Sherman Moore, Individually and D/B/A S & S Security Inc. and George Adams v. Patriot Security Inc.

Court of Appeals of Texas·Decided March 8, 2018·No. 09-16-00182-CV·Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

NO. 09-16-00182-CV

SHERMAN MOORE, INDIVIDUALLY AND D/B/A S&S SECURITY INC. AND GEORGE ADAMS, Appellants

V.

PATRIOT SECURITY INC., Appellee

On Appeal from the 58th District Court Jefferson County, Texas

Trial Cause No. A-191,488

MEMORANDUM OPINION

Appellants Sherman Moore (“Moore”), S&S Security Inc. (“S&S”), and George Adams (“Adams”) filed this appeal complaining of a summary judgment rendered in favor of Appellee Patriot Security Inc. (“Patriot” or “Appellee”). We affirm.

Background

The underlying lawsuit was filed in 2011 by Patriot against Moore, S&S, and Adams (collectively “Defendants”). Patriot alleged claims for tortious interference with contract and misappropriation of trade secrets. A jury trial commenced on December 8, 2015. After testimony by Adams, counsel for Patriot advised the court as follows:

The parties now announce that we’ve settled this case, the Patriot, Inc.; Cause No. A-191,488 against S & S Investigation and Security, Inc., and Sherman Moore individually, and George Adams.

I will try to recite it as best I remember, and these two able lawyers will jump in when my memory fails me. It will -- that settlement will include $100,000, 50,000 of which is due this Friday, . . . [t]he 11th[.]

....

And, then, another $50,000 will be paid 60 days from today’s date, which will put it -- pick a date. . . . February 15th -- . . . [T]he money will be delivered to my office. That will be made payable to Patriot Security, Inc.

Also, in addition to the monetary payment, the defendants have agreed to enter into a noncompete, confidentiality agreement, nonsolicitation of employees; but the noncompete applies to Jefferson and Orange County.

....

They have -- whatever that number is, they’ve agreed not to solicit, nor accept, or advertise for security business, which is the . . .

[a]rmed business [for] [t]hirty-six months[.]

....

There will be a confidentiality provision placed in that document.

There will be a liquidated damage provision added, for $150,000, that -- if there is a breach of the agreement.

Counsel for Moore and S&S advised the court that

Defendant S & S Investigations and Security has agreed to provide, through their accounting firm or accountant, the financial documents or records that prove that, over this 36-month period, that there has been no new accumulation of Jefferson County or Orange County businesses.

After some discussion regarding businesses with offices or operations in multiple counties, Mr. Moore stated he would make a list of “11 to 13 clients” in Jefferson and Orange Counties to which the noncompete agreement would apply and told the court “we’re not gonna put labor in Orange County or Jefferson County.” The court stated “I accept the tendered offer and I’ll await your order and it will conform with what you said and we’ll have the record and, if it conforms, I’ll sign it.” The proceedings then concluded.

At some point following the trial, Moore obtained new counsel, and on December 14, 2015, Moore’s new attorney filed a Motion for Mistrial and Notice of Rescission. In the motion for mistrial and notice of rescission, Moore argued that the attorneys had an exchange that was “more of a discussion with the court as opposed to any fashion of agreement.” In the notice of rescission, Moore alleged that “there is not now nor has there ever been a full and final agreement between all the parties

disposing of any and all issues” and due to “missing terms[]” and “missing resolutions for pending factual disputes amongst the litigants[,]” Moore stated that he was rescinding any purported agreements or obligations imposed in the course of the judicial proceedings.

On December 18, 2015, Patriot filed a Fifth Amended Original Petition. The amended petition alleged in part as follows:

[] On Friday, December 11, 2015, before 9:28 a.m., Defendants requested that Plaintiff allow Defendants to wire TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00) to the trust (IOLTA) account of [the] Bernsen Law Firm before noon of the same day and to wire the additional TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00) to the Bernsen Law Firm trust account on Tuesday, December 15, 2015. Plaintiff agreed to Defendants[’] request and at 9:20 a.m. sent wiring instructions to Bernsen Law Firm’s IOLTA account.

[] No monies have been received to date from Defendants.

The amended petition also alleged that, despite the fact that Defendants had agreed to provide a client list of “11 to 13 clients” in Jefferson and Orange Counties, the Defendants actually provided a “purported list of 39+ clients” in Jefferson and Orange Counties. The amended petition stated a claim for breach of contract or, in the alternative, specific performance of the contract, and sought damages of $250,000 plus attorney fees and costs.

On February 2, 2016, the court held a hearing on Moore’s motion for mistrial.

Counsel for Moore argued that the discussion on the record on December 8, 2015,

did not reflect an agreement as to who among the Defendants was to make a payment. According to Moore’s counsel, there was no agreement, no entry of judgment, and “basically [it] is our right to rescind or back out of any type of an agreement until there is, in fact, a final judgment or rendition from the Court.” Counsel for Patriot explained that Patriot had relied upon the representations of Defendants and their previous counsel to settle the case and that the parties had arrived at an agreement. The court denied the motion for mistrial.

On March 14, 2016, Patriot filed a traditional motion for summary judgment on its claim for breach of contract, attaching affidavits, an excerpt of proceedings, and various other exhibits. According to the motion, the parties had made a settlement agreement whereby, in exchange for Patriot dismissing the jury and eventually releasing Defendants from the lawsuit, Defendants would pay Patriot $100,000 in cash and agreed to a three-year non-compete provision. According to the motion for summary judgment, the Defendants also agreed on the record to provide a list of “11 to 13” clients that Defendants would keep and that would be exempt from the noncompetition agreement, and then instead sent Patriot a list of thirty-nine clients, some of whom Patriot alleged were already clients of Patriot. Patriot summarized its arguments as follows:

In short, Defendants made Plaintiff an offer which was promptly accepted in exchange for the dismissal of the jury and eventual

dismissal of the suit upon Defendants performance of the agreement.

Defendants quickly sough[t] to alter the agreement with Plaintiff’s approval, then eventually expanded the scope of the non-compete without Plaintiff’s approval and in bad faith. Moreover, Defendants now refuse to pay the agreed sum of money all together. Finally, Defendants filed an official notice of an intent to continue to breach the agreement, as such, Defendants are liable to Plaintiff for the amount of the original settlement amount, the liquidated damages, attorney’s fees, and strict enforcement of the non-compete agreement.

The motion alleged that Defendants breached the settlement agreement in two respects: they produced a list of clients far in excess of the agreed-upon eleven-to- thirteen number, and they did not make the agreed-upon payments. Patriot further argued in the motion

[] Per the Settlement Agreement, Defendants [are] owe[d]

$150,000 in liquidated damages due to their breach. Additionally, Defendants still owe Plaintiff the initial $100,000 from the settlement agreement as well. Furthermore, Plaintiff has incurred additional attorney fees to enforce the terms of the Settlement Agreement. These costs and damages exist solely because of Defendants’ breach.

....

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Sherman Moore, Individually and D/B/A S & S Security Inc. and George Adams v. Patriot Security Inc., (Tex. Ct. App. 2018).

Sherman Moore, Individually and D/B/A S & S Security Inc. and George Adams v. Patriot Security Inc. (Sherman Moore, Individually and D/B/A S & S Security Inc. and George Adams v. Patriot Security Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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