Oracle Elevator Holdco, Inc. v. Exodus Sols.
| Decision Date | 08 September 2021 |
| Docket Number | Civil Action 4:19-CV-4658 |
| Parties | ORACLE ELEVATOR HOLDCO, INC., Plaintiff, v. EXODUS SOLUTIONS, LLC, et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
FINDINGS OF FACT AND CONCLUSIONS OF LAW
On July 6 and 7, 2021, the Court held a bench trial on Plaintiff's claims. After Plaintiff rested, Defendants moved for a directed verdict. In a bench trial, such a motion is treated as a Motion for Judgment on Partial Findings pursuant to Rule 52(c) of the Federal Rules of Civil Procedure. After considering the record evidence parties' arguments, trial testimony, and exhibits, the Court determines that it must GRANT IN PART and DENY IN PART Defendant's motion. The Court submits the following Findings of Fact and Conclusions of Law pursuant to Rule 52(a)(1) of the Federal Rules of Civil Procedure.[1]
I. BACKGROUND
This is a business dispute between two elevator companies and various employees. Plaintiff Oracle Elevator Holdco, Inc. (“Plaintiff” or “Oracle”) filed the present suit in November 2019 against numerous Defendants asserting claims for breach of fiduciary duty; knowing participation in, as well as aiding and abetting, a breach of fiduciary duty; civil conspiracy; misappropriation of trade secrets under common law, the Defend Trade Secrets Act (“DTSA”), and the Texas Uniform Trade Secrets Act (“TUTSA”); tortious interference with contractual relations; tortious interference with prospective contracts fraud; conversion; common law theft; and unjust enrichment. (Doc. 1 at 3).
In April 2021, Plaintiff moved for partial summary judgment on a number of claims. (Doc. 49). The Court held a hearing and denied summary judgment as to all claims at issue. (Minute Entry 05/13/2021). In anticipation of trial and with Defendants' consent, Plaintiff amended its Complaint to narrow its claims. (Doc. 59). Plaintiff dismissed its claims of common law misappropriation of trade secrets, conversion and common law theft. Id. Plaintiff also dismissed from the case Defendants Shawn Avella, Jose Chavez, and Shaun Hicks. Id. The remaining Defendants are David Luxemburg, Sarah Luxemburg, Julia Avella, Exodus Solutions, LLC (“Exodus”), Jose “Alex” Rivera, and Anthony Avella.[2]
The Court heard sworn testimony and received exhibits in its two-day trial. Oracle rested its case, and Defendants moved for a judgment as a matter of law arguing that Plaintiff failed to show the existence of a trade secret, an independent tort that tortious interference of prospective contracts requires, and the existence of a fiduciary duty. After listening to the parties' arguments, the Court took Defendants' motion under advisement and Defendants presented their case. See Fed. R. Civ. P. 52(c) ().
II. LEGAL STANDARD
A motion for judgment as a matter of law made during a bench trial is treated as a motion for judgment on partial findings under Rule 52(c). Miles-Hickman v. David Powers Home, Inc., 613 F.Supp.2d 872, 879 (S.D. Tex. 2009) (citing Federal Ins. Co. v. HPSC, Inc., 480 F.3d 26, 32 (1st Cir. 2007)). Rule 52(c) of the Federal Rules of Civil Procedure provides that a court may enter judgment after a party has been “fully heard” on an issue during a nonjury trial. Fed.R.Civ.P. 52(c). A judgment on partial findings is appropriate when a claim or defense of the nonmoving party “can be maintained or defeated only with a favorable finding on that issue.” Id.
In considering a motion for judgment on partial findings, the court “is not required to draw any inferences in favor of the non-moving party.” Miles-Hickman, 613 F.Supp.2d at 880 (citing Ritchie v. United States, 451 F.3d 1019, 1023 (9th Cir. 2006)). Instead, the court's task is to evaluate all the evidence, resolve any conflicts, assess the witnesses' credibility, and resolve the case on the basis of the preponderance of the evidence. 9C Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2573.1 (3d ed. 2021).
A court entering judgment pursuant to Rule 52(c) must satisfy the requirements of Rule 52(a)(1) by “find[ing] the facts specially and stat[ing] its conclusions of law separately.” Fed.R.Civ.P. 52(c); Miles-Hickman, 613 F.Supp.2d at 880. In articulating findings of fact, Rule 52(a) “exacts neither punctilious detail nor slavish tracing of the claims issue by issue and witness by witness.” Cent. Marine Inc. v. United States, 153 F.3d 225, 231 (5th Cir. 1998) (quoting Burma Navigation Corp. v. Reliant Seahorse M/V, 99 F.3d 652, 656 (5th Cir. 1996)). The rule is satisfied where the findings present the reviewer with “a clear understanding of the basis for the decision.” Id. In accordance with Rule 52(a), the Court first lays out its findings of fact followed by its conclusions of law.
III. FINDINGS OF FACT
1. Oracle provides elevator services, including maintenance, repair, and modernization, throughout the United States. Oracle's branch offices that are relevant to this suit are located in Houston, Texas and Shreveport, Louisiana.
2. Exodus provides the same types of elevator services in the Houston area. (Tr. 1-80:15-17).[3] Exodus is owned and operated by Sarah Luxemburg and Julia Avella. (Tr. 1-80:11-14). Exodus was previously a construction company, but began providing elevator services in approximately March of 2019. (Tr. 1-80:15-24; 1-81:20-22).
3. David Luxemburg began working for Oracle in 2009. (Tr. at 1-149:24-150:1-4). Based on the conduct at issue, David Luxemburg was terminated on October 30, 2019, for failing to follow the company's handbook. (Tr. at 1-149:17-23).
4. David[4] served as Oracle's general manager for both the Houston branch and the Shreveport branch. As the general manager, David was responsible for the branch's growth and profits. (Tr. 2-9:3-7). This included training and management of personnel, managing customer relationships, and decisions regarding pricing and proposals. (Tr. at 1-28:16-25). He would make decisions on and submit proposals to customers on behalf of Oracle. (See, e.g., Pl. Exhs. 22, 24, 26). David also had access to information described as Oracle's “growth strategies, ” although it was not specified what that information entails. (Tr. 1-42:17-25).
5. In September 2018, David Baucom (“Baucom”), Oracle's regional vice president at the time, re-assigned David Luxemburg to manage only the Shreveport branch. (Tr. 2-12:9-14). Baucom believed the Houston branch had grown large enough that it was too large a responsibility for one manager to manage and grow both branches adequately. (Tr. 2-12:14-24). Since David Luxemburg was from Louisiana, he was re-assigned to Shreveport. (Tr. 2-12:22-24).
6. Baucom hired another general manager, Carlos Rosa, for the Houston branch. (Tr. 2-12:23-24; Tr. 1-63:4-7; Doc. 49-25 at ¶ 4 (Simmons Aff.)).
7. By February of 2019, Baucom re-assigned David Luxemburg as Houston's general manager. (Tr. 2-12:25-13:2). Rosa, the new general manager of Houston, was not growing Oracle's business and was not performing adequately with respect to customer relations and communications. (Tr. 2-13:3-14:2). Various customers complained about delays in work and about a lack of communication from the Houston branch. Many customers also expressed a preference for working with David Luxemburg. As a result, Baucom brought David Luxemburg back as Houston's general manager.
8. Baucom still intended to hire another general manager for Houston in the long-term, because he believed a general manager solely dedicated to Houston was needed to grow the branch further, but he felt the company could maintain relationships better with David Luxemburg. (Tr. 2-13:24-14:6).
9. Defendant Jose “Alex” Rivera was hired by Oracle in 2013 and resigned from his service technician position on October 28, 2019. (Simmons Aff. ¶ 5). Alex is the father of Sarah's children and is Shaun Hicks's half-brother. (Pl. Exh. 58 at 18:10-14, 61:15-18 (Sarah Tr.)). Alex has been an Exodus employee since November 29, 2019, and is currently a supervisor for Exodus. (Doc. 49-28 at No. 15; Tr. 1-88:10-11).
10. Defendant Anthony Avella is Julia Avella's husband. (Pl. Exh. 58 at 15:14-15). Previously dismissed defendant, Shawn Avella, is Anthony's brother. Anthony and Shawn are also both sons of Patrick Avella, who is discussed further infra. (Pl. Exh. 64 at 11:8-17 (Patrick Tr.)). Both Anthony and Shawn Avella previously worked for Oracle but resigned from their modernization technician positions on October 28, 2019. (Simmons Aff. ¶¶ 6-7). Anthony and Shawn Avella currently work for Exodus as a technician and a helper, respectively. (Doc. 49-28 at No. 15; Tr. 1-88:20-89:9).
11. Jose Chavez and Shaun Hicks are also previous Oracle employees who resigned from Oracle on October 4, 2019 and August 19, 2019, respectively. (Simmons Aff. ¶¶ 8-9). Chavez has worked for Exodus since October 7, 2019, and Hicks briefly worked for Oracle in May and June of 2020. (Doc. 49-28 at No. 15; Tr. 1-89:16-23, 88:12-17).
12. Boxer Property Management Corporation (“Boxer”) is a property management company and one of Oracle's former customers for elevator services. (Pl. Exhs. 3-8; Tr. 2-46:4-24). There is no longer a relationship between Boxer and Oracle. However, all of the projects at issue are projects for Boxer.
13. Patrick Avella, the father of Anthony and Shawn Avella, is a chief engineer consultant at Boxer, which is akin to a project manager, and includes managing any major projects at properties managed by Boxer. (Tr. 2-46:8-12). Patrick was a primary point of contact on behalf of Boxer with Oracle at the relevant time, including the general managers (David Luxemburg and Carlos Rosa) and the regional vice president (David...
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