Medical RX Services LLC v. Georgekutty
| Decision Date | 23 December 2021 |
| Docket Number | 02-21-00017-CV |
| Court | Texas Court of Appeals |
| Parties | Medical RX Services LLC; Remco Pharmacy, Inc.; Pharmaceutical Development Group, LLC d/b/a RX-Direct Home Delivery; Westlake Health & Beauty Products d/b/a Westlake Health Mart Pharmacy; and TM Pharmacy Services LLC d/b/a Pharm Trust Pharmacy, Appellants v. Lance Georgekutty; Vu Voung Cao; LGK Business Ventures LLC d/b/a Parkway Pharmacy; and Devoir Pharmacy LLC d/b/a MTM Pharmacy, Appellees |
On Appeal from the 48th District Court Tarrant County, Texas Trial Court No. 048-300355-18
Before Sudderth, C.J.; Womack and Walker, JJ.
Appellants appeal from a summary judgment entered in favor of Appellees. Because the summary-judgment evidence did not raise genuine issues of material fact regarding essential elements of Appellants' claims, we affirm.
Darren Tran created appellant Medical RX Services LLC (RX) to "maintain and manage" the administrative component of his four pharmacies: appellants Remco Pharmacy, Inc.; RX-Direct Home Delivery; Westlake Health Mart Pharmacy; and PharmTrust Pharmacy (collectively, RX Pharmacies).[1] Appellee Vu Voung Cao was a pharmacist for two of the RX Pharmacies.
On September 11, 2017, appellee Lance Georgekutty began working for RX in investor relations. Georgekutty signed a one-year[2] "General Employment Agreement" with RX that prohibited Georgekutty's disclosure of RX's trade secrets or his having any interest in "other business[es] similar to [RX's] business." The agreement also provided that if suit were filed regarding the employment agreement, the prevailing party would be entitled to recover attorney's fees.
On January 12, 2018, Georgekutty filed a certificate of formation for appellee Parkway Pharmacy and listed its purpose as "retail pharmacy business." Also in January, Cao left RX Pharmacies because his job was "stressful."
On February 26, 2018, RX fired Georgekutty for three alleged work-rules violations: violating the HIPAA policy, violating the nondisclosure policy, and falsifying company information.[3] Four days earlier, Georgekutty had emailed an unidentified third party, asking about reporting pharmacy fraud.
In March 2018, Georgekutty opened Parkway and hired Cao as a "pharmacist in charge." In June 2018, Georgekutty bought appellee MTM Pharmacy, which was an operating pharmacy in Red Oak. In March 2019, Cao quit his job with Parkway, to "get away from the pharmacy business."
On June 15, 2018 (around the time Georgekutty had bought MTM), RX and RX Pharmacies filed suit against Georgekutty, Cao, and Parkway.[4] Against Georgekutty, RX raised claims for breach of the employment agreement and breach of fiduciary duty. RX alleged that Cao and Parkway had induced, participated in, or aided and abetted[5] Georgekutty's breach of fiduciary duty. Against Georgekutty, Cao, and Parkway, RX and RX Pharmacies raised claims for misappropriation of trade secrets under the Texas Uniform Trade Secrets Act (TUTSA), common law misappropriation of trade secrets, [6] conversion, tortious interference with business relationships, and conspiracy. Georgekutty filed a counterclaim against RX, seeking his attorney's fees as provided in the employment agreement.
In December 2018, RX Pharmacies closed "due to a lack of business sufficient to sustain operations."[7] Parkway closed in September 2019 because "[t]he rent was too high," and MTM closed in October 2019 because it "didn't have any more business."
To provide context for our ultimate holdings, we must recite the byzantine procedural history surrounding the final summary judgment. And as suggested by Georgekutty, Cao, Parkway, and MTM, this history is best set out in a timeline format.
October 18, 2019-over one year after suit had been filed
Georgekutty, Cao, and Parkway file a no-evidence motion for summary judgment, which the trial court sets for written submission.
RX and RX Pharmacies file an amended petition adding MTM as a defendant to their claims for misappropriation of trade secrets, conversion, tortious interference, and conspiracy.
MTM files a no-evidence motion for summary judgment, joining the October 18 motion.
Georgekutty, Cao, Parkway, and MTM file a traditional motion for summary judgment.
RX and RX Pharmacies respond and specially except to the no-evidence motions for summary judgment.
Georgekutty, Cao, Parkway, and MTM file an amended no-evidence motion for summary judgment, partially in response to RX and RX Pharmacies' special exceptions and expressly “withdraw” and “supersede” the October 18, 2019 and January 2, 2020 no-evidence motions.
The trial court enters a scheduling order regarding the January 15, 2020 traditional motion and the January 29, 2020 amended no-evidence motion and sets them for written submission.
RX and RX Pharmacies' deadline to respond to the traditional and amended no-evidence motions expires, but they do not respond.
RX and RX Pharmacies file a verified motion for leave to file a late response to the traditional and amended no-evidence motions, noting that it would “likely add little more than new titles” to its prior January 22, 2020 response. RX and RX Pharmacies cite the factual and procedural complexity of the case, a family emergency, and a calendaring error to justify the extra time.
RX and RX Pharmacies object to Georgekutty, Cao, Parkway, and MTM's summary-judgment evidence attached to the traditional summary-judgment motion.
Georgekutty, Cao, Parkway, and MTM object to the summary-judgment evidence attached to RX and RX Pharmacies' January 22, 2020 response in case the trial court considered that response to be applicable to the traditional and amended no-evidence motions.
The trial court denies MTM's withdrawn January 2, 2020 no-evidence motion for summary judgment.
Texas Governor Greg Abbott issues a COVID-19 disaster declaration.
The trial court grants RX and RX Pharmacies' motion for leave to file a late summary-judgment response and sets an April 23, 2020 deadline. The trial court further resets the submission of the traditional and amended no-evidence motions for May 7, 2020.
RX and RX Pharmacies respond to the traditional and amended no-evidence motions but include the same evidence and arguments that were included in their January 22, 2020 response.
Georgekutty, Cao, Parkway, and MTM reply in support of their summary-judgment motions.
Georgekutty, Cao, Parkway, and MTM move for leave to file one-day-late objections to RX and RX Pharmacies' summary-judgment response and evidence; the objections are substantially similar to their March 3, 2020 objections. The motion for leave is unopposed.
The trial court grants the motion for leave to object and deems the objections to have been timely filed on May 1. The trial court sustains some, but not all, of Georgekutty, Cao, Parkway, and MTM's objections; sustains some, but not all, of RX and RX Pharmacies' objections; and grants the traditional and amended no-evidence motions for summary judgment.
After substituting new counsel, RX and RX Pharmacies file a motion for leave to “amend and supplement” their summary-judgment evidence. They also ask the trial court to partially reconsider its summary-judgment orders.
RX and RX Pharmacies file an amended motion for leave to amend and supplement their summary-judgment evidence and ask the trial court to reconsider the summary judgment. They partially rely on the fact that they filed their April 23, 2020 summary-judgment response “in the middle of the COVID-19 pandemic.” The trial court sets the amended motion for written submission on July 22, 2020.
Georgekutty, Cao, Parkway, and MTM respond to the amended motion for leave to amend and supplement.
RX and RX Pharmacies file a reply in support of the amended motion for leave to amend and supplement.
The trial court denies RX and RX Pharmacies' amended motion for leave to amend and supplement.
After a bench trial on Georgekutty's counterclaim for attorney's fees-the sole remaining issue in the case-the trial court enters final judgment in favor of Georgekutty, Cao, Parkway, and MTM.
Now on appeal, RX and RX Pharmacies (collectively, the RX Parties) assert that the trial court abused its discretion by refusing to allow them to amend or supplement their summary-judgment evidence, abused its discretion by sustaining some of the objections to their summary-judgment evidence, and erred by granting summary judgment in favor of Georgekutty, Cao, Parkway, and MTM (collectively, the Georgekutty Parties). The RX Parties challenge the summary judgments only as to their claims for breach of fiduciary duty (including Cao and Parkway's participation in Georgekutty's alleged breach of fiduciary duty), misappropriation of trade secrets under TUTSA, and Georgekutty's breach of the employment agreement. Thus, we
will not address their claims for conversion, tortious interference with business relationships, breach of a nondisclosure and noncompete agreement, [8] or conspiracy.
In their fourth issue, the RX Parties argue that the trial court abused its discretion by denying their motion to amend or supplement their summary-judgment evidence after summary judgment had been granted. In their motion, the RX Parties...
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