Expert Tool & MacHine, Inc. v. Sean Petras ( 2015 )

Affirmed and Opinion Filed August 28, 2015
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-00605-CV
EXPERT TOOL & MACHINE, INC., Appellant
V.
SEAN PETRAS AND LES STRICKLAND Appellees
On Appeal from the 95th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-13-006986
MEMORANDUM OPINION
Before Justices Bridges, Lang, and Schenck
Opinion by Justice Bridges
This case involves the alleged misappropriation of a trade secret after appellees Sean
Petras and Les Strickland, former employees of Expert Tool & Machine, Inc., left the company
and started their own competing business. The trial court granted a no-evidence motion for
summary judgment in favor of Petras and Strickland.
On appeal, Expert Tool first argues the trial court abused its discretion by granting a no-
evidence motion for summary judgment before adequate time for discovery had passed. In its
remaining issues, Expert Tool argues more than a scintilla of evidence exists to raise a genuine
issue of material fact as to its misappropriation of trade secrets, tortious interference, and civil
conspiracy causes of action. We affirm the trial court’s judgment.
Background
Expert Tool is a Dallas-based machining, fabrication, and welding company. Rudolph
Kobus founded the company almost twenty-five years ago.
In 2001, Petras joined Expert Tool as a welder and later became a production manager.
In his role as production manager, Petras prepared estimates for customers, supervised outside
projects, and supervised in-house fabrication and machining. Petras used a “price estimator” to
prepare bids. Petras described the price estimator as a “blank form,” which he filled out with
“the particulars of each job to come up with a number for the bid.” He explained the price
estimator was an internal document used to calculate the formal bid. It was never shown or
shared with any potential customer.
Strickland joined Expert Tool in 2002 as an independent contractor and sometimes
assisted Petras in preparing bids. In June of 2011, while still employed by Expert Tool, Petras
and Strickland told Kobus they had formed their own company called APS Industrial Services to
compete directly with Expert Tool. The two men left Expert Tool shortly thereafter. It is
undisputed Expert Tool did not require Petras or Strickland to enter into a non-competition
agreement or a non-solicitation agreement.
Shortly after their departure, Kobus had forensic work performed on computers to
determine if Petras and Strickland had engaged in any wrongdoing prior to their departure. The
investigation uncovered an email Petras sent to Strickland with the price estimator attached.
However, the email was sent while the two were still employed by Expert Tool and working on a
bid for a potential client.
Almost immediately upon their departure from Expert Tool, Strickland and Petras began
winning bids from long-term Expert Tool customers. Because Expert Tool believed Petras
misappropriated the price estimator, which it considered a trade secret, and suddenly began
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losing long-time clients, Expert Tool filed its original petition against Petras and Strickland on
June 24, 2013 seeking damages for misappropriation of a trade secret, tortious interference, and
civil conspiracy.
The trial court entered a Level 3 discovery order on September 9, 2013. The order set
trial for May 19, 2014 and set the deadline for discovery forty-five days before trial. Thus, the
parties had almost seven months to complete discovery.
In November of 2013, Expert Tool served written discovery on Petras and Strickland.
Both filed their answers and objections to the discovery in December of 2013. Expert Tool also
filed a notice of subpoena for production of documents from non-party, APS, on January 6,
2014. APS filed responses and objections to the subpoena on January 17, 2014. Following the
parties’ objections, Expert Tool’s attorney sent a letter on January 27, 2014 explaining why the
objections were unfounded and requesting their withdrawal.
Expert Tool never sent a request for production of documents to Petras or Strickland. It
also never requested any depositions. Petras and Strickland, on the other hand, deposed Kobus
and also obtained written discovery from Expert Tool.
On February 21, 2014, Petras and Strickland filed their traditional and no-evidence
motions for summary judgment. They argued there was no evidence supporting Expert Tool’s
misappropriation of a trade secret, tortious interference, or civil conspiracy claims.
On February 27, 2014, Expert Tool filed a motion to compel defendants’ to withdraw
objections and answer interrogatories and to compel production of documents from a non-party.
On the same day, Expert Tool filed a motion for continuance of the trial. In its continuance
motion, Expert Tool argued that once the trial court ruled on its motion to compel, and the
defendants and APS complied with the ruling, Expert Tool would then be able to review the
discovery responses and take appropriate depositions. It further stated, “The foregoing discovery
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is material to the Plaintiff’s claims, and the defendants and APS have refused and continue to
refuse to comply with the appropriate discovery rules.”
Expert Tool then filed its response to the traditional and no-evidence motion for summary
judgment. It argued the no-evidence motion was premature because “discovery remains in
progress, including a Motion to Compel discovery from Defendants that is pending before the
Court.”
On April 16, 2014, the trial court held a hearing to consider Petras’ and Strickland’s
motions for summary judgment and Expert Tool’s motion to compel and motion for continuance.
At the conclusion of the hearing, the trial court granted the no-evidence motion for summary
judgment.1 The trial court then stated, “Everything else is moot.” It did not, however, sign an
order denying Expert Tool’s continuance or motion to compel. This appeal followed.
Adequate Time for Discovery
Expert Tool first argues the trial court granted the no-evidence motion for summary
judgment before an adequate time for discovery had passed. It specifically argues the court erred
in its ruling because (1) Expert Tool’s sworn affidavit attached to its summary judgment
response demonstrated it had been denied adequate discovery; (2) the trial court did not rule on
the merits of its pending motion to compel or sworn motion for continuance of the trial; and (3)
the court acknowledged the case had been pending for only “a short time.” Petras and Strickland
respond Expert Tool failed to preserve this issue for review. Alternatively, if Expert Tool’s
argument is preserved, Petras and Strickland argue it has failed to establish its need for further
discovery through any of its filed documents.
1
The trial court also partially granted Petras’ and Strickland’s motion to strike evidence in support of Expert Tool’s response. Although
Expert Tool argues the trial court abused its discretion by striking portions of Kobus’ affidavit, we need not reach this issue for disposition of the
appeal. TEX. R. APP. P. 47.1.
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We address Petras’ and Strickland’s preservation argument first. They do not dispute
Expert Tool filed an affidavit with its summary judgment response requesting additional time for
discovery. However, they argue if the affidavit constitutes a request for continuance, Expert
Tool failed to request a hearing. Further, they argue Expert Tool never requested a ruling from
the trial court.
Petras and Strickland rely on several cases from this Court to support their waiver
argument. See Gonerway v. Corrections Corp. of Am., 442 S.W.3d 443, 446 (Tex. App.—
Dallas 2013, no pet.) (appellant failed to inform the trial court of her motion for continuance or
obtain a ruling on it; therefore, she waived her issue); Quintana v. CrossFit Dallas, L.L.C., 347
S.W.3d 445, 449 (Tex. App—Dallas 2011, no pet.) (same); Bryant v. Jeter, 341 S.W.3d 447, 451
(Tex. App.—Dallas 2011, no pet.) (same); Hightower v. Baylor Univ. Med. Ctr., 251 S.W.3d
218, 224 (Tex. App.—Dallas 2008, pet. struck) (trial court’s failure to grant continuance was not
properly before appellate court when record failed to show trial court ruled on the motion). The
common thread in these cases is that despite a party filing a motion for continuance prior to the
summary judgment hearing, the party failed to bring the motion to the trial court’s attention and
obtain a ruling before the trial court considered the summary judgment motion. Such is not the
case before us.
At the beginning of the hearing, the trial court stated the following:
We’re here on a variety of matters. I generally read your
filings. I know we have teed up today the defendants’ motion for
summary judgment. I have read the motion, the response and the
reply and the motion to strike in connection with the response.
I’ve looked at - - briefly at your motion to compel, and I’ve
looked at your motion for continuance, and I’ll hear from you on
your motion for summary judgment.
Thus, the record reflects the trial court was aware of Expert Tool’s motion for continuance.
While the better practice would have been for Expert Tool’s attorney to ask the trial court to
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entertain its motion for continuance before proceeding with the summary judgment, the record is
clear the motion was before the court. But see Quintana, 347 S.W.3d at 449 (record did not
indicate trial court was aware of continuance motion when hearing started with judge stating,
“First thing I’ve got in front of me is Defendant’s Motion for Summary Judgment”). Further,
after Petras and Strickland finished arguing the summary judgment motion and the court asked
Expert Tool for a response, the trial judge first said, “talk to me about the motion for
continuance, . . . .” Thus, we do not agree Expert Tool’s issue is waived for failing to request a
hearing or failing to bring its request for a continuance to the trial court’s attention.
We likewise disagree with Petras’ and Strickland’s contention that the trial court did not
rule on Expert Tool’s requested continuance. After granting the no-evidence summary
judgment, the trial judge stated, “Everything else is moot.” By granting the no-evidence motion
and stating the other motions were moot, the trial court implicitly overruled Expert Tool’s
request for a continuance. See Cooper v. Circle Ten Council Boy Scouts of Am., 254 S.W.3d
689, 696 (Tex. App.—Dallas 2008, no pet.) (“Although the trial court did not expressly rule on
the [motion for continuance], we conclude the trial court implicitly overruled the request when it
heard the [summary judgment] motion without granting a continuance.”). Having concluded
Expert Tool preserved its argument for review, we shall now address whether the trial court
abused its discretion by failing to grant a continuance to allow further discovery. See id. (“We
review a trial court’s decision whether to grant a party additional time for discovery before a
summary judgment hearing for an abuse of discretion.”).
A party contending it has not had adequate time for discovery before a summary
judgment hearing must file either an affidavit explaining its need for additional discovery or a
verified motion for continuance. Id.; see also TEX. R. CIV. P. 166a(g). The affidavit must
describe the evidence sought, explain its materiality, and set forth facts showing the due
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diligence used to obtain the evidence prior to the hearing. Cooper, 254 S.W.3d at 696. In
considering whether the trial court abused its discretion by denying the continuance, we consider
such factors as the length of time the case had been on file before the hearing, the materiality of
the discovery sought, whether the party seeking the continuance exercised due diligence in
obtaining the discovery, and what the party expects to prove. Id. Further, the affidavit must
state with particularity why the continuance is necessary; conclusory allegations are not
sufficient. Lee v. Haynes & Boone, L.L.P., 129 S.W.3d 192, 198 (Tex. App.—Dallas 2004, pet.
denied).
Here, Mark Alexander, Expert Tool’s attorney, filed an affidavit attached to the summary
judgment response stating Expert Tool had not yet had sufficient time or an adequate opportunity
to conduct discovery. He then stated the following:
5. Plaintiff maintains a Motion to Compel that is currently pending
before this Court. Obtaining the material that is subject to the
Motion to Compel is essential for the preparation of Plaintiff’s
case.
6. Additionally, Plaintiff has issued subpoenas deuces tecum to
certain non-parties, seeking documents and other material that are
essential to the preparation of Plaintiff’s case. Plaintiff is still
awaiting the results of those subpoenas.
Although Expert Tool argues it “went beyond” the requirements to explain its need for additional
discovery, we do not agree. Alexander’s affidavit is similar to the affidavit this Court found
inadequate in Lee. Id. In that case, the plaintiff alleged in her affidavit that she needed a
continuance to conduct further discovery because the requests for production “are extremely
relevant to the issues, and no doubt, will provide evidence essential to support [her] claims.” Id.
We concluded Lee did not provide any specifics regarding the documents she anticipated
receiving; therefore, the trial court had no basis to weigh the materiality of the requested
discovery or the length of continuance that would be needed. Id.
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Alexander’s affidavit suffers from the same flaws. He fails to explain what discovery
Expert Tool still needs or how such discovery is “essential” to the preparation of Expert Tool’s
case. Although Expert Tool argues any further description of the needed discovery would have
been redundant and the materiality of the discovery was established by the discovery itself, such
arguments fly in the face of the well-established case law requiring an affidavit to state with
particularity, not conclusory statements, why a continuance is necessary, describe the evidence
sought, and explain its materiality. Id.; see also Doe v. Roman Catholic Archdiocese of
Galveston-Houston, 362 S.W.3d 803, 813 (Tex. App.—Houston [14th Dist.] 2012, no pet.)
(denying motion for continuance when party failed to identify any facts needed for discovery or
how any facts party might discover could support the arguments he needed to respond to the
summary judgment). Further, Expert Tool’s affidavit failed to explain its diligence in attempting
to obtain discovery.2 Under these circumstances, we cannot conclude the trial court abused its
discretion by denying Expert Tool’s request for a continuance.
In reaching this conclusion, we are mindful Expert Tool filed a motion for continuance.
However, its motion requested a continuance of the trial setting and not the summary judgment
hearing. Regardless, even if we construed it as a request to continue the summary judgment
hearing, the motion suffers from the same deficiencies as its affidavit attached to the summary
judgment response.
To the extent Expert Tool urges it was entitled to a ruling from the trial court on its
pending motion to compel prior to disposition on the merits by summary judgment, we would
agree. See Eli Lilly & Co. v. Marshall, 829 S.W.2d 157, 158 (Tex. 1992) (orig. proceeding); see
2
Expert Tool again claims the record as a whole shows its diligence in obtaining discovery. However, while it may think it is redundant to
include the procedural history of the discovery dispute, that is exactly what the well-established case law requires. See Lee, 129 S.W.3d at 198
(“A party seeking more time to oppose a summary judgment must file an affidavit . . . showing the due diligence used to obtain the evidence.”);
see also Booklab Inc. v. Konica Minolta Bus. Solutions, Inc., No. 05-10-00095-CV, 2012 WL 3893521, at *2 (Tex. App.—Dallas Sept. 7, 2012,
pet. denied) (mem. op.) (noting affidavit did not set forth party’s diligence in attempting to obtain evidence necessary to oppose the summary
judgment motion).
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also In re Staff Care, Inc., No. 05-13-00987-CV, 2013 WL 4506571, at *1 (Tex. App.—Dallas
Aug. 21, 2013, orig. proceeding) (“A trial court has a duty to conduct hearings and render
decisions on motions that are properly filed and brought to the court’s attention, and a failure to
do so is an abuse of discretion.”). However, the record before this Court is clear the trial court
explicitly overruled the motion to compel when it stated at the end of the hearing that
“Everything else is moot.”3
Despite ruling on its motion to compel, Expert Tool argues this Court’s ruling in Nelson
v. PNC Mortgage Corporation, 139 S.W.3d 442 (Tex. App.—Dallas 2004, no pet.) is
“particularly on point,” and we should follow its reasoning and reverse the summary judgment.
In that case, a pro se inmate filed suit alleging wrongful foreclosure on his home. Id. at 443.
The record indicated Nelson filed approximately twelve discovery motions and sent eight letters
to the court requesting hearings. Id. at 444. He also filed motions for summary judgment. Id.
The court never set any hearings or ruled on Nelson’s motions. Id. In comparison, the trial court
promptly set hearings on the defendants’ motion to compel discovery, motion for protective
order, and later motions for summary judgment. Id. The trial court granted the defendants’
summary judgment.
In reversing the summary judgment we said, “our concern lies with the trial court’s
repeated failure to hear or rule on the numerous motions filed by Nelson despite Nelson’s
persistent requests for action.” Id. at 445. We noted the court granted the defendants’ summary
judgment without giving any apparent consideration to Nelson’s discovery motions. Id.
Such is not the case here. First, the record does not indicate Expert Tool repeatedly filed
motions to compel, which the trial court ignored. Rather, Expert Tool’s motion to compel was
3
Expert Tools appears to concede to this ruling in its reply brief. Moreover, while the trial court suggested the motion to compel was
denied for mootness, on appeal we review the denial of a motion to compel for an abuse of discretion and regardless of the proffered rationale,
look to determine whether the trial court reversibly erred in its ultimate judgment. See TEX. R. APP. P. 44.1(a)(1).
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set for hearing several times, but because of the court’s docket, the hearings were rescheduled.
Moreover, nothing indicates Petras and Strickland received preferential treatment when they
filed documents.
Here, the trial court acknowledged the pending motion to compel at the beginning of the
April 16, 2014 hearing. Unlike the pro se inmate in Nelson, who was not able to attend the
summary judgment hearing, Expert Tool’s attorney presented argument during the hearing and
briefly discussed its motion to compel as follows:
Court: Well, I still haven’t heard what it is specifically that’s on - -
lacking in the discovery that - -
[Expert Tool]: Well, like I said, Judge, if I have my motion to
compel here, and frankly I was hoping we’d entertain that first, I
have that here. I mean, we’ve asked for - - and I’m not going to go
through everything right now to, you know, say anything more
than I need to - - need to.
I asked about who - - who they contacted that were
customers - - pardon me - - that were customers of plaintiffs after
they left working for plaintiff. They object to that. Well, that’s
kind of important to know. I could go on and on. I asked them
how they come up with their factors for their price estimator. Oh,
they object to that. They don’t want to tell us how they do that.
I asked them who submitted bids on behalf of APS. They
object to that. . . .
The record, however, shows that although Petras and Strickland objected to the above-
mentioned interrogatories, they provided answers, subject to their objections. For example,
Expert Tool asked them to “Identify all of the entities in which you, on behalf of APS have
contacted to obtain work from since you ceased doing business with plaintiff.” Strickland
answered, “Subject to the foregoing objections, Defendant answers as follows. . . . Cytec
Engineered Materials, Central Life Sciences, and McCormick.” Petras answered, subject to
objections, “None.”
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Expert Tool asked Petras to “Identify each person who has submitted bids on behalf of
APS to former and/or current customers of plaintiff.” Subject to his objections, Petras answered,
“Defendant does not and cannot possibly know all of Plaintiff’s current or former customers. As
for Plaintiff’s customers that Defendant is aware of, bids have been submitted by Sean Petras,
Les Strickland, Nick Mikitoff, Rob Lane and Tim Bushee.”
Expert Tool did not specifically ask about the price estimator; however, it asked Petras
and Strickland to “Describe all of the trade secrets you have used to perform work since you
ceased doing business with Plaintiff. (This does not include any trade secret of a person/entity
not a party to this lawsuit.).” They answered, subject to objections, “None.”
Thus, the record shows Petras and Strickland answered Expert Tool’s discovery requests,
but Expert Tool was dissatisfied with their answers. Regardless, as discussed above, Expert Tool
filed a substantively defective affidavit and motion for continuance; therefore, it was not entitled
to more time to obtain discovery. Moreover, as directed to the party defendants, its motion to
compel was likewise overly broad in its requests and failed to alert the trial court of its need for
the requested discovery. And, as directed to the non-party witnesses, Expert Tool failed to
comply with the subpoena notice provision required by Texas Rule of Civil Procedure 205.2 See
TEX. R. CIV. P. 205.2. Thus, unlike Nelson, the trial court here did not foreclose any and all
possibility of Expert Tool exercising its right to obtain discovery before summary judgment was
rendered against it. Rather, both sides participated in the discovery process. As such, we do not
find Nelson supportive of Expert Tool’s argument that it was denied adequate time for discovery.
Finally, Expert Tool relies on statements the trial judge made during the summary
judgment hearing, such as acknowledging the case had been set for a “pretty short period” and
that he sometimes gets “a little trigger-happy on these cases,” to support its argument that it did
not have adequate time for discovery. However, despite these statements, the trial court
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ultimately granted the no-evidence summary judgment, which meant by the conclusion of the
hearing, the court believed adequate time for discovery had passed and granting a no-evidence
summary judgment was appropriate.
Many factors may affect a party’s adequate time for discovery. See, e.g., Carter v.
MacFadyen, 93 S.W.3d 307, 311 (Tex. App.—Houston [14th Dist.] 2002, pet. denied) (noting
“local dockets, scheduling practices, disruptive weather, the assumptions of the bar, and a myriad
of other factors may affect an ‘adequate time for discovery’”). Thus, we must defer to the trial
court’s discretion, absent abuse. Although reasonable minds could disagree, we cannot
substitute our judgment for that of the trial court. Id. (citing City of Pharr v. Tippitt, 616 S.W.2d
173, 176 (Tex. 1981) (explaining that when reasonable minds differ, no abuse of discretion is
shown)). Accordingly, based on the record before us, we conclude the trial court did not abuse
its discretion by denying Expert Tool’s request for more time to conduct discovery. We overrule
Expert Tool’s first issue.
Merits of No-Evidence Summary Judgment
In its three remaining issues, Expert Tool argues more than a scintilla of evidence existed
to raise a genuine issue of material fact as to whether the price estimator was a trade secret,
whether Petras and Strickland tortiously interfered with prospective business relations, and
whether they engaged in a civil conspiracy. However, Expert Tool’s main responsive argument
to the no-evidence summary judgment motion was its prematurity. It argued, “Without the
material requested in discovery, Plaintiff is plainly unable to make any meaningful response to
Defendants’ no-evidence arguments.” Moreover, during oral argument, Expert Tool conceded
that if this Court found against it on the first issue, then we need not address the merits of the
summary judgment. Accordingly, having ruled against Expert Tool on its first issue, we overrule
its remaining three issues.
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Conclusion
The judgment of the trial court is affirmed.
140605F.P05 /David L. Bridges/
DAVID L. BRIDGES
JUSTICE
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
EXPERT TOOL & MACHINE, INC., On Appeal from the 95th Judicial District
Appellants Court, Dallas County, Texas
Trial Court Cause No. DC-13-006986.
No. 05-14-00605-CV V. Opinion delivered by Justice Bridges.
Justices Lang and Schenck participating.
SEAN PETRAS AND LES STRICKLAND,
Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellee SEAN PETRAS AND LES STRICKLAND recover their
costs of this appeal from appellant EXPERT TOOL & MACHINE, INC.
Judgment entered August 28, 2015.
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