Snowhite Textile & Furnishings, Inc. v. Innvision Hosp., Inc.

• Decision Date: 14 December 2020
• Docket Number: No. 05-18-01447-CV,05-18-01447-CV
• Parties: SNOWHITE TEXTILE AND FURNISHINGS, INC., Appellant v. INNVISION HOSPITALITY, INC., Appellee
• Court: Texas Court of Appeals

SNOWHITE TEXTILE AND FURNISHINGS, INC., Appellant v. INNVISION HOSPITALITY, INC., Appellee

No. 05-18-01447-CV

Court of Appeals Fifth District of Texas at Dallas

December 14, 2020

On Appeal from the 193rd Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-14-11252

MEMORANDUM OPINION

Before Justices Osborne, Partida-Kipness, and Pedersen, III

Opinion by Justice Pedersen, III

This suit arises from a dispute between two competitors in the furniture, fixture, and equipment ("FF&E") industry involving violation(s) of the Texas Uniform Trade Secrets Act ("TUTSA"), tortious interference with prospective business, and tortious interference with existing contracts. Following a bench trial, the district court rendered judgment in favor of the plaintiff, Innvision Hospitality, Inc. ("Innvision"). The defendant, Snowhite Textile and Furnishings, Inc. ("Snowhite"), appeals the judgment, asserting, among other issues, that the evidence is insufficient to support the district court's liability findings. We affirm the trial court's judgment.

I. BACKGROUND

A. Parties

Wyndham Hotels & Resorts ("Wyndham") is a franchisor for a number of hotel chains including Baymont, La Quinta, Microtel, and Super 8 ("brands"). Innvision and Snowhite are two designated service providers ("DSPs") for Wyndham. These companies compete to provide a suite of services to design and provide FF&E for the Wyndham brands. Wyndham submits leads on their franchisee's projects to their DSPs.¹ After a DSP receives a lead on a Wyndham project, the DSP prepares a preliminary quote—using the information provided by Wyndham—to place a bid with the franchisee on the project.

DSPs often use Wyndham-selected design schemes and manufacturers when working on a Wyndham project. DSPs access a file transfer protocol site maintained by Wyndham ("Wyndham FTP"), which contains information regarding Wyndham's (i) pre-approved schemes and product specifications, and (ii) pre-negotiated pricing with its vendors.

B. Baymont Odessa Project

Wyndham sent Innvision an advance lead for a franchisee named Brett Norwich to complete FF&E work on a Baymont brand project located in Odessa, Texas ("Odessa Project"). Although Wyndham projects often used generic orprototype scheme pricing from the Wyndham FTP, Innvision created a custom scheme for the Odessa Project. Innvision did not access information from the Wyndham FTP in creating its preliminary bid for the Odessa Project. In September 2013, Pride Parr submitted Innvision's preliminary bid to the Odessa Project customer. Parr worked in Innvision's "Regional Design and Procurement" group as a sales representative.

Several Innvision employees left to join Snowhite in 2013. Emile Aboona worked at Innvision until July 2013, when he resigned to work at Snowhite. Parr worked at Innvision from July 1, 2013 until the first full week of October 2013, when she resigned to work at Snowhite. Millette Gathright, Kevin Barbarise, and Radhika Khurana also left Innvision to work at Snowhite.

After Parr began work at Snowhite in October 2013, she emailed Emile Aboona—then Snowhite's Chief Operating Officer—documents that Innvision had generated for its preliminary bid on the Odessa Project. This email attached Innvision internal documents that were not shared with the Odessa Project customer. These documents were labeled "Innvision Design," and included specifications, renderings, room schemes, stock codes, descriptions, order quantities, unit costs, unit prices, and net values.

Recognizing the value of these documents, Aboona and Dipak Kapadia, who was Snowhite's founder and president, sought to obtain further Innvision material. Snowhite copied the former Innvision employees' laptops and solicited additionalinformation related to Innvision's bid on the Odessa Project from then-current and former Innvision employees. Snowhite used the Innvision documents and information that Aboona and the Snowhite information technology worker gathered to secure their own winning bid for the Odessa Project.

C. Innvision Litigation Against Snowhite

Innvision sued Snowhite for (i) violations of the TUTSA,² (ii) tortious interference with existing contracts, and (iii) interference with prospective business relations and contracts. Innvision also asserted claims against Aboona and Kapadia.

Innvision's claims against Snowhite and Aboona were tried before the trial court on October 23, 24, and 25, 2018.³ The trial witnesses included Christopher Parker, Innvision's president, co-owner, and co-founder; Kapadia; and Aboona. At the conclusion of the bench trial, the trial court rendered judgment in favor of Innvision, including (i) finding that Innvision owned trade secrets in the form of design and planning specifications, along with pricing and margins data, relating to its bid proposal for the Odessa Project; (ii) finding that Snowhite tortiously interfered with Innvision's prospective contract for the Odessa Project; (iii) finding that Innvision sustained an economic loss of $45,000.00; and (iv) awarding Innvision's attorney's fees against Snowhite. The trial court further ordered that Innvision takenothing on its claims against Aboona and dismissed those claims with prejudice. This appeal followed.

II. ISSUES RAISED ON APPEAL

Snowhite raises four issues on appeal.

1. Whether it was error to find liability under TUTSA where Appellee disclosed the purported "trade secrets" to a mutual third party customer, non-confidentially, before those materials were given to the Appellant?

2. Whether it was error to find Tortious Interference with Prospective Business where the alleged interference was Appellant submitting an identical "preliminary bid" to a mutual customer who had openly solicited competing bids, had not yet selected a vendor, and all of this in a bidding environment where much or all of such "preliminary bid" is dictated by the customer?

3. Whether it was error to find damages and/or consider evidence of lost profits at trial where a lost profits damages calculation was never disclosed and the actual evidence presented at trial was speculative and conclusory?

4. Whether it was error to award attorney's fees under TUTSA where the Appellee failed to properly segregate its fees, and there is no showing of "malice" to support the "willful & malicious misappropriation" element of such award?

Snowhite challenges (i) both the legal and factual sufficiency of the evidence and (ii) the admissibility of certain evidence.⁴

III. STANDARD OF REVIEW

"In an appeal from a bench trial, the trial court's findings of fact have the same weight as a jury verdict." Sheetz v. Slaughter, 503 S.W.3d 495, 502 (Tex. App.—Dallas 2016, no pet.) (citing Fulgham v. Fischer, 349 S.W.3d 153, 157 (Tex. App.-Dallas 2011, no pet.)). Here, the appellate record contains a reporter's record; therefore the trial court's findings of fact are not conclusive and are binding only if supported by the evidence. Id. "We review a trial court's findings of fact under the same legal and factual sufficiency of the evidence standards used when determining if sufficient evidence exists to support an answer to a jury question." Id. (citing Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994)).

i. Legal Sufficiency

"When an appellant challenges the legal sufficiency of an adverse finding on which he did not have the burden of proof at trial, he must demonstrate there is no evidence to support the adverse finding." Fulgham v. Fischer, 349 S.W.3d 153, 157 (Tex. App.—Dallas 2011, no pet.). We view the evidence in the light most favorable to the fact finding, indulging every reasonable inference that would support it and disregarding contrary evidence unless a reasonable factfinder could not. Bos v. Smith, 556 S.W.3d 293, 300 (Tex. 2018). "When reviewing the record, we determine whether any evidence supports the challenged finding." Fulgham, 349 S.W.3d at 157. "If more than a scintilla of evidence exists to support the finding, the legal sufficiency challenge fails." Id.; see Formosa Plastics Corp. USA v. Presidio Eng'rs& Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998); see also King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (more than a scintilla of evidence exists when evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions"). We defer to the trial court's fact findings if they are supported by legally sufficient evidence. Bos, 556 S.W.3d at 300.

ii. Factual Sufficiency

"When an appellant challenges the factual sufficiency of the evidence on an issue, we consider all the evidence supporting and contradicting the finding." Fulgham, 349 S.W.3d at 157 (citing Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989)). "We set aside the finding for factual insufficiency only if the finding is so contrary to the evidence as to be clearly wrong and manifestly unjust." Id. (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam)). In a bench trial, the trial court, as factfinder, is the sole judge of the credibility of the witnesses. Id. As long as the evidence falls 'within the zone of reasonable disagreement,' we will not substitute our judgment for that of the fact-finder. Id. (quoting City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)). In conducting a factual sufficiency review, we should detail the evidence relevant to the issue in consideration and clearly state why the finding is factually insufficient or is so against the great weight and preponderance as to be manifestly unjust, shock the conscience, or clearly demonstrate bias. Windrum v. Kareh, 581 S.W.3d 761, 781 (Tex. 2019).

iii. Admissibility of Evidence

We review a trial court's decision to admit or exclude evidence for an abuse of discretion. In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005) (per curiam). A trial court abuses its discretion when it acts "without reference to any guiding rules and principles"—if it acts arbitrarily or unreasonably. Downer v. ...