Agar Corp. v. Electro Circuits Int'l, LLC
| Decision Date | 22 December 2016 |
| Docket Number | NO. 14–15–00134–CV,14–15–00134–CV |
| Citation | 565 S.W.3d 12 |
| Parties | AGAR CORPORATION, INC., Appellant v. ELECTRO CIRCUITS INTERNATIONAL, LLC and Suresh Parikh, Appellees |
| Court | Texas Court of Appeals |
Matthew A. Kornhauser, Dylan Benjamen Russell, Sidney Christian Watts, for AGAR Corporation, Inc.
Kenneth M. Krock, Matthew Buschi, Megan Brown, Terri Silver Morgan, for Electro Circuits International, LLC and Suresh Parikh.
Panel consists of Chief Justice Frost and Justices Boyce and Wise.
Agar Corporation, Inc. appeals two orders in which the trial court (1) granted summary judgment in favor of appellees Electro Circuits International, LLC and Suresh Parikh on Agar's claims against them; and (2) awarded attorney's fees to Electro Circuits and Parikh under the Texas Theft Liability Act. See Tex. Civ. Prac. & Rem. Code Ann. § 134.001 –.005 (Vernon 2011 & Supp. 2016). Electro Circuits and Parikh cross-appeal to challenge the trial court's order granting summary judgment in favor of Agar on their claim for additional attorney's fees based upon Agar's asserted breach of a release. We affirm.
This commercial dispute involves the alleged misappropriation of trade secrets relating to measurement and control devices that Agar designs, manufactures, and sells for use in the oil and gas industry. Agar contends two former employees, Sanjay Shah and Pandurang Nayak, conspired with many other persons and entities to obtain and use its trade secrets to sell knockoff Agar devices.
Agar sued more than a dozen individuals and entities in April 2008 including the two former Agar employees; it added Electro Circuits and Parikh as defendants to the existing lawsuit in a sixth amended petition filed in November 2011. That lawsuit was docketed as Cause No. 2008–20480.
In its seventh amended petition filed on February 10, 2012, Agar asserted claims against Electro Circuits and Parikh for tortious interference, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud, fraud by non-disclosure, misappropriation of trade secrets, violations of the Texas Theft Liability Act, conversion, and civil conspiracy. Agar sought actual and exemplary damages.1 Electro Circuits and Parikh answered and filed a counterclaim against Agar seeking attorney's fees based upon (1) the Texas Theft Liability Act; and (2) Agar's asserted breach of a "Mutual Release and Settlement Agreement" dated December 20, 2009.
Electro Circuits and Parikh filed a no-evidence motion for summary judgment under Texas Rule of Civil Procedure 166a(i) in September 2013. In the motion, they (1) identified each element of each claim asserted against them; and (2) contended that Agar lacked evidence on all specified elements of all claims. They also contended: "[T]o prevail on a civil conspiracy claim[,] the plaintiff must show that the defendant was liable for some underlying tort." Electro Circuits and Parikh combined their no-evidence motion with a motion for summary judgment under Texas Rule 166a(b); among other grounds, they sought a traditional summary judgment based on their affirmative defenses of release and the statute of limitations.
In its response to the combined motion, Agar contended that summary judgment was not warranted because (1) Electro Circuits and Parikh "are liable as co-conspirators of Defendants Sanjay Shah and Pandurang Nayak and their respective companies;" (2) specific portions of evidence attached to the response raise fact questions regarding the liability of Electro Circuits and Parikh as co-conspirators; (3) unspecified evidence attached to separate summary judgment motions and responses filed by Agar in relation to other defendants "clearly show[s] there was a fact issue on each of [Agar's] claims that it has also asserted against" Electro Circuits and Parikh; (4) Electro Circuits and Parikh were not parties to or third-party beneficiaries of the release agreement they invoked, so they could not rely on it to obtain attorney's fees; and (5) limitations does not bar Agar's claims against Electro Circuits and Parikh because the discovery rule tolls accrual of those claims.
The trial court signed an order on October 10, 2013, in which it granted the combined summary judgment motion in its entirety. After Agar moved for reconsideration, the trial court signed an order on December 20, 2013, in which it (1) denied the no-evidence motion for summary judgment as to Agar's claim for civil conspiracy; (2) granted the no-evidence motion in favor of Electro Circuits and Parikh "as to all other claims [by Agar] alleging direct liability;" and (3) granted "a traditional summary judgment on Plaintiff's claims against Defendants Electro Circuits International, LLC and Suresh Parikh only on the limited basis as to [their] ... affirmative defense of statute of limitations." The trial court's order states as follows:
The Court further finds the last overt act for limitations purposes regarding the conspiracy claim to be on July 3, 2009. Further, although the reasoning for the holding seems suspect, the cases from the Houston Court of Appeals clearly hold that the two year statute of limitations applies to conspiracy claims independent of whether the underlying tort has a longer limitations period. Since there is no evidence of any overt act within the two years prior to Electro Circuits and Suresh Parikh being named as Defendants, the Court feels compelled to grant the motion.
With respect to the traditional motion, the order also states as follows: "Plaintiff's claims against Defendants Electro Circuits International, LLC and Suresh Parikh are dismissed solely on the basis of the affirmative defense of statute of limitations."2
On April 9, 2014, the trial court signed an order granting a motion by Electro Circuits and Parikh to sever the claims among Agar, Electro Circuits, and Parikh from the original Cause No. 2008–20480. The order states Agar "was unopposed to the Motion ..." and reflects at the bottom that Agar's counsel approved the severance order "as to form only...." The December 20, 2013 order became part of the severed case under Cause No. 2008–20480–A. No final judgment existed in the severed case at this point because Electro Circuits and Parikh still had unresolved claims against Agar for attorney's fees.
Following severance, Electro Circuits and Parikh filed a second motion for summary judgment in June 2014 on their claims against Agar for attorney's fees. They sought traditional summary judgment in their favor on grounds that (1) they are prevailing parties under the Texas Theft Liability Act; and (2) they are entitled to fees because Agar breached the release when it sued Electro Circuits and Parikh. They supported this motion with an attorney's fees affidavit signed by attorney Ken Krock, which included detailed time sheets reflecting hours expended and billable rates for the attorneys representing Electro Circuits and Parikh. According to this affidavit, Electro Circuits and Parikh incurred $ 79,167.50 in fees in connection with Agar's claims. Of this amount, the affiant attributed $ 64,307.44 to the Texas Theft Liability Act claim. The trial court denied this motion in an order signed on August 11, 2014.
For its part, Agar filed a combined traditional and no-evidence motion for summary judgment in the severed case in August 2014 (and again in September 2014) on the unresolved claims for attorney's fees. The trial court also denied this motion on November 5, 2014.
On November 6, 2014, the trial court signed an order vacating its prior order denying the summary judgment motion of Electro Circuits and Parikh on attorney's fees.
The trial court signed a "Modified Order Constituting Final Judgment" in the severed case on January 20, 2015, in which it awarded $ 64,307.44 in attorney's fees to Electro Circuits and Parikh as prevailing parties under the Texas Theft Liability Act; the order conditionally awarded additional fees in the event of an appeal or a petition for review. The modified order denied any fee award in connection with the release. The modified order also granted Agar's motion for no-evidence and traditional summary judgment in part with respect to the claim for attorney's fees arising from the release. Taken together with the December 20, 2013 order, the January 20, 2015 order disposed of all parties and claims in the severed action docketed as Cause No. 2008–20480–A.
Agar appeals from the trial court's summary judgment order in favor of Electro Circuits and Parikh signed on December 20, 2013; Agar also appeals from the modified order signed on January 20, 2015, to challenge the award of attorney's fees to Electro Circuits and Parikh as prevailing parties under the Texas Theft Liability Act. Electro Circuits and Parikh cross-appeal from the January 20, 2015 modified order to challenge the denial of additional attorney's fees to them based on Agar's asserted breach of the release.
We review the trial court's grant of summary judgment de novo . Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005).
In reviewing either a no-evidence or traditional summary judgment motion, we must take as true all evidence favorable to the non-movant and draw every reasonable inference and resolve all doubts in favor of the non-movant. M.D. Anderson Hosp. & Tumor Inst. v. Willrich , 28 S.W.3d 22, 23–24 (Tex. 2000) (per curiam); Mendoza v. Fiesta Mart, Inc. , 276 S.W.3d 653, 655 (Tex. App.–Houston [14th Dist.] 2008, pet. denied).
A no-evidence motion for summary judgment is essentially a motion for a pretrial directed verdict. Tex. R. Civ. P. 166a(i) ; Timpte Indus., Inc. v. Gish , 286 S.W.3d 306, 310 (Tex. 2009). After an adequate time for discovery, a party without the burden of proof may, without presenting evidence, seek summary judgment on the ground that there is no evidence to support one or more essential elements of the non-movant's claim or...
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Agar Corp. v. Electro Circuits Int'l, LLC
...the trial court's summary judgment concluding that the civil conspiracy claims were indeed barred by limitations. 565 S.W.3d 12, 18 (Tex. App.—Houston [14th Dist.] 2016) (mem. op.) (citing TEX. CIV. PRAC. & REM. CODE § 16.003 and cases applying it to civil conspiracy). We do not agree that ......