In response to Appellants' argument that the temporary injunction order is

void because it does not comply with the strict requirements of Rule 683 of the

Texas Rules of Civil Procedure which requires that every order granting an

injunction must "set forth the reasons for its issuance" and "be specific in its terms"

and must provide a "detailed explanation of the reason for the injunction's

issuance", see e.g., Adust Video v. Nueces County, 996 S.W.2d 245, 249 (Tex.

App.--Corpus Christi 1999, no pet.), Ameripro refers to mere conclusions in the

temporary injunction order to claimed "destruction" of Ameripro's documents and

past "taking" of information belonging to Ameripro from "Ameripro's computer

network "(Ameripro Brief at 22-23); but, Ameripro fails to explain or establish

from the language of the order why any of these references in the order provide

any nexus to the specific future acts enjoined by the order, or why these

conclusions satisfied the requirements of Texas law. Merely restating the legal

standard for a temporary injunction does not provide the detailed explanation and

reasons for the necessity of the extraordinary relief of an injunction. There is no

evidence from the record that Appellants' "permanently destroy[ed]" any Ameripro

"documents", and Ameripro cites no reference in the record to support that

conclusion. There no evidence that at the time of the temporary injunction hearing

on May 26, 2015 Appellants' had in their possession of any "documents" or

"confidential and proprietary information belonging to" Ameripro. Ameripro cites 13 none. If Appellants, at the time of the temporary injunction hearing on May 26,

2015, did not have the Ameripro documents in their possession, then how can they

destroy something they did not possess? Ameripro cites no reference in the record

to support the conclusion from the temporary injunction order that Appellants

"permanently destroy[ed]" any Ameripro "documents" in the past or that they were

likely to do so in the future. ( RR Vol. 3 at 10-15; 19- 22; 24-27; 129)

The best that the record shows is that old Ameripro borrower electronic files

(from "Ameripro's computer network") were copied and backed up on external

drives owned by Nasserfar and Task (as authorized and required by Ameripro

policies and procedures) and intermingled with their electronic personal files. (See,

RR at Vol. 3 116; ). The record conclusively establishes -- without rebuttal from

Ameripro -- that all of the copied electronic files (from "Ameripro's computer

network") on the external hard drives owned by Nasserfar and Task were returned

to Ameripro prior to the temporary injunction hearing, and no such copied

electronic files (or paper files of any kind) were retained by Appellants at the time

of the temporary injunction hearing. (See, RR at Vol. 3 at 116; 122-123; 129;

Plaintiffs' Exhibit 34 at RR Vol.4; RR at Vol.3 at 73 and 85.)

Thus, there is no evidence that Appellants "permanently destroyed Ameripro

documents" because the only evidence is that electronic files were copied and

backed up on external storage devices, and then returned to Ameripro and not

14 retained. Additionally, there is no evidence from the record that Ameripro did not

have in its electronic storage systems the same electronic files that were copied and

backed up on external storage devices of Nasserfar and Task. Where are the

citations to the record of any evidence to support what Ameripro claims is the

legally necessary foundation to the temporary injunction order -- the attempts by

Appellants to "permanently destroy Ameripro documents"? The absence of this

evidence, which Ameripro claims is the cornerstone to the "reasons for issuance"

of the temporary injunction (Ameripro Brief at 22 -23), confirms the invalidity of

the injunction order.

In addition, the Temporary Restraining Order entered by the district court on

May 12, 2015 (14 days prior to the temporary injunction hearing), ordered

Appellants within three (3) days of May 12, 2015 to "return" the copied electronic

files of Ameripro from the external drives and after returning the copied electronic

files to Ameripro "not to retain any copies" -- in other words to destroy

("destruct") the copied electronic files from Appellants' electronic storage devices.

(CR at 95-98.). Before the temporary injunction hearing (which began on May 26,

2015) and in compliance with the Temporary Restraining Order, Appellants did as

the Temporary Restraining Order ordered them to do. All copied electronic files

potentially being the property of Ameripro were returned to Ameripro by Lee

Whitfield of Digital Discovery and after returning the copied electronic files, the

15 copied electronic files on the electronic devices of Appellants' were destroyed ("not

retained") by Lee Whitfield -- all as ordered by the district court in the Temporary

Restraining Order. (See, RR at Vol. 2 at 241-247). There was no finding in the

Temporary Injunction Order that Appellants had violated the Temporary

Restraining Order.

There is no evidence in the record that any copied electronic files (or paper files

or other information) belonging to Ameripro were retained by Appellants by the

time of the temporary injunction hearing beginning on May 26, 2015. Ameripro

demanded that the district court order Appellants to return the copied electronic

files and to destroy the copied electronic files after their return to Ameripro. Any

destruction of the copied electronic files from the electronic devices of Appellants'

was at the demand of, and in compliance with the district court Temporary

Restraining Order entered on May 12, 2015. Ameripro failed to cite to any

evidence in the record that Appellants, at any time, destroyed or attempted to

destroy documents or files on "Ameripro's computer network." Now, Ameripro

posits the justification for the Temporary Injunction based on Appellants'

compliance with the Temporary Restraining Order. Ameripro's argument is

invalid.

The only evidence of destruction of files was the destruction of the electronic

files on the laptop hard drive of Nasserfar by Ameripro after Nasserfar turned in his

16 laptop computer to Ameripro on January 16, 2015. (See, RR Vol. 3 at 27-30 ). In

addition, there is no evidence that Appellants possess any of the copied electronic

files (or paper files) of Ameripro after May 15, 2015 and no evidence was admitted

at the temporary injunction hearing that Appellants continued to possess any

copied electronic files or paper files of Ameripro as of May 26, 2015 because

everything had been returned prior to the beginning of the temporary injunction

hearing on May 26, 2015 (RR Vol. 2 at 115-117; 122-123; PX 34; Vol. 3 at 74-78;

82-83;85-86; 148-149). The "possession" and the alleged "destruction" of the files

of Ameripro by Appellants is the foundation to the arguments in Ameripro's

response brief to substantiate the reasons for the imminent and irreparable injury

justifying the temporary injunction order. The foundation fails for the reasons and

evidence explained in this section of the Reply Brief.

Ameripro's efforts to redeem the void temporary injunction order fail. Ameripro

relies on IAC, Ltd. v. Bell Helicoptor Textron, Inc. 160 S.W.3d 191 (Tex. App.--

Fort Worth 2005, no pet.) (Brief at 24) but, in that case the evidence was clear that

the defendant "possessed trade secrets" of the plaintiff and threatened to disclose

the plaintiff's trade secrets publicly. Those facts do not exist here. The elusive

trade secrets have never been identified by Ameripro or the district court. And

there is no evidence that Appellants possessed any documents, records or files of

Ameripro or trade secrets, if any, as of the date of the beginning of the temporary

17 injunction hearing on May 26, 2015. Again, the critical element of possession and

threat to disclose are completely absent. This authority is inapposite. For the same

reasons, Rugen v Interactive Business Systems, Inc., 854 S.W.2d 548 (Tex. App. --

Dallas 1993, no pet.) (Ameripro Brief at 24) is inapposite because the evidence

was clear that the "former employee possesses confidential information." Not only

is there no evidence of any possession by Appellants of trade secrets or

confidential and proprietary information allegedly belonging to Ameripro as of the

date of the beginning of the temporary injunction hearing - May 26, 2015 -; but,

additionally, the temporary injunction order does not find that Appellants had in

their possession as of May 26, 2015 any trade secrets or confidential and

proprietary information belonging to Ameripro. Everything had been returned and

not retained as ordered by the temporary restraining order dated May 12, 2015.

And, Tranter, Inc. v. Liss, 2014 WL 1257278*9 (Tex. App. -- Fort Worth March

27, 2014, no pet.) (Ameripro Brief at 25) involved breaches of non-competes

covenants, which do not exist in this case.

Possession of trade secrets is the constant theme of the additional authorities

relied upon by Ameripro to attempt to justify the reasons for the temporary

injunction. Hill v. McLane Co., Inc. 2011 WL 56061 *5 (Tex. App. -- Austin

January 5, 2011, no pet), and Conley v DSC Commun. Corp., 199 WL 89955 *5

(Tex. App. -- Dallas February 24, 1999, no pet.) (Ameripro Brief at 26), again

18 involve actual possession of trade secrets or confidential and proprietary

information by the defendants. No such evidence exists here and, therefore, these

cases are inapposite to support the issuance of the injunctive order.

The remaining authorities relied upon by Ameripro to revive the invalid

temporary injunction order did not involve cases for alleged misappropriation of

trade secrets, alleged possession of confidential and proprietary information, or

claims of "destruction" of documents. Amalgamated Acme affiliates, Inc. v Minton,

33 S.W.3d 387 (Tex. App. -- Austin 2000, no pet) involved claimed

misrepresentations concerning commercial speech which caused deception and

confusion among customers. It is inapposite. Inex Indus., Inc. v. Alpar resources,

Inc., 717 S.W.2d 685 (Tex. App. -- Amarillo 1986, no writ) involved an injunction

to prohibit appellant from reworking all and gas wells leased by the appellee. It is

inapposite. Texas Tech University Health Sciences Center v. Rao, 105 S.W.3d 763

(Tex. App. -- Amarillo 2003, pet. dismissed) involved an injunction to reinstate a

medical student expelled for engaging in protected free speech on a matter of

public interest concerning an autopsy that he witnessed. It too is inapposite.

It is not disputed that the temporary injunction order failed to find that

Appellants possessed Ameripro trade secrets and confidential and proprietary

information when the temporary injunction hearing began on May 26, 2015 and it

is not disputed that there is no evidence in the record that Appellants possessed

19 Ameripro trade secrets and confidential and proprietary information after May 15,

2015. The lack of any finding of possession and the lack of any evidence of

possession of any trade secrets or confidential and proprietary information dooms

any reasoning for granting the temporary injunction because, on his face, the

temporary injunction order does not explain why anything is imminent and why

failure to grant the temporary injunction is likely to cause irreparable injury to

Ameripro since there is no evidence that Appellants ever destroyed Ameripro's

documents, electronic files, or information. For this reason, the temporary

injunction should be declared invalid.

II.

REPLY TO AMERIPRO ARGUMENT APPLYING THE NON- SOLICITATION PROVISIONS OF THE CONTRACTS TO REAL ESTATE HOMEBUILDERS AND CONDOMINIUM DEVELOPERS, REAL ESTATE SALES AGENTS, AND OTHER REAL ESTATE PROFESSIONALS INVOLVED IN THE REAL ESTATE INDUSTRY BECAUSE THEY ARE NOT "CUSTOMERS" OF AMERIPRO.

Ameripro sidesteps the reading and construction of its employment

agreements with Nasserfar and Task. It's brief fails to address the actual language

of the contract and how the contract, on its face, should be interpreted.

Additionally, Ameripro sidesteps the explicit one-year limitation on the solicitation

of "customers" and does not address the unlimited duration of the injunction order

prohibiting solicitation. Ameripro does not explain or argue how the contract can

be interpreted in any way except that customers are the borrowers because of the 20 explicit language in the contract which provides "any customer of Employee that

existed prior to employment with the Company, provided the customer and their

loan is not being serviced by the Company." (Emphasis added). Ameripro gives no

rebuttal for the definition of the customer as being a customer who has a "loan"

with Ameripro. Ameripro's failure to offer a reasonable explanation regarding this

language speaks loudly concerning the improper construction of the contract by the

district court. ( RR Vol. 3 at 145-147).

Ameripro also does not offer any rebuttal or explanation rebutting the

essence of its business which is to loan money to borrowers who are its customers.

(RR Vol. 2 at 109-111; 115, L9-21). Ameripro offers no rebuttal, explanation or

argument regarding the language on the face of the employment contract language

which refers to the term "customer" as residential loan borrowers, not

homebuilders or residential developers. Ameripro refuses to engage in or offer

arguments from the face of the contract which would explain the district court error

in concluding that the term "customer" applies to residential homebuilders,

residential condominium developers, and other real estate professionals such as

real estate sales agents, and in granting a temporary injunction prohibiting

solicitation of "Brohn Homes, Seaholm Residences and Clark Wilson Builders"

(See, App. 1 at 4). On the face of the contract and the language of the contract, in

the absence of rebuttal argument from Ameripro, it is clear that the construction of

21 the contract by the district court is erroneous and is contrary to the explicit

language and intent of the agreement.

. Ameripro does not respond to the Texas authorities cited in Appellants' Brief

regarding the latent ambiguity of the contract created by collateral matters, such as

the application of the non-solicitation provisions to entities that are not customers 2 of Ameripro. Ameripro did not dispute that the temporary injunction record

provides no evidence that either Michael Nasserfar or Michael Task ever solicited

loans from any residential loan borrowers of Ameripro or from Brohn Homes,

Seaholm Residences, and Clark Wilson Builders.

Ameripro did not reply to or argue that a "customer" is not generally defined

as "one who regularly or repeatedly makes purchases of, or has business dealings

with, a tradesman or business." BLACK'S LAW DICTIONARY 348 (5th ed.

1979) or not "one who regularly or repeatedly makes purchases of, or has business

dealings with a tradesman or business house; one who customarily has dealings

with a business establishment." Ameripro did not dispute that it confessed at the

temporary injunction hearing that it does not have any direct business dealings

with and does not loan money to residential homebuilders, residential real estate

agents or residential developers. (RR at Vol. 2 at 109-111). Ameripro offered no

legal authority, statutory or case law, which would define the term "customer" in

2 See authorities cited in Appellants' Opening Brief at 30.

22 any other manner than one who, in response to Ameripro's offer of a residential

mortgage, does business with Ameripro and purchases the product offered by

Ameripro -- a residential mortgage, and such person can be none other than a

borrower who has purchased a residential mortgage.

Instead of addressing the legal arguments regarding the interpretation of the

employment contract on the face of the language from the contract and the legal

arguments regarding the definition of the term "customer," Ameripro relies upon

inapposite references to statements made by Nasserfar and Task. No matter what

their statements are, their statements cannot redefine or reformulate the definition

of the term "customer" which on its face in the employment contract is defined as

one who has a "loan" with Ameripro. The contract language controls, not the

parole statements of the parties. And, Ameripro has offered no legal authorities or

even any legal arguments that would interpret, from the face of the contract, the

term "customer" to mean anything other than a borrower who has a "loan" with

Ameripro. There is no other plausible explanation, from the wording of the

contract, than that the term "customer" is a reference to a mortgage loan

"borrower" who customarily does business with Ameripro -- a company, without

question, that has as its sole purpose to originate residential loan mortgages for

borrowers. For these reasons, as a matter of law, the district court erred in defining

23 the term "customer" to mean any one, person or entity other than a residential

mortgage borrower.

III.

REPLY TO AMERIPRO ARGUMENT THAT APPELLANTS CAN BE BARRED FROM SOLICITING AMEREIPRO CUSTOMERS FOR A COMPETITOR IN BREACH OF FIDUCIARY DUTIES.

The title of paragraph III. of Ameripro's brief is disjointed with the

arguments following the title. (Ameripro Brief at 35). Ameripro erroneously

asserts that the district court's findings of potential violations of causes of action

"warrant injunctive relief" without analysis of legal authorities to support the

imminent and irreparable injury requirements of Rule 683. Nowhere in this section

of the brief does Ameripro argue or explain the imminent and irreparable harm

requirements as applied to any alleged causes of action. Simply because a party is

alleged to have breached a contract does not, by that fact alone, justified the

issuance of the extraordinary remedy of a temporary injunction which is limited to

orders that are necessary to prevent imminent and irreparable injury. Likewise,

interference with contract, conversion, and misappropriation, do not, as simply

stated as conclusions, provide the necessary imminent and irreparable injury

requirement to justify the issuance of a temporary injunction. The authorities relied

upon by Ameripro are inapposite. ERI Consult. Engrs., Inc. v. Swinnea, 318

S.W.3d 867 (Tex. 2010) did not involve a review of a temporary injunction order

24 rather it involved a review of a final judgment on damages. Additionally, the

central question in the case was a non-compete provision in a buyout agreement.

There is no non-compete provision in the employment contracts under review here.

This case is inapposite. In Hunter v. Bldgs. & Mfg. LP v. MBI Global, LLC, 436

S.W.3d 9 (Tex. App. -- Houston [14th Dist] 2014, pet. denied) the court found that

the evidence was insufficient to support a finding that the misappropriation of trade

secrets proximately caused lost profits. It was not an injunction case. It is

inapposite to the issues before this court.

Ameripro refers to RR 66-68, 70-71, 81-82, 89-91, 99, and 143 in support of

its argument regarding trade secrets and misappropriation by Appellants (Brief at

36); however, none of this testimony even remotely suggests that Appellants had

any of the information referred to in this testimony in their possession on May 26,

2015 when the temporary injunction hearing began. While some of this

information may have been included in the external storage device backups that

were required to be copied as part of the policy of Ameripro, these references to

the record do not support the argument asserted by Ameripro that Appellants

possessed any of this information at the time that the temporary injunction order

was entered and, thus, there is a complete lack of evidence to support the necessity

for the temporary injunction order in order to prohibit imminent and irreparable

25 injury. Ameripro's arguments in this section of the brief go to the merits of its

claim for damages; not injunctive relief.

In part B., of III, at 37, Ameripro argues about alleged past conduct of

Appellants which might be relevant to Ameripro's damage claims but have no

relevance at all to the basis, justification and reasons for the temporary injunction

which concerns future conduct, not past conduct. Once again, Ameripro provides

no evidence from the record of any imminent conduct of Appellants that could

possibly cause irreparable injury to Ameripro. The arguments in this section of the

brief have no applicability to the question of the validity of the temporary

injunction order and go only to the question of damages, after trial. (See Ameripro

Brief at 37 - 40). It is unnecessary to address questions of past conduct that

provide no basis for any future actions or imminent irreparable injury.

Reply to Part C.

Although there is discussion of Texas cases in this section of the Ameripro

Brief, Ameripro, once again, fails to cite to evidence that any trade secrets exist or

were misappropriated by Appellants. Even if there were trade secrets and even if

there was a misappropriation, which is denied, Ameripro fails to provide any

evidence that any alleged trade secrets were still in the possession of Appellants as

of the date of the temporary injunction hearing on May 26, 2015 because all

possible information of Ameripro was returned to Ameripro by May 15, 2015 and

26 non was retained by Appellants. Ameripro, once again, fails to cite to evidence in

the temporary injunction record that Appellants possessed any trade secrets or

confidential or proprietary information of Ameripro as of the first day of the

temporary injunction hearing on May 26, 2015. This appeal is not about damages.

This is an appeal about an erroneous temporary injunction. Arguments concerning

past conduct which allegedly proximately caused damages -- lost profits -- to

Ameripro are inapplicable to this appeal. They need not be addressed by the court

in this appeal and there is no need to respond to such arguments in Appellants

Reply Brief.

Reply to part IV.

In part IV. of the Ameripro brief, Ameripro contends that Appellants'

argument that they returned all of the confidential information of Ameripro prior to

the May 26, 2015 hearing is "false"; but, Ameripro offers no evidence from the

hearing record that Appellants continued to possess any confidential information of

Ameripro on May 26, 2015. Ameripro's argument is confusing and strained. It

misconstrues the language of the temporary restraining order dated May 12, 2015.

(CR 95-98). The temporary restraining order states that Appellants are ordered to

"return to Ameripro all confidential documents and information they removed from

Ameripro, in whatever medium such documents and information exists, and do not

retain copies." (Emphasis added) (Except for counsel who can retain copies as

27 attorneys eyes only.). This order does not require that all laptops, external drives,

cell phones, and all other electronic storage devices ("medium") on which there

exist any confidential documents and information of Ameripro must be turned over

to Ameripro. It only requires that the documents and files be turned over, not the

computer drives, laptops, cell phones and all other electronic storage devices.

Ameripro misconstrues the temporary restraining order to require that Appellants

surrender to Ameripro all of their electronic storage devices -- laptops, external

storage devices, cell phones, etc. This misconstruction of the temporary restraining

order is the sole basis for Ameripro claiming that "Appellants did not return all of

the confidential information they downloaded from Ameripro's computers." It is an

erroneous claim.

The record is clear that Appellants returned all of the alleged confidential

and proprietary information of Ameripro prior to the May 26, 2015 hearing and did

not retain any copies. (RR at Vol.3 at 122: Plaintiffs' Exhibit 34 at RR Vol. 4; RR

at Vol. 3 at 73-78, and 85-86). Ameripro offered no conflicting evidence that the

information ordered to be returned was not returned or that the information ordered

to be returned was retained by Appellants. As of May 26, 2015, the evidence was

clear and concise that all information was returned to Ameripro and was not

retained by Appellants. Id. and RR Vol. 3, 74-71 and 85-86.

28 Next, Ameripro falsely contends that Appellants "destroyed documents"

after the "TRO commanded their return." See, Part B of Ameripro Brief at 44. This

contention is based on "140" folders that were deleted from a drive labeled "CO"

and reviewed by Roy Rector. (RR Vol. 3 at 10-15; 19- 22; 24-27; 129). However,

Ameripro never offered any evidence that the "CO" drive was ever in the

possession of Appellants, and never offered any evidence of the chain of custody

of the "CO" drive. Id. There is no evidence that the drive was a "USB device" as

contended by Ameripro and no evidence that the external drive was labeled

"Nasserfar External Drive." Id. Ameripro's contentions regarding the possession

by the Appellants as of May 26 2015 of any information and the deletion or

destruction of any information are unfounded and without support in the record.

Next, Ameripro argued that Appellants "used" the confidential information.

See Ameripro Brief at 46. This argument is immaterial to the question of the

validity of the temporary injunction. This appeal is not about damages arising

from the improper "use" of someone else's property. Whether the confidential

information was "used" or not "used" or "infringed" is a question of fact for the

jury and has no relevance to the validity of the temporary injunction order. This

argument is also irrelevant since there is no evidence that Appellants had

possession of any of the confidential information at the beginning of the temporary

injunction hearing on May 26, 2015. Where is the evidence from the temporary

29 injunction hearing record that Appellants had possession of any of the confidential

information as of May 26, 2015 -- the date that the temporary injunction hearing

began?

Reply to part V.

In part V. of Ameripro's Brief at 47, once again, Ameripro relies upon past

alleged wrongful conduct of the Appellants as the sole support for an injunction

which is prospective in nature and is to be designed to prevent future imminent and

irreparable harm. Past conduct does not matter. What matters is whether there is

evidence of imminent and irreparable harm if the injunction is not granted. Here

there is none. Nothing in this section of the Ameripro brief supports the district

court's temporary injunction. Hill and Miller Paper Co. v. Roberts Paper Co., 901

S.W.2d 593 (Tex. App. -- Amarillo 1995, no pet.), relied upon by Ameripro at 49

of its Brief, are inapplicable because in Hill it was undisputed that the defendants

had possession of trade secrets at the time that the injunction was issued and in

Miller the defendants had possession of confidential information and were actively

using the confidential information to compete at the time that the injunction was

issued. Here, there is no evidence of Appellants' use of any trade secret or

confidential information and no evidence that Appellants possessed any trade

secret or confidential information of Ameripro at the time of the temporary

injunction hearing in May 2015. Ameripro presented no evidence of any

30 solicitation, and no evidence of any competition using trade secrets or confidential

information, and no evidence that Appellants even possessed trade secrets or

confidential information when the temporary injunction was heard and issued. (RR

Vol. 3 133- 135).

Reply to part A. -C at 49 - 53.

In part A. - C. of IV. at 49 -53 of Ameripro's Brief, Ameripro urges that the

court ignore the damages which Ameripro is seeking as an inadequate remedy. In

Garth v Staktek Corp., 876 S.W.2d 545 (Tex. App. -- Austin 1994, writ dism'd

w.o.j.), there was clear and sufficient evidence that a trade secret existed and that

the defendant was using the trade secret to compete against the plaintiff. In this

case, there is no evidence of a trade secret, no evidence of any use of any trade

secret by Appellants and no evidence that Appellants even possessed a trade secret

of Ameripro at the time of the temporary injunction. Additionally, Garth involved

a technology product which was not generally available in a narrow marketplace

and there was no question regarding the trade secrets for developing the

technology product. Here, there are no trade secrets because the process and

methods and means of obtaining the origination of a residential mortgage is a

highly regulated industry and the methods and means of obtaining the origination

31 of a residential mortgage is public information and regulated by state and federal

law. 3 Garth is inapplicable.

Flake v. EGl Eagle Global Logistics, L.P., 2002 WL 31008136 *4 (Tex.

App. -- Houston [14th Dist. ] September 2, 2002, no pet.) is inapplicable because

defendant admitted to possessing trade secrets and confidential information at the

time of the temporary injunction hearing and defendant admitted that he was using

trade secrets and confidential information to compete against his former employer

and would continue to do so unless he was enjoined by the court. There was also

no adequate remedy in damages for the former employer. In Frequent Flyer Depot,

Inc. v American Airlines, Inc. 281 S.W.3d 215 (Tex. App. -- Fort Worth 2009, pet.

denied), did not involve trade secrets or confidential information. It involved the

defendants direct interference between a contract between the defendant and its

members of its frequent flyer program. On its facts, and law, it is not applicable.

There would be no damage claim that American Airlines could substantiate caused

by the brokering a frequent flyer miles. This case is inapplicable to the present

case. In Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993) the dispute centered on a

contract to purchase a business and the Supreme Court held that an injunction to

prohibit the sale of the business would maintain the status quo until the merits of 3 See, e.g., TEXAS FINANCE CODE, Title 3, Chapter 180 (2015)(Residential Mortgage Loan Originators); TRUTH IN LENDING ACT, 15 U.S.C. §1601, et seq.; THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT 124 Stat. 1376 (2010); THE S.A.F.E. MORTGAGE LICENSING ACT, 12 U.S.C. § 5101, et seq.; THE REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA), 12 U.S.C. § 2601, et. seq.; THE EQUAL CREDIT OPPORTUNITY ACT, 15 U.S.C. 1691 et. seq.; and, THE FAIR CREDIT REPORTING ACT (FCRA), 15 U.S.C. 1861, et seq.

32 the contract dispute can be determined. On its facts, it is inapplicable to the issues

in this case. Topheavy, cited at 52, is an applicable because here there is no

evidence of any future harm to Ameripro that could not be compensated by

damages whereas in that case the question was the unlawful distribution sale of

games.

Ameripro next makes the other meritorious argument that it's sworn

interrogatories seeking over $1.9 million in damages cannot be considered by the

court as evidence of an adequate remedy at law. Ameripro Brief at 53. The

evidence that America was seeking millions of dollars in damages and has sworn

in answers to interrogatories that is entitled to seek millions of dollars in damages

is part of the record. The clerk's record was supplemented and is part of the

appellate record in this case. The credibility of Ameripro is called into question

when its president testifies at the hearing that he cannot calculate damages and yet

Ameripro swears in and answers to interrogatories after the hearing that it is

entitled to recover over $1.9 million in damages. It is clear from the record

including the supplemental clerk's record that Ameripro has an adequate remedy in

damages that it is seeking from Appellants and, consequently, there is no

irreparable injury for which a temporary injunction is necessary to prohibit.

Ameripro has not been irreparably injured and there will be no irreparable injury if

the temporary injunction is quashed.

33 VI.

REPLY TO AMERIPRO ARGUMENT THAT THE TEMPORARY INJUNCTION IS NOT OVERBROAD AND THAT THERE IS A DIRECT NEXUS BETWEEN THE ENJOINED CONDUCT AND IMMINENT AND IRREPARABLE INJURY TO AMERIPRO.

Ameripro does not dispute that a district court abuses its discretion when it

misapplies the law to established facts or when it concludes that a temporary

injunction should be granted and such conclusion is not reasonably supported by

the evidence or that the entry of a temporary injunction that enjoins lawful as well

as unlawful acts is overbroad and constitutes abuse of discretion.4

Part VI. of the Brief of Ameripro sidestepped any argument regarding the

nexus between the imminent and irreparable injury and the specifics of the conduct

that is enjoined. Nowhere in the Ameripro Brief is there an argument or even an

attempt to connect the enjoined actions with reasons for imminent and irreparable

injury. For this reason, the temporary injunction order is overbroad.

There is no bases, and Ameripro provides no argument or legal authorities

for justifying the AEO quarantine of all of the "media" -- electronic devices of

Nasserfar, Task and Gosnay -- that may have, at one time, contained a file of

Ameripro. No evidence was presented at the May 26, 2015 temporary injunction

hearing that any of the "media" of Nasserfar, Task and Gosnay still contained any

information of Ameripro, and the brief of Ameripro does not address the absence

4 See, authorities cited in Appellants' Opening Brief at 54-55.

34 of evidence to substantiate that the electronic devices of the Austin loan officers

still contains information of Ameripro. There is no evidence that the information

of Ameripro was in danger of being destroyed if the electronic devices of the

Austin loan officers was not placed in AEO quarantine because there is no

evidence that the electronic devices of the loan officers was the only source of

information of Ameripro. No evidence was ever offered at the temporary

injunction hearing that the copied electronic file backed up information was the

only source of information of Ameripro. For this reason, the temporary injunction

order, in this respect, is overbroad.

Ameripro's reliance on Correa v. Houston Surg. Asst. Serv., Inc. , 2013 WL

3958499 (Tex App. -- Houston [14th Dist.] July 30, 2013, no pet.) is misplaced

because Correa was enforcement of a non-compete clause in a contract. The

contracts here do not contain non-compete provisions. Therefore, clause (iii) of

the temporary restraining order unreasonably restrains "Oak Mortgage, [and]

employees of Oak Mortgage" from "directly or indirectly, soliciting business from

Brohn Homes, Seaholm Residences and Clark Wilson Builders." There is no

contract or fiduciary relationship between Oak Mortgage and Ameripro and, thus,

no legal justification for enjoining all loan officers and employees of Oak

Mortgage from soliciting business from publicly known homebuilders. The

temporary injunction order does not set forth an explanation of why Ameripro will

35 be imminently and irreparably injured if loan officers and employees of Oak

Mortgage -- other than Nasserfar, Task and Gosnay -- solicit business from

publicly known homebuilders -- such as Brohn Homes, Seaholm Residences, and

Clark Wilson Builders -- and there is no evidence of imminent or irreparable injury

that will occur to Ameripro if such actions are not enjoined. Ameripro failed to

address this argument. The injunction should be modified to, if at all, only restrain

solicitation if in direct concert with Nasserfar, Task or Gosnay. Prohibiting

solicitation by Oak Mortgage and its other employees and officers, who have no

contract with Ameripro is overly broad.

Ameripro's response to Appellants' argument that clause (iii) of the

temporary restraining order is unreasonable and overbroad because it does not

restrict the prohibition on solicitation to the one (1) year term as set forth in the

employment agreements. (App. 6; RR Vol. 4 Plaintiffs' Exhibit 3) is inapposite to

the argument. Ameripro sidesteps the argument and refuses to address the limited

duration of the contractual non-solicitation provisions to one year. The restriction

on solicitation, if properly applied and applicable at all, is limited to one year from

the date that Nasserfar, Task and Gosnay terminated their employment relationship

with Ameripro. Ameripro has no response to this argument. For these reasons, the

temporary injunction order is overbroad in many specific respects

36 PRAYER

For these reasons, Appellants pray that the court dissolve the temporary

injunction.

Respectfully submitted,

/s/ Charles Bundren WM. CHARLES BUNDREN & ASSOCIATES LAW GROUP, PLLC Wm. Charles Bundren, Esq. Attorney-in Charge State Bar No. 03343200 2591 Dallas Parkway, Suite 300 Frisco, Texas 75034 (214) 808-3555 Telephone (972) 624-5340 Facsimile e-mail: charles@bundrenlaw.net ATTORNEY FOR APPELLANTS

CERTIFICATE OF SERVICE

The undersigned certifies that on this 2nd day of November, 2015, all counsel of record were served with a copy of this document by serving the following:

Susan Burton, Esq. State Bar No. 03479350 GRAVES DOUGHTERY HEARON & MOODY P.C. 401 Congress., Suite 2200 Austin, Texas 78701 Telephone: (512) 480-5600 Telecopier: (512) 480-5862 (facsimile) E-mail: sburton@gdhm.com ATTORNEY FOR APPELLEE:

37 __X__by the electronic filing manager pursuant to TRAP 6.3, 9.2 (c)(2), 9.5 (a), 9.5 (b) (1), 9.5(c) (4)and 9.5(e),

____ by certified mail return receipt requested deposited with the United States Postal Service on the date indicated above pursuant to TRAP 6.3, 9.2 (c)(2), 9.5 (a), 9.5 (b) (1), 9.5(c) (4)and 9.5(e),

__X__ by email at the email address indicated above pursuant to TRAP 6.3, 9.2 (c)(2), 9.5 (a), 9.5 (b) (1), 9.5(c) (4)and 9.5(e),

____ by commercial delivery service deposited with ___________________ on the date indicated above pursuant to TRAP 6.3, 9.2 (c)(2), 9.5 (a), 9.5 (b) (1), 9.5(c) (4)and 9.5(e),

and/or

____ by fax at the fax number indicated above pursuant to. TRAP 6.3, 9.2 (c)(2), 9.5 (a), 9.5 (b) (1), 9.5(c) (4)and 9.5(e),

/s/ Charles Bundren Wm. Charles Bundren, Esq. ATTORNEY FOR: APPELLANTS

CERTIFICATE OF COMPLIANCE

I certify that this document was produced on a computer using Microsoft

Word and contains 7.430 words, as determined by the computer software's word-

count function, excluding the sections of the document listed in Texas rule of

appellate procedure 9.4(i)(1).

/s/ Charles Bundren

WM. CHARLES BUNDREN & ASSOCIATES LAW GROUP, PLLC 38 Wm. Charles Bundren, Esq. Attorney-in Charge State Bar No. 03343200 2591 Dallas Parkway, Suite 300 Frisco, Texas 75034 (214) 808-3555 Telephone (972) 624-5340 Facsimile e-mail: charles@bundrenlaw.net ATTORNEY FOR APPELLANTS