Airgas–Sw., Inc. v. Iws Gas & Supply of Tex., Ltd.

• Citation: 390 S.W.3d 472
• Decision Date: 30 August 2012
• Docket Number: No. 01–10–00938–CV.,01–10–00938–CV.
• Parties: AIRGAS–SOUTHWEST, INC., Appellant v. IWS GAS AND SUPPLY OF TEXAS, LTD., Appellee and Robert A. Morton, Jr., Steven P. Lynch, Ruben G. Pena, Rhanda Childers, Denis Stermer, Kevin James, Thomas Smith and John Rogstad, Appellants v. Airgas–Southwest, Inc., Appellee.
• Court: Court of Appeals of Texas

390 S.W.3d 472

AIRGAS–SOUTHWEST, INC., Appellant

v.IWS GAS AND SUPPLY OF TEXAS, LTD., AppelleeandRobert A. Morton, Jr., Steven P. Lynch, Ruben G. Pena, Rhanda Childers, Denis Stermer, Kevin James, Thomas Smith and John Rogstad, Appellants

v.Airgas–Southwest, Inc., Appellee.

No. 01–10–00938–CV.

Court of Appeals of Texas, Houston (1st Dist.).

Aug. 30, 2012.

William B. Gaudet, Adams and Reese LLP, New Orleans, LA, Emily C. Taube, Memphis, TN, for Appellant.

Charles L. Carbo III, William S. Helfand, Steven J. Knight, Chamberlain, Hrdlicka, White, Williams, Martin & Aughtry, Houston, TX, for Appellee.

Panel consists of Chief Justice RADACK and Justices MASSENGALE and HUDDLE.

OPINION

MICHAEL MASSENGALE, Justice.

IWS Gas and Supply of Texas, Ltd. (“IWS”) sought and obtained a money judgment against Airgas–Southwest, Inc. (“Airgas”) for malicious prosecution. Robert A. Morton, Jr., Steven P. Lynch, Ruben G. Pena, Rhanda Childers, Dennis Stermer, Kevin James, Thomas Smith and John Rogstad, all of whom were employees of IWS (the “Individual Employees”), also sued Airgas for malicious prosecution, but the trial court rendered partial summary judgment dismissing those claims at an earlier stage of the litigation. Airgas appeals from the final judgment in favor of IWS. The Individual Employees also appeal from the summary-judgment dismissal of their malicious prosecution claims against Airgas.

We conclude that there was legally insufficient evidence that IWS suffered a special injury, which is an essential element of a claim for malicious prosecution. Accordingly, we reverse in part the judgment of the trial court and render a take-nothing judgment against IWS. For the same reason, we affirm the judgment to the extent it incorporated the summary-judgment dismissal of the Individual Employees' claims.

Background

I. Airgas's acquisitions

Airgas is a distributor of gases and welding and safety supplies in Harris County and the surrounding area. In 2006, Airgas, Inc., the parent company of Airgas, acquired one of its competitors, Aeriform Corporation. While this transaction was pending, another Airgas competitor, IWS Gas and Supply Corporation, recruited Aeriform's four-person Houston-based industrial sales force to join what would eventually become its subsidiary, IWS. Soon after Airgas's acquisition of Aeriform was announced, the four Aeriform industrial salesmen—Jerry Barton, Steven Lynch, Robert Morton, Jr., and Ruben Pena—resigned their jobs to work for the newly-formed IWS. Upon tendering his resignation, Barton showed his supervisor the offer letter from IWS, which offered a “considerable increase” in compensation above what Airgas paid him, plus the option to buy shares in IWS.

Shortly after the four Aeriform salesmen joined IWS, approximately 35 customersstopped ordering supplies from Aeriform. The volume of lost sales amounted to between $500,000 and $600,000 per month. Due to the sudden loss of customers, Airgas and Aeriform management suspected that IWS had solicited the customers by obtaining confidential information through the four former Aeriform salesmen. According to his former supervisor, Barton had approached Aeriform's record-keeper shortly before leaving the company and obtained copies of all his customer contracts, which reflected pricing and product information. Allegedly, neither Airgas nor Aeriform ever recovered the missing customer contracts.

While Airgas was acquiring Aeriform, Airgas was also in the process of acquiring Gulf Oxygen, LLC, another company in the gas and welding supply business. Before acquiring Gulf Oxygen, Airgas management heard rumors that employees would leave the company upon the acquisition. Around the time of the closing, several Gulf Oxygen employees—including Rhanda Childers, Kevin James, John Rogstad, Thomas Smith, and Dennis Stermer—quit to work for IWS. According to Gulf Oxygen's former owner, when Airgas personnel searched Gulf Oxygen's premises, they could not find any of the customer contracts.

II. Litigation of Airgas's original claims

Airgas, as assignee of Aeriform Corporation, filed a petition in Harris County district court to take pre-suit depositions of the former Aeriform employees. Before the district court took action on the petition, the former Aeriform employees and IWS filed a separate lawsuit which was assigned to a different Harris County district court. Their petition requested a declaratory judgment that they did not misappropriate Aeriform's confidential information, they did not engage in unfair competition, they did not tortiously interfere with Airgas's current or prospective contracts, and no law or contract precluded them from contacting Airgas's employees or customers.

In response, Airgas filed an answer and counterclaim against Aeriform's former employees for breach of fiduciary duty, and the company filed additional counterclaims against them and IWS for conspiracy to breach fiduciary duty and unfair competition. Airgas later amended its pleadings to allege those same claims against former Gulf Oxygen employees Childers, James, Rogstad, Smith, and Stermer, and it additionally alleged claims against the opposing parties for misappropriation of trade secrets.

Airgas obtained a temporary restraining order against IWS and all of its employees, specifically including the former employees of Aeriform and Gulf Oxygen. The TRO restrained and enjoined them from:

1. Contacting any Airgas employee or in any manner soliciting any Airgas employee for employment with IWS;

2. Entering into any new employment agreements and/or hiring any current Airgas employee whether solicited or not; and

3. Having any former Airgas employee now with IWS (including any former Aeriform or Gulf Oxygen LLC (or affiliate) or employee) contact any customers they had while at Airgas, Aeriform or Gulf Oxygen LLC that are not currently customers of IWS.

A hearing was scheduled for 13 days after the TRO was signed to determine whether it should be made into a temporary injunction pending full trial on the merits, and the TRO stated that it would expire 14 days after it was signed. At the TRO hearing, Airgas announced that it had decidednot to pursue a preliminary injunction, and that it would instead proceed to trial on an expedited basis. Airgas did not again request or obtain a restraining order or injunction against any party during the course of the underlying litigation.

Airgas amended its pleadings to assert an additional action under the Texas Theft Liability Act against all the adverse parties. On a motion for summary judgment, the trial court ordered that Airgas take nothing on that claim, but the remaining claims were allowed to proceed to trial by jury. Airgas nonsuited without prejudice its claims against all the Individual Employees except for Barton, thus leaving IWS and Barton as the sole adverse parties at trial.

At trial, after Airgas rested, the trial court directed a verdict in favor of IWS and Barton on the remaining claims, and in the final judgment it ordered that Airgas take nothing. The judgment additionally ordered that IWS and Barton should recover $336,269 in attorney's fees incurred during the period in which Airgas's claim under the Texas Theft Liability Act was pending, and that the nonsuit of Airgas's claims against the Individual Employees should be with prejudice.

III. Malicious prosecution claims

After the close of the litigation of Airgas's claims, IWS and the Individual Employees (excluding Barton) filed suit against Airgas and its president, Brent Sparks, asserting a claim of malicious prosecution which was stated as follows:

18. Defendants instituted a claim against Plaintiffs in the Lawsuit for: (i) misappropriation of trade secrets and confidential information, (ii) violations of the Texas Theft Liability Act, (iii) breach of fiduciary duty, (iv) unfair competition and (v) conspiracy. Defendants also sought, and obtained, injunctive relief against Plaintiffs.

19. Defendants acted with malice in asserting these claims and seeking injunctive relief.

20. Defendants lacked probable cause for these claims and the injunctive relief.

21. Defendants['] claims against each Plaintiff for violation of the Texas Theft Liability Act terminated in Plaintiffs['] favor when the Court entered a take nothing judgment in favor of each Plaintiff.

22. All remaining claims against Plaintiff IWS terminated in IWS' favor upon directed verdict of the Court, as reflected in the Final Judgment.

23. Defendant Airgas's voluntary dismissal with prejudice of all remaining claims against all other Plaintiffs, as reflected in the Final Judgment, was a termination in Plaintiffs' favor.

24. As a result of Defendants['] conduct described herein, Plaintiffs suffered actual and consequential damages within the jurisdictional limits of this Court including, but not limited to: (i) legal fees and costs, (ii) lost profits, (iii) lost income, (iv) lost business opportunities and (v) mental anguish.

On Airgas and Sparks's motion for partial summary judgment, the trial court dismissed the Individual Employees' claims for malicious prosecution, but it allowed IWS to proceed with its malicious prosecution claim. At trial, the court directed a verdict in Airgas's favor on a separate claim for tortious interference with prospective business relationships that IWS and the Individual Employees had asserted in an amended petition. However, the court denied Airgas's request for a directed verdict on IWS's malicious prosecution claim.

At trial, Rogstad, who became president of IWS after quitting Airgas, testified that the TRO in the underlying litigation preventedthe salespeople from fulfilling their jobs because “they were scared that if they went out and tried to get a customer that it could hurt them in the lawsuit itself,” and that he himself ignored phone calls from customers with whom he had dealt in the past. He further testified that customers refrained from doing...