Murrco Agency, Inc. v. Ryan

• Decision Date: 07 November 1990
• Docket Number: No. 05-90-00179-CV,05-90-00179-CV
• Citation: 800 S.W.2d 600
• Parties: The MURRCO AGENCY, INC. et al., Appellants, v. Alex RYAN et al., Appellees.
• Court: Texas Court of Appeals

Page 600

800 S.W.2d 600

The MURRCO AGENCY, INC. et al., Appellants, v. Alex RYAN et al., Appellees.

No. 05-90-00179-CV.

Court of Appeals of Texas Dallas.

Nov. 7, 1990.

Charles E. Smith, Dallas, for appellants.

Wendel A. Withrow, Carrollton, for appellees.

Before McCLUNG, THOMAS and BURNETT, JJ.

OPINION

McCLUNG, Justice.

The Murrco Agency, Inc. obtained a judgment against Alex Ryan based on conversion of funds and breach of contract involving misuse of proprietary business information. Murrco also obtained a judgment against Debbie Dickens for misuse of proprietary information. Murrco was awarded attorney's fees to be recovered from Ryan and Dickens. Ryan, by way of a counterclaim, obtained a judgment against Murrco for a breach of contract involving unpaid commissions. Ryan was awarded attorney's fees to be recovered from Murrco.

In three points of error, Murrco asserts that the trial court erred: (1) by failing to offset all amounts awarded, including the attorney's fees, and (2) by ordering that the attorney's fees awarded to Ryan were to be held by Ryan for the use and benefit of his attorney. In three cross points of error, Ryan and Dickens maintain: (1) that the trial court erred in entering judgment against them for misuse of proprietary information, (2) that the trial court erred in awarding attorney's fees to Murrco, and (3) that the jury's finding that Ryan was not injured by enforcement of a covenant not to compete was against the great weight and preponderance of the evidence. We sustain all of Murrco's points of error, and we overrule all of Ryan's and Dickens's cross points.

In the judgment, the trial court added all damages and interest awarded to Murrco, and subtracted therefrom the lesser damages awarded to Ryan, thereby awarding a net amount to Murrco. The trial court awarded $92,000 in attorney's fees to Murrco. The court also awarded $16,200 in attorney's fees to Ryan, but the trial court did not offset the awards of attorney's fees by subtracting the lesser award from the greater award. Further, the trial court decreed that the $16,200 in attorney's fees awarded to Ryan "shall be held by [Ryan] for the use and benefit of his attorney ... and Alex Ryan shall forthwith remit the same to [his attorney] upon receipt of the aforesaid $16,200."

In its first two points of error, Murrco argues that the trial court erred in failing to offset all awards, including attorney's fees, and in failing to award judgment of one net amount in favor of Murrco. Murrco asserts in its third point of error that the trial court erred in ordering the attorney's fees awarded to Ryan to be held for the use and benefit of Ryan's attorney.

It is undisputed that both parties were entitled to attorney's fees even though one party's recovery was entirely offset by the opposing party's claim. See McKinley v. Drozd, 685 S.W.2d 7, 10-11 (Tex.1985) (interpreting former article 2226 of the Revised Civil Statutes, now codified in chapter 38 of the Civil Practice and Remedies Code); Arguelles v. Kaplan, 736 S.W.2d 782, 786-87 (Tex.App.--Corpus Christi 1987, writ ref'd n.r.e.) (decided under the present statute, section 38.001 of the Civil Practice and Remedies Code); see also TEX.CIV.PRAC. & REM.CODE ANN. § 38.001 (Vernon 1986). It has been held that section 38.001 was not intended to provide for an award of attorney's fees directly to a party's attorney; instead, the fees are to be awarded to the client. Streeter v. Thompson, 751 S.W.2d 329, 331 (Tex.App.--Fort Worth 1988, no writ). ¹ Although the $16,200 in attorney's fees were purportedly awarded to Ryan, Ryan was also required to hold them for the use and benefit of his attorney and to remit them to his attorney upon receipt. These additional conditions contained in the judgment effectively override the unqualified requirement that the attorney's fees are to be awarded to the client.

Moreover, these gratuitous conditions are designed to benefit a person who was not a party to the lawsuit, and they are inconsistent with both the jury's verdict and Ryan's prayer for attorney's fees as contained in his pleadings. See TEX.R.CIV.P. 301 (a judgment shall conform to the pleadings and the verdict and shall give a party all relief to which he may be entitled). The record establishes that Ryan's attorney was not a party to the lawsuit, nor were there any pleadings requesting that attorney's fees be awarded to Ryan for the use and benefit of his attorney. By its verdict, the jury simply found that Ryan was entitled to $16,200 in attorney's fees. Because the trial court's judgment grants relief to one who was not a party to the lawsuit, and because the award is in conflict with the jury's verdict and the relief requested in Ryan's pleadings, the trial court erred in awarding attorney's fees to Ryan for the use and benefit of his attorney and in requiring that Ryan remit the fees to his attorney upon receipt. See Streeter, 751 S.W.2d at 331. ²

The claims for attorney's fees belong to the litigants, not to their attorneys. Satellite Earth Stations East, Inc. v. Davis, 756 S.W.2d 385, 387 (Tex.App.--Eastland 1988, writ denied). In the absence of any authorization for decreeing that the attorney's fees awarded to Ryan should be held for the use and benefit of Ryan's attorney and remitted to the attorney upon receipt, the attorney's fees awarded to the parties should have been offset along with the other awards of damages and interest. See Satellite Earth Stations, 756 S.W.2d at 387; Streeter, 751 S.W.2d at 331-32. ³

We sustain Murrco's three points of error. We reform the judgment so that the attorney's fees are awarded unconditionally to the respective parties. We further reform the judgment by providing that all awards, including attorney's fees, are offset.

In their first cross point of error, Ryan and Dickens maintain that the trial court erred in entering judgment against them for misuse of proprietary information. The jury found that both Ryan and Dickens had used proprietary business information obtained from Murrco in order to divert business from Murrco, causing economic detriment to Murrco. ⁴

Because the first cross point is somewhat vague and very general, we are required to ascertain the nature of the complaint from the wording of the point and the argument under the point. See Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982). In their argument, Ryan and Dickens assert that certain facts were undisputed. Ryan and Dickens conclude their argument under the cross point by stating that Murrco was not entitled to any jury questions as a matter of law and that a take-nothing judgment should have been rendered in favor of Ryan and Dickens with respect to the alleged misuse of proprietary information. Their argument that the claim of misuse of proprietary information should not have been submitted to the jury is particularly telling in view of the rule that a trial court must submit a jury question even if the evidence is factually insufficient to support a judgment based on the submitted proposition, whereas the court may refuse to submit a question to the jury only if there is no evidence raising the issue. See, e.g., Burke Wiley, Inc. v. Lenderman, 545 S.W.2d 226, 228 (Tex.Civ.App.--Houston [1st Dist.] 1976, writ ref'd n.r.e.). We determine that Ryan and Dickens are arguing that there was no evidence to support the alleged misuse of proprietary information and that these claims therefore should not have been submitted to the jury. See Garza v. Alviar, 395 S.W.2d 821, 824 (Tex.1965); American Home Assurance Co. v. Brandt, 778 S.W.2d 141, 144 (Tex.App.--Texarkana 1989, writ denied); Alstan Corp. v. Board of Admin., 713 S.W.2d 130, 132-33 (Tex.App.--Austin 1986, writ ref'd n.r.e.).

In reviewing Ryan's and Dickens's no-evidence point, we are required to consider only the evidence and inferences which tend to support the jury's findings, disregarding all evidence and inferences to the contrary. Jacobs v. Danny Darby Real Estate, Inc., 750 S.W.2d 174, 175 (Tex.1988). A no-evidence point should be sustained only when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the only evidence offered to prove a vital fact is barred from consideration by rules of law or evidence; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. C & C Partners v. Sun Exploration and Prod. Co., 783 S.W.2d 707, 716 (Tex.App.--Dallas 1989, writ denied).

Murrco is an insurance agency doing business as Cooper Aircraft Insurance. Murrco sold nonstandardized policies providing insurance coverage for aircraft. Ryan and Dickens were employees of Murrco. They both left Murrco, and Ryan began competing with Murrco via his own business known as Universal Insurance Associates. Dickens went to work for Ryan.

We find a multitude of evidence supporting the jury's finding that Ryan and Dickens had misused proprietary information obtained from Murrco. Roy Murray testified that Murrco customer lists which included policy expiration dates were considered to be trade secrets. ⁵ He said that those lists were divided among employees on a "need to know" basis and were confidential. Each employee's list contained information on different customers, and employees were instructed not to exchange, recopy or republish the lists nor to disclose the information to outsiders. Murray stated that Murrco maintained the information in a restricted and secure manner. He said that both expiration dates and premium amounts ⁶ are confidential information. Murray testified that Murrco had built up its business over a period of twelve years in a highly competitive market.

Joseph Benero, president of Global Aviation Insurance Services, testified as an expert witness. He stated that client lists are proprietary and confidential and constitute the lifeblood of the aviation...