Computek Computer & Office v. Walton

• Decision Date: 15 February 2005
• Docket Number: No. 05-03-00889-CV.,05-03-00889-CV.
• Citation: Computek Computer & Office v. Walton, 156 S.W.3d 217 (Tex. App. 2005)
• Parties: COMPUTEK COMPUTER & OFFICE SUPPLIES, INC. & Michael Williams, Individually, Appellants, v. Daron WALTON d/b/a OEM Supplies, Appellee.
• Court: Texas Court of Appeals

156 S.W.3d 217

COMPUTEK COMPUTER & OFFICE SUPPLIES, INC. & Michael Williams, Individually, Appellants, v. Daron WALTON d/b/a OEM Supplies, Appellee.

No. 05-03-00889-CV.

Court of Appeals of Texas, Dallas.

February 15, 2005.

Todd W. White, The White Law Firm, Rockwall, for appellants.

Jay R. Stucki, Hulse & Stucki, Irving, for appellee.

Before Justices MOSELEY, O'NEILL, and RICHTER.

OPINION

Opinion by Justice MOSELEY.

Daron Walton d/b/a OEM Supplies (OEM) sued Computek Computer & Office Supplies, Inc., and Michael Williams, Computek's owner, (collectively, Computek), alleging, among other claims, that Williams used trade secrets obtained during his employment with OEM to form a competing company. The trial court found in favor of OEM on this claim and awarded it actual and exemplary damages. In addition, the trial court entered a permanent injunction against Computek. In its first issue, Computek contends that the permanent injunction is improper because it lacks specificity and is overly broad. In its second issue, Computek contends the award of joint and several exemplary damages against two defendants is improper. For the reasons that follow, we (1) reverse the permanent injunction in part and remand it to the trial court for further proceedings, and (2) modify the permanent injunction in part. Further, we reverse the judgment of the trial court on the merits as to the joint and several award of exemplary damages and remand that issue to the trial court for further proceedings. In all other respects, the permanent injunction and judgment on the merits are affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

Daron Walton and Michael Williams worked as sales representatives at ABBA, which sold office supplies to businesses. Walton left ABBA and started OEM, a business that competed with ABBA. In November 2000, Walton hired Williams. Williams brought with him the contacts he established at ABBA. Williams testified that he and Walton orally agreed that Williams could take his ABBA clients with him when he left OEM. OEM used TeleMagic, a computer program, to keep track of its salespersons' contacts with clients. The information included clients' names, contact information, current and past purchase orders, quoted prices, and personal information. The TeleMagic documents were labeled as confidential and the property of OEM. In addition, Williams had purchase orders for his ABBA clients that included some of this information.

In May 2002, while he was still employed by OEM, Williams incorporated Computek to compete with OEM. In August 2002, Williams deleted all of the information from 300 to 400 client files in OEM's TeleMagic program, and removed paperwork regarding those clients, such as purchase orders, from OEM's office. Williams used some of the deleted information to start Computek. When Walton discovered the information had been deleted and that client files had been removed, he fired Williams. Subsequently, OEM sued Williams for breach of a covenant not to compete, misappropriation of trade secrets, unfair competition, violation of the Texas Theft Liability Act, and conversion, and sought actual and exemplary damages and attorney's fees. OEM obtained a temporary restraining order and then a temporary injunction, which restrained Williams from taking certain actions regarding OEM clients or the information on the records Williams deleted or removed, including "[c]anvassing, soliciting, or accepting any business ... from any OEM clients" or "using OEM confidential and proprietary information or the records and files taken from OEM or that were in OEM's possession prior to [Williams] leaving employment with OEM to solicit OEM clients."

The case was tried to the court. At the close of the trial, the court orally found for OEM on the claim for misappropriation of trade secrets and awarded actual damages of $113,000, exemplary damages of $100,000, and offset these amounts by $1,500. Alternatively, the trial court found for OEM on the theft of property claim and awarded OEM $113,000 in actual damages, $1,000 additional damages pursuant to the statute, $60,000 attorney's fees, and costs of court. The court found in Computek's favor on all other claims. The trial court subsequently signed a "Judgment of the Trial on the Merits," which found for OEM on the claim for misappropriation of trade secrets and for Computek on the remainder of the claims and awarded OEM $113,000 in actual damages, $100,000 in exemplary damages, and offset these amounts by $1,500. The trial court also signed a permanent injunction. Computek filed a motion to clarify/modify injunction and judgment and for new trial, which was overruled by operation of law. This appeal timely followed.

PERMANENT INJUNCTION

In its first issue, Computek contends the permanent injunction is improper because it lacks clarity. Computek argues the injunction fails to specify which OEM clients Computek may not contact and that it is overly broad because it prevents Computek from engaging in activities it has a lawful right to perform. Computek requests that this Court either modify the permanent injunction, see Ghidoni v. Stone Oak, Inc., 966 S.W.2d 573, 583 (Tex.App.-San Antonio 1998, pet. denied), or reverse and remand to the trial court for further proceedings. See Kulkarni v. Braeburn Valley W. Civic Ass'n, Inc., 880 S.W.2d 277, 278 — 79 (Tex.App.-Houston [14th Dist.] 1994, no writ).

Standard of Review and Applicable Law

Whether to grant a permanent or temporary injunction is ordinarily within the sound discretion of the trial court and, on appeal, review of the trial court's action is limited to the question of whether the action constituted a clear abuse of discretion. Priest v. Tex. Animal Health Comm'n, 780 S.W.2d 874, 875 (Tex.App.-Dallas 1989, no writ). Because an injunction is an equitable remedy, a trial court weighs the respective conveniences and hardships of the parties and balances the equities. Hitt v. Mabry, 687 S.W.2d 791, 792 (Tex.App.-San Antonio 1985, no writ) (citing Lower Nueces River Water Supply Dist. v. Live Oak County, 312 S.W.2d 696, 701 (Tex.Civ.App.-San Antonio 1958, writ ref'd n.r.e.)).

However, "[e]very order granting an injunction ... shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail and not by reference to the complaint or other document, the act or acts sought to be restrained...." TEX.R. CIV. P. 683. An injunction must be as definite, clear and precise as possible and when practicable it should inform the defendant of the acts he is restrained from doing, without calling on him for inferences or conclusions about which persons might well differ and without leaving anything for further hearing. Villalobos v. Holguin, 146 Tex. 474, 480, 208 S.W.2d 871, 875 (1948); Hellenic Inv., Inc. v. Kroger Co., 766 S.W.2d 861, 866 (Tex.App.-Houston [1st Dist.] 1989, no writ). Persons seeking the extraordinary remedy of injunction must be specific in pleading the relief sought, and the courts are without authority to grant relief beyond that so specified. Hitt, 687 S.W.2d at 795.

An injunction should be broad enough to prevent a repetition of the evil sought to be corrected. Id. However, an injunction must not be so broad as to enjoin a defendant from activities that are a lawful and proper exercise of his rights. Id. at 796. Moreover, where a party's acts are divisible, and some acts are permissible and some are not, an injunction should not issue to restrain actions that are legal or about which there is no asserted complaint. Hellenic Inv., Inc., 766 S.W.2d at 867. Thus, the entry of an injunction that enjoins lawful as well as unlawful acts may constitute an abuse of discretion. Id.

Discussion

1. Whether the permanent injunction lacks specificity

Numbered paragraphs one and two of the permanent injunction enjoin Computek from doing business, or authorizing anyone else to do business, with any OEM client not listed on Attachment A or that was a new account set up while Williams worked for OEM. Attachment A is a list of 184 clients that Williams brought from ABBA to OEM that Computek may contact. However, the clients Computek may not contact, which is the purpose of paragraphs one and two, are not named or identified. Paragraph three enjoins Computek from advising OEM clients to cancel their business with OEM. It refers to those who were OEM clients as of October 16, 2002 (two days before the request for injunction was filed and the temporary restraining order was signed) and new accounts set up while Williams worked for OEM; however, it does not name or identify those clients. Paragraphs four and five enjoin Computek from disclosing or using the non-ABBA information and files Williams took from OEM or that OEM possessed before Williams left OEM's employment; those paragraphs do not specifically list the information and files Computek may not use or disclose.

Computek argues that the injunction lacks specificity because paragraphs one through five seek to prevent Computek from doing business with OEM clients, but the injunction does not include a list of OEM clients.¹ Rather, because it includes a list of clients Computek may contact, but not a list of those it must not contact Computek contends that it cannot know whether a contact is an OEM client.

OEM responds that the first paragraph clearly enjoins Computek from contacting those OEM clients existing at the time the injunction became effective. Further, OEM responds that the first paragraph should be reformed to add language that it refers to clients of OEM as of October 16, 2002, or that were new accounts set up while Williams worked for OEM. Although these dates narrow the scope of OEM clients included in the injunction, the dates alone do not identify the OEM clients who are off-limits to Computek. Accordingly, we agree with Computek that these paragraphs enjoin Computek from taking specific actions involving...