Citizens, Inc. CICA Life Ltd. And Cica Life Insurance Company of America v. Randall H. Riley Citizens American Life, LLC Citizens American Life, Inc. Alexis Enrique Delgado Carlos Nalsen Landa Enrique Pinzon Ruiz Johan Emilio Mikuski Silva And Esperanza Peralta De Delgado

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-19-00560-CV
Citizens, Inc.; CICA Life Ltd.; and CICA Life Insurance Company of America, Appellants
v.
Randall H. Riley; Citizens American Life, LLC; and Citizens American Life, Inc.,
Appellees
FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-18-006739, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING
MEMORANDUM OPINION
This is an interlocutory appeal from the trial court’s denial of an application for a
temporary injunction. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(4) (permitting interlocutory
appeal of order that refuses temporary injunction). Appellee Randall H. Riley worked for
appellants Citizens, Inc.; CICA Life Ltd.; and CICA Life Insurance Company of America
(collectively, “CICA”)1 as a marketing executive focused on selling life insurance policies to
foreign nationals. CICA terminated his employment in 2015, after which Riley took steps to
found his own insurance company by creating appellees Citizens American Life, LLC, and
Citizens American Life, Inc. (collectively, CALI). CICA sued Riley and CALI for unfair
competition, tortious interference with a contract, and misappropriation of trade secrets. CICA
1
Citizens, Inc., is the parent company of CICA Life Ltd. and CICA Life Insurance
Company of America.
applied for a temporary injunction to prevent appellees from engaging in a host of activities that
CICA alleges continue to cause it irreparable harm, including selling any insurance product or
policy. The district court denied the application. CICA contends that the district court abused its
discretion by denying the application. We will affirm.
BACKGROUND
In 1969, Riley’s father, Harold Riley, founded CICA, a life insurance company
that earned most of its revenue by selling life insurance policies to foreign nationals. Harold
hired Riley in 1987 as an employee of CICA Life Ltd. to develop a marketing structure in Chile.
Riley lived in Chile for about three years while developing a marketing program. Riley testified
that his father wanted him to learn Spanish and learn about Latin American cultures so that he
could more effectively interact with the independent consultants CICA contracted with to sell its
insurance policies. Both Riley and his father befriended many of the independent consultants
who contracted with their company. Riley returned to the United States in 1991 to become the
international marketing director and served in that role until 1997. As part of his job, Riley
helped revise CICA’s policies based on comparisons between the policies CICA offered and the
policies, pricing, and other materials he reviewed from other companies. In 1997, Riley
resigned. He returned to CICA in 2006 and again served as international marketing director on
the condition that he would not be involved in anything “but international marketing.” Riley
testified that in 2014, he heard that CICA’s executives were discussing “pulling the company out
of the international market.” He stated that he “didn’t take it to heart because it was, I think, they
testified 70-75 percent of the business.” However, as the conversations about CICA leaving the
international market continued, Riley learned that CICA had failed to report taxable income and
2
might become bankrupt, meaning that they would no longer be operating in the international
market. Riley’s father retired in June 2015. Riley was terminated in October 2015.
After his termination, Riley began planning to found a life insurance company of
his own, and he created Citizens American Life, LLC and Citizens American Life, Inc. Riley
explained that he chose names and symbols for these companies because it was “a continuance
of what my father had done and created and what I had been a major part in, because of the
success I had building the sales force.” Riley also testified that CICA was “going to pull out of
the market” in Latin America and that he believed his names would not cause confusion because
CICA worked under the name “CICA Life, and we were Citizens American Life.” Riley hired
Jonathan Pollio, an actuary who had worked at CICA, to create actuarial information for CALI to
use in developing its products. He also eventually recruited other former CICA employees and
independent consultants to work with CALI. Riley used premium rates, dividends, cash values
and other information from CICA’s publicly available policies to develop his insurance products.
In October 2017, First Trinity Financial contacted Riley to express interest in
having CALI assist First Trinity in developing an international marketing program. First Trinity
purchased CALI, and Riley now oversees the marketing of First Trinity’s products in Latin
America. Riley testified that for a short period of time during “the changeover” “we had to
continue operating as [CALI] until [First Trinity] could get their systems functioning so we could
issue the policy in Trinity American.” Riley now markets First Trinity’s products through the
entity International Marketing Group SA, LLC (IMG). IMG does not set premium rates, issue
policies, handle policy applications, or develop actuary information. IMG’s logo does not
resemble those of CALI or CICA, which also has a new logo, even though CICA argues that any
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logo similar to its old logo would continue to cause confusion among its customers because the
old logo appears on insurance policies still in circulation.
In May 2018, CICA stopped accepting new policy applications in Brazil, which
had been one of its highest producing countries and which CICA acknowledged would have a
negative impact on its ability to retain independent consultants. As a result, Riley significantly
expanded his independent consultant network in Brazil such that IMG “primarily” markets
policies in Brazil, though it has also sold policies in Chile, Uruguay, Argentina, Venezuela,
Colombia, and Ecuador.
In November 2018, CICA sued Riley, CALI, and former CICA independent
consultants Alexis Enrique Delgado, Carlos Nalsen Landa, Enrique Pinzon Ruiz, Johan Emilio
Mikuski Silva, and Esperanza Peralta De Delgado, who are all associated with a company called
Los Raudales.2 CICA sued Riley and CALI for unfair competition, tortious interference with a
contract, and misappropriation of trade secrets. Riley and CALI moved to dismiss the appeal
pursuant to the Texas Citizens Participation Act (TCPA). See Tex. Civ. Prac. & Rem. Code
§§ 27.001-.011.3 CICA responded to the TCPA motion, attaching over 900 pages of evidence to
its response to support its prima facie case for each essential element of its claims. Following a
hearing, the district court denied the TCPA motion to dismiss on April 11, 2019. CICA asserts
that it had continued its investigation into CALI and Riley while the litigation was stayed in the
2
CICA did not seek a temporary injunction against the Los Raudales defendants, and
they are not parties to this appeal.
3
The TCPA was amended in the 2019 legislative session, but those amendments do not
apply to this lawsuit, which was filed before the amendments’ effective date. See Act of May 17,
2019, 86th Leg., R.S., ch. 378, §§ 11, 12, 2019 Tex. Gen. Laws 684, 687 (amendments to TCPA
apply “only to an action filed on or after” September 1, 2019). Accordingly, this opinion refers
to the version of the statute in effect before September 1, 2019.
4
district court by the pending TCPA motion and discovered that, at some point after January
2019, the defendants “had begun marketing and selling insurance products derived from
[CICA’s] trade secrets.” On May 29, 2019, CICA filed an application for a temporary
injunction, which incorporated by reference the evidence filed with its response to the TCPA
motion. After a hearing at which additional exhibits were introduced, the district court denied
the application. CICA appeals, asserting (1) the district court abused its discretion by denying
the temporary injunction and (2) the district court abused its discretion by excluding Plaintiff’s
Exhibit 26 as hearsay at the hearing on the temporary injunction.
ANALYSIS
Exclusion of Exhibit 26
We first address CICA’s complaint that the district court should have admitted
Plaintiff’s Exhibit 26. We review a trial court’s exclusion of evidence for an abuse of discretion.
JLG Trucking, LLC v. Garza, 466 S.W.3d 157, 161 (Tex. 2015). A trial court abuses its
discretion when it acts in an arbitrary or unreasonable manner without reference to any guiding
principles or rules. See Enbridge Pipelines (E. Tex.) L.P. v. Avinger Timber, LLC, 386 S.W.3d
256, 262 (Tex. 2012). Erroneous exclusion of evidence is reversible error only if it probably
resulted in an improper judgment. Tex. R. App. P. 44.1(a)(1); Garza, 466 S.W.3d at 161; State
v. Central Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009) (stating that the
“complaining party must only show ‘that the exclusion of evidence probably resulted in the
rendition of an improper judgment’” (quoting McCraw v. Maris, 828 S.W.2d 756, 758 (Tex.
1992) (internal citation omitted))). “[T]he exclusion . . . is likely harmless if the evidence was
cumulative, or the rest of the evidence was so one-sided that the error likely made no difference
in the judgment.” Central Expressway Sign, 302 S.W.3d at 870. Whether the erroneous
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exclusion of evidence probably caused the trial court to render an improper judgment is a
“judgment call entrusted to the sound discretion and good sense of the reviewing court from an
evaluation of the whole case.” First Emps. Ins. v. Skinner, 646 S.W.2d 170, 172 (Tex. 1983).
The district court excluded Exhibit 26, which CICA attempted to introduce during the testimony
of its Vice President of Compliance, on the ground that it was hearsay. See Tex. R. Evid. 801,
802 (prohibiting the admission of out-of-court statements offered to prove their truth unless a
hearsay exception applies). Exhibit 26 is an email from one of the Los Raudales defendants,
Carlos Nalsen Landa (Nalsen), to Riley and Alexis Enrique Delgado (another Los Raudales
defendant). The email compared information regarding yields from CICA’s insurance plans to
those of CALI. CICA first argues the Exhibit was not hearsay because it was not offered to
show the truth of the matter asserted but was offered to show that Nalsen was providing
information about CICA to Riley. CICA next argues that the email was admissible as a
statement by an opposing party. See id. R. 801(e)(2)(A) (statement by party-opponent offered
against that party is not hearsay); see also Njowo v. Welling, No. 01-17-00798-CV, 2018 Tex.
App. LEXIS 6898, at *14 (Tex. App.—Houston [1st Dist.] August 28, 2018, no pet.) (mem. op.)
(“While a party’s out-of-court statements may be offered against the party who made them, this
exclusion does not allow a litigant to offer the out-of-court statements made by one party against
another party for the truth of the matter asserted, absent another exclusion from, or exception to,
the hearsay rule.”).
CICA does not explain how the exclusion of this email might have impacted the
district court’s decision to deny the application for a temporary injunction. We note that there
are over 1,400 pages of other evidence, some of which show that CALI focused on gathering
information about CICA in order to directly compete with CICA. For example, an email from
6
Riley himself explains that his goal is to learn as much about CICA as possible to develop “a
product that is better than CICA’s from all angles and points of view.” He also wrote, “We have
their product, so all we have to do is develop one that is superior.” Another exhibit contains
another email from Nalsen to Riley in which he presents a comparison between CICA’s and
CALI’s premiums and commissions. Because CICA does not explain how exclusion of Exhibit
26 resulted in an improper ruling on its application for a temporary injunction, we overrule
CICA’s issue regarding the exclusion of Exhibit 26. See Central Expressway Sign, 302 S.W.3d
at 870.
Temporary Injunction
A temporary injunction is an extraordinary remedy and does not issue as a matter
of right. Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993). The purpose of a temporary
injunction is to preserve the status quo of the litigation’s subject matter pending a trial on the
merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The status quo is “the last
actual, peaceable, non-contested status which preceded the pending controversy.” In re Newton,
146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding) (quoting Janus Films, Inc. v. City of Fort
Worth, 358 S.W.2d 589, 589 (Tex. 1962) (per curiam)). To obtain a temporary injunction, the
applicant must ordinarily plead and prove three specific elements: (1) a cause of action against
the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and
irreparable injury in the interim. Butnaru, 84 S.W.3d at 204. A probable injury is one that is
imminent, irreparable, and has no adequate remedy at law. Lavigne v. Holder, 186 S.W.3d 625,
629 (Tex. App.—Fort Worth 2006, no pet.).
In an appeal from an order granting or denying a request for a temporary
injunction, our review is confined to the validity of the order that grants or denies the injunctive
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relief. Synergy Ctr., Ltd. v. Lone Star Franchising, Inc., 63 S.W.3d 561, 564 (Tex. App.—
Austin 2001, no pet.); see Taylor Hous. Auth. v. Shorts, 549 S.W.3d 865, 878 (Tex. App.—
Austin 2018, no pet.) (stating that the appeal of a temporary injunction “does not present the
merits of the underlying case for review, but only whether the trial court abused its discretion in
determining whether or not the applicant is entitled to preservation of the status quo pending
determination of those merits”). The decision to grant or deny an injunction is within the sound
discretion of the trial court, and we will not reverse that decision absent a clear abuse of
discretion. Walling, 863 S.W.2d at 57. A trial court abuses its discretion when it acts arbitrarily
and unreasonably, without reference to guiding rules or principles, or when it misapplies the law
to the established facts. Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011) (citing
Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996)); Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985). In deciding whether the trial
court has abused its discretion in denying or granting a request for a temporary injunction, the
reviewing court may neither substitute its judgment for that of the trial court nor consider the
merits of the underlying lawsuit. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978); Synergy Ctr.,
Ltd., 63 S.W.3d at 564. We must review the evidence in the light most favorable to the order and
must indulge all reasonable inferences in favor of the trial court’s decision. Center for Econ.
Justice v. American Ins., 39 S.W.3d 337, 344 (Tex. App.—Austin 2001, no pet.). “A trial court
does not abuse its discretion if it heard conflicting evidence and evidence in the record
reasonably supports the trial court’s decision.” Shorts, 549 S.W.3d at 878. In the absence of
specific findings of fact and conclusions of law, the trial court’s order must be upheld on any
legal theory supported by the record. Davis, 571 S.W.2d at 862; Universal Health Servs., Inc. v.
Thompson, 24 S.W.3d 570, 577 (Tex. App.—Austin 2000, no pet.).
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CICA asserts the district court abused its discretion in denying its application for
a temporary injunction because CICA showed it had (1) causes of action against CALI and Riley
for unfair competition, tortious interference with a contract, and misappropriation of trade
secrets; (2) a probable right to the relief sought for each of these claims; and (3) a probable,
imminent, and irreparable injury as a result of each of these claims in the interim. CICA
specifically urges that there can be no dispute that it pleaded and proved causes of action for
unfair competition, tortious interference with a contract, and trade secret misappropriation
against Riley and CALI “given that [CICA] defeated a motion to dismiss those very claims under
the TCPA.” In other words, CICA argues that “a party who defeats a TCPA motion to dismiss a
priori has ‘plead[ed] and prove[d]’ the corresponding causes of action with clear and specific
evidence.” The “prima facie case” required to overcome dismissal under the TCPA “requires
only the minimum quantum of evidence necessary to support a rational inference that the
allegation of fact is true.” Serafine v. Blunt, 466 S.W.3d 352, 357 (Tex. App.—Austin 2015, no
pet.) (quoting In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004) (orig.
proceeding) (internal quotation marks and citation omitted)). A prima facie case will entitle a
party to recover only if no evidence to the contrary is offered by the opposite party. Id.; cf.
Kerlin v. Arias, 274 S.W.3d 666, 668 (Tex. 2008) (per curiam) (explaining that summary-
judgment movant’s presentation of prima facie evidence of deed’s validity established his right
to summary judgment unless nonmovants presented evidence raising a fact issue related to
validity). We further note that under the TCPA, “the court shall consider the pleadings and
supporting and opposing affidavits stating the facts on which the liability or defense is based,”
such that a party could establish its prima facie case based on its pleadings. Tex. Civ. Prac. &
Rem. Code § 27.006(a) (“Evidence”). The standards for reviewing orders of dismissal under the
9
TCPA and decisions on applications for temporary injunctions differ substantially. As a result,
the district court’s decision to deny the TCPA motion does not bear on whether the district court
abused its discretion in denying CICA’s application for a temporary injunction.
Unfair Competition
The basis of the tort of unfair competition is “a likelihood of consumer confusion
as to the source of the goods.” John Paul Mitchell Sys. v. Randalls Food Mkts., Inc., 17 S.W.3d
721, 735 (Tex. App.—Austin 2000, pet. denied) (citing Matrix Essentials, Inc. v. Emporium
Drug Mart, Inc., 988 F.2d 587, 590-92 (5th Cir. 1993); Pebble Beach Co. v. Tour 18 I, 942 F.
Supp. 1513, 1554 (S.D. Tex. 1996), aff’d as modified, 155 F.3d 526 (5th Cir. 1998)). “Unfair
competition ‘consists in the simulation by one person, for the purpose of deceiving the public, of
the names, symbols, labels, or devices employed by a business rival, in order to induce the
purchasing public to buy his products in the belief that they are those of his rival.’” Id. at 735
n.3 (quoting Avnet v. Texas Centennial Cent. Exposition, 96 S.W.2d 685, 687 (Tex. App.—
Dallas 1936, writ dism’d w.o.j.) (internal quotations omitted)).
CICA sought to enjoin CALI and Riley from using any name or brand
incorporating the word “Citizens” or “CICA” or using any logo confusingly similar to CICA’s
former logo, which included an etched globe. As evidence of this confusion, CICA introduced
testimony that in a few instances, customers had sent premium payments to CALI instead of
CICA for CICA policies. A CICA employee testified that “we had customers who were
confused about the policy that they purchased with us and now are they making a premium
payment to Citizens American or to our company, Citizens.” He also testified that CICA lost
independent consultants who were once producing business for CICA. However, additional
10
evidence showed that CICA’s contracts and insurance policies contained at the tops of the
documents the name “CICA Life Insurance Company of America.” CICA’s employee
confirmed that CICA Life Insurance Company of America had novated all of its policies to
“CICA Life” and that none of the policies issued by CICA Life contain the name “Citizens” in
the title. No evidence in the record suggested that CALI had used “CICA” in its documents.
Further, at the time of the hearing on the temporary injunction, Citizens American Life, Inc., had
been purchased by First Trinity; Citizens American Life, LLC, was no longer being used for
business purposes; and Riley was marketing First Trinity’s products through IMG, which has a
logo that does not resemble CICA’s former globe logo nor CICA’s current logo, which no longer
includes a globe. On these facts, we conclude that CICA has not shown a probable, imminent,
and irreparable injury in the interim between when it sought the injunction and when the claim
for unfair competition is tried. See Butnaru, 84 S.W.3d at 204. Accordingly, the district court
did not abuse its discretion in denying a temporary injunction to enjoin CICA and Riley from
using the word “Citizens” or “CICA” in its name or using a logo involving a globe.
Tortious Interference with a Contract
To recover for tortious interference with a contract, a plaintiff must prove: (1) the
existence of a contract subject to interference; (2) a willful and intentional act of interference;
(3) the act was a proximate cause of the plaintiff’s damages; and (4) actual damage or loss. See
Butnaru, 84 S.W.3d at 207 (describing elements of a claim for tortious interference with a
contract). CICA’s claim for tortious interference alleges that CALI and Riley willfully and
intentionally interfered with the contracts between CICA and the Los Raudales defendants to
11
breach the Los Raudales contracts.4 CICA sought to enjoin CALI and Riley from interfering
with CICA’s existing contracts with independent consultants and marketing firms by using
CICA’s confidential information or contacting the consultants or firms or attempting to divert
those consultants or firms to any other insurance company or its affiliates. CICA further sought
to enjoin CALI and Riley from “communicat[ing] to any independent consultants or marketing
firms who are known or believed by [CALI and Riley] to be in a contractual relationship with
[CICA].” CICA alleges that it was harmed by losing some of its valuable “independent
consultant network.” CICA points to Nalsen’s communications with CICA and Riley as its
strongest evidence that appellees induced Nalsen to breach his contract, specifically, Nalsen’s
chart comparing the premiums and commissions for CALI’s and CICA’s products. Riley
testified that he did not actively or knowingly recruit independent consultants or marketing firms
that had previously worked for CICA. In addition, the evidence showed that CICA had been
considering ending operations in foreign markets before Riley was terminated from CICA and
that CICA ultimately ceased issuing policies in Brazil, one of CICA’s “top-producing” countries,
which CICA acknowledged would have a negative impact on its ability to retain independent
consultants. Riley testified that CICA had not properly paid income tax at some point after 2015,
with the result that it owed “upwards of $80 million in back taxes,” which might have caused
some of the independent consultants to stop working with CICA. Because the departure of
independent consultants, including the Los Raudales defendants, and their corresponding
customer bases may have resulted from CICA’s tax issues, rumors of its plans to withdraw from
the international market, or its actual withdrawal from Brazil, the district court could have
4
The parties’ briefs mention that CICA has filed an amended petition while this appeal
was pending. That petition is not in the record.
12
determined that CICA did not establish that Riley and CALI proximately caused the Los
Raudales defendants to leave CICA’s network of consultants. Accordingly, the district could
have concluded that, having failed to establish that appellees caused CICA’s harm, CICA failed
to demonstrate a probable right to the relief it sought. On these facts, we cannot conclude that
the trial court abused its discretion in denying the request to enjoin CALI and Riley from
communicating with any independent consultants or marketing firms they know or believe to be
in a contractual relationship with CICA.
Misappropriation of Trade Secrets
The elements of trade-secret misappropriation are: (1) the existence of a trade
secret owned by the plaintiff; (2) breach of a confidential relationship or improper discovery of a
trade secret; (3) “use” of the trade secret; and (4) injury. Trilogy Software, Inc. v. Callidus
Software, Inc., 143 S.W.3d 452, 463 (Tex. App.—Austin 2004, pet. denied). “A trade secret is
any formula, pattern, device, or compilation of information which is used in one’s business and
presents an opportunity to obtain an advantage over competitors who do not know or use it.”
Computer Assocs. Int’l v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996) (citing Hyde Corp. v.
Huffines, 314 S.W.2d 763, 776 (Tex. 1958) (quoting Restatement of Torts § 757 (1939))); see
Restatement (Third) of Unfair Competition § 39 (1995). To determine whether a trade secret
exists, Texas courts weigh six nonexclusive factors:
(1) the extent to which the information is known outside of the business;
(2) the extent to which it is known by employees and others involved in the
business;
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(3) the extent of the measures taken to guard the secrecy of the information;
(4) the value of the information to the business and its competitors;
(5) the amount of effort or money expended in developing the information; and
(6) the ease or difficulty with which the information could be properly acquired or
duplicated by others.
In re Bass, 113 S.W.3d 735, 739 (Tex. 2003) (orig. proceeding) (citing Restatement of Torts
§ 757 cmt. b (1939); Restatement (Third) of Unfair Competition § 39 reporter’s n. cmt. d
(1995)). Because “trade secrets do not always neatly fit each of the factors,” and because “other
factors could also be relevant to trade secret analysis,” courts should “weigh the factors in the
context of the surrounding circumstances.” Id. at 740. However, at the preliminary stage of
deciding whether to grant a temporary injunction, a trial court does not determine whether or not
a trade secret actually exists. Center for Econ. Justice, 39 S.W.3d at 343. Instead, “the trial
court ascertains whether the applicant has established that the information is entitled to trade-
secret protection until trial on the merits.” Id. (citing T-N-T Motorsports, Inc. v. Hennessey
Motorsports, Inc., 965 S.W.2d 18, 23 (Tex. App.—Houston [1st Dist.] 1998, no pet.)). “[A]n
order granting trade-secret protection does not mean the protected information is in fact a trade
secret.” Id. (citing Midland Bldg. & Loan Ass’n v. Sparks Chapel Colored M.E. Church, 35
S.W.2d 774, 775 (Tex. App.—Dallas 1931, no writ)).
CICA sought to enjoin CALI and Riley from disclosing its trade secrets and from
“selling any insurance product, policy, or interest in insurance that is based on, derived from, or
utilizes, in whole or part” CICA’s confidential information or trade secrets. For purposes of the
injunction, CICA defined “confidential information and trade secrets” as:
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all files, documents, email, technology, specifications, designs, processes, plans,
intellectual property, and other materials or items (regardless of media, written,
electronic or otherwise, and whether stored in local or central databases, on
personal computers, in files or otherwise) of or developed or conceived by or for
Plaintiffs, except for any documents or information available in the public domain
that was not improperly placed in the public domain by any Defendant.
In addition to that broad definition, CICA also defined trade secrets for purposes of the
injunction as “consist[ing] of”:
[CICA’s] commission tables;
[CICA’s] “Persistence Study”;
[CICA’s] summary profit sheets, premium rates, and actuarial tables;
Customer lists or compilations of contact information of [CICA’s] policyholders;
Lists of [CICA’s] existing independent consultants or independent marketing
networks; and
Any other materials created by [CICA] that [CALI and Riley] received in the
course of their employment with [CICA] and that [CALI and Riley] were
contractually bound to hold in confidence and to return to [CICA] upon the
termination of their employment.
CICA emphasizes that Riley frequently emailed himself documents containing CICA’s
confidential information and trade secrets. Riley testified that he emailed himself these
documents to ensure that he had access to them while traveling for his international marketing
work for CICA, a practice that continued until he was unexpectedly terminated in October 2015.
Riley further testified that he had never used some of the information alleged to be in his
possession, such as the “anti-money laundering curriculum” that had been emailed to him by a
15
former CICA employee. Riley testified that much of the information, such as CICA’s policies
and commission tables were made available not only to CICA’s independent consultants, but
also to prospective consultants because they were included as part of a recruiting package that
Riley used and which was given out without any requirement to maintain its confidentiality. The
premium rates for CICA’s policies are included in the policies that are sold to customers,
meaning that both the policies and the premium rates have been released to the public. The
evidence further showed that CICA’s commission tables are available online. CICA also argued
that an email from Nalsen included a list of sixty customers. See Parker Barber & Beauty
Supply, Inc. v. Wella Corp., No. 03-04-00623-CV, 2006 Tex. App. LEXIS 8841, at *52 (Tex.
App.—Austin Oct. 11, 2006, no pet.) (mem. op.) (explaining that “[w]hether a customer list
should be considered a trade secret depends on the circumstances”); Trilogy Software, 143
S.W.3d at 466-67 (noting that trade secret status does not automatically attach to any information
that a company acquires regarding its customers; “if it did, it would amount to a de facto
common law non-compete prohibition”). In his testimony about that email, Riley testified that
he received an email from Nalsen saying that a group of Venezuelan insureds had inquired about
moving their policies to CALI. Riley stated that the email referenced the policies by face
amount and date of issue, though he conceded that “[t]here might have been some names.” Riley
further stated that he declined the opportunity to move those policies to CALI. Riley also
testified that, rather than using CICA’s actuarial tables, he paid a former CICA employee, Pollio,
to create actuarial information, which Pollio did over the course of two years, finishing the work
after CALI was purchased by Trinity. Pollio had told Riley that Pollio did not have access to
CICA’s actuarial information.
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Although the record contained conflicting evidence regarding whether some of
CICA’s information constituted trade secrets, CALI and Riley adduced evidence that, at least as
to the categories of information discretely identified by CICA, much of the information was
known extensively among employees and independent consultants for CICA, some information
was available to customers through their polices, and some information was available online
without any measures in place to guard its secrecy. Based on the evidence in the record, the
district court could have determined that the information CICA sought to protect was not entitled
to trade-secret protection until trial on the merits. We therefore conclude that the district court
did not abuse its discretion in denying the temporary injunction based on CICA’s claim for
misappropriation of trade secrets.
CONCLUSION
For the foregoing reasons, we affirm the district court’s order denying CICA’s
application for injunctive relief.
__________________________________________
Gisela D. Triana, Justice
Before Chief Justice Rose, Justices Triana and Smith
Affirmed
Filed: August 31, 2020
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