Jai S. Byun and Kim A. Byun D/B/A Aju Insurance Agency v. Soon O. Hong and Sook Nam Byun

NO. 12-20-00184-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
JAI S. BYUN AND KIM A. BYUN § APPEAL FROM THE 113TH
D/B/A AJU INSURANCE AGENCY,
APPELLANTS
V. § JUDICIAL DISTRICT COURT
SOON O. HONG AND SOOK NAM
BYUN,
APPELLEES § HARRIS COUNTY, TEXAS
OPINION
After a jury returned a verdict in favor of Appellants Jai S. Byun and Kim A. Byun d/b/a
Aju Insurance Agency in their suit against Appellees Soon O. Hong and Sook Nam Byun for
breach of contract, the trial court granted Appellees’ motion for judgment notwithstanding the
verdict (JNOV) and signed a take-nothing judgment. 1 In five appellate issues, the Byuns 2 contend
that (1) the non-competition agreement was ancillary to an otherwise enforceable agreement and
supported by mutual non-illusory promises, (2) the agreements were not unreasonable, (3) the
agreements were not illegal, (4) the agreements were not unconscionable, and (5) because the
jury’s answers regarding the Hongs’ sale of insurance policies while employed by Aju were not
dependent upon the enforceability of the agreements and were not addressed by the motion for
JNOV, the trial court erred in granting JNOV as to those findings. For the reasons explained herein,
we affirm the trial court’s judgment in part and reverse and render in part.
1
This case was transferred to this Court from the First Court of Appeals in Houston, Texas, pursuant to a
docket equalization order. See TEX. GOV’T CODE ANN. § 73.001 (West 2013).
2
We will refer to Appellant Jai Byun as “Byun,” and we will refer to Appellee Soon Hong as “Hong.” We
will refer to Appellant Kim A. Byun as “Mrs. Byun,” and we will refer to Appellee Sook Nam Byun as “Mrs. Hong.”
When speaking of Appellants or Appellees collectively, we will refer to them as “the Byuns” and “the Hongs,”
respectively.
BACKGROUND
In 2009, Hong began working as a customer service representative for Byun, who owned
Aju Insurance Agency. When Byun hired Hong, Hong was not licensed to sell insurance. Hong
became licensed to sell property and casualty insurance on June 18, 2012, and he received his
license to sell life and health insurance on July 30, 2013. On July 1, 2012, the Byuns signed an
agreement with the Hongs. The contract consisted of four parts: employment agreement,
management agreement, buy-sell agreement, and a “noncompetition and other” agreement.
According to Byun, he included the two-year employment agreement in the contract because Hong
could not afford to purchase Aju in 2012. The employment agreement stated that Hong would
work in the office of Aju for a minimum of twenty hours per week and Mrs. Hong would work in
the office for a minimum of forty hours per week. In addition, Hong was to receive a “basic
commission” of $1,250 per month, and Mrs. Hong’s salary would be $1,750 per month for the first
three months and $2,000 per month thereafter. Hong was to be paid sales commission of 50% of
the income from property and casualty income above $14,450, and any shortage would be carried
over to the next month. The agreement also provided that any income greater than $5,000 per
month would be deposited with Byun for a management security deposit, up to $15,000. The
employment agreement section of the contract further stated that the Hongs “shall not engage in
any other business than Aju except existing Amway business. Otherwise, it is the ground of
default.” According to Byun, Hong’s employment as a salesman with Aju allowed Hong access to
approximately 2,000 customer files, and Hong received commissions.
Under the terms of the management section of the contract, which would have begun on
July 1, 2014, and ended on June 30, 2016, the Hongs would be responsible for Aju’s operations,
the Hongs would deposit $15,000 with the Byuns as a security deposit, and any of Hong’s income
over $5,000 “up to 20% of [the] purchase price” would “be used to purchase Aju.” Like the
employment portion of the agreement, the management section stated that except for the Hongs’
existing Amway business, the Hongs could not engage in any business other than their work for
Aju. During the management period, the Hongs would oversee Aju’s operations and receive fifty
percent of its net operating income. The buy-sell portion of the agreement provided that the Hongs
would purchase Aju on July 1, 2016, for “$375,000 plus the amount over $173,400 of the gross
[property and casualty] commission during 07/01/15-06/30/16[,]” and all life and health business
would remain the property of the Byuns. Under the terms of the buy-sell agreement, the Hongs
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also had an option to purchase Aju with cash at any time during the management period. The buy-
sell agreement required the Hongs to retain “Aju” as the name of the agency. In addition, the
agreement provided that the Byuns “may take over Aju in case of default of two consecutive
monthly payments without a legal action.” According to Byun, Hong was not obligated to purchase
Aju, but Hong had the right to do so.
The “noncompetition and other agreement” section stated that the Hongs “shall not engage
in the insurance or related business, directly or indirectly, within Harris County and all the adjacent
counties for the period of 5 years after this agreement is in default or void.” The agreement further
required the Hongs to “keep all the information of Aju confidential.” According to Byun, the
Hongs were provided with confidential information regarding Aju’s customers and finances, and
“[t]he sole basis for this access and disclosure was the sales portion of the Agreement.” The jury
found that the parties intended the noncompetition agreement to become effective on July 1, 2012,
the date the agreement was signed.
On October 24, 2012, the parties executed a supplemental agreement, 3 which provided that
“Jai Byun shall advance to Soon Hong the difference when the gross income for Soon Hong and
Sook Byun falls below $4,200 per month[.]” Furthermore, the advance agreement stated that the
Hongs “shall be personally responsible for the advance.” Byun testified that the parties modified
their original agreement because Hong indicated that he needed more money, and Byun
characterized the advances as “a personal loan.”
Mrs. Hong obtained a higher-paying job and left Aju in January of 2014, and Hong left Aju
the following month. According to Byun, Hong owed $10,754.62 for advances paid pursuant to
the advance agreement. Hong testified that he was obligated to repay the advances. Byun testified
that from 2014 to 2016, Hong competed against him and took business from him. Mrs. Byun also
testified that Hong competed against Aju and had contacted some of Aju’s customers. Hong
testified that he competed with Aju in Harris County and surrounding counties during 2014, 2015,
2016, 2017, and 2018. Byun ultimately sold Aju to another buyer in June 2016.
The Byuns filed suit against the Hongs for breach of contract and sought damages for the
Hongs’ alleged breach of the covenant not to compete, as well as allegedly unearned advance
commissions. The Hongs entered a general denial, asserted the affirmative defenses of illegality,
offset and credit, and failure of consideration, and filed a counterclaim alleging fraud. The jury
3
We will refer to the supplemental agreement as “the advance agreement.”
3
found the following: the parties agreed that the Hongs would repay any advances; the Hongs would
not sell insurance policies for their own benefit while working for Aju; the parties intended for the
covenant not to compete to begin on July 1, 2012; Hong failed to repay advances against unearned
commissions; the Byuns were entitled to recover damages of $10,794.62 for the unrepaid
advances; Hong sold insurance policies for his own benefit while still associated with Aju; and
Hong violated the covenant not to compete. The jury also found that the Byuns did not fail to
comply with the agreement and did not commit fraud, the Hongs’ failure to comply with the
agreement was not excused, and the Byuns were entitled to recover (1) $297.09 as damages for
Hong’s sale of insurance policies for his own benefit while still associated with Aju and (2)
damages of $15,000 for Hong’s violation of the covenant not to compete.
The Hongs filed a motion for JNOV, in which they contended that the covenant not to
compete was unenforceable because it is unreasonable, not supported by adequate consideration,
invalid because no otherwise enforceable agreement existed, and unconscionable, and the advance
agreement is illegal because it “failed to satisfy the statutory requirements for an employer to
advance unearned wages to an employee.” The trial court signed a final judgment, in which it
found that “the underlying agreements are unenforceable[,]” granted the Hongs’ motion for JNOV,
and ordered that the Byuns take nothing. This appeal followed.
STANDARD OF REVIEW
A trial court may disregard a jury’s findings and grant a motion for judgment
notwithstanding the verdict when a directed verdict would have been proper. TEX. R. CIV. P. 301.
A motion for JNOV should be granted when (1) one party is entitled to recover as a matter of law
because the evidence is conclusive, or (2) a legal principle precludes recovery. Hunter v.
PriceKubecka, PLLC, 339 S.W.3d 795, 806 (Tex. App.—Dallas 2011, no pet.); John Masek
Corp. v. Davis, 848 S.W.2d 170, 173 (Tex. App.—Houston [1st Dist.] 1992, writ denied). Thus,
we review the granting of a motion for judgment notwithstanding the verdict under a legal
sufficiency standard. Tanner v. Nationwide Mut. Fire Ins., 289 S.W.3d 828, 830 (Tex. 2009);
Pointe W. Ctr., LLC v. It’s Alive, Inc., 476 S.W.3d 141, 150 (Tex. App.—Houston [1st Dist.]
2015, pet. denied). When, as here, a trial court does not specify the basis for granting judgment
notwithstanding the verdict, an appellant must show that the judgment cannot be sustained on any
of the grounds asserted in the motion; that is, we must affirm a JNOV if it can be sustained on any
4
ground or combination of grounds set forth in the motion. Fort Bend Cty. Drainage Dist. v.
Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991); Viajes Gerpa, S.A. v. Fazeli, 522 S.W.3d 524, 530
(Tex. App.—Houston [14th Dist.] 2016, pet. denied); Monk v. Dallas Brake & Clutch Serv. Co.,
697 S.W.2d 780, 783-84 (Tex. App.—Dallas 1985, writ ref’d n.r.e.).
VALIDITY OF THE COVENANT NOT TO COMPETE
In issue two, the Byuns argue that the trial court erred by holding that the underlying
agreements are unenforceable because they are unreasonable. Because issue two is dispositive with
respect to the covenant not to compete, we address it first.
Applicable Law
Covenants not to compete are restraints of trade, and they are unenforceable as a matter of
public policy unless the restraints are reasonable. John R. Ray & Sons, Inc. v. Stroman, 923
S.W.2d 80, 85 (Tex. App.—Houston [14th Dist.] 1996, writ denied); see TEX. BUS. & COM. CODE
ANN. § 15.50(a) (West 2021). The enforceability of a covenant not to compete is a question of law.
Powerhouse Prods., Inc. v. Scott, 260 S.W.3d 693, 696 (Tex. App.—Dallas 2008, no pet.); see
also Gorman v. CCS Midstream Servs., L.L.C., No. 12-09-00204-CV, 2011 WL 1642624, at *3
(Tex. App.—Tyler 2011, no pet.) (mem. op.). We therefore review a trial court’s determination of
whether a covenant to compete is reasonable de novo. EMS USA, Inc. v. Shary, 309 S.W.3d 653,
659 (Tex. App.—Houston [14th Dist.] 2010, no pet.). The enforceability of a covenant not to
compete should not be decided on excessively technical disputes over whether the covenant is
ancillary to an otherwise enforceable agreement. Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson,
209 S.W.3d 644, 655 (Tex. 2006). Rather, the core inquiry pursuant to the Covenants Not to
Compete Act (“the Act”) is whether the covenant’s limitations as to time, geographical area, and
scope of activity to be restrained are reasonable and do not impose a greater restraint than is
necessary to protect the employer’s goodwill or other business interest. Id.; see TEX. BUS. & COM.
CODE ANN. § 15.50(a).
“Unreasonable limitations on employees’ abilities to change employers or solicit clients or
former co-employees, i.e., compete against their former employers, could hinder legitimate
competition between businesses and the mobility of skilled employees.” Marsh USA Inc. v. Cook,
354 S.W.3d 764, 769 (Tex. 2011). However, valid covenants not to compete are reasonable
restraints agreed to by the parties “and may increase efficiency in industry by encouraging
5
employers to entrust confidential information and important client relationships to key
employees.” Id. The Legislature crafted the Act with the goal of balancing these potentially
conflicting interests. Id. at 770. “The hallmark of enforcement is whether or not the covenant is
reasonable.” Id. at 777.
To be enforceable, a noncompetition agreement must be reasonable in time, scope, and
geographical area. Id. at 771. Generally, the territory in which the employee worked for the
employer is a reasonable geographical restriction. Butler v. Arrow Mirror & Glass, Inc., 51
S.W.3d 787, 793 (Tex. App.—Houston [1st Dist.] 2001, no pet.); Zep Mfg. Co. v. Harthcock, 824
S.W.2d 654, 660 (Tex. App.—Dallas 1992, no writ). A covenant not to compete is unreasonable
if it imposes a greater restraint than necessary to protect the employer’s business and goodwill.
Harthcock, 824 S.W.2d at 660. “A restraint on client solicitation in a personal services contract is
overbroad and unreasonable if it extends to clients with whom the employee had no dealings during
his employment.” Shary, 309 S.W.3d at 660. However, prohibiting a former employee from
contacting existing customers does not necessarily equate to a prohibition against contacting
customers with whom the former employee had no dealings; that is, “[a] restraint on client
solicitation in a personal services contract limited to current customers is not necessarily
unreasonable on its face.” Id. An industry-wide exclusion from subsequent employment is
unreasonable. Gehrke v. Merritt Hawkins and Assocs., LLC, No. 05-18-01160-CV, 2020 WL
400175, at *2 (Tex. App.—Dallas Jan. 23, 2020, pet. denied) (mem. op.) (citing Peat Marwick
Main & Co. v. Haass, 818 S.W.2d 381, 386-88 (Tex. 1991)); Stroman, 923 S.W.2d at 85.
Covenants not to compete that prohibit solicitation of clients with whom a former salesman had
no dealings are unreasonable and unenforceable because they are not reasonably necessary to
protect the employer’s business interest of preventing the employee from taking clients to a
competitor. Gehrke, 2020 WL 400175, at *3 (citing Haass, 818 S.W.2d at 386-88).
Analysis
In this case, the covenant not to compete prohibited Hong from engaging in the business
of insurance or “related business, directly or indirectly, within Harris County and all the adjacent
counties” for the period of five years after the agreement ends. The agreement does not define
“related business.” The covenant not to compete is not limited to clients of Aju or clients with
whom Hong had dealings while he was employed by Aju, nor does it merely prohibit Hong from
engaging in the sale of insurance. Rather, the covenant not to compete prohibits Hong from
6
working in the insurance business in any capacity. In addition, the undefined term “related
business” potentially expands the reach of the covenant not to compete even farther. See generally
Forum US, Inc. v. Musslewhite, No. 14-17-00708-CV, 2020 WL 4331442, at *8 (Tex. App.—
Houston [14th Dist.] July 28, 2020, no pet.) (mem. op). For all these reasons, we conclude that the
scope of the covenant not to compete is overly broad as to the activities it seeks to restrain and
therefore constitutes an unreasonable restraint of trade. See TEX. BUS. & COM. CODE ANN. §
15.50(a); Marsh USA Inc., 354 S.W.3d at 771; Haass, 818 S.W.2d at 386-88; Gehrke, 2020 WL
400175, at *2-3; Shary, 309 S.W.3d at 660; Johnson, 209 S.W.3d at 655; Stroman, 923 S.W.2d
at 85; Harthcock, 824 S.W.2d at 660. Having concluded that the covenant not to compete is
unenforceable because its scope is overly broad as to the activities restrained, we need not consider
the reasonableness of the time and geographical limitations imposed by the covenant not to
compete. See TEX. R. APP. P. 47.1.
Section 15.51(c) of the Act provides that if a covenant that is found to be ancillary to or
part of an otherwise enforceable agreement contains unreasonable limitations, the trial court shall
reform the covenant “to the extent necessary to cause the limitations contained in the covenant as
to time, geographical area, and scope of activity to be restrained to be reasonable and to impose a
restraint that is not greater than necessary to protect the goodwill or other business of the promissee
and enforce the covenant as reformed[.]” TEX. BUS. & COM. CODE ANN. § 15.51(c) (West 2021).
Assuming without deciding that the covenant is ancillary to or part of an otherwise enforceable
agreement, the covenant not to compete expired by its own terms in 2019, i.e., five years from the
date the agreement terminated upon the Hongs’ departure from Aju in 2014. We therefore conclude
that any reformation would be an exercise in futility, and we need not remand the case to the trial
court to reform the covenant not to compete. See Stroman, 923 S.W.2d at 85 (holding that because
the covenant not to compete expired, “any reformation of that provision by the trial court would
have been an exercise in futility.”).
Because the covenant not to compete is unenforceable as written, the Byuns are precluded
from recovering damages for the Hongs’ violation of it, and this Court may render the judgment
that the trial court should have rendered. See TEX. R. APP. P. 43.2(c), 43.3; Stroman, 923 S.W.2d
at 85; Haass, 818 S.W.2d at 388 (concluding that because the plaintiff did not seek reformation of
the covenant before the defendant’s actions for which it sought damages, the Act prohibits the
plaintiff from obtaining damages). Accordingly, we overrule issue two and affirm the trial court’s
7
judgment to the extent it ordered that the Byuns take nothing as to their claim for violation of the
covenant not to compete. See Hunter, 339 S.W.3d at 806; Davis, 848 S.W.2d at 173. Having found
that the covenant not to compete is unreasonable and therefore unenforceable, we need not address
issues one and four, in which the Byuns assert that the covenant not to compete was enforceable
because it was ancillary to an otherwise enforceable agreement and was not unconscionable. See
Sbrush, 818 S.W.2d at 394; Monk, 697 S.W.2d at 783-84 (explaining that an appellate court must
affirm a JNOV if it can be sustained on any ground set forth in the motion).
UNREPAID ADVANCES
In issue three, the Byuns argue that the trial court erred by granting JNOV on the grounds
that the underlying agreements were illegal. Because this issue implicates the Byuns’ recovery of
damages for advances made to the Hongs that were not repaid, we address issue three as to that
topic.
Applicable Law
Section 61.018 of the Texas Labor Code provides that an employer may not withhold or
divert any part of an employer’s wages unless the employer is ordered to do so by a court, is
authorized by state or federal law to do so, or “has written authorization from the employee to
deduct part of the wages for a lawful purpose.” TEX. LAB. CODE ANN. § 61.018 (West 2021). The
Texas Administrative Code defines a “lawful purpose” as “one that is authorized, sanctioned, or
not forbidden, by law.” 40 TEX. ADMIN. CODE § 821.28(a)(3). In addition, the Texas
Administrative Code states that “[i]f a wage advance is not recouped in the next regularly
scheduled paycheck following the advance, the employer shall comply with § 61.018[.]” 40 TEX.
ADMIN. CODE § 821.29(c).
Analysis
The jury found that the Hongs failed to repay advances against unearned commissions and
awarded damages of $10,794.62 to the Byuns. In their motion for JNOV, the Hongs’ sole argument
regarding the damages for unearned commissions was that the advance agreement was illegal.
Specifically, the Hongs argued that as to the Byuns’ claims for failure to repay advances, the Byuns
“failed to satisfy the statutory requirements for an employer to advance unearned wages to an
employee[,]” which the Hongs assert are contained in Chapter 61 of the Texas Labor Code as well
as volume 40 of the Texas Administrative Code.
8
The Texas Workforce Commission (TWC) promulgated the Texas Payday Rules (the
Rules), including Section 821.29, pursuant to its authority to interpret and enforce Chapter 61 of
the Texas Labor Code (the Payday Law). See TEX. LAB. CODE ANN. § 61.002 (West 2021) (stating
that the TWC will administer and implement the statute); 40 TEX. ADMIN. CODE § 821.1 (providing
that the purpose of the Rules is to implement and interpret the provisions of Chapter 61 of the
Labor Code). The Payday Law “establishes an administrative system vesting authority in the
[TWC] to govern the payment of wages by employers.” Holmans v. Transource Polymers, Inc.,
914 S.W.2d 189, 190 n.1 (Tex. App.—Fort Worth 1995, writ denied). To make a wage claim under
the Payday Law, an employee is required to “file a wage claim with the [TWC] . . . in a manner
and on a form prescribed by the commission.” TEX. LAB. CODE ANN. § 61.051(a), (b) (West 2021).
An employee asserting a claim pursuant to the Payday Law may choose to either file an
administrative claim with the TWC under the Payday Law or a common law breach of contract
claim in court. Abatement Inc. v. Williams, 324 S.W.3d 858, 864 (Tex. App.—Houston [14th
Dist.] 2010, pet. denied). “Common law claims and TWC claims are distinct remedial schemes,
and a litigant must choose which one to pursue.” Id. A common law cause of action may be implied
only when a legislative intent to do so appears in the statute. Id. We must strictly construe statutory
enforcement schemes and “imply causes of action only when the legislative intent is clear from
the language of the statute.” Id. “Chapter 61 provides a detailed administrative enforcement
scheme and allows the possibility for enforcement by the attorney general, and nothing in the
language of chapter 61 shows any intent to also allow a private action.” Id. Additionally, Chapter
62 of the Payday Law explicitly provides for a private cause of action for failure to pay minimum
wages, and the Legislature’s “express inclusion of a private right of action in chapter 62 and
omission of that language in chapter 61 strongly suggests that the legislature did not intend a
private right of action under chapter 61.” Id. at 864-65.
The appellate record does not indicate that the Hongs filed a claim with the TWC. Rather,
the record demonstrates that the Hongs elected to assert defenses and a counterclaim in the Byuns’
lawsuit. The Hongs cite no authorities, and we are aware of none, that permit the provisions of
Chapter 61 and the Rules promulgated by the TWC in the Texas Administrative Code to create or
to govern private common law causes of action for breach of contract. See id.; Sbrusch, 818
S.W.2d at 394 (appellate court may affirm a JNOV only on a ground asserted in the written motion
for JNOV). We therefore conclude that the trial court erred by granting JNOV in favor of the
9
Hongs based upon the alleged illegality of the advance agreement under Chapter 61 of the Texas
Labor Code and the Texas Administrative Code. We sustain issue three. We therefore reverse the
trial court’s JNOV that the Byuns take nothing on their claim for the unrepaid advances and render
judgment in favor of the Byuns for damages of $10,794.62 in accordance with the jury’s findings.
SELLING INSURANCE POLICIES FOR OWN BENEFIT DURING EMPLOYMENT
In issue five, the Byuns argue that the trial court erred in granting JNOV as to the jury’s
findings that the Hongs failed to comply with the agreement because they sold insurance policies
for their own benefit while working at Aju and that the Byuns were entitled to damages of $297.09
as a result.
Applicable Law
A trial court may disregard a material jury finding only on written motion. TEX. R. CIV. P.
301; St. Paul Fire & Marine Ins. Co. v. Bjornson, 831 S.W.2d 366, 369 (Tex. App.—Tyler 1992).
If the trial court’s judgment notwithstanding the verdict can be upheld on any of the grounds
asserted in the motion for JNOV, we must affirm the judgment. Sbrush, 818 S.W.2d at 394. A
motion for JNOV must specifically identify the findings to be disregarded, present the reasons and
authority for disregarding them, and request that the trial court either sign a judgment on the
remaining findings, or, if all the findings are to be disregarded, a judgment contrary to all the
findings. Dupree v. Piggly Wiggly Shop Rite Foods, Inc., 542 S.W.2d 882, 892 (Tex. App.—
Corpus Christi 1976, writ ref’d n.r.e.) (op. on reh’g), disapproved on other grounds, Fifth Club,
Inc. v. Ramirez, 196 S.W.3d 788, 796 (Tex. 2006); Bjornson, 831 S.W.2d at 369.
Analysis
Question two of the jury charge asked whether the parties agreed that the Hongs would not
sell insurance policies for their own benefit while working at Aju. Question four contained three
distinct parts, in which it asked whether the Hongs failed to comply with the agreement by (a)
failing to repay advances against unearned commissions, (b) selling insurance policies for their
own benefit while still associated with Aju, and (c) violating the covenant not to compete. Question
nine asked what sum of money, if any, would fairly and reasonably compensate the Byuns for their
damages, if any, that resulted from the Hongs’ sale of insurance policies for their own benefit
while still associated with Aju. The jury found that (1) the Hongs and the Byuns agreed that the
Hongs would not sell insurance policies for their own benefit while working at Aju, (2) the Hongs
10
failed to comply with the agreement because they sold policies for their own benefit during their
employment, and (3) the Byuns were entitled to damages of $297.09 as a result.
As discussed above, the charge asked the jury for separate determinations regarding failure
to repay advances, selling insurance policies for their own benefit, and violating the covenant not
to compete. The Hongs’ written motion for JNOV did not challenge the jury’s finding that the
Hongs sold insurance policies for their own benefit while employed at Aju or the award of damages
to the Byuns in the amount of $297.09. 4 Rather, the Hongs’ motion for JNOV dealt only with the
enforceability of the covenant not to compete and the alleged illegality of the advance agreement.
The trial court submitted the covenant not to compete and the Hongs’ obligation not to engage in
other business except Amway while employed by Aju as separate, independent issues, and the
parties’ agreement likewise set forth those provisions in different sections. The covenant not to
compete purported to govern the parties’ relationship when the agreement terminated or became
void, but the provision regarding not engaging in business other than Aju governed the parties’
relationship while the Hongs were employed at Aju. We conclude that because the Hongs’ written
motion for JNOV did not challenge the jury’s findings regarding the Hongs’ sale of insurance
policies for their own benefit during their employment at Aju and the resulting damages, the trial
court improperly granted JNOV as to those jury findings. See TEX. R. CIV. P. 301; Dupree, 542
S.W.2d at 892; see also Westergren v. Nat’l Prop. Holdings, L.P.; 409 S.W.3d 110, 121-22 (Tex.
App.—Houston [14th Dist.] 2013), aff’d in part and rev’d in part on other grounds, 453 S.W.3d
419 (Tex. 2015). We sustain issue five, reverse the trial court’s JNOV as to the jury’s answers to
questions two, four, and nine, and render judgment in favor of the Byuns for $297.09. See TEX. R.
APP. P. 43.2, 43.3.
DISPOSITION
Having sustained issues three and five, we reverse the trial court’s take-nothing judgment
as to the jury’s findings that the Hongs failed to repay advances and sold insurance policies for
their own benefit while employed by the Hongs, as well as with respect to the jury’s findings that
the Byuns are entitled to damages of $10,794.62 and $297.09, and we render judgment in favor
of the Byuns for $11,091.71 (the sum of those two amounts). See TEX. R. APP. P. 43.2(c), 43.3.
Having overruled issue two after concluding that the covenant not to compete is unenforceable
4
The Hongs also did not respond in their appellate brief to the Byuns’ arguments regarding said jury findings.
11
because it is unreasonable, we affirm the remainder of the trial court’s judgment, which granted
JNOV as to the covenant not to compete and ordered that the Byuns take nothing as to their claim
for violation of the covenant not to compete.
JAMES T. WORTHEN
Chief Justice
Opinion delivered February 16, 2022.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
(PUBLISH)
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COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
FEBRUARY 16, 2022
NO. 12-20-00184-CV
JAI S. BYUN AND KIM A. BYUN D/B/A AJU INSURANCE AGENCY,
Appellants
V.
SOON O. HONG AND SOOK NAM BYUN,
Appellees
Appeal from the 113th District Court
of Harris County, Texas (Tr.Ct.No. 2016-12589)
THIS CAUSE came to be heard on the appellate record and briefs filed herein,
and the same being considered, it is the opinion of this Court that there was error in judgment as
entered by the court below and that same should be reversed and judgment rendered.
It is therefore ORDERED, ADJUDGED and DECREED by this Court that the
trial court’s take-nothing judgment as to the jury’s findings that the Appellees failed to repay
advances and sold insurance policies for their own benefit while employed by the Appellees, as
well as with respect to the jury’s findings that the Appellants are entitled to damages of $10,794.62
and $297.09, be reversed, and judgment rendered in favor of the Appellants for $11,091.71 (the
sum of those two amounts); the remainder of the trial court’s judgment, which granted JNOV as
to the covenant not to compete and ordered that the Appellants take nothing as to their claim for
violation of the covenant not to compete is hereby affirmed. All costs of this appeal be, and the
same are, adjudged against the Appellees, SOON O. HONG AND SOOK NAM BYUN, for
which let execution issue; and that this decision be certified to the court below for observance.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.