Vertex Services, LLC v. Oceanwide Houston, Inc., Oceanwide Texas, Inc., and Oceanwide America, Inc. ( 2019 )

Opinion issued August 13, 2019
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-18-00125-CV
———————————
VERTEX SERVICES, LLC, Appellant
V.
OCEANWIDE HOUSTON, INC., OCEANWIDE TEXAS, INC.,
AND OCEANWIDE AMERICA, INC., Appellees
On Appeal from the 55th District Court
Harris County, Texas
Trial Court Case No. 2016-30943A
OPINION
In four issues,1 appellant Vertex Services, LLC (Vertex) challenges the trial
court’s rendition of no-evidence and traditional summary judgment in favor of
1
Vertex presents its four issues as follows:
appellees Oceanwide Houston, Inc., Oceanwide Texas, Inc., and Oceanwide
America, Inc. (collectively Oceanwide) on Vertex’s claims of tortious interference
with contract, tortious interference with prospective business relations, common-
law misappropriation, and civil conspiracy.
We affirm.
Background
Vertex is in the business of providing offshore labor and staffing to clients in
the energy industry. After losing contracts with its long-time foreign labor supplier,
Sea Cross Marine PTE (Sea Cross), and its client, oil and gas company TETRA
Applied Technologies, LLC (TETRA),2 Vertex sued competitor Oceanwide.
According to Vertex, Oceanwide “poached” the foreign workers that Vertex had
“located and groomed” for its contract with TETRA and then offered them to
1. The trial court erred when it improperly concluded that “if [Plaintiff’s claim
for] misappropriation fails then all four causes of action against the
Oceanwide defendants fail because it is the underlying tort.”
2. The trial court erred when it failed to recognize that misappropriation is a
valid cause of action and encompasses Vertex’s claims for unfair
competition.
3. Oceanwide’s motion for summary judgment failed to address Vertex’s
claim for tortious interference with its contract with Sea Cross Marine.
4. Vertex presented ample summary judgment evidence to support the
essential elements of all four of its claims against the Oceanwide
Defendants.
2
Vertex also sued TETRA Applied Technologies, LLC and DHD Offshore
Services, LLC, neither of which were parties to the summary-judgment motion
Oceanwide appeals.
2
TETRA, “forc[ing] Vertex out of the loop and adversely effect[ing] its business.”
The dispute arises out of the following events.
Vertex entered into a contract (Vertex-TETRA contract) to supply both
foreign and domestic contract labor to TETRA’s “Hedron” barge from January 1,
2014 until December 31, 2015. To meet its supply obligations, Vertex procured its
foreign labor through Sea Cross pursuant to a June 20, 2010 contract (Vertex-Sea
Cross contract)3 which stated that Sea Cross would provide laborers, who would
remain Sea Cross employees, to Vertex on an as-needed basis. Although the
Vertex-Sea Cross contract stated an end date of October 9, 2010, the parties
continued to operate under it past that date.
On December 1, 2015, TETRA gave Vertex written notice that it was not
extending the Vertex-TETRA contract past the initial term because it needed to
find lower cost options as a result of the downturn in the energy market. The notice
stated that TETRA would contact Vertex “as to how we can continue to partner
with Vertex for our offshore contractor labor needs.” On the same day, Melanie
Fite, TETRA’s strategic sourcing manager of global supply chain and
procurement, emailed Jason Green, Vertex’s vice president and commercial
contract contact, advising him that TETRA had sent its notice not to extend the
3
The contract is between Vertex and Blue Marine Offshore Pte Ltd, which later
changed its named to Sea Cross Marine PTE. In this opinion, we use the name Sea
Cross to include Blue Marine.
3
Vertex-TETRA contract and stating that “we really need to talk about next year
and a way for TETRA to secure a reduction in the cost for the same.”
On December 15, 2015, Fite emailed Green asking him to confirm that
Vertex would be able “to submit a proposal by the end of this week on next year’s
commercial terms, including the discount on rates we spoke about.” She also
forwarded Green a letter from TETRA’s chief operating officer to its suppliers
asking for price reductions to meet the effects of falling oil prices. On that same
day, Jimmy Ho, owner of Sea Cross, sent Vertex a letter stating:
Our company has had an ongoing relationship with Vertex Services
for the past 6 years (DB1 and Hedron) and business relationships with
their owners since 2002. We are happy with the agreement between
the companies and prefer to work with them on the Hedron. As we
were approached by TETRA Technologies (TOS) to switch to another
US company, it is in our best interest to continue our relationship with
Vertex Services. With the assistance of Vertex Services, we believe
the crews provided to TETRA Technologies (TOS) are some of the
best in the world and have been on the Hedron since 2011. We hope
to continue the relationship with Vertex Services and provide
personnel through them to TETRA Technologies.
On December 21, 2015, Green responded by email to Fite’s request for
Vertex’s bid to supply labor to the Hedron for the 2016 season. He attached
Vertex’s proposal and stated that it was “unprofessional” for TETRA “to try to go
behind our backs and cut us out.”
In “February 2016,” Sea Cross terminated the Vertex-Sea Cross contract.
4
On February 2, 2016, TETRA invited Oceanwide to bid on supplying its
foreign labor, thus beginning the negotiations between the two companies for the
provision of foreign labor to work offshore on the Hedron.
In the first four days of February 2016, John Ford, Oceanwide’s president,
and Jimmy Ho, owner of Sea Cross, exchanged numerous text messages, including
the following:
Ford: Any news on who Tetra will utilize as your partner for the
foreign labor? Us?
Ho: My sincere apologies for not being able to give you any
feedback on Tetra before as everything is still on the discussion
stage. We had several meetings while in Houston and emails
and phone conversation with Tetra of how we should go about,
with our contract with them. They propose to us to use GMC
but we told them we prefer [Oceanwide]. Now, I need to get an
agreement from you as with GMC we are able to maintain our
rates with them and they mark up a percentage to Tetra. If you
are agreeable to a mark up between the safety courses
reimburseable by Tetra (they agree) then I can go back to Tetra
and tell them we want to go through [Oceanwide].
....
Ford: We have run the numbers and if this is what [V]ertex agreement
was or similar we can see why there may have been some issues
with their finances.
....
Ho: We have some issue with Vertex which we need to seriously
deal with before we can say yes or no to you.
Ford: Ok. If we can help let me know.
5
On February 8, 2016, James Ireland, Vice-President of Oceanwide America,
Inc., emailed Ho asking, “Who is Sea Cross?” Ho responded, “Sea Cross is one of
our company[ies].” Ho then provided information about its services and made
several statements about its previous provision of labor to TETRA through a “local
agent,” including advising that courses in rigging, firewatch, and fall protection
had been supervised “by local agent and billed at cost + [redacted],” and that
TETRA would require deck foremen and lead electricians.
That same day, Ireland sent Fite an email entitled “Oceanwide proposal to
provide foreign labor to Tetra on board the Hedron.” Among other things, the
email confirmed that “TETRA will be provided with same members of the foreign
labor as was supplied by Sea Cross during 2015,” and relayed the information Ho
had emailed to Ireland regarding Sea Cross’s previous provision of labor to
TETRA (discussing supervision and billing of certain courses and requirements for
certain categories of labor).
On February 22, 2016, TETRA sent Vertex a letter rejecting the bid it had
submitted on December 21, 2015. The letter noted that “as long as the issue of non-
payment of Sea Cross for labor supplied to the Hedron in 2015 continues, further
discussion of commercial terms for 2016 labor remains unlikely.”
On March 4, 2016, TETRA and Oceanwide entered into a labor-supply
contract (TETRA-Oceanwide contract) that required Oceanwide “to ensure that
6
TETRA is provided the same members of the foreign labor contingent supplied by
Sea Cross or its affiliates to the Hedron during the 2015 season.”
Vertex filed suit against Oceanwide for “stealing” the labor force it “spent a
considerable amount of money and time” training to fulfill its obligations under the
Oceanwide-TETRA contract. Its petition alleged causes of action against
Oceanwide for (1) tortious interference with the Vertex-Sea Cross contract,
(2) tortious interference with a prospective business relationship with Sea Cross,
(3) misappropriation of Vertex’s “knowledge of the industry, business practices,
and trained employees,” and (4) conspiracy to tortiously interfere with the Vertex-
Sea Cross contract.
Oceanwide filed a combined no-evidence and traditional summary-judgment
motion on all of Vertex’s claims against it. The trial court signed an order granting
Oceanwide’s motion. After stating that “[t]he Motion is granted on all grounds
stated therein,” the order continued:
Plaintiff makes the sensible argument that, as one court put it, the
defendants should not be able to reap where they have not sown. This
“free ride” is couched as a claim for misappropriation. But if
misappropriation fails then all four causes of action against the
Oceanwide defendants fail because it is the underlying tort.
The Court has not found any case which applies the concept of
misappropriation to people. The topic of workers being restricted in
their movement has been extensively treated in its own case law, and
more recently through Business and Commerce Code section 15.50.
Because of this law and policy, the Court observes that had the
workers in question been employed by the Plaintiff they could not
7
have been prevented from going to work for Defendants or anyone
else. Why, then, where the Plaintiff does not employ the workers in
question, could Plaintiff prevent them going to work for Defendants
or anyone else?
This case is not about non-compete contracts. However, preventing
competition and free movement of workers is what the case against
the Oceanwide defendants is about. Plaintiff cannot do indirectly what
it could not do directly.
Vertex appealed.
Summary Judgment
A. Standard of Review
We review a trial court’s summary judgment de novo. Valence Operating
Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins.
Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In conducting our review, we take
as true all evidence favorable to the nonmovant, and we indulge every reasonable
inference and resolve any doubts in the nonmovant’s favor. Valence Operating,
164 S.W.3d at 661; Knott, 128 S.W.3d at 215.
A party seeking summary judgment may move for both traditional and no-
evidence summary judgment. Binur v. Jacobo, 135 S.W.3d 646, 650 (Tex. 2004);
see TEX. R. CIV. P. 166a(c), (i). When a party has sought summary judgment on
both grounds, we typically review first the propriety of the summary judgment
under the no-evidence standard. See Merriman v. XTO Energy, Inc., 407 S.W.3d
244, 248 (Tex. 2013); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.
2004).
8
Following an adequate time for discovery, a party may move for summary
judgment on the basis that there is no evidence of one or more essential elements
of a claim on which the adverse party would have the burden of proof at trial. TEX.
R. CIV. P. 166a(i); LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688 (Tex. 2006). To
defeat a no-evidence motion, the nonmovant must produce at least a scintilla of
evidence raising a genuine issue of material fact as to the challenged elements.
Lightning Oil, 520 S.W.3d at 45. “More than a scintilla of evidence exists if the
evidence ‘rises to a level that would enable reasonable and fair-minded people to
differ in their conclusions.’” Essex Crane Rental Corp. v. Carter, 371 S.W.3d 366,
376 (Tex. App.—Houston [1st Dist.] 2012, pet denied) (quoting Merrell Dow
Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).
A defendant moving for traditional summary judgment bears the burden of
proving that no genuine issues of material fact exist on at least one essential
element of the cause of action asserted against it and that it is entitled to judgment
as a matter of law. TEX. R. CIV. P. 166a(c); Lightning Oil Co. v. Anadarko E&P
Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017). If the movant meets its burden, the
burden then shifts to the nonmovant to raise a fact issue precluding summary
judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
When a trial court does not specify the grounds it relied upon in making its
determination, we will affirm a summary-judgment ruling if any of the grounds
9
asserted in the motion are meritorious. Lightning Oil, 520 S.W.3d at 45; Beverick
v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.] 2005,
pet. denied).
B. The Summary-Judgment Order
In its first issue, Vertex complains about the trial court’s statement in its
summary-judgment order that “if misappropriation fails then all four causes of
action against the Oceanwide defendants fail because it is the underlying tort.”
According to Vertex, this indicates that the trial court failed to consider each of its
four claims against Oceanwide individually.
The challenged statement does not supplant the trial court’s statement that
Oceanwide’s motion is granted “on all grounds stated therein.” Further,
conclusions of law are not appropriate under summary judgment procedure
because “if summary judgment is proper, there are no facts to find, and the legal
conclusions have already been stated in the motion and response.” Hudson v. City
of Houston, 392 S.W.3d 714, 720 n.6 (Tex. App.—Houston [1st Dist.] 2011, pet.
denied). Thus, to the extent the complained-of statement can be characterized as a
legal conclusion (as opposed to an offer of insight into the trial court’s legal
reasoning), we will not consider it in our review for that additional reason. See IKB
Indus. v. Pro Line Corp., 938 S.W.2d 440, 441 (Tex. 1997) (“[F]indings and
10
conclusions following summary judgment can have no purpose, should not be
filed, and if filed, should be ignored by the trial court . . . .”).
We therefore overrule Vertex’s first issue.
C. Misappropriation
In its second issue and in a portion of its fourth, Vertex challenges the trial
court’s rendition of no-evidence summary judgment on its misappropriation claim.
It argues that it presented evidence of each of the elements of misappropriation,
and that the trial court failed to recognize that misappropriation “covers the type of
unfair business practices Oceanwide engaged in.”
The elements of common law misappropriation (also called unfair
competition) are “(1) the creation of plaintiff’s product through extensive time,
labor, skill, and money; (2) the defendant’s use of that product in competition with
the plaintiff, thereby gaining a special advantage in that competition (i.e., a “free
ride”) because defendant is burdened with little or none of the expense incurred by
the plaintiff; and (3) commercial damage to the plaintiff.” BP Auto., L.P. v. RML
Waxahachie Dodge, L.L.C., 448 S.W.3d 562, 571–72 (Tex. App.—Houston [1st
Dist.] 2014, no pet.); United States Sporting Prods., Inc. v. Johnny Stewart Game
Calls, Inc., 865 S.W.2d 214, 218 (Tex. App.—Waco 1993, writ denied).
In both of its issues challenging the trial court’s rendition of summary
judgment on its misappropriation claim, Vertex argues that its “knowledge of the
11
sourcing and provision of offshore labor to TETRA” qualifies as a “work product”
within the meaning of the first element. According to Vertex, the trial court erred
by “narrowly focusing on the workers as sort of a commodity” because a common-
law misappropriation claim “encompasses the value of one’s labor (i.e., expertise,
plus time, toil and talent).” Specifically, Vertex maintains that the “institutional
knowledge that it developed over time and used to craft this pool of labor,” the
training and certifications that it provided to the labor pool, and its “ability to
navigate the international customs issues involved” constitute its work product.
Recognizing that knowledge, training, and expertise are not typically
considered “products,” Vertex relies on a 1993 Waco Court of Appeals case to
support its argument that such intangibles are capable of misappropriation. In U.S.
Sporting Products, Inc. v. Johnny Stewart Game, 865 S.W.2d 214 (Tex. App.—
Waco 1993, writ denied), a company that sold tape recordings of animal sounds
sued a sporting goods company and its president for tortious misappropriation of
the recordings. The court held that the tape recordings could be misappropriated
because “[a] complainant has a protectable property interest in the product of his
labor, regardless of subject matter, so long as that matter confers on him a
commercial advantage.” Id. at 219.
We do not disagree with the Waco court. But its holding addresses a saleable
product with commercial value and thus does nothing to answer the question
12
whether knowledge, training, and expertise of human labor can be considered
products capable of misappropriation.
In Thomason v. Collins & Aikman Floorcoverings, Inc., No. 04-02-00870-
CV, 2004 WL 624926, at *4 (Tex. App.—San Antonio Mar. 31, 2004, pet. denied)
(mem. op.), a carpet salesperson sued a carpet manufacturer, alleging it had
misappropriated the “fruits of [his] knowledge, work and efforts.” The salesperson
argued that his efforts to convince the State of Texas to adopt particular carpet
specifications that only the carpet manufacturer could fulfill constituted a “work
product” that could be misappropriated. Id. The court of appeals disagreed, holding
that “[a]lthough there is no doubt that [plaintiff]’s time, labor, and skill went into
securing [defendant]’s position on the [contract], these efforts did not result in a
‘work product’ subject to appropriation by a competitor.” Id.
We conclude that Vertex’s knowledge, effort, and expertise are not work
products capable of being misappropriated. Similarly, training and certification are
not distinct saleable work products, because once imparted, they are inseparable
from the laborers themselves. Cf. Wooters v. Unitech Int’l, Inc., 513 S.W.3d 754,
763 (Tex. App.—Houston [1st Dist.] 2017, pet. denied) (“An employee . . . may
use his general skills and knowledge obtained through employment to compete
with the former employer.”); Sharma v. Vinmar Int’l, Ltd., 231 S.W.3d 405, 424
(Tex. App.—Houston [14th Dist.] 2007, no pet.) (former employees not barred
13
from using “general knowledge, skill, and experience acquired during
employment” in subsequent employment).
Finally, to the extent Vertex argues that the workforce itself was a product,
the Vertex-Sea Cross contract it relies on to defeat summary judgment belies this
assertion: it states that Sea Cross “agrees to provide laborers, on an as needed
basis,” and that “all employees are employed, paid by, and under the direct
supervision” of Sea Cross. Vertex did not have the right to any particular Sea Cross
employees. See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d at 727 (“When two
parties are competing for interests to which neither is entitled, then neither can be
said to be more justified or privileged in his pursuit. If the conduct of each is
lawful, neither should be heard to complain that mere unfairness is actionable.”).
All the Vertex-Sea Cross contract entitled Vertex to receive was a supply of
laborers at specified rates. Thus, losing access to the particular Sea Cross
employees it had honed and improved to work on TETRA’s Hedron was Vertex’s
risk to bear. Because Vertex failed to present evidence that it created a product
subject to misappropriation, the trial court did not err by granting Oceanwide’s no-
evidence summary-judgment motion on Vertex’s common-law misappropriation
claim.
We overrule Vertex’s second issue and the portion of its fourth issue
addressing the common-law misappropriation claim.
14
D. Tortious Interference with Contract
In its third issue and a portion of its fourth, Vertex argues that the trial court
erred by granting Oceanwide’s motion for summary judgment on its claim for
tortious interference with contract because (1) the motion addressed the wrong
contract, and (2) there is more than a scintilla of evidence to support each of the
elements of its claim.
Vertex argues that Oceanwide’s summary-judgment motion failed to address
the correct contract, and therefore did not assert grounds for summary judgment on
its tortious interference with contract claim. Vertex alleged in its petition that
Oceanwide interfered with its contract with Sea Cross Marine. But in its summary-
judgment motion, Oceanwide mistakenly addressed only Vertex’s contract with
TETRA.4 For example, Oceanwide stated that “Vertex did not have an existing
contract with Tetra that was subject to interference during the relevant time period”
and “Oceanwide did not commit a knowing and intentional act of interference with
Vertex’s contract with Tetra.” Likewise, Oceanwide attached evidence that
pertained only to the Vertex-TETRA contract.
We conclude that Oceanwide’s summary-judgment motion addressed the
wrong contract and therefore did not place Vertex’s claim for tortious interference
4
Oceanwide explains that the Vertex-TETRA contract “was the only contract that
discovery had revealed was in existence and the only contract with which
Oceanwide had any involvement. The loss of the Vertex/TETRA contract was the
only basis upon which Vertex could base a claim for damages.”
15
before the trial court. See Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex.
2009) (trial court may not grant summary judgment on grounds not presented in
motion); Narnia Invs., Ltd v. Harvestons Sec., Inc., No. 14-10-00244-CV, 2011
WL 3447611, at *5 (Tex. App.—Houston [14th Dist.] Aug. 9, 2011, no pet. (mem.
op.) (trial court erred in granting summary judgment on claims not addressed in
summary-judgment motion because motion “neither conclusively disprove[d] any
element” “nor challenge[d] the existence of any evidence of any element” of
unmentioned claims); see also Nnah v. 125 Interests, Inc., No. 14-15-00443-CV,
2016 WL 4543685, at *6 (Tex. App.—Houston [1st Dist.] Aug. 31, 2016, pet.
denied) (mem. op.) (two appellees failed to seek summary judgment on appellant’s
breach of contract claim against them where their no-evidence motion challenged
only appellant’s contract with different appellee). Therefore, the trial court erred by
granting appellees more relief than they sought in their summary judgment motion.
Conceding as much, Oceanwide argues that its no-evidence summary-
judgment motion adequately challenged Vertex’s claim with regard to the Vertex-
Sea Cross contract by including statements such as “Vertex has no evidence to
support critical elements of each of the causes of action that it has asserted against
Oceanwide,” and requesting dismissal of “all claims in this matter” against it. But
because these general statements do not identify which elements of Vertex’s claim
for tortious interference with the Vertex-Sea Cross contract Oceanwide is
16
challenging, they do not satisfy the “specificity requirement” for a no-evidence
motion. See TEX. R. CIV. P. 166a(i) (no-evidence summary judgment must state
“elements as to which there is no evidence”); see also Nnah, 2016 WL 4543685, at
*6 (no-evidence motion that did not address breach of specific contract failed to
seek judgment on that contract despite global statements that motion is directed to
“all remaining causes of action” and that nonmovant had no support for “element
numbers 1 through 6”); Guest v. Cochran, 993 S.W.2d 397, 402 (Tex. App.—
Houston [14th Dist.] 1999, no pet.) (holding that sentence in summary-judgment
motion purporting to seek judgment “regarding all claims and causes of action
asserted” in plaintiff’s response to special exceptions and first amended petition
was insufficient to place all claims at issue because motion made “no mention of or
reference to” of certain of plaintiff’s claims). We conclude that because it argued,
presented evidence, and challenged elements of tortious interference only with
regard to the Vertex-TETRA contract, Oceanwide’s motion did not raise grounds
for summary judgment on Vertex’s claim for tortious interference with the Vertex-
Sea Cross Marine contract.
Oceanwide next argues that even if its summary-judgment motion itself did
not succeed in putting Vertex’s claim for tortious interference with the Sea Cross
contract before the court, Vertex’s response and its reply did. A summary-
judgment motion “must stand or fall on the grounds expressly presented in the
17
motion.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex.
1993). And with specific regard to replies, we have held that when a plaintiff
amends its petition to add claims against a summary-judgment movant, the movant
may not address the new claims by reply but must instead file an amended or
supplemental motion. Blancett v. Lagniappe Ventures, Inc., 177 S.W.3d 584, 592
(Tex. App.—Houston [1st Dist.] 2005, no pet.) (citing McConnell, 858 S.W.2d at
341). The purpose of this rule is to avoid unfairness to the nonmovant by assuring
it sufficient information and time to respond to the summary-judgment motion. See
McConnell, 858 S.W.2d at 340–41 (Rule 166a(c) does not permit summary
judgment movant “to place, or possibly hide, grounds for summary judgment in a
brief filed in support of the motion or in accompanying summary judgment
evidence); Sanders v. Capitol Area Council, 930 S.W.2d 905, 911 (Tex. App.—
Austin 1996, no writ) (“The purpose of the time requirements in [R]ule 166a(c), to
give the nonmovant notice of all claims that may be summarily disposed of and the
specific grounds on which the movant relies, would be severely undercut if a
movant’s ‘reply’ in which new independent grounds were presented could be
treated as an amended motion for summary judgment.”); Sams v. N.L. Indus., Inc.,
735 S.W.2d 486, 488 (Tex. App.—Houston [1st Dist.] 1987, no writ) (granting
summary judgment on grounds added in reply would deprive nonmovant of
hearing and mandatory 21–day notice of hearing required by Rule 166a(c)); cf.
18
Sartin v. Beacon Mar., Inc., No. 09-08-00166-CV, 2009 WL 1076815, at *3 (Tex.
App.—Beaumont Apr. 23, 2009, no pet.) (mem. op.) (“A trial court cannot grant
summary judgment on a cause of action addressed only in movant’s reply brief,
which in this case was filed the Friday afternoon before the Monday hearing.”).
Disregarding the parties’ summary-judgment briefing addressing Vertex’s
claim for tortious interference with the Sea Cross contract would serve no purpose
here, where Oceanwide’s reply did not introduce a summary-judgment ground that
Vertex had not had occasion to address. Rather, it replied to the assertion in
Vertex’s response that Oceanwide had misidentified the contract with which it had
allegedly interfered. By its reply, Oceanwide corrected its mistake, specifically
identifying the elements of Vertex’s claim for tortious interference with its contract
with Sea Cross that it contended lacked evidentiary support. See TEX. R. CIV. P.
166a(i) (no-evidence summary judgment must state “elements as to which there is
no evidence”). Importantly, Vertex does not claim to have been prejudiced by this,
and we cannot imagine how it could have been, given that in its response, it not
only argued but also presented evidence in an effort to defeat no-evidence
summary judgment on its pleaded claim of tortious interference with the correct
(Vertex-Sea Cross) contract. See Blakey v. Texas Dep’t of Health, No. 03-02-
00682-CV, 2004 WL 334866, at *6 (Tex. App.—Austin Feb. 12, 2004, no pet.)
(mem. op.) (“If a nonmovant is not prejudiced and deprived of fair notice of the
19
grounds underlying the motion for summary judgment and had a fair opportunity
to respond, we are not convinced that a movant always would be prohibited from
including an additional ground for summary judgment in a reply.”). And there is no
indication from the record that the trial court’s hearing on the motion, response,
and reply took place sooner than 21 days after Oceanwide filed its reply. See id.;
see also Sams, 735 S.W.2d at 488 (granting summary judgment on grounds added
in reply would deprive nonmovant of hearing and mandatory 21–day notice of
hearing required by Rule 166a(c)).
Furthermore, our review of Vertex’s response and Oceanwide’s reply
indicates that both parties directly addressed and fully briefed Oceanwide’s no-
evidence grounds for summary judgment on Vertex’s claim for tortious
interference with its contract with Sea Cross. The trial court’s order granting
summary judgment confirms that it considered the motion “along with the
Response, Reply, summary judgment evidence and oral argument.” For these
reasons, we, too, consider the response and reply in holding that the issue was tried
by consent. See PAS, Inc. v. Engel, 350 S.W.3d 602, 610 (Tex. App.—Houston
[14th Dist.] June 28, 2011, no pet.) (“Trial by consent may be appropriate in some
limited summary judgment contexts.” (citing Roark v. Stallworth Oil & Gas Inc.,
813 S.W.2d 492, 495 (Tex. 1991))); Henny v. JPMorgan Chase Bank, N.A., No.
01-10-00476-CV, 2012 WL 524429, at *4–5 (Tex. App.—Houston [1st Dist.] Feb.
20
16, 2012, no pet.) (mem. op.) (applying concept of “trial by consent” to motion to
dismiss, but holding affirmative defenses not addressed in motion were not tried by
consent because it was unclear that they “were fully discussed and tried by the
parties [in their response and reply] as claimed by [movant]”). Because it was tried
by consent, the trial court did not err in granting summary judgment on Vertex’s
claim for tortious interference with its contract with Sea Cross.
With regard to the portion of its fourth issue dealing with its tortious
interference with contract claim, Vertex argues that it presented evidence to defeat
Oceanwide’s challenge to each of the elements of that claim. See TEX. R. CIV. P.
166a(i). To establish a cause of action for tortious interference with contract, a
plaintiff must prove that (1) a contract subject to interference exists, (2) the
defendant committed a willful and intentional act of interference with the contract,
(3) the act proximately caused injury, and (4) the plaintiff sustained actual damages
or loss. Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 588 (Tex. 2017); Better
Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345,
361 (Tex. App.—Houston [1st Dist.] 2013, pet. denied).
Oceanwide argues that there is no evidence that the Vertex-Sea Cross
contract was in effect when Oceanwide is alleged to have interfered with it. We
agree.
21
Vertex presented its June 20, 2010 contract with Sea Cross, along with
affidavit testimony that although the contract stated an end date of October 9,
2010, the parties continued to operate pursuant to its terms “until February 2016
when Sea Cross Marine decided to no longer provide foreign labor for offshore use
to Vertex.” Vertex also presented Sea Cross’s December 15, 2015 letter stating that
Sea Cross “has had an ongoing relationship with Vertex Services for the past 6
years.” But Vertex did not present any evidence to pinpoint the date on which Sea
Cross ended this arrangement. Critically, the only evidence of Oceanwide’s alleged
interference consists of two emails between Oceanwide and Sea Cross, both dated
February 8, 2016. Thus, there is no evidence to show that Vertex and Sea Cross
were still operating under the extended contract, which Vertex claims ended in
“February 2016,” when Oceanwide is alleged to have interfered with it.5
Further, even if Vertex had presented evidence that its contract with Sea
Cross was in force when the alleged interference occurred, there is no evidence
that Oceanwide committed a willful and intentional act of interference with it. See
Rincones, 520 S.W.3d at 588. Indeed, Vertex has not offered any evidence to show
that Oceanwide knew that the Vertex-Sea Cross contract was in effect (if indeed it
was) at the time it was alleged to have interfered with it. Mark III Sys., Inc. v.
5
Further, Vertex’s summary-judgment response attached text messages dated
February 1–4, 2016, between Ho and Oceanwide’s president, John Ford, which
suggest that Oceanwide’s understanding was that the contract between Ho
(through one of his companies) and Vertex was no longer in effect.
22
Sysco Corp., No. 01-05-00488-CV, 2007 WL 529960, at *5 (Tex. App.—Houston
[1st Dist.] Feb. 22, 2007, no pet.) (mem. op.) (“To be subject to liability [for
tortious interference with contract], an actor must have knowledge of the contract
or relation with which he is interfering and of the fact that he is interfering with the
performance of that contract.”). All Vertex’s evidence shows is that Oceanwide
knew that Sea Cross had previously supplied TETRA’s Hedron labor force through
Vertex.
Even if Vertex had presented evidence that the Vertex-Sea Cross contract
was in effect at the pertinent time, and that Oceanwide was aware of it, to survive
no-evidence summary judgment, Vertex would still have to present evidence that
Oceanwide willfully and intentionally interfered with the contract. See Rincones,
520 S.W.3d at 588; see also Ellis v. McKinney, No. 01-00-01098-CV, 2001 WL
1445892, at *5 (Tex. App.—Houston [1st Dist.] Nov. 15, 2001, pet. denied)
(“Merely contracting with someone while knowing of that person’s contract with
another is not the same as inducing a breach.”). Vertex argues that the Oceanwide-
TETRA contract’s requirement that Oceanwide use the same workforce that
Vertex had supplied to TETRA through its contract with Sea Cross is evidence of
Oceanwide’s willful and intentional interference, because “the only way to obtain
the exact same labor force that was used during 2015 was to interfere with the
Vertex and Sea Cross Marine agreement in order to steal the workers then being
23
provided to Vertex.” The fact that the Oceanwide-TETRA contract required
Oceanwide to use the 2015 Hedron workforce does not compel the conclusion that
Oceanwide willfully and intentionally interfered with the Vertex-Sea Cross
contract. Missing is any evidence that Oceanwide was “more than a willing
participant” in any breach Sea Cross may have committed, or in other words, that it
“took an active part in persuading” or “knowingly induced” Sea Cross to breach its
contract with Vertex. See Ferrara v. Nutt, 555 S.W.3d 227, 243 (Tex. App.—
Houston [1st Dist.] 2018, no pet.) (“To establish a willful and intentional act of
interference, there must be evidence that the defendant was more than a willing
participant—the defendant must have knowingly induced one of the contracting
parties to breach its obligations under a contract.” (citation omitted)); see also
Fitness Evolution, L.P. v. Headhunter Fitness, L.L.C., No. 05-13-00506-CV, 2015
WL 6750047, at *23 (Tex. App.—Dallas Nov. 4, 2015, no pet.) (mem. op.) (to
survive summary judgment on tortious interference with contract claim,
nonmovant must present “some direct evidence of a willful act of interference”)
(citing Browning–Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex. 1993); Rugaart
v. Rodriguez, No. 13-02-00116-CV, 2003 WL 22671571, at *4 (Tex. App.—
Corpus Christi Nov. 13, 2003, no pet.) (mem. op.) (plaintiff must show that
defendant “took an active part in persuading” party to contract to breach).
24
Vertex next argues that the February 8, 2016 email from Jim Ireland of
Oceanwide to Melanie Fite of TETRA indicating that Ireland and Jimmy Ho had
earlier communicated about how the Vertex-Sea Cross contract dealt with certain
issues (supervision and billing for courses the Hedron laborers were required to
complete) shows Oceanwide’s willful and intentional interference. According to
Vertex, this shows that Oceanwide “committed an intentional act of interference
with the contract by contacting Jimmy Ho about breaching it.” We disagree.
First, there is no evidence that Ireland initiated the contact with Ho or sought
the information he relayed. Other of Vertex’s summary-judgment evidence
indicates that the opposite is true: Ho’s email to Ireland earlier that day set forth
the precise information relayed in the Ireland-Fite email at issue, in response to
Ireland’s one-line email asking, “Who is Sea Cross?” Second, the February 8, 2016
email shows only that Oceanwide and Ho had discussed certain aspects of
TETRA’s training and staffing needs, not that Oceanwide “knowingly induced”
Sea Cross (through Ho) to breach the Vertex-Sea Cross contract. See Ferrara, 555
S.W.3d at 243; see also Fluor Enters., Inc. v. Conex Int’l Corp., 273 S.W.3d 426,
443 (Tex. App.—Beaumont 2008, pet. denied) (defendant’s intent must be to effect
breach of the contract).6
6
The early February 2016 text messages between Ho and John Ford attached to
Vertex’s summary-judgment response are inconsistent with Vertex’s assertion that
Oceanwide induced Sea Cross (through Ho) to breach any contractual obligation it
25
Accordingly, we hold that Vertex has not presented evidence that
Oceanwide acted to induce Sea Cross to terminate its contract with Vertex. See
Lightning Oil, 520 S.W.3d at 45 (to survive no-evidence summary-judgment,
nonmovant must produce “at least a scintilla of evidence raising a genuine issue of
material fact as to the challenged elements”).
Finally, with regard to proximate cause, assuming again that the Vertex-Sea
Cross contract was still in effect, Vertex has not presented any evidence that Sea
Cross breached it. Vertex presented Green’s declaration stating that the parties
continued to operate under the contract past its expiration date of October 9, 2010
until February 2016. But Vertex has not offered any evidence or cited any legal
authority to show that Sea Cross did not have the right to terminate the contract
when it did. As the Texas Supreme Court has held, “merely inducing a contract
obligor to do what it has a right to do is not actionable interference.” ACS
Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997). In other words,
Vertex has no cause of action against Oceanwide for inducing Sea Cross to do
what it had a right to do. See id.; Schimmel v. McGregor, 438 S.W.3d 847, 861
(Tex. App.—Houston [1st Dist.] 2014, pet. denied); see also Faucette v. Chantos,
may have had to Vertex. For example, the texts indicate that Ho was already in
separate discussions with TETRA when the text exchanges occurred. The texts
also show that Ford merely asked Ho whether he thought TETRA would consider
using Oceanwide as Ho’s (through Sea Cross) partner in supplying labor for 2016,
and that Ho responded that he would tell TETRA he wanted TETRA to use
Oceanwide if Ford would agree to allow Ho to maintain his rates.
26
322 S.W.3d 901, 914 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (“[M]erely
inducing one of the parties to exercise his right to terminate contractual relations
after giving the required notice does not necessarily constitute tortious interference
with contract under Texas law.” (quotation omitted)). Any “harm that results only
from lawful competition is not compensable by the interference tort.” Wal-Mart
Stores, Inc. v. Sturges, 52 S.W.3d 711, 727 (Tex. 2001).
No reasonable juror could find that Oceanwide interfered with the Vertex-
Sea Cross contract based upon the record evidence. See Goodyear Tire & Rubber
Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (in reviewing summary judgment,
appellate courts “must consider whether reasonable and fair-minded jurors could
differ in their conclusions in light of all of the evidence presented”). We therefore
hold that Vertex has not presented any evidence that Oceanwide willfully and
intentionally interfered with the Vertex-Sea Cross contract.
We overrule Vertex’s second issue and the portion of its fourth issue
addressing its tortious interference with contract claim.
E. Tortious Interference with Prospective Business Relations
As part of its fourth issue, Vertex argues that the trial court erred in granting
Oceanwide’s motion for summary judgment on its tortious interference with
prospective business relations claim because it presented more than a scintilla of
27
evidence to support the essential elements of that claim.7 Vertex’s only appellate
challenge to the court’s rendition of summary judgment on this claim is that it
presented evidence that Oceanwide tortiously interfered with its prospective
business relations with TETRA. But in its live petition, Vertex only alleges
interference with its prospective business relations with Sea Cross. Likewise,
Oceanwide moved for summary judgment, and the trial court, in rendering
summary judgment on all grounds alleged in Oceanwide’s motion, granted
summary judgment on Vertex’s tortious interference with prospective business
relations claim based only on Vertex’s relations with Sea Cross.
Because Vertex has failed to challenge the only grounds on which the trial
court rendered summary judgment on Vertex’s tortious interference with
prospective business relations claim, we affirm the judgment of the trial court. See
Hernandez v. Kroger Texas L.P., No. 01-15-00836-CV, 2017 WL 1429200, at *2
(Tex. App.—Houston [1st Dist.] Apr. 20, 2017, pet. denied) (mem. op.) (“If
7
To establish a cause of action for tortious interference with prospective contract or
business relationships, a plaintiff must show that (1) there was a reasonable
probability that the parties would have entered into a business relationship; (2) the
defendant committed an independently tortious or unlawful act that prevented the
relationship from occurring; (3) the defendant either acted with a conscious desire
to prevent the relationship from occurring or knew the interference was certain or
substantially certain to occur as a result of the conduct; and (4) the plaintiff
suffered actual harm or damages as a result of the defendant’s interference. Better
Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345,
361–62 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); Richardson–Eagle,
Inc. v. William M. Mercer, Inc., 213 S.W.3d 469, 475 (Tex. App.—Houston [1st
Dist.] 2006, pet. denied).
28
summary judgment may have been rendered, properly or improperly, on a ground
not challenged, the judgment must be affirmed.”).
We overrule the portion of Vertex’s fourth issue addressing its tortious
interference with prospective business relations claim.
F. Conspiracy
In a portion of its fourth issue, Vertex argues that it produced sufficient
evidence on each of the elements of its civil conspiracy claim to survive
Oceanwide’s no-evidence summary-judgment motion.
The Texas Supreme Court has defined the elements of civil conspiracy as:
“(1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds
on the object or course of action; (4) one or more unlawful, overt acts; and (5)
damages as the proximate result.” Agar Corp., Inc. v. Electro Circuits Int’l, LLC,
No. 17-0630, — S.W.3d —, 2019 WL 1495211, at *4 (Tex. Apr. 5, 2019) (quoting
Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983)).
Civil conspiracy is not an independent tort, but a derivative tort that depends
on participation in some underlying tort for which the plaintiff seeks to hold the
defendant liable. Id.; Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996).
Therefore, civil conspiracy “survives or fails alongside” the underlying tort
alleged. Agar, 2019 WL 1495211, at *3.
29
Vertex argues on appeal that Oceanwide conspired with TETRA to
wrongfully interfere with Vertex’s contract with Sea Cross. Because we have held
that Vertex’s tortious interference with contract claim did not survive summary
judgment, we further hold that its civil conspiracy claim “fails alongside” it. Id.
Conclusion
We affirm the trial court’s summary-judgment order.
Peter Kelly
Justice
Panel consists of Justices Keyes, Kelly, and Goodman.
30