Deaton v. United Mobile Networks, L.P.

• Decision Date: 13 August 1996
• Docket Number: No. 06-95-00096-CV,06-95-00096-CV
• Citation: 926 S.W.2d 756
• Parties: 1996-2 Trade Cases P 71,490 Ronny DEATON and Barbara Deaton, Appellants, v. UNITED MOBILE NETWORKS, L.P., Appellee.
• Court: Texas Court of Appeals

Page 756

926 S.W.2d 756

1996-2 Trade Cases P 71,490

Ronny DEATON and Barbara Deaton, Appellants, v. UNITED MOBILE NETWORKS, L.P., Appellee.

No. 06-95-00096-CV.

Court of Appeals of Texas,

Texarkana.

Submitted Feb. 8, 1996.

Decided April 17, 1996.

Rehearings Overruled with Substituted Opinion July 18, 1996.

Rehearings Overruled Aug. 13,1996.

John R. Mercy, Atchley, Russell, Waldrop, Texarkana, for appellants.

Larry Powers, Powers & Blount, Sulphur Springs, for appellee.

Before CORNELIUS, C.J., and GRANT and STARR, JJ.

OPINION

GRANT, Justice.

Ronny and Barbara Deaton appeal from a judgment finding violations of a noncompetition agreement and awarding damages and injunctive relief.

The Deatons contend that there is no or insufficient evidence to support the jury's finding that Ronny Deaton entered an agreement not to compete and breached that agreement or that he converted a customer list. They also contend that the amount of damages awarded for conversion is not supported by the evidence, that the trial court erred by entering an injunction against Barbara Deaton, that the court erred by awarding attorney's fees against Barbara Deaton, and that the trial court erred by entering judgment against Ronny and Barbara Deaton jointly and severally. They further contend that the trial court erred by reforming the noncompetition agreement because the geographic radius provided by the reformation was not reasonable or supported by the evidence and by entering judgment based on the noncompetition agreement because the Texas Business and Commerce Code provides that such damages are not recoverable if the court reforms the covenant not to compete. They also contend the court erred by not allowing them a reasonable time to object to the charge and by refusing to submit a jury question on monopoly practices.

Ronny Deaton started a two-way radio business in 1973. This business blossomed into three separate businesses and, by 1990, his primary income came from radio sales and air time sales from radio towers in the area. In 1990, United Mobile Networks purchased his business for $1.5 million. Counsel represents that the final agreement consisted of approximately fifty different documents, including two covenants not to compete. As part of the purchase agreement, Deaton was to become an employee of United Mobile Networks and remain so for five years. In mid-1993, he began discussing termination of his employment before the end of the employment agreement. Deaton's wife and their two sons remained as employees of the business without written employment contracts.

Ronny Deaton's employment with United Mobile Networks terminated on November 9, 1993. The arrangement seems to have been that Deaton was no longer employed by United Mobile Networks, but was selling the radios as an independent salesman. The radios were then programmed to work with United Mobile Networks tower facilities. When he left United Mobile Networks, he obtained a computer disk containing a list of United Mobile Networks' customers. In January 1994, United Mobile Networks sent a letter to Deaton stating that he was in violation of the noncompetition agreement and directing him not to sell SMR radios. ¹ It is undisputed that he has not done so since that time.

In December 1993, Barbara Deaton was fired after she was involved in an altercation with another United Mobile Networks salesman. Immediately thereafter, Barbara Deaton began filing with the Federal Communications Commission to obtain licenses that would permit her to establish an SMR system in competition with the one owned by United Mobile Networks. She also opened a business to sell two-way radios. In application forms filed with the manufacturers of the radios, Ronny Deaton was listed as an employee of the business. Barbara Deaton has continued to sell radios and have customers programmed onto United Mobile Networks systems through the trial of the suit.

On March 22, 1994, United Mobile Networks filed suit seeking a declaration that the covenant not to compete was valid and enforceable against Ronny Deaton, requesting an injunction and seeking damages for breach. United Mobile Networks later added Barbara Deaton as a defendant and requested damages for conversion, tortious interference, breach of fiduciary duty, breach of contract, breach of lease, and civil conspiracy.

At trial, the jury found (1) that Ronny Deaton and United Mobile Networks agreed the covenant not to compete would remain in effect after his voluntary termination of employment, (2) that Deaton had breached the covenant and converted the customer list and records, and (3) that United Mobile Networks were entitled to damages for breach of covenant and for conversion. The jury further found that Barbara and Ronny Deaton had entered into a civil conspiracy. The trial court entered judgment for United Mobile Networks awarding damages of $600,000 plus accrued interest and attorney's fees and granted a permanent injunction against further violations of the covenant not to compete.

The Deatons first contend that the trial court erred by entering a judgment against Barbara Deaton for $675,781.44 in damages, an injunction, and attorney's fees because there was no jury finding against her individually to support those remedies. The judgment against Barbara Deaton is necessarily rendered based upon the jury's finding that she engaged in a civil conspiracy with her husband, Ronny. The jury question was whether Ronny and Barbara entered into a conspiracy to do any one of four things: (1) violate the covenant not to compete; (2) tortiously interfere with plaintiff's customers; (3) breach defendant Ronny Deaton's fiduciary relationship with the plaintiff; or (4) breach the lease agreement with the plaintiff.

In Massey v. Armco Steel Co., 652 S.W.2d 932, 933-34 (Tex.1983), the Supreme Court held that the essential elements of an actionable civil conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. The "unlawful, overt act" requirement places civil conspiracy in the category of an intentional tort.

Joint and several liability is proper when parties are in some way jointly liable, as in the context of a civil conspiracy. Barbara Deaton contends that civil conspiracy was not proven; thus, joint and several liability may not be imposed upon her for her husband's wrongful acts. In this case, the concept of civil conspiracy was used as a basis for establishing the joint and several liability among the multiple parties. Carroll v. Timmers Chevrolet, 592 S.W.2d 922, 925-26 (Tex.1979). ²

Of the four theories for recovery submitted to the jury, it found in separate questions that tortious interference and breach of fiduciary relationship did not occur. The jury's finding that she was engaged in a conspiracy with her husband must be based upon the remaining findings: either a violation of the covenant not to compete or breach of the lease agreement.

There is no independent cause of action for conspiracy. Any finding of conspiracy must be based on some underlying tort. Schoellkopf v. Pledger, 778 S.W.2d 897, 900 n. 5 (Tex.App.--Dallas 1989, writ denied). An actionable conspiracy must consist of wrongs that would have been actionable against the conspirators individually. International Bankers Life Insurance Co. v. Holloway, 368 S.W.2d 567, 581 (1963). These cases further hold generally, if an act by one person cannot give rise to a cause of action, then the same act cannot give rise to a cause of action if done pursuant to an agreement between several persons. Schoellkopf, 778 S.W.2d at 900; Gulf & Atlantic Life Ins. Co. v. Hurlbut, 696 S.W.2d 83, 102 (Tex.App.--Dallas 1985), rev'd on other grounds, 749 S.W.2d 762 (Tex.1987). This concept was most recently addressed by this Court in Closs v. Goose Creek Consolidated ISD, 874 S.W.2d 859, 871-72 (Tex.App.--Texarkana 1994, no writ).

As a general rule, an actionable conspiracy must consist of wrongs that could have been actionable against the individual conspirators. The Supreme Court has most recently held that civil conspiracy, "generally defined as a combination of two or more persons to accomplish an unlawful purpose, or to accomplish a lawful purpose by unlawful means, might be called a derivative tort." Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.1996). The court also held that a defendant's liability for conspiracy depends on his participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable. See generally J. HADLEY EDGAR, JR. & JAMES B. SALES, 1 TEXAS TORTS AND REMEDIES § 3.02 (1996).

The question is whether some tort has been shown to exist in this case. Breach of contract is by definition actionable, but breach of contract is not a tort. In Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493, 493-95 (Tex.1991), the Court reviewed a plaintiff's effort to recover against Southwestern Bell for its failure to publish a yellow pages advertisement in accordance with the contract between the parties. In DeLanney, the Supreme Court held that when a defendant's conduct would give rise to liability independent of the fact that a contract exists between the parties, the plaintiff's claim may also sound in tort. 809 S.W.2d 493. The court recognized that the act of a party may breach duties in tort or contract alone or simultaneously in both. "The nature of the injury most often determines which duty or duties are breached. When the injury is only the economic loss to the subject of a contract itself the action sounds in contract alone." DeLanney, 809 S.W.2d at 495, quoting Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex.1986).

United Mobile Networks contends that Ronny Deaton's conversion of the customer list that occurred along with his breach of the...