Texas Integrated Conveyor Systems, Inc. v. Innovative Conveyor

• Decision Date: 06 October 2009
• Docket Number: No. 05-08-00654-CV.,05-08-00654-CV.
• Citation: 300 S.W.3d 348
• Parties: TEXAS INTEGRATED CONVEYOR SYSTEMS, INC., Appellant v. INNOVATIVE CONVEYOR CONCEPTS, INC., Gregory Scott Terry, Michael Todd Terry, and David Batchelder, Appellees.
• Court: Texas Court of Appeals

300 S.W.3d 348

TEXAS INTEGRATED CONVEYOR SYSTEMS, INC., Appellant v. INNOVATIVE CONVEYOR CONCEPTS, INC., Gregory Scott Terry, Michael Todd Terry, and David Batchelder, Appellees.

No. 05-08-00654-CV.

Court of Appeals of Texas, Dallas.

October 6, 2009.

Jonathan M. LeBlanc, The LeBlanc Law Firm, Dallas, TX, for Appellant.

Harold Dean Jones, Jessica R. Brown, Law Offices of Anderson and Jones, PLLC, Dallas, TX, for Appellee.

Before Justices RICHTER, LANG, and MURPHY.

OPINION ON MOTION FOR REHEARING

Opinion By Justice LANG.

On August 27, 2009, this Court issued an opinion affirming in part, reversing in part, and vacating in part the trial court's judgment and remanding this case to the trial court for further proceedings consistent with that opinion. Appellees Innovative Conveyor Concepts, Inc., Gregory Scott Terry, Michael Todd Terry, and David Batchelder (collectively, the "Innovative Conveyor defendants") filed a motion for rehearing on September 14, 2009.¹ We deny the Innovative Conveyor defendants' motion for rehearing. In addition, we withdraw our August 27, 2009 opinion and vacate the judgment of that date. This is now the opinion of the Court.

This case involves claims asserted by an employer, Texas Integrated Conveyor Systems, Inc. ("Texas Integrated"), against its former employees and others for, inter alia, breach of a non-compete agreement, misappropriation of trade secrets, and fraud. Texas Integrated, a subsidiary of American Conveyor Group, appeals the trial court's order granting the motions of the Innovative Conveyor defendants for traditional and no-evidence summary judgment dismissing Texas Integrated's claims and order denying Texas Integrated's motion for new trial. Additionally, Texas Integrated appeals the trial court's order imposing sanctions and order denying its motion to reconsider and vacate that order.

In five issues, Texas Integrated argues the trial court erred when it: (1) denied Texas Integrated's motion for new trial because Texas Integrated had no notice the hearing on the no-evidence motions for summary judgment had been changed or canceled; (2) denied Texas Integrated's motion for new trial without considering the timely filed new evidence; (3) granted the Innovative Conveyor defendants' motions for traditional summary judgment because Texas Integrated raised genuine issues of material fact; (4) granted the Innovative Conveyor defendants' motions for no-evidence summary judgment because Texas Integrated presented more than a scintilla of evidence supporting each of its causes of action; and (5) imposed sanctions against Texas Integrated and denied its motion to reconsider or vacate the order imposing sanctions.

We conclude the trial court erred when it denied Texas Integrated's motion for new trial as to the Innovative Conveyor defendants' motions for no-evidence summary judgment because Texas Integrated was denied due process as to those motions. In addition, we conclude the trial court properly granted the motion of Innovative Conveyor for traditional summary judgment as to the claim of civil conspiracy against it, but erred in granting the motions of the Integrated Conveyor defendants for traditional summary judgment as to all other claims. Finally, we conclude the trial court abused its discretion when it imposed the discovery sanctions at issue against Texas Integrated. As described in detail below, the trial court's judgment is affirmed in part, reversed in part, and vacated in part, and this case is remanded to the trial court for further proceedings consistent with this opinion.

I. PROCEDURAL BACKGROUND

The Innovative Conveyor defendants filed a total of eight motions for summary judgment, four seeking no-evidence summary judgment and four seeking traditional summary judgment. The four motions for no-evidence summary judgment state they were based on Texas Integrated's petition that was filed in February 2007. The four motions for traditional summary judgment state they were based on Texas Integrated's second amended petition that was filed on July 25, 2007. Neither Texas Integrated's February 2007 petition nor its second amended original petition is in the clerk's record. The only petition of Texas Integrated in the record is its December 10, 2007 fourth amended original petition. In that petition, Texas Integrated alleges an array of claims against, among others, the Innovative Conveyor defendants, and seeks a permanent injunction, damages, and attorneys' fees. The Innovative Conveyor defendants' answer is not in the clerk's record.

The Innovative Conveyor defendants' four no-evidence summary judgment motions were filed in July 2007 and were set and reset for hearing on several occasions. The last notice of hearing sent to Texas Integrated was dated January 22, 2008 and provided the four no-evidence motions would be heard March 7, 2008 at 9:30 a.m. The Innovative Conveyor defendants each filed a traditional summary judgment motion pursuant to Texas Rule of Civil Procedure 166a(c) on September 11, 2007. The hearing on those four motions was set for February 8, 2008.

At the time of the February 8, 2008 hearing, the fourth amended original petition was the current pleading. At the commencement of the hearing, the parties advised the trial court the no-evidence summary judgment motions were set for a hearing on March 7, 2008. The trial court told counsel to proceed on the "four motions for summary judgment." However, following the hearing, the trial court signed an order on February 18, 2008 granting all eight motions for traditional and no-evidence summary judgment. The order specifically dismissed with prejudice the claims of Texas Integrated against the Innovative Conveyor defendants for (1) breach of non-compete agreement, (2) conversion, (3) breach of fiduciary duty, (4) fraud/constructive fraud, (5) misappropriation/theft of trade secrets, (6) tortious interference with existing contracts, (7) tortious interference with prospective contracts, (8) breach of confidentiality agreement, (9) civil conspiracy, (10) misappropriation/theft of funds, (11) unjust enrichment/equitable relief, (12) violations of theft liability act, (13) alter ego, (14) respondeat superior, and (15) permanent injunctive relief. In addition, the order provided that Texas Integrated "take nothing against [the Innovative Conveyor defendants] by its suit," ordered costs taxed against Texas Integrated, and contained a "Mother Hubbard" clause.²

As part of our analysis in this matter, we must determine whether the eight motions for summary judgment actually addressed all of the claims asserted by Texas Integrated in its fourth amended original petition. We must compare the claims asserted, the claims addressed in the motions for summary judgment, and the trial court's ruling on the summary judgment motions. Accordingly, to simplify these facts, which would otherwise need to be tediously described in additional numerous paragraphs, we set out below a chart that shows the claims pending against each Innovative Conveyor defendant at the time of the February 8, 2008 hearing.³ In the chart, (1) the claims for which each Innovative Conveyor defendant sought no-evidence summary judgment are indicated with an "N," (2) the claims for which each Innovative Conveyor defendant sought traditional summary judgment pursuant to rule 166a(c) are indicated with a "T," and (3) the claims on which the trial court expressly granted summary judgment are indicated with an "X."

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Texas Integrated filed a joint response to all eight motions for summary judgment, which was before the trial court at the time of the February 8, 2008 hearing. Texas Integrated also filed a second supplemental response to the no-evidence motions on February 26, 2008. Such filing would have been timely for the hearing scheduled for March 7, 2008.

After the trial court signed the February 18, 2008 order granting judgment for all of the Innovative Conveyor defendants, Texas Integrated filed a motion for new trial on March 14, 2008 based on the following "points of error": (1) Texas Integrated did not receive notice the scheduled March 7, 2008 hearing on the no-evidence motions had been canceled or changed, (2) the trial court's granting of the Innovative Conveyor defendants' motions for traditional summary judgment constituted reversible error because an issue of fact was created by Texas Integrated's responses to those motions and movants were not entitled to judgment as a matter of law, (3) the trial court's granting of the Innovative Conveyor defendants' motions for no-evidence summary judgment constituted reversible error because Texas Integrated presented more than a scintilla of evidence to defeat those motions, (4) the trial court's granting of the Innovative Conveyor defendants' motions for no-evidence summary judgment constituted reversible error because the trial court did not consider new evidence that was timely filed by Texas Integrated, and (5) the trial court's issuing of the order as to sanctions was an abuse of discretion and contrary to current Texas law. Following an April 9, 2008 hearing on Texas Integrated's motion for new trial, the trial court signed an order on April 14, 2008, denying the motion. The trial court did not specify the grounds for denial.

During the discovery phase and prior to the motions for summary judgment, the Innovative Conveyor defendants filed a motion seeking the imposition of sanctions against Texas Integrated for abuse of the discovery process. After a hearing, the trial judge for the 101st District Court of Dallas County granted the motion. Subsequent to that order, Texas Integrated filed its second motion seeking recusal of the trial judge for the 101st District Court, alleging ex parte communications with counsel for the Innovative Conveyor defendants and reliance on extrajudicial sources to formulate opinions as...