Cent. States Logistics, Inc. v. Boc Trucking, LLC
| Decision Date | 01 November 2018 |
| Docket Number | NO. 01-16-00693-CV,01-16-00693-CV |
| Parties | CENTRAL STATES LOGISTICS, INC. d/b/a Diligent Delivery Systems, Appellant v. BOC TRUCKING, LLC and Clarence J. Meyers, III Individually and d/b/a BOC Logistics, Appellees |
| Court | Texas Court of Appeals |
Kevin Pennell, Maurice Bresenhan, Jr., Zukowski, Bresenhan, & Piazza, LLP, 1177 West Loop South, Ste. 1100, Houston, TX 77027, for Appellant.
Clinard J. Hanby, 7 Switchbud, Ste. 192, The Woodlands, TX 77380, for Appellees.
Panel consists of Justices Jennings, Keyes, and Higley.
Central State Logistics, Inc. d/b/a Diligent Delivery Systems filed suit against BOC Trucking, LLC and Clarence J. Meyers III, alleging breach of contract for a covenant not to compete, tortious interference with existing contract, and violations of the Texas Uniform Trade Secrets Act. At trial, the trial court granted a directed verdict on Diligent’s trade secrets claim. The jury found liability and awarded damages on Diligent’s remaining claims. After trial, the trial court granted Meyers’s motion for judgment notwithstanding the verdict on Diligent’s tortious interference claim. In three issues on appeal, Diligent challenges the trial court’s directed verdict on its trade secrets claim and its judgment notwithstanding the verdict on its tortious interference claim. In three issues on cross-appeal, BOC Trucking argues the evidence is insufficient to support the jury’s determination of lost profits, the covenant not to compete is too broad to be enforceable, and the covenant not to compete is not ancillary to an otherwise enforceable agreement.
We affirm, in part, and reverse and render, in part.
Diligent is a transportation logistics company. It acts as a broker between companies that need freight transported and carrier companies to transport the freight. BOC Trucking is a freight transporting company. Meyers is the president and majority owner of BOC Trucking.
In February of 2013, Diligent and BOC Trucking entered into a broker-carrier agreement. Under the terms of the agreement, Diligent would use BOC Trucking as one of the carriers when Diligent’s clients needed freight transported. BOC Trucking agreed, as part of the contract, not to attempt to divert the business of any client of Diligent’s to any competitor of Diligent for the duration of the contract and for two years after BOC Trucking’s last contact with any client of Diligent.
Ameriforge was one of Diligent’s clients. Diligent arranged for BOC Trucking to transport some of Ameriforge’s transport. About ten months after BOC Trucking began transporting Ameriforge’s freight, Meyers formed a sole-proprietor logistics company. He used the name BOC Logistics as an assumed name for his work. BOC Logistics obtained Ameriforge as a client and used BOC Trucking to transport its freight.
In April of 2015, Diligent filed suit against BOC Trucking and Meyers. It asserted claims of breach of contract against BOC Trucking, tortious interference with existing contract against Meyers, and violations of the Texas Uniform Trade Secrets Act against both BOC Trucking and Meyers. The case went to trial. At the close of the evidence BOC Trucking and Meyers moved for a directed verdict on Diligent’s trade secrets claim. Diligent asserted it had presented evidence that BOC Trucking and Meyers obtained Diligent’s pricing information for Ameriforge and used that information for BOC Logistics to undercut Diligent’s pricing. The trial court disagreed that such evidence was in the record and granted a directed verdict on the claim.
The jury found BOC Trucking liable for breach of contract and Meyers liable for tortious interference with existing contracts. After trial, Meyers moved for a directed verdict for the jury’s questions regarding liability and damages for the tortious interference claim. For liability, Meyers argued that, because he was an agent of BOC Trucking, he could only be found to have interfered with BOC Trucking’s contract with Diligence if Diligence established that Meyers’s actions were so contrary to BOC Trucking’s interests that Meyers could only have been motivated by personal interests. Meyers argued that there was no such evidence in the record and that, accordingly, he was entitled to judgment notwithstanding the verdict on the claim. The trial court agreed.
Diligent filed a notice of appeal of its claims against Meyers. In its brief, Diligent indicated that BOC Trucking had filed for bankruptcy. We stayed the appeal, pending the bankruptcy. After we received notice that the bankruptcy case had closed, we reinstated this appeal. After the appeal was reinstated, BOC Trucking filed a notice of appeal, which we held was timely.1
In its second issue on cross-appeal, BOC Trucking argues the trial court erred by denying its motion to reform or void the judgment.
Whether a covenant not to compete is enforceable as written or must be modified to be enforceable is a question of law. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009) ; Butler v. Arrow Mirror & Glass, Inc. , 51 S.W.3d 787, 792 (Tex. App.—Houston [1st Dist.] 2001, no pet.).
When a question of law has been raised in a full evidentiary hearing, "the trial court frequently must resolve questions of fact before deciding the jurisdiction question." BMC Software Belg., N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002) (). In that circumstance, factual disputes are subject to legal and factual sufficiency challenges and conclusions of law are subject to a legal sufficiency challenge. Id. ; see also Dale v. Hoschar , No. 05-13-01135-CV, 2014 WL 3907997, at *1 (Tex. App.—Dallas Aug. 12, 2014, no pet.) (mem. op.) (applying BMC Software standard of review to enforceability of covenant not to compete). When, as here, the trial court does not issue findings of fact and conclusions of law, "all facts necessary to support the judgment and supported by the evidence are implied." BMC Software , 83 S.W.3d at 795. A party can challenge the implied findings for legal and factual sufficiency, however. Id.
When considering whether legally sufficient evidence supports a challenged finding, we must consider the evidence that favors the finding if a reasonable fact finder could, and disregard contrary evidence unless a reasonable fact finder could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We view the evidence in the light most favorable to the trial court’s findings and indulge every reasonable inference to support them. Id. at 822. We may not sustain a legal sufficiency, or "no evidence," point unless the record demonstrates (1) a complete absence of evidence of a vital fact; (2) that the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) that the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) that the evidence conclusively establishes the opposite of the vital fact. Id. at 810.
In a factual sufficiency review, we consider and weigh all of the evidence. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) ; Arias v. Brookstone, L.P., 265 S.W.3d 459, 468 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). When the appellant challenges an adverse finding on an issue on which it did not have the burden of proof at trial, we set aside the verdict only if the evidence supporting the finding is so weak as to make the verdict clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176 ; Reliant Energy Servs., Inc. v. Cotton Valley Compression, L.L.C., 336 S.W.3d 764, 782 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
In this situation, the trial court was the sole judge of the credibility of witnesses and the weight to be given to their testimony. See BMC Software , 83 S.W.3d at 795 (); Choice! Power, L.P. v. Feeley , 501 S.W.3d 199, 208 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (, when it acts as fact finder, trial court is sole judge of credibility of witnesses and weight to be given to testimony). As long as the evidence at trial "would enable reasonable and fair-minded people to differ in their conclusions," we will not substitute our judgment for that of the fact finder. City of Keller, 168 S.W.3d at 822.
Diligent asserts that res judicata applies as a bar to BOC Trucking’s appeal. Diligent argues, "The order allowing Diligent’s claim for $210,950 for breach of a valid agreement (which was fully litigated in the Trial Court below and not set aside in the bankruptcy proceeding) is claims preclusive between Diligent and BOC Trucking." BOC Trucking complains this argument is improper because Diligent’s proof for its argument lies outside the record. See Till v. Thomas , 10 S.W.3d 730, 733 (Tex. App.—Houston [1st Dist.] 1999, no pet.) ("We cannot consider documents attached to an appellate brief that do not appear in the record."). Diligent argues BOC Trucking waived its complaint by relying on bankruptcy documents outside the appellate record to establish it timely filed a notice of appeal. It also argues this Court can take judicial notice of the bankruptcy records attached to its brief. See Nwokedi v. Unlimited Restoration Specialists, Inc. , 428 S.W.3d 191, 209 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (). We do not need to resolve this dispute because, even assuming we can properly consider them, the documents Diligent attaches to its brief do not establish claim preclusion.2
Certain orders of a bankruptcy court can bar subsequent suits for...
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