Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., Jody W. Olson and Carey Roberts

414 S.W.3d 911, 36 I.E.R. Cas. (BNA) 1781, 2013 WL 5727548, 2013 Tex. App. LEXIS 13104
CourtCourt of Appeals of Texas
DecidedOctober 22, 2013
Docket01-12-00370-CV
StatusPublished
Cited by38 cases

This text of 414 S.W.3d 911 (Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., Jody W. Olson and Carey Roberts) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., Jody W. Olson and Carey Roberts, 414 S.W.3d 911, 36 I.E.R. Cas. (BNA) 1781, 2013 WL 5727548, 2013 Tex. App. LEXIS 13104 (Tex. Ct. App. 2013).

Opinion

OPINION

EVELYN V. KEYES, Justice.

Appellant, Sentinel Integrity Solutions, Inc. (“Sentinel”), sued appellees, Mistras Group, Inc., Jody W. Olson, and Carey Roberts, for damages arising out of Olson’s alleged breach of a covenant not to compete in his employment agreement with Sentinel and Mistras’s alleged tor-tious interference with the employment agreement. In bench conference before the submission of the charge to the jury, Sentinel agreed with the defendants that the scope of the covenant not to compete was overbroad as to its geographic limits. The trial court submitted eight questions to the jury on Sentinel’s claims against Mistras and Olson’s claims for attorney’s fees. The jury charge did not address the enforceability of the covenant not to compete or Olson’s alleged breach, and Sentinel did not object to the charge. The jury returned a verdict finding no liability on the part of any of the defendants. After the jury reached its verdict, the court reformed the covenant not to compete at Sentinel’s request. The trial court then entered judgment that Sentinel take nothing on its claims and that it pay Olson’s attorney’s fees pursuant to Texas Business and Commerce Code section 15.51.

In seven issues, Sentinel argues that: (1) “the covenant not to compete [was] enforceable as a matter of law,” that “even if the contract was ‘at will,’ the covenant was enforceable,” that the trial court had a mandatory duty under section 15.51(c) to reform the covenant not to compete to cause its limitations “to be reasonable and to impose a restraint that is not greater than necessary” and “to Enforce the covenant as reformed,” and that “[t]he trial court erred in determining the covenant was unenforceable and ordering the parties to a jury trial” and “in placing the issue of attorneys’ fees before the jury”; (2) the evidence was insufficient to support the jury’s finding, pursuant to section 15.51, that Sentinel knew at the time of execution of the employment agreement that the covenant did not contain reasonable limitations and that it sought to enforce the limitations to a greater extent than was necessary to protect its business interests; (3) the attorney’s fees awarded were not “actually incurred” by Olson; (4) the attorney’s fees were not properly segregated; (5) the conditional appellate attorney’s fees were not actually and reasonably incurred; (6) the trial court’s award of $750,000 in attorney’s fees for trial expenses and $200,000 in conditional appellate fees should be reversed and rendered or reformed; and (7) the trial court erred in granting pre-judgment interest on attorney’s fees.

We remand the award of appellate attorney’s fees. We further modify the judgment to delete the award of pre-judgment interest and affirm as modified.

*915 Background

Olson works as an inspector of oil and gas refinery equipment. He obtained certification from the American Petroleum Institute in 2002 and worked for a variety of companies supervising “turnarounds,” or inspections that are conducted under time-sensitive conditions while the facility is shut down. In February 2008, Olson began working for Sentinel, a Houston-based inspection company, as a turnaround supervisor. In January 2009, Sentinel promoted Olson to the position of assistant division manager of the Corpus Christi office.

On August 1, 2009, Sentinel’s general manager, Scott Corey, presented Olson with an employment agreement. The agreement provided the effective date for Olson’s promotion to assistant division manager and stated the covered duties and managerial responsibilities covered by the agreement. The employment agreement also contained a covenant not to compete, which provided, inter alia, that Sentinel “has and will disclose” confidential information regarding customers, customer representatives, employees, and specialized training. The covenant not to compete required that Olson “refrain from competing with the Company or otherwise engaging in ‘Restricted Activities’ (as defined below), for a reasonable period of time” in order to protect the confidential information. The covenant defined the “Restricted Period” as “a period of three (3) years after the Termination Date [during which Olson] will not, directly or indirectly, as an employee, officer, director, shareholder, proprietor, agent, partner, recruiter, consultant, salesman, independent contractor or in any other individual or representative capacity engage in any of the Restricted Activities.” The covenant also provided that, upon termination without cause, or in other circumstances within Sentinel’s discretion, it would pay Olson four weeks’ salary.

The covenant not to compete defined “Restricted Activities” as including:

(i) Conducting, engaging or participating in ... Inspection, Risk Based Inspection and Asset Integrity Management services in any capacity in which Employee served while working with Company, if such activity is on behalf of a customer that Employee called upon or serviced while employed by Company. Notwithstanding the foregoing, the term “Restricted Activities” as defined herein shall apply only if Employee voluntarily terminates his employment with Employer, or if Employer terminates Employee’s employment with Employer for cause as defined in this Agreement!;]
(ii) Recruiting, hiring, and/or attempting to recruit or hire ... any employees ... of the Company; or contacting or communicating with any other employees of the Company or any of its Customers for the purpose or with the intent of inducing such other employees to terminate their employment with the Company or a Customer ...;
(iii) Communicating, by any means, ... with any Customer or Customer Representative, to or for which the Company has provided services at any time during Employee’s employment by Company;
(iv) Communicating, by any means ... with an employee of the Company after the Termination Date, provided, however, that the foregoing shall not be deemed to preclude any casual contacts which are strictly social ...;
(v) Using, disclosing, publishing, copying, distributing or communicating *916 any Company Information of any nature;
(vi) Using, disclosing, publishing, copying, distributing or communicating any Confidential Information of any nature.

The covenant not to compete defined the “Restricted Area” as including seven cities and four counties in Texas, plus locations in California, Utah, Louisiana, Pennsylvania, Colorado, Wyoming, and Trinidad and Tobago. The Restricted Area also included “a twenty (20) mile radius around all customers’ jobsites and/or project facilities that Employee called on or serviced on behalf of Employer in all geographic regions, wherever located.”

The covenant not to compete also provided:

Employee and Company agree that the limitations as to time and scope of activity to be restrained are reasonable and do not impose a greater restraint on Employee than is necessary to protect the property rights and other business interests of Company. Notwithstanding the foregoing, Employee reserves the right to seek reformation of the limitations as to the time and scope of activity in a court of competent jurisdiction, in accordance with Section 9, paragraph (a) hereunder.

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Bluebook (online)
414 S.W.3d 911, 36 I.E.R. Cas. (BNA) 1781, 2013 WL 5727548, 2013 Tex. App. LEXIS 13104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sentinel-integrity-solutions-inc-v-mistras-group-inc-jody-w-olson-texapp-2013.