Snowhite Textile and Furnishings, Inc. v. Innvision Hospitality, Inc. ( 2020 )

Affirmed and Opinion Filed December 14, 2020
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-01447-CV
SNOWHITE TEXTILE AND FURNISHINGS, INC., Appellant
V.
INNVISION HOSPITALITY, INC., Appellee
On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-14-11252
MEMORANDUM OPINION
Before Justices Osborne, Partida-Kipness, and Pedersen, III
Opinion by Justice Pedersen, III
This suit arises from a dispute between two competitors in the furniture,
fixture, and equipment (“FF&E”) industry involving violation(s) of the Texas
Uniform Trade Secrets Act (“TUTSA”), tortious interference with prospective
business, and tortious interference with existing contracts. Following a bench trial,
the district court rendered judgment in favor of the plaintiff, Innvision Hospitality,
Inc. (“Innvision”). The defendant, Snowhite Textile and Furnishings, Inc.
(“Snowhite”), appeals the judgment, asserting, among other issues, that the evidence
is insufficient to support the district court’s liability findings. We affirm the trial
court’s judgment.
I. BACKGROUND
A. Parties
Wyndham Hotels & Resorts (“Wyndham”) is a franchisor for a number of
hotel chains including Baymont, La Quinta, Microtel, and Super 8 (“brands”).
Innvision and Snowhite are two designated service providers (“DSPs”) for
Wyndham. These companies compete to provide a suite of services to design and
provide FF&E for the Wyndham brands. Wyndham submits leads on their
franchisee’s projects to their DSPs.1 After a DSP receives a lead on a Wyndham
project, the DSP prepares a preliminary quote—using the information provided by
Wyndham—to place a bid with the franchisee on the project.
DSPs often use Wyndham-selected design schemes and manufacturers when
working on a Wyndham project. DSPs access a file transfer protocol site maintained
by Wyndham (“Wyndham FTP”), which contains information regarding
Wyndham’s (i) pre-approved schemes and product specifications, and (ii) pre-
negotiated pricing with its vendors.
B. Baymont Odessa Project
Wyndham sent Innvision an advance lead for a franchisee named Brett
Norwich to complete FF&E work on a Baymont brand project located in Odessa,
Texas (“Odessa Project”). Although Wyndham projects often used generic or
1
These leads are referred to in the industry as “notice[s] of execution.” The leads vary in content but
generally include a list of (1) required or replacement FF&E and (2) requested project tasks including
refinishing, cleaning, and repairing items and areas.
–2–
prototype scheme pricing from the Wyndham FTP, Innvision created a custom
scheme for the Odessa Project. Innvision did not access information from the
Wyndham FTP in creating its preliminary bid for the Odessa Project. In September
2013, Pride Parr submitted Innvision’s preliminary bid to the Odessa Project
customer. Parr worked in Innvision’s “Regional Design and Procurement” group as
a sales representative.
Several Innvision employees left to join Snowhite in 2013. Emile Aboona
worked at Innvision until July 2013, when he resigned to work at Snowhite. Parr
worked at Innvision from July 1, 2013 until the first full week of October 2013, when
she resigned to work at Snowhite. Millette Gathright, Kevin Barbarise, and Radhika
Khurana also left Innvision to work at Snowhite.
After Parr began work at Snowhite in October 2013, she emailed Emile
Aboona—then Snowhite’s Chief Operating Officer—documents that Innvision had
generated for its preliminary bid on the Odessa Project. This email attached
Innvision internal documents that were not shared with the Odessa Project customer.
These documents were labeled “Innvision Design,” and included specifications,
renderings, room schemes, stock codes, descriptions, order quantities, unit costs, unit
prices, and net values.
Recognizing the value of these documents, Aboona and Dipak Kapadia, who
was Snowhite’s founder and president, sought to obtain further Innvision material.
Snowhite copied the former Innvision employees’ laptops and solicited additional
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information related to Innvision’s bid on the Odessa Project from then-current and
former Innvision employees. Snowhite used the Innvision documents and
information that Aboona and the Snowhite information technology worker gathered
to secure their own winning bid for the Odessa Project.
C. Innvision Litigation Against Snowhite
Innvision sued Snowhite for (i) violations of the TUTSA,2 (ii) tortious
interference with existing contracts, and (iii) interference with prospective business
relations and contracts. Innvision also asserted claims against Aboona and Kapadia.
Innvision’s claims against Snowhite and Aboona were tried before the trial
court on October 23, 24, and 25, 2018.3 The trial witnesses included Christopher
Parker, Innvision’s president, co-owner, and co-founder; Kapadia; and Aboona. At
the conclusion of the bench trial, the trial court rendered judgment in favor of
Innvision, including (i) finding that Innvision owned trade secrets in the form of
design and planning specifications, along with pricing and margins data, relating to
its bid proposal for the Odessa Project; (ii) finding that Snowhite tortiously interfered
with Innvision’s prospective contract for the Odessa Project; (iii) finding that
Innvision sustained an economic loss of $45,000.00; and (iv) awarding Innvision’s
attorney’s fees against Snowhite. The trial court further ordered that Innvision take
2
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 134A.001–.008.
3
Prior to final trial, Innvision non-suited its claims against Kapadia.
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nothing on its claims against Aboona and dismissed those claims with prejudice.
This appeal followed.
II. ISSUES RAISED ON APPEAL
Snowhite raises four issues on appeal.
1. Whether it was error to find liability under TUTSA where
Appellee disclosed the purported “trade secrets” to a mutual third party
customer, non-confidentially, before those materials were given to the
Appellant?
2. Whether it was error to find Tortious Interference with
Prospective Business where the alleged interference was Appellant
submitting an identical “preliminary bid” to a mutual customer who had
openly solicited competing bids, had not yet selected a vendor, and all
of this in a bidding environment where much or all of such “preliminary
bid” is dictated by the customer?
3. Whether it was error to find damages and/or consider
evidence of lost profits at trial where a lost profits damages calculation
was never disclosed and the actual evidence presented at trial was
speculative and conclusory?
4. Whether it was error to award attorney’s fees under
TUTSA where the Appellee failed to properly segregate its fees, and
there is no showing of “malice” to support the “willful & malicious
misappropriation” element of such award?
Snowhite challenges (i) both the legal and factual sufficiency of the evidence
and (ii) the admissibility of certain evidence.4
4
We note that Snowhite’s briefing does not expressly frame its first two issues as sufficiency issues.
Snowhite’s briefing fails to meaningfully identify the respective standard of review for these two issues in
its appellant brief. See TEX. R. APP. P. 38.1(f), (i). Only in Snowhite’s reply brief does it identify that the
first issue is to be reviewed at least under a factual sufficiency review. To adequately address Snowhite’s
first two issues, we apply both legal and factual sufficiency review standards.
–5–
III. STANDARD OF REVIEW
“In an appeal from a bench trial, the trial court’s findings of fact have the same
weight as a jury verdict.” Sheetz v. Slaughter, 503 S.W.3d 495, 502 (Tex. App.—
Dallas 2016, no pet.) (citing Fulgham v. Fischer, 349 S.W.3d 153, 157 (Tex. App.–
Dallas 2011, no pet.)). Here, the appellate record contains a reporter’s record;
therefore the trial court’s findings of fact are not conclusive and are binding only if
supported by the evidence. Id. “We review a trial court’s findings of fact under the
same legal and factual sufficiency of the evidence standards used when determining
if sufficient evidence exists to support an answer to a jury question.” Id. (citing
Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994)).
i. Legal Sufficiency
“When an appellant challenges the legal sufficiency of an adverse finding on
which he did not have the burden of proof at trial, he must demonstrate there is no
evidence to support the adverse finding.” Fulgham v. Fischer, 349 S.W.3d 153, 157
(Tex. App.—Dallas 2011, no pet.). We view the evidence in the light most favorable
to the fact finding, indulging every reasonable inference that would support it and
disregarding contrary evidence unless a reasonable factfinder could not. Bos v.
Smith, 556 S.W.3d 293, 300 (Tex. 2018). “When reviewing the record, we determine
whether any evidence supports the challenged finding.” Fulgham, 349 S.W.3d at
157. “If more than a scintilla of evidence exists to support the finding, the legal
sufficiency challenge fails.” Id.; see Formosa Plastics Corp. USA v. Presidio Eng’rs
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& Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998); see also King Ranch, Inc. v.
Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (more than a scintilla of evidence exists
when evidence “rises to a level that would enable reasonable and fair-minded people
to differ in their conclusions”). We defer to the trial court’s fact findings if they are
supported by legally sufficient evidence. Bos, 556 S.W.3d at 300.
ii. Factual Sufficiency
“When an appellant challenges the factual sufficiency of the evidence on an
issue, we consider all the evidence supporting and contradicting the finding.”
Fulgham, 349 S.W.3d at 157 (citing Plas–Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d
442, 445 (Tex. 1989)). “We set aside the finding for factual insufficiency only if the
finding is so contrary to the evidence as to be clearly wrong and manifestly unjust.”
Id. (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam)). In a bench
trial, the trial court, as factfinder, is the sole judge of the credibility of the witnesses.
Id. As long as the evidence falls ‘within the zone of reasonable disagreement,’ we
will not substitute our judgment for that of the fact-finder. Id. (quoting City of Keller
v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)). In conducting a factual sufficiency
review, we should detail the evidence relevant to the issue in consideration and
clearly state why the finding is factually insufficient or is so against the great weight
and preponderance as to be manifestly unjust, shock the conscience, or clearly
demonstrate bias. Windrum v. Kareh, 581 S.W.3d 761, 781 (Tex. 2019).
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iii. Admissibility of Evidence
We review a trial court’s decision to admit or exclude evidence for an abuse
of discretion. In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005) (per curiam). A trial
court abuses its discretion when it acts “without reference to any guiding rules and
principles”—if it acts arbitrarily or unreasonably. Downer v. Aquamarine
Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). We will uphold the ruling if
there is any legitimate basis in the record to support it. Ten Hagen Excavating, Inc.
v. Castro-Lopez, 503 S.W.3d 463, 490 (Tex. App.—Dallas 2016, pet. denied). To
reverse an erroneous evidentiary ruling, an appellant must both establish error and
show that the error probably caused an improper judgment. TEX. R. APP. P. 44.1;
Thawer v. Comm’n for Lawyer Discipline, 523 S.W.3d 177, 183 (Tex. App.—Dallas
2017, no pet.).
IV. ISSUE ONE – WHETHER IT WAS ERROR TO FIND LIABILITY UNDER TUTSA
WHERE APPELLEE DISCLOSED THE PURPORTED “TRADE SECRETS” TO A
MUTUAL THIRD PARTY CUSTOMER, NON-CONFIDENTIALLY, BEFORE THOSE
MATERIALS WERE GIVEN TO THE APPELLANT
“When an effort is made to keep material important to a particular business
from competitors, trade secret protection will be available.” Rugen v. Interactive
Bus. Sys., Inc., 864 S.W.2d 548, 552 (Tex. App.—Dallas 1993, no writ). “TUTSA
was enacted in 2013 ‘to make uniform the law with respect to the subject of this
chapter among states enacting it.’” Baxter & Associates, L.L.C. v. D & D Elevators,
Inc., No. 05-16-00330-CV, 2017 WL 604043, at *6 (Tex. App.—Dallas Feb. 15,
–8–
2017, no pet.) (mem. op.) (quoting CIV. PRAC. & REM. § 134A.008). Subsection
134A.002(6) provides,
“Trade secret” means information, including a formula, pattern,
compilation, program, device, method, technique, process, financial
data, or list of actual or potential customers or suppliers, that:
(A) derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
disclosure or use; and
(B) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
CIV. PRAC. & REM § 134A.002(6). Subsection 134A.002(3) defines
“misappropriation” as,
(A) acquisition of a trade secret of another by a person who knows or
has reason to know that the trade secret was acquired by improper
means; or
(B) disclosure or use of a trade secret of another without express or
implied consent by a person who: . . .
(ii) at the time of disclosure or use, knew or had reason to know
that the person’s knowledge of the trade secret was:
(a) derived from or through a person who used improper
means to acquire the trade secret; . . .
CIV. PRAC. & REM § 134A.002(3). In summary, the elements of trade secret
misappropriation under TUTSA are: (i) a trade secret existed; (ii) the trade secret
was acquired through a breach of a confidential relationship or discovered by
improper means; (iii) the trade secret was used without authorization; and (iv) the
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trade secret owner suffered damages as a result. CIV. PRAC. & REM. §§
134A.002(1),(3),(6); Twister B.V. v. Newton Research Partners, LP, 364 S.W.3d
428, 437 (Tex. App.—Dallas 2012, no pet.); Calce v. Dorado Expl., Inc., 309
S.W.3d 719, 737–38 (Tex. App.—Dallas 2010, no pet.) (party is entitled to recover
for misappropriation of trade secrets by establishing the existence of a trade secret,
breach of a confidential relationship, use of the trade secret without authorization,
and resulting damages).
1) Innvision’s Disclosure of the Odessa Bid Proposal
The trial court found that “[Innvision] owned trade secrets in the form of
design and planning specifications, along with pricing and margins data, relating its
bid proposal for the [Odessa Project].” The document that is germane to the bid
proposal and the trade secret dispute is Exhibit 22—the email from Parr to Aboona.
The body of the email reads “[h]ere is what we [Innvision] have sent [to the Odessa
Project customer] to date and all the mood boards from design. Let me know if you
have any questions.” Parr’s email attached several documents and—most
importantly—a spreadsheet. The spreadsheet listed stock codes, descriptions, order
quantities, unit costs, unit prices, and net values. Parker testified that this spreadsheet
was an “Innvision internal quotation,” derived from Innvision’s accounting software
(“Markup Spreadsheet”). The other attached documents included mood boards,
which Parker testified “are digitally constructed layouts of what an interior will look
like when the fabrics and materials are combined together.” The mood boards
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depicted various FF&E arranged in virtual room configurations. The remaining
attached documents included sales quotations, which show descriptions, unit prices,
quantities, and total costs for various FF&E. The trial court found that “[Snowhite]
knew these data were trade secrets and surreptitiously acquired them.”
Snowhite first argues that even if Exhibit 22 were a trade secret, Innvision
forfeited that trade secret status. Snowhite relies on INEOS Group Ltd. v. Chevron
Phillips Chemical Co., LP, which held “. . . ”the unrestricted disclosure of trade-
secret information to third parties, outside the context of a confidential relationship,
destroys the trade-secret status of the information.” 312 S.W.3d 843, 852 (Tex.
App.—Houston [1st Dist.] 2009, no pet.) (internal citations omitted). Snowhite
contends that—because Innvision submitted its trade secret to the Odessa Project
customer—Innvision no longer enjoys trade-secret protection. Snowhite bases this
assertion on the body of the email of Exhibit 22, framing the referenced disclosure
to the Odessa Project customer as an “unrestricted disclosure.” The body of the email
reads “[h]ere is what we [Innvision] have sent [to the Odessa Project customer] to
date and all the mood boards from design. Let me know if you have any questions.”
Here, although Innvision concedes to piecemeal disclosure of certain parts of
Exhibit 22 to the Odessa Project customer as a part of its bid proposal, there is
conflicting evidence regarding whether the Markup Spreadsheet was disclosed to the
Odessa Project customer. Apart from the sentence in Exhibit 22, there is scant
support in the record that the Markup Spreadsheet was given to the Odessa Project
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customer. Parker testified that Innvision “reviewed the files and emails that Pride
Parr sent as part of the discovery process for this case, and [the Markup Spreadsheet]
was not there.” Parker further testified that Innvision expected the client to treat
disclosed materials as confidential, so that no trade secret protection was lost:
. . . [W]hen we send a client a sales quotation, we believe that
information is confidential. Most clients in our experience do not share
sales quotations from the competitor. And in that experience, that keeps
it confidential in our eyes. I know there are instances where a client
may choose to share that, but what we’ve seen is that most of the time
a client is not sharing a competitor’s quotation, therefore, we think it’s
confidential.
“[A] limited disclosure to others pledged to secrecy will not destroy the trade
secret’s status as such.” Leonard v. State, 767 S.W.2d 171, 175 (Tex. App.—Dallas
1988); see also Schalk v. State, 823 S.W.2d 633 (Tex. Crim. App. 1991) (citing
Metallurgical Indus. Inc. v. Fourtek, Inc., 790 F.2d 1195, 1200 (5th Cir.1986)). “If
a voluntary disclosure occurs in a context that would not ordinarily occasion public
exposure, and in a manner that does not carelessly exceed the imperatives of a
beneficial transaction, then the disclosure is properly limited and the requisite
secrecy retained.” Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1124
(5th Cir. 1991). “Trade secret status is not destroyed simply by showing the
protected item to prospective buyers, customers, or licensees.” Lamont v. Vaquillas
Energy Lopeno, Ltd., LLP, 421 S.W.3d 198, 212 (Tex. App.—San Antonio 2013, no
pet.). The Fifth Circuit Court of Appeals has held:
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a holder may divulge his information to a limited extent without
destroying its status as a trade secret. To hold otherwise would greatly
limit the holder’s ability to profit from his secret. If disclosure to others
is made to further the holder’s economic interests, it should, in
appropriate circumstances, be considered a limited disclosure that does
not destroy the requisite secrecy.
Metallurgical Indus. Inc., 790 F.2d at 1200. In Metallurgical Industries Inc., the
Fifth Circuit held that trade secret holder Metallurgical’s disclosures of its trade
secret to others were limited—and therefore insufficient to extinguish the secrecy
Metallurgical’s other evidence had suggested—for two reasons. Id. First,
Metallurgical’s “disclosures were not public announcements; rather, Metallurgical
divulged its information to only two businesses with whom it was dealing.” Id.
(distinguishing Luccous v. J.C. Kinley Co., 376 S.W.2d 336 (Tex. 1964), “in which
the court concluded that the design of a device could not be a trade secret because it
had been patented—and thus revealed to all the world—before any dealing between
the parties”). Second, Metallurgical “revealed its discoveries as part of business
transactions by which it expected to profit.” Id.Similar to Metallurgical’s, the record shows that Innvision’s disclosure of its
bid proposal was not unrestricted. Innvision (i) divulged its bid proposal to the
Odessa Project customer—not as a public announcement and (ii) divulged its bid
proposal as a part of a business transaction by which it expected to profit. See
generally id. Furthermore, there is evidence suggesting that Innvision did not submit
the Markup Spreadsheet to the Odessa Project customer. Considering the evidence
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in the light most favorable to the verdict and indulging every reasonable inference
that would support the trial court’s verdict, we conclude that a rational factfinder
could have found the evidence was legally sufficient to support a finding that
Innvision’s disclosure(s) to the Odessa Project customer did not cause Innvision to
forfeit its trade secret. Therefore, we conclude that legally sufficient evidence
supports the trial court’s implied finding that that Innvision’s disclosure(s) to the
Odessa Project customer did not cause Innvision to forfeit its trade secret.
Considering all the evidence in the record supporting and contradicting the trial
court’s judgment, we also conclude that a rational factfinder could have found the
evidence was factually sufficient that Innvision did not forfeit its trade secret. On
this record, such a finding would not be so against the great weight and
preponderance as to be manifestly unjust, shock the conscience, or clearly
demonstrate bias. Therefore, we conclude that both legally and factually sufficient
evidence supports the trial court’s implied finding that Innvision did not forfeit its
trade secret.
2) Whether a Trade Secret Existed
Snowhite next argues that Innvision’s Odessa Project bid proposal was not a
trade secret even before disclosure to the Odessa Project customer. We have
described above that Exhibit 22 consisted of information and compilation of data, so
our focus turns to the remaining elements of a trade secret: (i) the economic value of
the information and (ii) the efforts used to maintain the information’s secrecy.
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i. Economic Value of Exhibit 22
Parker testified that the Markup Spreadsheet’s stock codes indicated the
specific FF&E manufacturer for each particular item. He explained that the Markup
Spreadsheet’s relationship between the unit cost and unit price reveals the markup
of Innvision’s service to its customers—that “as a matter of practice, a salesperson
would not send its company costs to a customer.”5 Parker explained that the Markup
Spreadsheet, in combination with the design specifications and sales quotations in
Exhibit 22, could be used by a competitor to “undercut” Innvision.
The record indicates that the general contractor for the Odessa Project
provided Innvision with a list of FF&E items and quantities to be included in various
areas. The record contains emails between the general contractor and Innvision in
which certain vendors are named by reference in discussion of bids. The record
indicates that the Wyndham FTP provided a “generic . . . prototype approved scheme
pricing.” However, those documents do not contain the respective vendors’ pricing
or markups with Innvision on the Odessa Project—the record shows that solely
Exhibit 22 contains that combination of information.
Furthermore, the record shows that Innvision did not use the generic prototype
on the Odessa Project. Parker testified that Innvision’s “designers were designing a
5
Parker testified “[u]nit cost here means the vendor pricing, the manufacturer’s price to Innvision.
That’s a cost that we are going to pay that for that item, or a projected cost if this is a preliminary budget.
So[,] unit cost and unit price have a relationship with each other. The markup that we talked about earlier,
or the margin, is something that is relational between those two.”
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Baymont custom for that project.” The record indicates that the vendor prices found
in Exhibit 22 were unique to Innvision and derived from Innvision’s relationship
with its vendors. Parker explained that “vendor relationships were… one of the
pillars of [Innvision’s] success.”
Both Aboona and Kapadia admitted that the information contained in Exhibit
22 was confidential. While working at Snowhite in October 2013, Aboona wrote in
an email to a Wyndham representative about markups:
I do recall this was asked of us when I was at Innvision and at that time
I explained that this is confidential information as we could not generate
one standard mark-up across the board since each FF&E category will
differ in mark-up parameters in order to remain competitive. This
explanation will also apply here as well and it will be difficult to
provide you with our [Snowhite’s] mark ups for the same reason.
During Kapadia’s testimony in court, he was asked:
Q: At least in the 2013 timeframe, did Snowhite consider margin
information to be confidential?
A: Yes.
...
Q: There’s no dispute that at least in this industry margin information
is confidential, right?
A: Yes.
Furthermore, Kapadia testified that the Odessa Project used a custom scheme.
ii. Efforts to Maintain Secrecy
The record shows that Innvision took steps to maintain the secrecy of Exhibit
22. First, Innvision required Parr, Aboona, and its other employees to agree that they
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would not disclose Innvision’s confidential information for a period of two years
after the term of their employment ended.6 Second, Innvision used internal
accounting software to maintain their vendor descriptions and pricing. With respect
to this internal accounting software, Parker explained that Innvision (i) limited
access to project salespeople or project support, (ii) protected access with
password(s), (iii) ran the software on an internal Innvision network, and (iv) did not
load the software onto outside salespeople’s computers. As mentioned above,
Innvision did not share its markups with its customers.
Thus, the record shows that the Exhibit 22 email consisted of information and
compilation of data that (i) had independent economic value not readily
ascertainable by proper means by other persons who can obtain economic value from
its disclosure or use, which (ii) Innvision made reasonable efforts to maintain as a
secret. Considering the evidence in the light most favorable to the verdict and
6
Innvision’s confidentiality agreement defines “confidential information” as follows:
7. Confidential Information. Employee agrees that he/she shall not, during the term of
this Agreement and continuing for a period of two (2) years thereafter, disclose to any
person or entity whatsoever, other than to Employer or its representatives, or use for his/her
personal benefit or that of any party other than Employer in any manner whatsoever, any
confidential or proprietary business information of Employer including, but not limited to,
confidential and proprietary financial data, marketing data, product markets, market
projections. sales leads und opportunities, contacts, customers or customer lists, vendor
lists. product plans, products, prototypes or models, software, hardware, designs, drawings,
research, engineering know-how, services, recipes, methods of manufacture or production,
techniques for improved production which are not otherwise included within the definition
of Trade Secrets all such information being collectively defined as ‘‘Confidential
Information.” To the extent that Confidential Information covered by this paragraph
constitutes a ‘‘trade secret” as that term is defined under applicable law, this paragraph is
not intended to. and does not, limit or waive Employer’s rights or remedies thereunder, and
the time period for prohibition on disclosure or use of such trade secret information is as
provided by such applicable law.
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indulging every reasonable inference that would support the trial court’s verdict, we
conclude that a rational factfinder could have found that Innvision owned a trade
secret in its bid proposal. Therefore, we conclude the evidence is legally sufficient
that Innvision owned a trade secret in its bid proposal. Considering all the evidence
in the record supporting and contradicting the trial court’s finding, we conclude the
trial court’s finding that Innvision owned a trade secret was not so contrary to the
evidence as to be manifestly unjust, shock the conscience, or clearly demonstrate
bias. We conclude that factually sufficient evidence supports the trial court’s finding
that Innvision owned a trade secret in its bid proposal. Since we conclude the
evidence was legally and factually sufficient to show that (i) Innvision owned a trade
secret and (ii) Innvision did not forfeit its trade secret, it was not error for the trial
court to find liability under TUTSA. We overrule Snowhite’s first issue.
V. ISSUE TWO – WHETHER IT WAS ERROR TO FIND TORTIOUS INTERFERENCE
WITH PROSPECTIVE BUSINESS WHERE THE ALLEGED INTERFERENCE WAS
APPELLANT SUBMITTING AN IDENTICAL “PRELIMINARY BID” TO A MUTUAL
CUSTOMER WHO HAD OPENLY SOLICITED COMPETING BIDS, HAD NOT YET
SELECTED A VENDOR, AND ALL OF THIS IN A BIDDING ENVIRONMENT WHERE
MUCH OR ALL OF SUCH “PRELIMINARY BID” IS DICTATED BY THE CUSTOMER
“Texas, like most states, has long recognized a tort cause of action for
interference with a prospective contractual or business relation.” Wal-Mart Stores,
Inc. v. Sturges, 52 S.W.3d 711, 712–13 (Tex. 2001).
To prevail on a claim for tortious interference with prospective business
relations, the plaintiff must establish that (1) there was a reasonable
probability that the plaintiff would have entered into a business
relationship with a third party; (2) the defendant either acted with a
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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; (3) the defendant’s conduct was independently tortious or
unlawful; (4) the interference proximately caused the plaintiff injury;
and (5) the plaintiff suffered actual damage or loss as a result.
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013).
Snowhite argues that the trial court erred in making its finding that “Snowhite did
tortuously interfere with [Innvision]’s prospective contract on the [Odessa Project].”
Snowhite challenges the first, third, and fourth elements of tortious interference with
prospective business relations in this issue.7 Snowhite challenges the actual damage
or loss element of tortious interference in its third issue discussed hereunder.8
1) Whether Snowhite’s Conduct Was Independently Tortious or Unlawful
The trial court found, and we have confirmed, that Snowhite violated the
TUTSA by misappropriating Innvision’s trade secret. Trade secret misappropriation
under the TUTSA is an “independently tortious act,” which supports the third
element of tortious interference with prospective business. See id; Rugen, 864
S.W.2d at 552; CIV. PRAC. & REM. §§ 134A.002(1), (3), (6). Snowhite urges that
Innvision owned no trade secret, and therefore, no independently tortious act of trade
7
Snowhite specifically argues (i) that the Odessa bid proposal was not a trade secret, so its acquisition
and use by Snowhite cannot be construed as an independently tortious act; (ii) the evidence at trial was
insufficient to establish that Innvision was likely to enter a business relationship with the Odessa Project
customer; and (iii) “each entities’ submission of identical ‘preliminary bids’ as the beginning stage to their
separate and independent processes of designing unique final bids, does not demonstrate that Appellee was
somehow robbed of its fair opportunity to win the Odessa business.”
8
We do not address the second element of tortious interference with prospective business relations—
whether 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—because
Snowhite does not challenge the second element. See Coinmach Corp., 417 S.W.3d at 923.
–19–
secret misappropriation occurred. We have rejected that argument, and Snowhite’s
briefing does not otherwise dispute the remaining elements of the independently
tortious act of misappropriation of trade secret; therefore, we do not address those
elements. Consequently, we reject Snowhite’s assertion that its actions cannot be
construed as an independently tortious act of trade secret misappropriation, which
meets the third element of tortious interference with prospective business.
2) Whether There Was a Reasonable Probability that the Innvision Would
Have Entered Into a Business Relationship with the Odessa Project
Customer
Snowhite contends that there was no likelihood that Innvision would have
entered into a business relationship with the Odessa Project customer but for
Snowhite’s actions. First, Snowhite frames Innvision’s Odessa bid as “only in its
infancy” and “merely . . . a preliminary bid.” Snowhite refers to Parker’s testimony
that Innvision’s “whole sales cycle from meeting a potential client to fulfilling their
FF&E can take up to [twenty-four] months, but it’s more common for it to take nine,
[twelve] months if it’s a new construction.” Parker also testified that the Innvision
quote was a “preliminary quote” and “that there are preliminarily estimates, and then
there are final sales quotations.” Nevertheless, the record shows that Snowhite’s
ultimate winning bid on the Odessa Project used documents and figures identical to
those found in Innvision’s “preliminary quote”—with slight changes such as
changing the logo from “Innvision” to “Snowhite” and changing Innvision’s
employees’ names to Snowhite’s respective employee’s names.
–20–
Snowhite next refers to evidence of email correspondence between Innvision
and an Odessa Project customer’s team member, Chad Huffer, to supports its
argument that the Odessa Project customer had not committed to Innvision and was
actively soliciting bidders (“Huffer Email”). However, the text of the Huffer Email
does not discuss committing to Innvision or any other bidder. Regarding bids, the
Huffer Email—which was emailed to Parr at her Innvision email address—states
“[i]t has been difficult to get accurate bids based on the drawings because so many
things are different from what I understand.”9
Parker testified on the Odessa Project that “[i]n September [Innvision was] far
enough along with that [Odessa Project customer] to know that we were engaged in
the process. [Innvision’s] credit team had been engaged and had received a credit
application and letters from the [Odessa Project customer]’s bank.” Parker further
stated that—by the time a client talks with the Innvision credit team—
95 percent of the time we would expect to win a job, if the client has
received preliminarily pricing, given us the credit application readily,
provided all the information on the credit app so that we could do the
research to determine where the funding is for the project and what sort
of creditworthiness the client will have.
...
And further, to have the client introduce us to the banker and begin
getting letters from the bank sent to us to build the case for the client
that he or she has a creditworthy status. Once we’ve gotten to that point,
even if the pricing hasn’t been completely finalized, our credit team has
9
Snowhite suggests that the Odessa Project customer accepted Snowhite’s bid based on the Odessa
Project customer’s relationship with Parr. However—beyond Huffer’s email’s addressing Parr by her
name— Snowhite offers no record citation to support this inference. Snowhite raises this suggestion in its
assertions regarding proximate cause, discussed infra.
–21–
done that enough to see that the client is really our client. It’s really
something that we would 19 times out of 20 expect to win that
business.10
We reject Snowhite’s assertion that Innvision’s Odessa bid was only in its
infancy and merely a preliminary bid.
3) Whether Snowhite’s Actions Proximately Caused Innvision Injury
The trial court found that Snowhite used Innvision’s data “to obtain the
‘Odessa Job,’ which otherwise would have gone to [Innvision].” Snowhite contends
that its actions did not proximately cause Innvision injury because the Odessa Project
customer’s “real allegiance was always to Pride Parr, not to [Innvision].” Apart from
the Huffer Email discussed above, Snowhite cites no evidence to support this
assertion—instead raising a purported opinion that “[i]t doesn’t even make sense
that submission of an identical bid would represent some sort of unfair advantage.”
The evidence shows that Snowhite hired and used Parr, Gathright, and other
former Innvision employees to obtain Innvision documents, including Innvision’s
custom scheme created for the Odessa Project and related trade secret documents.
There is no evidence that Snowhite generated its own bid without use of the
confidential Innvision documents. To the contrary, Snowhite used Innvision’s trade
secrets to submit a bid identical to Innvision’s bid for the Odessa Project. Snowhite
secured the Odessa Project and earned a profit, whereas Innvision did not earn profit
10
Parker testified “the whole sales cycle from meeting a potential client to fulfilling their FF&E can
take up to 24 months, but it’s more common for it to take nine, 12 months if it’s a new construction.”
–22–
from its work. The evidence suggests that, were it not for Snowhite’s actions in
obtaining and using Innvision’s confidential documents, the Odessa Project
customer would have selected Innvision for the Odessa Project. We reject
Snowhite’s contention that its actions did not proximately cause Innvision injury.
Considering the evidence in the light most favorable to the verdict and
indulging every reasonable inference that would support the trial court’s verdict, we
conclude that a rational factfinder could have found that (i) there was a reasonable
probability that Innvision would have entered into a business relationship with the
Odessa Project customer; (ii) Snowhite’s conduct was independently tortious or
unlawful; and (iii) Snowhite’s interference proximately caused Innvision injury. In
our review of all the evidence in the record supporting and contradicting the trial
court’s judgment, we further conclude that the trial court’s implied findings as to
these three elements are not so contrary to the evidence as to be manifestly unjust,
shock the conscience, or clearly demonstrate bias. We conclude that legally and
factually sufficient evidence supports the trial court’s finding. Accordingly, it was
not error for the trial court to find that Snowhite tortiously interfered with Plaintiff’s
prospective contract on the Odessa Project. We overrule Snowhite’s second issue.
–23–
VI. ISSUE THREE – WHETHER IT WAS ERROR TO FIND DAMAGES AND/OR TO
CONSIDER EVIDENCE OF LOST PROFITS AT TRIAL WHERE NO LOST PROFITS
DAMAGES CALCULATION WAS DISCLOSED AND THE ACTUAL EVIDENCE
PRESENTED AT TRIAL WAS SPECULATIVE AND CONCLUSORY
The trial court found that Innvision sustained damages for both violation of
the TUTSA and tortious interference, measured at the same amount.11 The Texas
Supreme Court has held that “[a] ‘flexible and imaginative’ approach is applied to
the calculation of damages in misappropriation-of-trade-secrets cases.” Sw. Energy
Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 710 (Tex. 2016) (quoting Univ.
Computing Co. v. Lykes–Youngstown Corp., 504 F.2d 518, 538 (5th Cir. 1974)).
Damages in misappropriation cases can therefore take several forms,
including the value of the plaintiff’s lost profits, the defendant’s actual
profits from the use of the secret . . .
...
Loss of value to the plaintiff is usually measured by lost profits.
...
To recover lost profits, a party must introduce objective facts, figures,
or data from which the amount of lost profits can be ascertained.
Id. at 710-711. (emphasis added, internal quotations and citation omitted). “The
plaintiff bears the burden of providing evidence supporting a single complete
calculation of lost profits, which may often require certain credits and expenses.”
ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 878 (Tex. 2010). Here,
Snowhite argues that it was error for the trial court to consider evidence of
11
The trial court found “[T]he measure of economic damages on the tortious interference claim is the
same as for the TUTSA claim.”
–24–
damages—in particular, testimony from Kapadia—because Innvision failed to
disclose its proposed method of calculating damages prior to trial.
1) Challenged Testimony
During trial, Innvision introduced Kapadia’s testimony from his June 14, 2017
deposition. Kapadia—testifying as Snowhite’s corporate representative—testified as
follows:
Q: Four is a question about Pride Parr or is a topic list about Pride Parr.
It says, six months of sales rep, did bring one—what
does that say?
A: One project.
Q: One project. Had trouble working with client and project, and that
project was Baymont Odessa?
A: Baymont Odessa, yes.
Q: And you mentioned before where there was an interrogatory
response which says there was 600,000—
A: Yes.
Q: —approximately in revenue generated from that deal?
A: Yes. And probably total that was a net sales part of it. And I
think we already submitted document, the net profit from that or
something like 45,000.
...
Q: But so out of that 600,000, the profit was 45,000?
A: 45,000.
Q: The rest of that is eaten up in costs, huh?
A: The rest of them—yeah, cost.
–25–
Q: What is—
A: Overhead, cost and everything else.
Q: What is usually the profit margin that you’re—
A: 15 percent usually.
Q: 15 percent. And my math isn’t that great and that’s why I became a
lawyer. What is the margin—what is 45,000 on 600,000 in revenue?
A: That after reducing—oh, the 15,000, that’s 90,000. That’s a net
profit less overhead expenses.
2) Analysis
Snowhite first contends that the trial court abused its discretion in admitting
Kapadia’s testimony on Snowhite’s profits over Snowhite’s motion to exclude
evidence and according objection(s). Snowhite specifically complains that Innvision
did not disclose or supplement its discovery responses with any amount or method
of calculating economic damages.12 Relying on Heat Shrink Innovations, LLC v.
Medical Extrusion Techs.—Tex., Inc., Snowhite asserts that Innvision’s failure to
timely disclose on the issue of damages resulted in unfair surprise or prejudice. No.
02-12-00512-CV, 2014 WL 5307191, at *6 (Tex. App.—Fort Worth Oct. 16, 2014,
pet. denied) (mem. op.); see TEX. R. CIV. P. 193.6(a).13 Snowhite further contends
12
Snowhite’s briefing does not direct us to any specific request for discovery. Rather, Snowhite refers
to Texas Rule of Civil Procedure 194.2(d), which specifies that “A party may request disclosure of . . . the
amount and any method of calculating economic damages.” TEX. R. CIV. P. 194.2(d) We therefore presume
that Snowhite complains Innvision failed to adequately respond to an according request for disclosure.
13
Texas Rule of Civil Procedure 193.6(a) governs exclusion of evidence and exceptions as follows:
–26–
that the evidence supporting Innvision’s lost profits was neither legally nor factually
sufficient.
Innvision responds that it timely disclosed its damages, arguing that its
Second Amended Petition filed on May 15, 2015, indicated that Innvision would be
seeking its “lost profits” or Snowhite’s “unjust enrichment” as damages. Innvision
further claims that—during the trial court’s October 22, 2018 hearing on Snowhite’s
Motion To Exclude All Evidence of Damages—it stated its intention to rely on the
“testimony given by Snowhite in this case, a corporate representative,” as a part of
its damage theory.
Heat Shrink involved adjudication of, among other causes of action,
misappropriation of trade secrets. Id. at *1. Pertinent to our discussion, the Heat
Shrink appellants challenged evidence of lost profits, arguing that appellee failed to
timely disclose its damages calculation. Id. at *4 (citing TEX. R. CIV. P. 194.2(d)).
The appellee responded that it disclosed that “its damages model will include
amounts for lost profits” in a fourth supplemental response to request for disclosures.
Id. at *4-5. As in the instant case, the trial court permitted evidence on damages;
(a) Exclusion of Evidence and Exceptions. A party who fails to make, amend, or
supplement a discovery response in a timely manner may not introduce in evidence the
material or information that was not timely disclosed, or offer the testimony of a witness
(other than a named party) who was not timely identified, unless the court finds that:
(1) there was good cause for the failure to timely make, amend, or supplement the
discovery response; or
(2) the failure to timely make, amend, or supplement the discovery response will
not unfairly surprise or unfairly prejudice the other parties.
TEX. R. CIV. P. 193.6(a).
–27–
however, the record in Heat Shrink showed that Bauer, appellee’s operator, “had not
made any calculation of lost profits. When asked what damages Bauer sought against
[appellants], Bauer said, ‘It would be the diminished sales of [a customer].’” Id. at
*5–6. Appellee further “pointed to two separate sections of Bauer’s deposition and
suggested Heat Shrink was responsible for putting the two answers together and
concluding that they formed [appellee]’s damage model.” Id. at *6. Our sister court
held that appellee (i) failed to show why its failure to provide the calculation was not
unfair surprise or prejudice to the appellants and (ii) failed to provide a “single
complete calculation of lost profits.” Id. Our sister court concluded that “any
evidence of lost profits admitted was in error [and] the award of lost profits
predicated on such evidence was likewise in error.” Id.
Unlike the appellant in Heat Shrink, Snowhite appears to claim that its own
corporate representative’s testimony was unfairly surprising or prejudicial when
used as evidence on issue of damages.
In Oscar Luis Lopez v. La Madeleine of Tex., Inc., we held:
We consider this focus on surprise as to the “issues” in a case
inaccurate. Although it might be possible that untimely supplemented
or amended discovery responses could cause surprise concerning the
issues in a case, rule 193.6(a) relates to the discovery of evidence; its
principal purpose—and most common application—is to protect a
party from surprise concerning the existence of undisclosed evidence—
not issues. The rule applies when the existence of evidence was not
disclosed in a timely manner, whether or not such evidence related to
an issue both parties knew existed in the case. Thus, a party who failed
to disclose the existence of an eye-witness to an auto accident cannot
argue the absence of surprise or prejudice on the grounds that his party
–28–
opponent was aware that whether the traffic light was red or green was
an issue in the case.
200 S.W.3d 854, 862 (Tex. App.—Dallas 2006, no pet.) (emphasis added).
Here, Innvision’s May 2015 pleading gave notice to Snowhite that it sought
damages, which included lost profits. Kapadia—testifying as Snowhite’s corporate
representative during his deposition—testified to $45,000.00 in actual profit from
the Odessa Project over a year before trial. The record shows that Snowhite secured
the Odessa Project after submitting a bid identical to Innvision’s Odessa bid. Since
misappropriation damages can take the form of the defendant’s actual profits from
the use of the secret, Kapadia testified to a single complete calculation of lost profits
when he testified that Snowhite earned $45,000.00 from the Odessa Project. See Sw.
Energy Prod. Co., 491 S.W.3d at 710–11; ERI Consulting Eng’rs, Inc., 318 S.W.3d
at 878.14
Unlike our hypothetical example of an eye-witness to an auto accident in
Oscar Luis Lopez, the record here shows that Kapadia’s testimony did not unfairly
surprise or prejudice Snowhite; the challenged testimony arises directly from
Snowhite’s corporate representative. See Oscar Luis Lopez, 200 S.W.3d at 862. We
have found no support for the position that a corporate representative’s
uncontroverted testimony about his or her business entity’s profits unfairly
14
Snowhite frames Kapadia’s testimony regarding the $45,000.00 in profit as “speculative,”
complaining that Innvision should have submitted “objective evidence” in the form of Snowhite’s profit
documents. However, the record shows no objections to speculation as to this testimony, and there is no
evidence controverting the testimony of Snowhite’s earning $45,000.00 in profit.
–29–
prejudiced the business entity. Thus, the trial court did not abuse its discretion in
admitting Kapadia’s testimony.
In viewing the evidence in the light most favorable to the fact finding,
indulging every reasonable inference that would support it, and disregarding
contrary evidence unless a reasonable factfinder could not, the record contains more
than a scintilla of evidence to support the trial court’s finding that Innvision
sustained lost profits and economic damages. The trial court’s findings on damages
are not so contrary to the overwhelming weight of the evidence as to be clearly
wrong or unjust. The evidence is legally and factually sufficient to support the trial
court’s findings on Innvision’s damages. Accordingly, it was not error for the trial
court to find damages of or to consider evidence of lost profits at trial. We overrule
Snowhite’s third issue.
VII. ISSUE FOUR – WHETHER IT WAS ERROR TO AWARD ATTORNEY’S FEES
UNDER TUTSA WHERE THE APPELLEE FAILED TO PROPERLY SEGREGATE ITS
FEES, AND THERE IS NO SHOWING OF “MALICE” TO SUPPORT THE “WILLFUL
& MALICIOUS MISAPPROPRIATION” ELEMENT OF SUCH AWARD
“A party who prevails in a lawsuit is entitled to recover attorney’s fees only if
permitted by statute or by contract.” Med. City Dall., Ltd. v. Carlisle Corp., 251
S.W.3d 55, 58 (Tex. 2008) (citing Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d
299, 310 (Tex. 2006)). Under TUTSA, the court may award reasonable attorney’s
fees to the prevailing party if, among other bases, willful and malicious
misappropriation exists. CIV. PRAC. & REM. § 134A.005(3). “Willful and malicious“
–30–
misappropriation is defined as “intentional misappropriation resulting from the
conscious disregard of the rights of the owner of the trade secret.” CIV. PRAC. &
REM. § 134A.002(7).15 A trial court’s decision about the reasonableness of an
attorney’s fee award is reviewed under an abuse of discretion standard. Bocquet v.
Herring, 972 S.W.2d 19, 21 (Tex. 1998). The reasonableness of attorney’s fees is a
fact question, and the appellate court may not substitute its judgment for the
factfinder’s. Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009).
1) Whether Snowhite’s Actions Were Willful and Malicious
The trial court found that Snowhite’s “misappropriation was willful and
malicious as [] defined in the TUTSA.” Snowhite contends that Innvision presented
no evidence regarding Snowhite’s subjective intent in obtaining Innvision’s Odessa
Project information. Snowhite further contends that there is no evidence that it acted
with ill will or “malice” toward Innvision.
The record shows (i) Snowhite—specifically Aboona—encouraged former
Innvision employees to breach their confidentiality agreements with Innvision; (ii)
Snowhite encouraged these former Innvision employees to participate in covert,
comprehensive copying of Innvision documents, including at least one Innvision
computer; (iii) Snowhite copied and accepted Innvision documents from current and
15
Snowhite cites multiple cases from other states that interpret the Uniform Trade Secrets Act with
respect to the terms willful and malicious. Although those cases may hold persuasive value, we note that in
civil matters, “this Court is bound by decisions of the United States Supreme Court, the Texas Supreme
Court, and prior decisions of this Court.” Owen v. Jim Allee Imports, Inc., 380 S.W.3d 276, 284 (Tex.
App.—Dallas 2012, no pet.).
–31–
former Innvision employees; (iv) Snowhite reviewed the collected documents, with
Kapadia corresponding with Aboona that information from the Innvision documents
was “very helpful”; and (v) Snowhite used Innvision’s trade secrets by submitting
an identical bid for the Odessa Project. Furthermore, there is evidence that Snowhite
recognized internally that its actions were in conscious disregard of Innvision’s
rights in its documents and corresponding trade secrets. In addition to Aboona’s
acknowledgement in correspondence of Gathright’s “fear” in copying Snowhite
documents, the record contains evidence that Kevin Barbarise stated in emails to
Aboona and another Snowhite employee that he sought to “steal business from
Innvision.” The record also includes correspondence from Kapadia in which he
states that he hopes to obtain more information from the copied Innvision
documents—for other projects beyond the Odessa Project.
The record reveals that Snowhite’s misappropriation of Innvision’s trade
secret was intentional and resulted from the conscious disregard of Innvision’s
rights. Viewing the evidence in the light most favorable to the fact finding, indulging
every reasonable inference that would support it, and disregarding contrary evidence
unless a reasonable factfinder could not, the record contains more than a scintilla of
evidence to support the trial court’s finding that Snowhite’s misappropriation of
Innvision’s trade secret was willful and malicious. We conclude the evidence was
–32–
legally sufficient to support the trial court’s finding that Snowhite’s
“misappropriation was willful and malicious” against Innvision.16
2) Whether Attorney’s Fees Awarded Were Properly Segregated and
Reasonable
Snowhite next contends that Innvision failed to segregate its attorney’s fees
and that the amount of attorney’s fees awarded were unreasonable. The trial court
determined that Innvision was entitled to $133,891.60 as reasonable and necessary
attorney’s fees incurred through trial “attributable to the work performed by
Plaintiff’s Counsel on either tasks related to the TUTSA claim, or tasks that were
inextricably intertwined with the TUTSA claims, and which, therefore, cannot be
segregated therefrom.”
Snowhite relies on our holding in Regions Bank v. Bay to argue that Innvision
failed to segregate its attorney’s fees. No. 05-12-00531-CV, 2013 WL 5299174, at
*3 (Tex. App.—Dallas Sept. 18, 2013, no pet.) (mem. op.). In Regions Bank we held
Where, as here, a party seeks attorney’s fees in a case where some
claims permit the recovery of fees and others do not, the party must
segregate and exclude the fees for services related to the claims for
which fees are not recoverable unless “the discrete legal services
advance[d] both [the] recoverable claim and the unrecoverable claim.”
16
Snowhite frames this issue as a no evidence point. Considering all the evidence in the record
supporting and contradicting the trial court’s judgment, we conclude that a rational factfinder could have
found that Snowhite’s “misappropriation was willful and malicious” against Innvision. On this record, the
trial court’s finding is not so against the great weight and preponderance as to be manifestly unjust, shock
the conscience, or clearly demonstrate bias. Out of an abundance of caution, we conclude that factually
sufficient evidence supports the finding that Snowhite’s misappropriation was willful and malicious, as
well.
–33–
Id. (internal citations omitted). Snowhite argues that Innvision’s counsel “made no
serious attempt to segregate his legal fees.” We have held that a party may segregate
attorney’s fees by percentage instead of by an entry-by-entry account. See Kelly v.
Isaac, No. 05-19-00813-CV, 2020 WL 4746589, at *8-9 (Tex. App.—Dallas Aug.
17, 2020, pet. filed) (mem. op.). “[I]t is sufficient to submit to the fact-finder
testimony from a party’s attorney concerning the percentage of hours that related
solely to a claim for which fees are not recoverable. RM Crowe Prop. Servs. Co.,
L.P. v. Strategic Energy, L.L.C., 348 S.W.3d 444, 453 (Tex. App.—Dallas 2011, no
pet.) (citing Chapa, 212 S.W.3d at 314).
Here, the record shows that Innvision submitted its attorney’s fees by
declaration of William E. Hammel with attached fee statements.17 Hammel’s
declaration described the total amount of attorney’s fees; provided the billing rates
for himself, associates, and staff; declared that he reviewed the billing; and described
the manner in which he segregated the attorney’s fees that were recoverable under
TUTSA as follows:
Of the total amount of fees incurred in the amount of $156,343, it is my
opinion that eighty-five percent (85%) of that amount was incurred
pursuing the claims against Snowhite for which attorney’s fees are
recoverable. This is so because much of the legal work performed on
behalf of Innvision necessarily overlapped and intertwined.
17
The parties agreed at trial to submit their respective attorney fee applications by affidavit.
–34–
Thus, in accordance with RM Crowe Property and Kelly, Innvision segregated its
attorney’s fees by percentage. See id.; Kelly, 2020 WL 4746589, at *8–9.
“Sufficient evidence to support an award of attorney’s fees includes, at a
minimum, the following evidence: (1) the particular services performed, (2) who
performed those services, (3) approximately when the services were performed, (4)
the reasonable amount of time required to perform the services, and (5) the
reasonable hourly rate for each person performing the services.” KBIDC
Investments, LLC v. Zuru Toys Inc., No. 05-19-00159-CV, 2020 WL 5988014, at
*21 (Tex. App.—Dallas Oct. 9, 2020, no pet. h.) (citing Rohrmoos Venture v. UTSW
DVA Healthcare, LLP, 578 S.W.3d 469, 502 (Tex. 2019)). The fee statements
attached to Hammel’s declaration comply with each of these five requirements and
otherwise detail the work performed. See id.Although Snowhite claims Innvision’s 85% segregation of attorney’s fees is
insufficient, Snowhite refers to no authority or controverting evidence in the
record.18 See Rohrmoos Venture, 578 S.W.3d at 501 (“if a fee opponent seeks a
reduction, it bears the burden of providing specific evidence to overcome the
presumptive reasonableness of the base lodestar figure”). “Testimony from a party’s
attorney about a party’s attorneys’ fees is taken as true as a matter of law if the
testimony ‘is not contradicted by any other witness and is clear, positive, direct, and
18
We note that Snowhite questioned Innvision’s attorney’s fees entries in a post-trial motion and its
appellate briefing. Nevertheless, the record does not show that Snowhite controverted those fees with
evidence.
–35–
free from contradiction.’” In re A.B.P., 291 S.W.3d 91, 98 (Tex. App.—Dallas 2009,
no pet.) (quoting Blockbuster, Inc. v. C-Span Entm’t, Inc., 276 S.W.3d 482, 490
(Tex. App.—Dallas 2008, pet. granted)). Here, the record of Innvision’s attorney’s
fees is clear, positive, direct, and free from contradiction. See id. We conclude that
Innvision adequately segregated its recoverable attorney’s fees.
In viewing the evidence in the light most favorable to the fact finding,
indulging every reasonable inference that would support it, and disregarding
contrary evidence unless a reasonable factfinder could not, the record contains more
than a scintilla of evidence to support the trial court’s findings on Innvision’s
attorney’s fees. Furthermore, after weighing all the evidence in the record, we can
not conclude that the trial court’s judgment on Innvision’s attorney’s fees is
manifestly unjust, shocks the conscience, or clearly demonstrates bias. Coupled with
our conclusion that legally sufficient evidence supports the trial court’s finding that
Snowhite’s misappropriation was willful and malicious, we conclude that the
evidentiary record is both legally and factually sufficient to support the trial court’s
award of attorney’s fees to Innvision under TUTSA. See CIV. PRAC. & REM. §
134A.005(3). We further conclude the trial court’s determination and award of
Innvision’s attorney’s fees in the amount of $133,891.60 was neither arbitrary nor
unreasonable as this amount is approximately 85% of Innvision’s total attorney’s
fees. The trial court did not abuse its discretion in awarding Innvision’s attorney’s
–36–
fees, and it was not error for the trial court to award Innvision’s attorney’s fees under
TUTSA. We overrule Snowhite’s fourth issue.
VIII. CONCLUSION
Because we overrule all four of Snowhite’s issues against it, we affirm the
judgment of the trial court.
/Bill Pedersen, III//
181447f.p05 BILL PEDERSEN, III
JUSTICE
–37–
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
SNOWHITE TEXTILE AND On Appeal from the 193rd Judicial
FURNISHINGS, INC., Appellant District Court, Dallas County, Texas
Trial Court Cause No. DC-14-11252.
No. 05-18-01447-CV V. Opinion delivered by Justice
Pedersen, III. Justices Osborne and
INNVISION HOSPITALITY, INC., Partida-Kipness participating.
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.
It is ORDERED that appellee INNVISION HOSPITALITY, INC. recover
its costs of this appeal from appellant SNOWHITE TEXTILE AND
FURNISHINGS, INC.
Judgment entered this 14th day of December, 2020.
–38–