Erica Whitlock, Jerramy Jay Boyles, and Walter Gale \"Trey\" Boyles v. CSI Risk Management, LLC

AFFIRMED as MODIFIED and Opinion Filed April 30, 2021
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-01297-CV
ERICA WHITLOCK, JERRAMY JAY BOYLES, AND WALTER GALE
“TREY” BOYLES, Appellants
V.
CSI RISK MANAGEMENT, LLC, Appellee
On Appeal from the 116th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-16-05743
MEMORANDUM OPINION
Before Justices Partida-Kipness, Pedersen, III, and Goldstein
Opinion by Justice Goldstein
Appellant Erica Whitlock’s former employer CSI Risk Management, LLC sued
her and two individuals with whom she opened and operated a competing business. The
jury answered more than 20 questions; all in favor of CSI except the predicate questions
necessary for a punitive damages award. Appellants challenge the jury’s answer to
virtually every question and the resulting judgment. Although we sustain one issue and
reform the judgment to correct an error regarding the basis for the trial court’s award of
interest, we affirm.
1
BACKGROUND
In 2014, CSI, a commercial insurance agency owned and operated by Steve
Spalding since 2010, hired Whitlock as a temporary employee who at that time, signed
a Non-Compete, Non-Solicitation and Confidentiality Agreement (the Temporary
Agreement). When she was converted to a permanent employee a few weeks later, she
was asked to sign an Employee Handbook (Handbook) and an Independent Sales
Representative Agreement (the Permanent Agreement). Whitlock disputed signing the
Permanent Agreement, but admitted signing two other documents received at the same
time.
The Temporary Agreement prohibited competition in Dallas County and
solicitation of CSI’s clients for 13 months following Whitlock’s termination, and
provided Whitlock’s agreement to protect trade secrets, customers, and other
information as confidential. The Permanent Agreement provided additional details
regarding the defined confidential information, non-solicitation and non-compete
provisions, and Whitlock’s consent to the reasonableness of the agreement’s restrictive
covenants. Whitlock worked concurrently as a customer service representative and a
sales representative for CSI and was paid both a salary and a share of commissions on
insurance policies she sold.
Following her departure and CSI’s discovery of information pertaining to her
efforts to create and operate a new insurance agency and her sales to former CSI
2
customers, CSI sued Whitlock and the Boyles. CSI asserted claims against Whitlock
for breach of the Temporary and Permanent Agreements, breach of fiduciary duty,
tortious interference with contractual relations, and misappropriation of trade secrets and
conspiracy, and added the Boyles as defendants for the last two claims. Premised on a
letter CSI sent to its clients about Whitlock’s activities, Whitlock asserted a defamation
counterclaim against CSI and the same cross claim against Spalding. The case
proceeded to trial on all claims and the jury returned a verdict in favor of CSI. Following
appellants’ motions for JNOV and remittitur, the court entered judgment. It also denied
a subsequent motion for new trial and motion to disregard jury findings and vacate final
judgment.
Raising a total of fourteen issues, twelve of which include painfully multifarious
subparts, appellants challenge the jury’s answers to virtually every question. We
consider each issue in turn.1
DISCUSSION
Because she challenges the legal sufficiency of the evidence on issues on which
she did not have the burden of proof,2 Whitlock must demonstrate no evidence supports
the challenged adverse findings. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983).
1
Many of appellants’ issues raise duplicative arguments. We discuss and resolve each complaint once, regardless
of how many times the issue was raised.
2
We discuss separately the standard of review and burden for Whitlock’s defamation counterclaim.
3
Regarding such a challenge, we consider the evidence in the light most favorable to the
verdict, “credit favorable evidence if reasonable jurors could and disregard contrary
evidence unless reasonable jurors could not.” City of Keller v. Wilson, 168 S.W.3d 802,
807 (Tex. 2005). If more than a scintilla of evidence supports the finding, the no
evidence challenge fails. United Services Auto. Ass’n v. Croft, 175 S.W.3d 457, 463
(Tex. App.—Dallas 2005, no pet.). With respect to a factual sufficiency challenge, we
consider all of the evidence in a neutral light and set aside the jury’s verdict only if it is
so contrary to the overwhelming weight of the evidence as to be clearly wrong and
unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Puig v. High Standards
Networking & Computer Serv., Inc., No. 01-16-00921-CV, 2017 WL 4820171, at *2
(Tex. App.—Houston [1st Dist.] Oct. 26, 2017, no pet.) (mem. op.). For any sufficiency
challenge, we defer to the jury’s determination regarding the witnesses’ credibility, the
weight accorded their testimony, and the jury’s resolution of conflicting evidence. City
of Keller, 168 S.W.3d at 819; McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex.
1986).
Whitlock asserts the trial court erred in granting judgment against her premised
on CSI’s breach of contract claims. Her first issue, Whitlock alleges CSI’s client list
was not a confidential trade secret, asserts the Handbook was not a contract and could
not support the jury’s answer, and also challenges the legal and factual sufficiency of the
4
evidence supporting the jury’s answers to questions one and two.3 The jury answered
“yes” to question one regarding Whitlock’s agreement to a) the Employee Handbook,
and b) the Permanent Agreement, although the jury was instructed not to consider the
non-compete provision of the Permanent Agreement.4 The jury answered the same to
each component of question two regarding whether Whitlock failed to comply with
either agreement. Similarly, the jury answered question 2A, which asked whether
Whitlock failed to comply with the Temporary Agreement, affirmatively.
A. CSI’s confidential information
In one sub-part of her first issue, Whitlock contends no violation of the
confidentiality provisions included in the contracts identified in questions one and two5
could have occurred because CSI’s client information was publicly available and thus
not a protectable trade secret. CSI responds that the evidence demonstrated its
“insurance policies and products, computer programs, networking products, customer
lists and contacts, pricing information, vendor contacts and information, marketing
3
Question one asked whether a) Whitlock signed the Permanent Agreement, and b) the Employee Handbook.
Question two asked, in sub-parts, whether she failed to comply with either of those agreements.
4
During a side-bar conference, the trial court determined no pleading supported a claim for breach of the non-
compete provisions of the Permanent Agreement and denied a motion for a trial amendment to expressly assert
such a claim.
5
As argued by appellants, CSI concedes that under McAllen Hospitals, LP v. Lopez, 576 S.W.3d 389 (Tex. 2019),
the Handbook was not a contract and we accordingly disregard it as a potential basis for sustaining the jury’s
verdict and the judgment.
5
information and specific customer information” was confidential, not in the public
domain, and entitled to protection.
Question eleven and the jury’s answer to it inform our analysis of this issue.6 In
that question the jury was asked if CSI owned “a trade secret in the form of a list of
actual or potential customers and suppliers.” The charge defined “trade secret” as:
information, including a list of actual or potential customers and suppliers,
that–
1. 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
2. is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
Although Whitlock objected to submission of question eleven on the grounds
that no evidence of a trade secret had been introduced and that potential customers
or clients are not trade secrets, she did not object to the trade secret definition. Thus,
the court’s charge provides the standard by which we measure the sufficiency of the
evidence with respect to the existence of a trade secret.7 Calce v. Dorado Expl., Inc.,
6
See also subpart I, “Liability for misappropriation of trade secrets” herein addressing issue ten.
7
The definition tracks the breadth of protectable trade secrets. In re Bass, 113 S.W.3d 735, 739 (Tex. 2003) (any
formula, pattern, device, or compilation of information used in one’s business and which presents an opportunity
to obtain an advantage over competitors who do not know or use it, qualifies as a trade secret); Reliant Hosp.
Partners, LLC v. Cornerstone Healthcare Grp. Holdings, Inc., 374 S.W.3d 488, 499 (Tex. App.—Dallas 2012,
pet. denied). This Court has repeatedly afforded trade secret status to customer lists, pricing information, client
information, customer preferences, buyer contacts, and the like. Reliant Hosp. Partners, 374 S.W.3d at 499;
Texas Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 367 (Tex. App.—
Dallas 2009, pet. denied); see also Global Water Group, Inc. v. Atchley, 244 S.W.3d 924, 928 (Tex. App.—Dallas
2008, pet. denied). Likewise, business compilations, as with the materials identified above, are protectable trade
6
309 S.W.3d 719, 735–36 (Tex. App.—Dallas 2010, no pet.). The definition recognizes
that acquiring protected information through unfair means rather than the ability to
legitimately acquire it provides the focus. See Reliant Hosp. Partners, LLC, 374 S.W.3d
at 499.
Spalding testified about CSI’s efforts to maintain the secrecy of its customer lists
and related information, its computer system, and its business strategy information, all
of which it asserted was confidential. The jury was informed that CSI hired attorneys to
prepare agreements its employees were required to sign evidencing their agreement to
protect the information; used a specific software program that limited access to the
information and used a log-in and password to track the user’s activities in that software;
and kept a binder of confidential client information under lock and key. Further,
Spalding testified that by virtue of the Permanent Agreement, Whitlock agreed that
CSI’s customer lists and contacts were acquired at great expense and were not in the
public domain and not available for acquisition from other sources. CSI also introduced
testimony that Whitlock earned at least $62,000 through use of its confidential
information, thus circumstantially demonstrating the confidential information’s value.
secrets when the compilation is neither “generally known” nor “readily available.” Reliant Hosp. Partners, LLC,
374 S.W.3d at 499; Eagle Oil & Gas Co. v. Shale Expl., LLC, 549 S.W.3d 256, 269–70 (Tex. App.—Houston
[1st Dist.] 2018, pet. dism’d) (“A compilation of business information that provides a competitive advantage over
those who lack the compilation may constitute a trade secret.”).
7
Whitlock asserted that she had contact information for many of CSI’s customers
because they had contacted her on her cell phone while she worked for CSI, and thus
that CSI’s data was not confidential. Possession of those customers’ phone numbers
fails to address the totality of the information CSI asserted was confidential that was also
available to Whitlock, for instance the specific underwriters whose policies insured those
customers. Likewise, Whitlock’s contention that the identity of CSI’s customers was
disclosed in a group email CSI sent to its customers about Whitlock’s departure and her
competition fails to acknowledge the information not included in the emails, for instance
those customers’ pricing information, contact information for those customers other than
their email addresses, and the carriers CSI used to insure its customers.
We conclude more than a scintilla of evidence demonstrates CSI’s actual and
prospective customer information was confidential. Viewing all of the evidence
neutrally, we cannot conclude the jury’s verdict regarding CSI’s ownership of
confidential information was so contrary to the overwhelming weight of the evidence as
to be clearly wrong and unjust. See Global Water Grp., Inc. v. Atchley, 244 S.W.3d 924,
929 (Tex. App.—Dallas 2008, pet. denied) (“The status of the information claimed as a
trade secret must be determined through a comparative evaluation of all the relevant
factors, including the value, secrecy, and definiteness of the information as well as the
nature of the defendant’s misconduct.”).
8
Finally, in her reply, Whitlock contends inclusion of the Handbook in question
two created a Casteel8 problem. We do not consider arguments raised for the first time
in reply briefs. Stovall & Assocs., P.C. v. Hibbs Fin. Ctr., Ltd., 409 S.W.3d 790, 803
(Tex. App.—Dallas 2013, no pet.) (declining to consider argument raised for the first
time in a reply brief, which was “wholly different” from arguments raised in opening
brief). Moreover, Whitlock fails to demonstrate she objected to inclusion of the
Handbook in question two, a further basis for her waiver of the argument. Holmes v.
Concord Homes, Ltd., 115 S.W.3d 310, 313 (Tex. App.—Texarkana 2003, no pet.) (test
for preservation regarding charge error “‘is whether the party made the trial court aware
of the complaint, timely and plainly, and obtained a ruling.’” (quoting State Dep’t of
Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241 (Tex.1992)).
We overrule each sub-part of Whitlock’s first issue and all portions of her other
issues including issue 10B that are dependent on the sufficiency of the evidence
supporting the jury’s verdict regarding CSI’s ownership of confidential information.
B. Breach of the Confidentiality Provisions
Whitlock’s second issue attacks the jury’s determination in question 2A that she
breached the Temporary Agreement.9 Whitlock alleges the non-compete provision in
8
Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 389 (Tex. 2000).
9
Question 2A asked if Whitlock failed to comply with “the Non-Compete, Non-Solicitation, and Confidentiality
Agreement dated September 2, 2014.”
9
that agreement was not enforceable;10 the trial court erred in allowing CSI to offer
evidence contrary to its ruling about that agreement at a temporary restraining order
hearing; the trial court erred in allowing the jury to interpret the legal meaning of the
contract; and, legally and factually insufficient evidence supports the jury’s answer to
question 2A.
Although it argues persuasively that the non-compete provision is fully
enforceable and that Whitlock waived any potentially valid challenges to it, CSI also
argues the confidentiality provisions of both agreements and the non-solicitation
provision of the Temporary Agreement support the jury’s verdict and thus eliminate the
burdens for enforceability of the covenant not to compete. See TEX. BUS. & COM. CODE
§ 15.50 (“(a) Notwithstanding Section 15.05 of this code, and subject to any applicable
provision of Subsection (b), a covenant not to compete is enforceable if it is ancillary to
or part of an otherwise enforceable agreement at the time the agreement is made to the
extent that it contains limitations as to time, geographical area, and scope of activity to
be restrained that are reasonable and do not impose a greater restraint than is necessary
to protect the goodwill or other business interest of the promisee.”) (hereafter CNCA));
Alex Sheshunoff Mgmt. Svcs, L.P. v. Johnson, 209 S.W.3d 644, 648-49 (Tex. 2006).
10
Because appellants provide no argument as to why the confidentiality provision in the Permanent Agreement
is unenforceable, and we perceive no meaningful difference between enforceability of those provisions in the two
Agreements, we analyze breach of both confidentiality provisions together.
10
We agree that the confidentiality provisions of the Temporary Agreement fall
beyond the strictures of the CNCA. See Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654,
662 (Tex. App.—Dallas 1992, no writ) (non-disclosure provisions may be
enforceable even if remainder of employment contract is not); see also
Neurodiagnostic Consultants, LLC v. Nallia, No. 03-18-00609-CV, 2019 WL 4231232,
at *7 (Tex. App.—Austin Sept. 6, 2019, no pet.) (mem op.) (CNCA does not apply to a
claim for damages for violating non-disclosure agreement).11 We thus reject appellants’
arguments premised on the enforceability of the non-compete or non-solicitation
provisions in the Temporary Agreement, since the jury was not limited to considering
only those provisions and appellants fail to assert the confidentiality provisions lacked
force.12 Accordingly, because reliance on the non-compete and non-solicitation
provisions is unnecessary to resolve appellants’ arguments regarding question 2A, we
11
As a restraint on trade, however, the non-solicitation provision falls within the scope of the CNCA. Marsh
USA Inc. v. Cook, 354 S.W.3d 764, 768 (Tex. 2011) (“Covenants that place limits on former employees’
professional mobility or restrict their solicitation of the former employers’ customers and employees are
restraints on trade and are governed by the Act.”).
12
In their factual recitation, appellants asserted Whitlock did not sign the Permanent Agreement and the signature
on the document admitted into evidence was a forgery. Even if this contention was properly raised as argument
and supported by authorities, see TEX. R. APP. P. 38.1, we would reject it given the conflicting and contrary
evidence and our obligation to indulge every reasonable inference in support of the jury’s verdict. City of Keller,
168 S.W.3d at 822.
11
confine our evaluation of their complaints regarding this question to the confidentiality
provision.13
The confidentiality provision in the Temporary Agreement provided:
Confidentiality
(Independent Contractor/employee) hereby acknowledges that while
working she will have contact with and develop and serve the customers
of Company and that in all of his/her activities, and through the nature of
complying with his/her obligations pursuant to the business, assets,
operations, customers, suppliers, contractual parties and other persons with
whom Company does business. The (Independent Contractor/Temp)
acknowledges that the Company shall or may in reliance of this agreement
provide her access to trade secrets, customers, suppliers and other
confidential data and good will. The worker hereby acknowledges and
confirms that such information constitutes the exclusive property of
Company and she agrees to retain said information as confidential and not
to use said information on his or her own behalf or discuss same to any
third party.
Although appellants disputed the evidence, the jury was free to believe the
testimony of CSI’s witnesses that a three-ring binder Whitlock refused to return
contained confidential data on a year’s worth of CSI’s business. CSI’s witness testified
that all of the information in the binder—names and contact information of insureds,
premiums, and notes about each client and their needs—was helpful to Whitlock in
forming a competing business. Likewise, CSI provided evidence that Whitlock refused
13
Thus, we need not consider appellants’ argument that at the temporary restraining order hearing the trial court
defined “hospitality business” as “restaurants and hotels,” since the confidentiality provision omits the “hospitality
business” restriction included in the non-compete provision.
12
to return a company laptop provided for her use and by which she had access to CSI’s
confidential computer system. Although appellants assert that the only customers who
testified confirmed they sought out Whitlock rather than having been contacted by her
through their confidential contact information, CSI’s confidential information was not
limited to its customers’ contact information. Moreover, appellants ignore CSI’s
evidence that these customers had Whitlock’s cell phone number because she had first
contacted them by using CSI’s confidential information while employed by CSI. Thus,
we conclude more than a scintilla of evidence supported the jury’s determination that
Whitlock breached the confidentiality provision of the Temporary Agreement, and
further conclude the jury’s verdict was not contrary to the overwhelming weight of the
evidence.
Appellants also contend the trial court erred in submitting question 2A because
the court rather than the jury should have interpreted the agreement and determined
whether it was enforceable. But the question did not require the jury to interpret
anything. It asked whether Whitlock failed to comply with the Temporary Agreement;
a disputed factual issue. See ITT Commercial Fin. Corp. v. Riehn, 796 S.W.2d 248, 254,
n.3 (Tex. App.—Dallas 1990, no writ) (court should submit questions to the jury
“concerning the failure of a contract party to conduct himself in accordance with contract
requirements”).
13
The remainder of the complaints in appellants’ second issue focus on enforcement
of the non-compete, evidence regarding the reasonableness of the non-compete and
CSI’s arguments in support of it, and inclusion of the non-compete in submission of
question 2A. Although the record suggests appellants likely waived these arguments,
the evidence supporting Whitlock’s breach of the confidentiality provision moots them.
We overrule all of appellants’ challenges to the jury’s answer to question 2A, including
their second issue.
C. Denial of discovery and error regarding admission of evidence regarding
CSI’s economic damages
In her third issue, Whitlock contends the trial court committed harmful error when
it entered a pre-trial protective order that she claims denied her the right to obtain
discovery and ultimately call witnesses—CSI’s customers and former customers—
regarding CSI’s alleged damages. The protective order about which Whitlock
complains, as well as Whitlock’s failure to allege that she sought the court’s
permission to obtain the discovery she contends she was denied, belie her argument.
We review discovery orders for an abuse of discretion. Avary v. Bank of Am.,
N.A., 72 S.W.3d 779, 787 (Tex. App.—Dallas 2002, pet. denied). Even assuming an
abuse of discretion occurred, it will not support reversal unless the complaining party
demonstrates that the error probably resulted in an improper judgment. City of
Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995).
14
The order at issue directed appellants to cease seeking discovery from or
serving subpoenas on certain CSI customers identified on a Customer List
“provided, in confidence, to Defendants’ counsel.” It qualified that prohibition:
“[s]uch discovery may only be sent to a Client or Customer on the Customer List
with written authorization from this Court.” On its face, the order permitted
appellants to subpoena CSI’s customers if they obtained written authorization from
the trial court. Contrary to appellants’ arguments, the order did not prohibit them
from seeking discovery from other customers within their knowledge or seeking the
identity of additional customers from CSI if appellants believed all relevant
customers had not been identified. Appellants fail to demonstrate that they ever
requested permission to seek discovery from any witness following entry of the
order, let alone the trial court’s denial of any such request. Nor do appellants
demonstrate that CSI withheld the identity of former customers, that they ever
complained to the trial court about any such discovery issue, or that the order limited
their trial presentation or precluded them from calling any witness.14 Thus, any error
with respect to the order, if indeed one was committed, was waived by appellants’
14
Further, Whitlock’s complaints that “she was not even permitted to put on evidence that claimed clients
were not actually clients or the reasons that they elected not to do business with Appellees” lacks any
supporting record reference. We will not scour the record to determine whether support exists for a factual
assertion or argument. Unifund CCR Partners v. Weaver, 262 S.W.3d 796, 797 (Tex. 2008) (per curiam)
(“We will not consider factual assertions that appear solely in briefs and are not supported by the appellate
record.”).
15
failure to request the relief it allowed, or demonstrate that they sought and were
denied the identity of CSI customers whose testimony might have changed the
outcome at trial. Because appellants failed to carry their burden with respect to any
potential harm, we decline to examine the trial court’s order for an abuse of discretion.
TEX. R. APP. P. 44.1; see also KMS Retail Rowlett, L.P. v. City of Rowlett, 559 S.W.3d
192, 197–198 n.5 (Tex. App.—Dallas 2017), aff’d, 2019 WL 2147205 (Tex. May 17,
2019) (declining to address the merits of evidentiary objections to summary judgment
evidence where appellant failed to allege the evidence probably resulted in the rendition
of an improper judgment). We conclude appellants failed to demonstrate any error with
respect to the order, and accordingly overrule their third issue.
D. Evidence regarding CSI’s undisclosed theory of recovery
To the extent it does not duplicate arguments raised in other issues, issue four
challenges evidentiary rulings regarding admission of evidence and a theory of recovery
appellants contend was not disclosed prior to trial. The argument focuses on whether
CSI pleaded and disclosed breach of the non-competition provision in the Permanent
Agreement or relied solely on the non-competition provision in the Temporary
Agreement. The distinction between the scope of the two provisions gives rise to the
argument. The Temporary Agreement prohibited competition for 13 months following
termination with respect to substantially similar businesses or those competitive with
CSI, and “applied” to Dallas County. The broader Permanent Agreement prohibited,
16
within a 75-mile radius of CSI’s Dallas office, competition in any manner in any
business activity in which CSI engaged during the term of the agreement.
Appellants contend that prior to trial CSI had never asserted that Whitlock was
prohibited from selling to anyone outside of Dallas County if she was located within
Dallas County while she made the sale. They thus argue the trial court erred by admitting
damages evidence related to sales made to clients who were outside of Dallas County.15
Appellants however, ignore the portions of CSI’s pleadings and disclosures that provide
notice of CSI’s theory and damages calculation premised on misappropriation and use
of its confidential information and breach of the non-solicitation provisions of both
contracts, which is the same evidence appellants contend should have been inadmissible
in relation to the undisclosed theory. Any failure to disclose the theory by which
Whitlock may have breached the non-compete provision in either agreement had no
bearing on whether the challenged damages information was inadmissible, since the
same damages information was relevant to the other disclosed theories. See LaBeth v.
Pasadena Bayshore Hosp., Inc., No. 14-10-01237-CV, 2012 WL 113050, at *5 (Tex.
App.—Houston [14th Dist.] Jan. 12, 2012, pet. denied) (mem. op.) (rules require
15
During a bench conference and based on CSI’s live pleading and its disclosures that referenced only the non-
compete provision in the Temporary Agreement, the trial court ruled that CSI could admit evidence about the
non-solicitation and confidentiality provisions of the Permanent Agreement, but it could not rely on the non-
compete provision in that agreement. Thus, question two, which inquired about Whitlock’s breach of the
Permanent Agreement, instructed the jury not to consider paragraph 8, the Permanent Agreement’s non-compete
provision.
17
disclosure of party’s “basic assertions” and exclusion is not warranted when opposing
party was not surprised or prejudiced by legal theories at issue); Beck v. Law Offices of
Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 442 (Tex. App.—Austin 2009, no pet.)
(“In other words, a trial court does not abuse its discretion in admitting or excluding
evidence if it reaches the right result for the wrong reason.”); see also Reliance Steel &
Aluminum Co. v. Sevcik, 267 S.W.3d 867, 871 (Tex. 2008) (“Erroneous admission of
evidence is harmless unless the error probably (though not necessarily) caused rendition
of an improper judgment.”). Even if the damages evidence—Whitlock’s sales to CSI’s
clients, including those located outside of Dallas County as evidence of CSI’s lost
commissions and sales—had not been disclosed, Whitlock objected to CSI’s damages
exhibits based only on relevance. Any objection premised on failure to produce the
evidence prior to trial, a contention not supported by the record, was waived. See
Morales v. Rice, 388 S.W.3d 376, 381 (Tex. App.—El Paso 2012, no pet.) (“Error is
preserved with regard to a ruling that admits evidence if the opponent of the evidence
makes a timely, specific objection and obtains a ruling.”); Talley Const. Co. v.
Rodriguez, No. 01-03-01147-CV, 2006 WL 908180, at *4 (Tex. App.—Houston [1st
Dist.] Apr. 6, 2006, no pet.) (mem. op.) (failure to raise specific objection to challenged
evidence waives objection). We overrule appellants’ fourth issue.
18
E. Testimony following alleged violation of the Rule
Appellants’ fifth issue complains the trial court erred in allowing testimony after
violation of the Rule.16 During a break, appellants’ counsel heard yelling between what
she thought was a witness whose testimony was not yet complete, Carter, and a witness
who had not yet testified, Spalding. After appellants raised their objection, CSI’s
counsel informed the trial court that he, rather than Spalding, had been yelling, and that
he was yelling at Spalding, rather than Spalding yelling at Carter. The trial judge
questioned Carter, whose testimony had begun prior to the break. Carter confirmed he
had overheard an exchange between Spalding and CSI’s counsel, but said it was not
about his or Spalding’s testimony. The trial court then permitted appellants’ counsel to
question Carter, who testified the conversation had been about documents not identified
in his presence and that were not at the courthouse. CSI’s lawyer clarified that he had
yelled at his client instructing him to stop pressuring the lawyer, and outside of Carter’s
presence had instructed a paralegal to locate a specific production report. The trial judge
determined neither witness had disclosed his anticipated testimony in the presence of the
other, although she also cautioned the parties and witnesses that if one witness had
suggested what the other should testify about, those statements would violate the court’s
16
TEX. R. EVID. 614 (“At a party’s request, the court must order witnesses excluded so that they cannot hear other
witnesses’ testimony.”).
19
orders. She also observed that she had previously ruled during the trial that Carter was
not permitted to testify about production reports, which were the subject of the exchange
Carter had overheard. The trial judge then allowed Carter to continue his testimony and
subsequently allowed Spalding to also testify.
With certain inapplicable exceptions, Rule 614 provides for the exclusion of
witnesses from the courtroom during the testimony of other witnesses. TEX. R. EVID.
614. If the Rule is violated and depending on the circumstances, the judge may allow
the testimony, exclude the testimony, or hold the violator in contempt. In the Interest of
A.H.J., No. 05-15-00501-CV, 2015 WL 5866256, at *7 (Tex. App.—Dallas Oct. 8,
2015, pet. denied) (mem. op). We review such rulings for an abuse of discretion, but
absent harm, even an incorrect ruling will not justify reversal. Id.Given Carter’s testimony about the exchange, appellants fail to demonstrate how
or why the trial court’s determination that the Rule had not been violated was error.
Even if they had done so, however, they wholly fail to address how any such error was
harmful. Id. (concluding no reversible error from violation of the Rule where appellant
failed to show how the violation affected the subsequent testimony). We overrule
appellants’ fifth issue.
F. Damages award
Issue six, as well as several preceding and subsequent sub-issues, attacks the
damages award. Appellants contend the trial court submitted an incorrect measure of
20
damages and the evidence is legally and factually insufficient to support the jury’s
awards in answer to questions three and 3A, the damages questions related to breach of
the different contracts.17 Specifically, appellants argue CSI’s damages evidence was an
improper measure of its damages because 1) instead of offering evidence of its own
damages CSI relied on evidence of Whitlock’s earnings after she left CSI; 2) Whitlock’s
earnings from sales to CSI’s clients included premiums earned from businesses that fell
outside the scope of the Temporary Agreement’s non-compete provision; 3) premiums
charged did not provide a fair measure of Whitlock’s earnings; 4) CSI relied on lost
gross revenue instead of net revenue; and 5) CSI failed to demonstrate causation between
the damages the jury awarded and Whitlock’s breaches of the agreements and her
misappropriation of trade secrets.18
The jury awarded the same damages for each of CSI’s claims: $140,000 for
damages sustained in the past and $170,000 for future losses, and the judgment allowed
a total recovery of $310,000, plus attorney’s fees. Accordingly, to sustain the award we
need only conclude the measure of damages was correct as to one of the claims. See,
17
Those questions, properly conditioned on preceding liability answers, instructed the jury to award damages for
loss of commissions and fees sustained in the past and loss of commissions and fees that, in reasonable probability,
would be sustained in the future. Similarly, question seven, which was predicated on a liability finding for breach
of a fiduciary duty, provided the same instruction for a damages award. Question eight, also predicated on a
liability finding for breach of a fiduciary duty, asked the jury to determine the amount of commissions and fees
Whitlock received as a result of obtaining insurance policies for CSI’s former clients.
18
Appellants include a sub-point in their tenth issue arguing that no evidence supports the damages award for
misappropriation of trade secrets, but in support incorporate their arguments from issue six. We address all
arguments regarding damages in the discussion above.
21
e.g., Lundy v. Masson, 260 S.W.3d 482, 506 (Tex. App.—Houston [14th Dist.] 2008,
pet. denied) (“When, as in this case, the plaintiff establishes separate theories of liability
based on the same facts and fails to elect between more than one recovery, the appellate
court should render judgment on the finding affording the greatest recovery.”). We first
address appellants’ contention that CSI relied on an incorrect measure of damages and
inapplicable or incomplete evidence to support the damages award.
1. Measure of damages and evidence supporting the amount awarded
With the exception of the tortious interference claim, every damages question
submitted to the jury by CSI involved loss of trade secrets or, relatedly, failure to
maintain the confidentiality of CSI’s confidential information as required by both
contracts. The measure of injury for these claims consequently focuses on the value of
the lost trade secrets and confidential information. Sw. Energy Prod. Co. v. Berry-
Helfand, 491 S.W.3d 699, 710–11 (Tex. 2016) (“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, the value a reasonably prudent
investor would have paid for the trade secret, the development costs the defendant
avoided by the misappropriation, and a reasonable royalty.”). Comparatively, the loss
of the contracts with which CSI alleged Whitlock interfered—the sales agreements
between CSI and its former customers without regard to the location of the customers or
22
any time-limitation created by the terms of the non-compete provisions19—demonstrates
the lost benefit of the bargain and thus the measure of damages for CSI’s tortious
interference claim. See Palla v. Bio-One, Inc., 424 S.W.3d 722, 726 (Tex. App.—Dallas
2014, no pet.).
Recovery of lost profits as damages are generally allowed where the evidence
demonstrates that “a loss of profits is the natural and probable consequence of the act
or omission complained of, and their amount is shown with sufficient certainty.”
Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520 S.W.3d 848, 860 (Tex.
2017) (internal quotation omitted). Although exact calculation is not necessary,
recovering lost profits, future or past, requires competent evidence demonstrating the
loss amount with reasonable certainty, and opinions regarding the loss amount must rest
upon objective facts, figures, or data. Holt Atherton Indus. Inc. v. Heine, 835 S.W.2d
80, 84 (Tex. 1992). CSI’s entitlement to damages for any claim also required it to
provide evidence “supporting a single complete calculation,” for that claim, including if
applicable, credits and expenses. ERI Consulting Engineers, Inc. v. Swinnea, 318
S.W.3d 867, 878 (Tex. 2010).
The jury determined that Whitlock received $62,000 in commissions from sales
to CSI’s former clients. The evidence supporting that number was derived from a
19
Thus, appellants’ arguments and reliance on evidence regarding the location of the clients at issue and the nature
of their business does not inform the factual sufficiency of the damages award.
23
spreadsheet introduced by CSI that reflected specific sales amounts to specific customers
made by Whitlock after her departure from CSI. One column on the spreadsheet
reflected “agency commissions” and provided the gross sales amounts that would have
been received by CSI if the sales had been made by CSI rather than Whitlock.
Additional testimony from CSI’s witness demonstrated individual sales do not impact
its fixed expenses, and thus CSI’s lost profits as measured by Whitlock’s sales to CSI’s
former customers was a net number for CSI. CSI also provided evidence that its
customers are generally retained for multiple years and the loss of one customer thus
impacts income for several years. More specifically, in 2017 after Whitlock left, CSI
lost between 40–45% of its business, although it also provided evidence that on average
it had previously retained 85% of its business annually, and that many customers stay
with CSI for 6–8 years, although some stay 10–15 years.20 Moreover, one client who
switched his business to Whitlock testified that he generally did not move his business
and would not have done so had Whitlock not been at a new firm.21 Thus, evidence of
Whitlock’s sales to CSI’s former clients coupled with the percentage decrease in CSI’s
client retention as compared to its prior retention, is evidence of CSI’s losses.
20
The same information also supports the inference that CSI was a going concern that would have continued
operating profitably for the foreseeable future, although appellants do not challenge that aspect of CSI’s
entitlement to recover future lost profits.
21
Id.24
Although CSI concedes the absence of any obvious explanation for how the jury
calculated damages, the award does not become improper or unsupported legally or
factually on that basis. Enright v. Goodman Distribution, Inc., 330 S.W.3d 392, 403
(Tex. App.—Houston [14th Dist.] 2010, no pet.) (lack of clarity in jury’s reasoning for
damages award provides no basis to disregard the award, if the award is “within the
range permitted by the evidence”). A jury has discretion to award damages within the
range permitted by the evidence, as long as a rational basis exists for the jury’s damage
calculation. Id. Assuming the jury determined CSI would have retained 85% of the
$62,000 Whitlock received in sales to former CSI clients, it could have extrapolated the
amounts awarded as damages sustained in the years between Whitlock’s departure and
the trial by multiplying $62,000 by 85% and carrying it forward and back several years.22
This evidence amounts to more than a scintilla, as well as a rational basis to support the
jury’s award, and further demonstrates that the jury’s award was not contrary to the
overwhelming weight of the evidence. See Picard v. Badgett, No. 14-19-00006-CV,
2021 WL 786817, at *18 (Tex. App.—Houston [14th Dist.] Mar. 2, 2021, no pet. h.)
(mem. op.) (damages within the range of the evidence presented, including percentage
of clients lost following breach and value of that percentage, provided “rational basis”
for lost profit award). We overrule appellants’ sixth issue and all issues and sub-issues
22
In closing, CSI’s attorney asserted it would suffer losses for six years in the future and asked the jury not to
limit the damage award to one year of losses.
25
challenging the measure of damages and those challenging the legal and factual
sufficiency regarding the amount of the award.
2. Causation
Appellants also contends no causation connects any of Whitlock’s or the Boyles’s
conduct23 with the damages awarded by the jury. “[T]he existence and nature of certain
basic conditions, proof of a logical sequence of events, and temporal proximity between
an occurrence and the conditions” suffices to support causation. Guevara v. Ferrer, 247
S.W.3d 662, 667 (Tex. 2007); Perez v. Johnson, No. 02-19-00082-CV, 2020 WL
5552139, at *2 (Tex. App.—Fort Worth Sept. 17, 2020, no pet.) (mem. op.). Here,
ample evidence supports causation.
Beginning in February 2015, Whitlock began communicating with Jay Boyles
and Trey Boyles about starting a new agency together, and confirmed those
communications in texts to friends. In other texts in late 2015, she referenced a specific
CSI customer as “hers.” The day before she resigned, Whitlock exchanged emails with
the Boyles that evidenced payment for Error & Omissions coverage for a new agency,
AAA Insurance Planning Services, LLC d/b/a Atless Insurance. An assumed name
certificate included in the email string demonstrated the entity was owned by Jay Boyles
23
Appellants attack causation between the damages awarded only with respect to the misappropriation and
conspiracy claims, the only claims asserted against the Boyles.
26
and had been created in February 2016. Whitlock forwarded the string to her Atless
email account, which she had set up while still working at CSI.
Additional evidence demonstrates Whitlock’s efforts to write coverage from the
new agency for CSI’s customers. For instance, in an email string with a long-standing
CSI customer that began in February 2016 when the customer began asking for a quote
for insurance and renewal for the corporate entity owned by the customer, Whitlock
informed the customer only after she left CSI, from her new email account at Atless that
she was working on the quotes. In the four weeks after leaving CSI, Whitlock had calls
with multiple CSI customers. Ultimately, in the months following her departure from
CSI, Whitlock through Atless wrote policies for 15 of CSI’s former customers.
Although Whitlock testified that these customers contacted her on her personal cell
phone based on the rapport she had developed with them, this information underscores
the purpose of CSI’s efforts to protect its customer information as confidential and
prohibit Whitlock’s competition. See Peat Marwick Main & Co. v. Haass, 818 S.W.2d
381, 387 (Tex. 1991) (“The fundamental legitimate business interest that may be
protected by such covenants is in preventing employees or departing partners from using
the business contacts and rapport established during the relationship of representing the
accounting firm to take the firm’s customers with him.”). These events, their logical
sequence, and the temporal relation between appellants’ activities and CSI’s losses
provide legally and factually sufficient evidence supporting causation between
27
appellants’ misappropriation and the damages. We overrule appellants’ challenges to
causation supporting the damages award.
G. Attorney’s Fees
Appellants’ seventh issue attacks the attorney’s fee award, contending CSI failed
to segregate fees for parties who were no longer present in the case at trial, as well as for
abandoned claims and claims on which summary judgment had been granted.24 The
record belies each argument.
A party seeking to recover attorney’s fees must demonstrate that the fees were
reasonable and necessary, a burden that includes showing the fees were incurred with
respect to a claim that provides for their recovery. Stewart Title Guar. Co. v. Sterling,
822 S.W.2d 1, 10–11 (Tex. 1991). Thus, absent an exception, fees incurred in pursuing
claims for which fees are not recoverable must be segregated from fees incurred with
respect to claims for which fees are recoverable. Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 312–13 (Tex. 2006); Emerson Elec. Co. v. Am. Permanent Ware Co.,
201 S.W.3d 301, 316 (Tex. App.—Dallas 2006, no pet.).
24
Whitlock also argues generally that CSI failed to justify the reasonableness of the fees it requested as required
by Arthur Andersen & Company v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). Because she fails to
include sufficient argument regarding any purportedly missing factors, however, Whitlock failed to preserve any
error regarding this complaint. See Favaloro v. Comm’n for Lawyer Discipline, 13 S.W.3d 831, 840 (Tex.
App.—Dallas 2000, no pet.) (“Because . . . Favaloro does nothing more than summarily state his point of
error, without citation to legal authority or substantive analysis, we conclude he has failed to preserve these
arguments for review.”).
28
CSI’s attorney testified he segregated fees out of what was requested for work
incurred with respect to defendants who had been dismissed prior to trial. He also
testified he segregated out fees related to Whitlock’s counterclaim, as well as CSI’s tort
claims on which fees were not recoverable. CSI admitted two exhibits reflecting its
counsel’s fees, both of which were marked to show segregated fees that were not
requested. CSI’s attorney testified as to the total amount remaining, after he subtracted
the segregated fees, which was the amount the jury awarded. We conclude CSI satisfied
its burden to segregate fees that were not recoverable from those that were and overrule
appellants’ seventh issue.
H. The sufficiency of the evidence supporting Whitlock’s liability for breach of
fiduciary duty and tortious interference
Issue eight attacks the sufficiency of the evidence supporting questions five
through eight regarding Whitlock’s breach of fiduciary duty. Issue nine attacks the
sufficiency of the evidence supporting the jury’s answers to questions nine and ten which
addressed Whitlock’s tortious interference and associated damages. While we would
conclude the law and the record support the jury’s answers to these questions, including
the existence of a contractual relationship between an insurance agent and the insured
client, we need not do so because any error would not entitle Whitlock to reversal. See
TEX. R. APP. P. 44.1 (No judgment reversed on appeal unless complained of error
probably caused the rendition of an improper judgment).
29
The jury found a total of $310,000 in damages arising from each claim entitling
CSI to the same amount of actual damages awarded by the jury for the breach of contract
claim—that we have already affirmed—as for any breach of fiduciary duty, tortious
interference, misappropriation or conspiracy that we discuss below. CSI was required
to elect its remedy and the judgment accordingly awarded only $310,000.25 Thus, even
if error occurred with respect to any of the jury’s answers to questions regarding
Whitlock’s breach of fiduciary duty or tortious interference, such error could not have
been harmful. See Petrohawk Props., L.P. v. Jones, 455 S.W.3d 753, 773 (Tex. App.—
Texarkana 2015, pet. dism’d) (error in charge harmless “when the findings of the jury
in answer to other issues are sufficient to support the judgment.”) (internal quotation
omitted)). Because we need not address issues eight and nine to dispose of this appeal,
we overrule them without further discussion. TEX. R. APP. P. 47.1 (requiring appellate
court to address only issues necessary for disposition of appeal); see also Fritts v.
McDowell, No. 02-16-00373-CV, 2017 WL 3821889, at *8, n.12 (Tex. App.—Fort
Worth Aug. 31, 2017, pet. denied) (mem. op.) (no need to address issues where
resolution of other issues determines disposition).
25
Because the judgment was joint and several as to all three defendants and only the misappropriation claim
allowed for recovery of fees against the Boyles, we surmise CSI elected to recover pursuant to that claim.
30
I. Liability for misappropriation of trade secrets
Issue ten attacks the jury’s answers to questions 11–13, premised on whether
CSI’s customer list was a trade secret26 and Whitlock’s and the Boyles’s
misappropriation of that information. Appellants assert no evidence demonstrates
their improper acquisition or use of CSI’s trade secrets; no evidence demonstrates
causation for the damages; and the trial court erred in submitting question 12, which
was the pattern charge for a section 134A.00227 claim rather than the common-law
misappropriation claim pleaded by CSI; and question 12 omitted the “clear and
convincing” standard required for recovery under the statute.
To recover on its misappropriation of trade secret claim, CSI was required to
establish 1) the existence of a trade secret; 2) acquired by appellants through a breach of
a confidential relationship or discovery by improper means; (3) use by appellants,
without CSI’s authorization; and 4) CSI’s resulting damages. Tex. Integrated Conveyor
Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 366–67 (Tex. App.—
Dallas 2009, pet. denied). In attacking the legal and factual sufficiency of the evidence
supporting the jury’s answers in favor of CSI regarding this claim, appellants contend
26
Appellants’ argument regarding the sufficiency of the evidence supporting the jury’s determination that CSI’s
customer or supplier list was a trade secret incorporates their argument regarding the same subject from issue one.
Because we overruled the same argument with respect to issue one, we need not address it again.
27
TEX. CIV. PRAC. & REM. CODE § 134A.
31
CSI was required to obtain a ruling that Jay Boyles and Trey Boyles owed it a fiduciary
duty. But even the authority cited by appellants for this proposition does not support
their argument, since acquisition by “improper means” suffices. See Tex. Integrated
Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 366–67
(Tex. App.—Dallas 2009, pet. denied) (acquisition through breach of a confidential
relationship or improper means). Indeed, “‘[a] complete catalogue of improper means
is not possible. . . [but generally] they are means which fall below the generally accepted
standards of commercial morality and reasonable conduct.’” Lamont v. Vaquillas
Energy Lopeno Ltd., LLP, 421 S.W.3d 198, 213 (Tex. App.—San Antonio 2013, pet.
denied) (quoting E.I. duPont deNemours & Co. v. Christopher, 431 F.2d 1012, 1015–
16 (5th Cir. 1970) (applying Texas law)).
Here, the jury heard ample evidence in support of the Boyles’s acquisition of
CSI’s trade secrets through Whitlock’s breach of her confidential relationship,28 conduct
the jury could correctly have deemed “improper.” For instance, CSI’s former attorney
testified about a conversation he overheard between Spalding and Jay Boyles at a
December 2015 sporting event in which Boyles offered to purchase CSI. When
Spalding declined the offer, Boyles told Spalding, “that’s okay . . . I’ve already got
someone that works for you to give me all of your client records. We’ll just take your
28
In response to question six the jury determined Whitlock breached her fiduciary duty to CSI.
32
business.” Although Boyles denied the attorney was part of the conversation and
claimed Spalding had asked Boyles to purchase the business, the jury decides which
witnesses to believe. Gamache v. Baker, No. 05-92-02487-CV, 1993 WL 532064, at *1
(Tex. App.—Dallas Dec. 23, 1993, no writ) (mem. op.). The jury also heard testimony
that in written correspondence to one of CSI’s competitors and while Whitlock was
working for CSI, Trey Boyles referred to Whitlock as “one of our assistants.” Trey
Boyles was the owner of Atless and filed its assumed name certificate. Trey Boyles
admitted Whitlock assisted him in obtaining Errors & Omissions insurance for the new
agency, while she was employed by CSI. And in addition to threatening to take CSI’s
business using one of CSI’s employees, Jay Boyles loaned Trey money to start the new
agency and was originally listed as a manager in Atless’s formation documents. Thus,
contrary to appellants’ arguments, even when viewing all of the evidence in a neutral
light, the jury’s verdict was not contrary to the overwhelming weight of the evidence,
nor was it unsupported by only a scintilla of evidence.
Appellants also argue no evidence demonstrates their use of the confidential
information, but ignore CSI’s response that Whitlock’s failure to return the laptop
through which she could access CSI’s confidential website and the three-ring binder
containing extensive information about its customers, was circumstantial evidence
demonstrating appellants’ intent to use that information in their competing business. Cf.
Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 465 (Tex. App.—
33
Austin 2004, pet. denied) (appellant’s failure to explain how confidential information
received by appellee could have been used “to a competitive advantage” where the
information which had nothing to do with appellee’s business, demonstrated stacked
inferences rather than circumstantial evidence). Utilizing the correct standard and
burden for the distinct legal and factual sufficiency challenges, we conclude this
evidence is sufficient to defeat both challenges.
Finally, although CSI refutes the factual basis for appellants’ complaints about
question twelve, we also observe appellants fail to demonstrate or even assert that
prior to its submission, they raised any objection to the question. Accordingly,
appellants waived any error with respect to the form of the question. Heatley v. Red
Oak 86, L.P., No. 05-18-01083-CV, __ S.W.3d __, 2020 WL 4745553, at *10 (Tex.
App.—Dallas Aug. 17, 2020, no pet.). We overrule appellants’ tenth issue.
J. Liability for conspiracy
Issue eleven rests on appellants’ assertion that liability for conspiracy fails absent
an underlying tort and their related contention that the jury erred in concluding they
misappropriated CSI’s trade secrets. See Agar Corp., Inc. v. Electro Circuits Int’l, LLC,
580 S.W.3d 136, 141–43 (Tex. 2019) (civil conspiracy depends on injury caused by
underlying tort or illegal conduct). We concluded above, however, that sufficient
evidence supports the jury’s answers to the misappropriation of trade secrets questions.
34
Further, we reject appellants’ arguments that they could not have conspired absent
knowledge of the confidentiality and non-compete agreements that bound Whitlock.
Their liability for misappropriation does not rest on knowledge of the non-compete, but
instead on their improper acquisition of trade secrets. See Tex. Integrated Conveyor Sys.,
Inc., 300 S.W.3d at 366–67. And appellants’ arguments regarding an absence of
evidence supporting a meeting of the minds fails in light of CSI’s evidence that neither
of the Boyles had experience operating an insurance agency, and because neither was
licensed neither could have operated Atless without Whitlock. Whitlock testified that
she assisted Jay and Trey Boyles in getting Atless started and both needed her to assist
them in getting their own insurance licenses. The jury also learned that another Atless
employee, who was concurrently working for Jay Boyles at a roofing company Boyles
owned (and for which Whitlock also served as an independent contractor), solicited
business from CSI’s customers because Whitlock instructed him to do so. Moreover, as
discussed above regarding his threat to take CSI’s business by using an “insider” and
contrary to appellants’ assertion, Jay Boyles’s liability does not rest solely on his role as
a lender to his brother. When coupled with the evidence regarding misappropriation,
this evidence provides legally and factually sufficient evidence supporting the existence
of each element of the claim. See Int’l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d
567, 582 (Tex. 1963) (related acts of defendants gave rise to “inferences and deductions
of concerted action and common design which may properly be drawn by, and are
35
peculiarly within the province of, the trier of facts.”). We conclude legally and factually
sufficient evidence supports the jury’s determination that appellants engaged in a
conspiracy. See Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 926 (Tex. 1979).
We overrule issue eleven.
K. Whitlock’s counterclaim and crossclaim
Whitlock asserted a counterclaim against CSI and a crossclaim against Spalding
for defamation. The claim rested on statements in a letter CSI sent to its customers in
which it advised its clients of Whitlock’s departure, and stated:
[P]lease rest assured that your current policies of insurance through CSI
are in full force and effect. All of our CSI insurance carrier partners have
been notified of Ms. Whitlock’s criminal activity and have vowed to
support CSI in stopping Ms. Whitlock’s inappropriate, criminal and
dangerous conduct. All of us here at CSI will continue to strive to deliver
the best client service possible, and we will make every effort to ensure
your satisfaction.
As the party who had the burden of proof regarding her defamation claim,
succeeding on her legal sufficiency contention required Whitlock to demonstrate that
the evidence established the facts supporting her claim as a matter of law. Dow Chem.
Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). With respect to her factual sufficiency
challenge regarding the same claim, Whitlock must demonstrate the jury’s failure to find
that the challenged statements were defamatory was against the great weight and
preponderance of the evidence. Id. In light of CSI’s evidence regarding the truth of the
challenged statements, Whitlock can do neither.
36
Truth provides an absolute defense to a defamation claim. Iroh v. Igwe, 461
S.W.3d 253, 264 (Tex. App.—Dallas 2015, pet. denied); Knox v. Taylor, 992 S.W.2d
40, 54 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (“The statements need not be
literally true; rather, the ‘substantial truth’ is sufficient.”). CSI’s witnesses testified that
despite demand, Whitlock refused to return a laptop that belonged to CSI and used CSI’s
Staple’s account without permission to purchase office supplies that CSI never received.
The attorney who drafted the letter at issue testified that the description of Whitlock’s
conduct as “criminal,” “inappropriate,” and “dangerous” referred to her theft of the
laptop, the office supplies, and CSI’s trade secrets. We conclude CSI’s evidence
regarding the truth of the challenged statements was sufficient to defeat Whitlock’s legal
and factual sufficiency challenges.29
L. Pre- and post-judgment interest
The judgment awarded pre- and post-judgment interest, “[p]ursuant to Sections
304.003, 304.102 and 304.103 of the Texas Finance Code.”30 Issue 13 challenges the
award but not the amount of both, contending these finance code provisions apply only
to cases involving wrongful death, personal injury, or property damage.
29
CSI had the burden of demonstrating the truth of the allegedly defamatory statements. Knox, 992 S.W.2d at 54.
30
“A money judgment of a court of this state to which Section 304.002 does not apply, including court costs
awarded in the judgment and prejudgment interest, if any, earns post-judgment interest at the rate determined
under this section.” TEX. FIN. CODE § 304.003(a). “A judgment in a wrongful death, personal injury, or property
damage case earns prejudgment interest.” TEX. FIN. CODE § 304.102. “Prejudgment Interest Rate for Wrongful
Death, Personal Injury, or Property Damage Cases.” TEX. FIN. CODE § 304.103.
37
Appellants are correct with respect to finance code sections 304.102 and 304.103.
We see no basis for their application to this case. Section 304.003, however, has no
subject matter limitation and applies generally to judgments not otherwise governed by
section 304.002.31 TEX. FIN. CODE § 304.001 (money judgments must allow for post-
judgment interest).
“General principles of equity” as well as enabling statutes allow for the recovery
of prejudgment interest. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962
S.W.2d 507, 528 (Tex. 1998). When, as here, no statute controls the award of
prejudgment interest, whether to award prejudgment interest is left to the sound
discretion of the trial court, which should rely upon equitable principles and public
policy when making that decision. Ponderosa Pine Energy, LLC, v Illinova Generating,
Co., No. 05-15-0339-CV, 2016 W.L 3902559, at *7 (Tex. App.—Dallas, July 14, 2016)
(mem. op.); see also DeGroot v. DeGroot, 369 S.W.3d 918, 926 (Tex. App.—Dallas
2012, no pet.) (reviewing award of prejudgment interest for abuse of discretion); Bufkin
v. Bufkin, 259 S.W.3d 343, 356 (Tex. App.—Dallas 2008, pet. denied) (same)). Under
this standard, we will not disturb a trial court’s findings on factual issues unless the court
reasonably could have reached only one decision and failed to do so. Ponderosa Pine
Energy, LLC, 2016 WL 3902559, at *7.
31
Section 304.002 governs postjudgment interest for judgments premised on contracts.
38
“Prejudgment interest is compensation allowed by law as additional damages for
lost use of the money due as damages during the lapse of time between the accrual of
the claim and the date of judgment.” Ventling v. Johnson, 466 S.W.3d 143, 153 (Tex.
2015). Prejudgment interest accrues from the earlier of: (1) 180 days after the date a
defendant receives written notice of a claim, or (2) the date suit is filed, and until the day
before the judgment. Long v. Castle Tex. Prods. Ltd. P’ship, 426 S.W.3d 73, 77 (Tex.
2014) (citing Johnson & Higgins, 962 S.W.2d at 531). “A ‘claim’ is ‘a demand for
compensation or an assertion of a right to be paid.’” Johnson & Higgins, 962 S.W.2d at
531 (citing Robinson v. Brice, 894 S.W.2d 525, 528 (Tex. App.—Austin 1995, writ
denied); Claim, BLACK’S LAW DICTIONARY 247 (6th ed. 1991) (a “claim” is a “demand
for money or property as of right”)). A defendant has notice of a claim for purposes of
prejudgment interest only if the plaintiff’s written notice communicates that the plaintiff
is claiming a right to compensation and provides enough information that the defendant
could plausibly settle the claim without incurring interest. Wheelbarger v. Landing
Council of Co-Owners, 471 S.W.3d 875, 892 (Tex. App.—Houston [1st Dist.] 2015,
pet. denied) (citing Johnson & Higgins, 962 S.W.2d at 531; Owens–Ill., Inc. v. Estate of
Burt, 897 S.W.2d 765, 769 (Tex. 1995)).
The trial court calculated prejudgment interest commencing on the 181st day after
suit was filed until July 11, 2019, 18 days before the judgment. Appellant does not
challenge the principles of equity permitting the trial court’s discretion in awarding
39
prejudgment interest, or the calculation thereunder. The unchallenged finding supports
the trial court’s judgment and we find no abuse of discretion in the award of prejudgment
interest.
Thus, although references to section 304.102 and 304.103 have no application
here, the trial court did not err in relying on section 304.002 or awarding the post-
judgment interest included in the judgment. Accordingly, we sustain issue 13 and
reform the judgment to delete reference to finance code sections 304.102 and 304.102.
See TEX. R. APP. P. 43.2 (court of appeals may modify the trial court’s judgment and
affirm it as modified); Am. Paper Stock Co. v. Howard, 528 S.W.2d 576, 577 (Tex.
1975) (reforming judgment to correct erroneous interest award).
M. Cumulative errors
In their final issue, appellants complain in a single sentence that the “cumulative
errors by the trial court resulted in harm when aggregated.” This issue fails to comply
with TEX. R. APP. P. 38.1 and in light of our detailed consideration of appellants’
substantive arguments above, we overrule it.
40
CONCLUSION
We sustain appellants’ issue 13 and reform the judgment to delete references to
the inapplicable sections of the finance code. As modified, and in all other respects, we
affirm the judgment.
/Bonnie Lee Goldstein/
BONNIE LEE GOLDSTEIN
JUSTICE
191297F.P05
41
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
ERICA WHITLOCK, JERRAMY On Appeal from the 116th Judicial
JAY BOYLES, AND WALTER District Court, Dallas County, Texas
GALE “TREY” BOYLES, Trial Court Cause No. DC-16-05743.
Appellants Opinion delivered by Justice
Goldstein. Justices Partida-Kipness
No. 05-19-01297-CV V. and Pedersen participating.
CSI RISK MANAGEMENT, LLC,
Appellee
Based on the Court’s opinion of this date, we MODIFY the judgment
as follows: We DELETE reference to finance code sections 304.102 and 304.102.
As modified, we AFFIRM the trial court’s judgment.
It is ORDERED that appellee CSI RISK MANAGEMENT, LLC recover its
costs of this appeal from appellants ERICA WHITLOCK, JERRAMY JAY
BOYLES, AND WALTER GALE “TREY” BOYLES.
Judgment entered April 30, 2021.
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