United Mobile Networks, L.P. v. Deaton
| Decision Date | 21 February 1997 |
| Docket Number | No. 96-0863,96-0863 |
| Citation | 40 Tex. Sup.Ct. J. 360,939 S.W.2d 146 |
| Parties | 40 Tex. Sup. Ct. J. 360 UNITED MOBILE NETWORKS, L.P., Petitioner, v. Ronny DEATON and Barbara Deaton, Respondents. |
| Court | Texas Supreme Court |
This case involves the proper proof of the measure of damages in a conversion case. United Mobile Networks, L.P. (UMN) sued Ronny and Barbara Deaton for breach of a noncompetition agreement, tortious interference with contract, conversion and civil conspiracy. The trial court rendered judgment on the jury's verdict for UMN. The court of appeals deleted the damages award for breach of the noncompetition agreement and reversed the trial court's judgment against the Deatons on UMN's civil conspiracy claim. 926 S.W.2d 756. The court of appeals affirmed the jury's conversion finding, but remanded the case in part, holding that there was insufficient evidence to support the jury's damage award on UMN's conversion claim. We disagree with the court of appeals. Because UMN did not offer any competent evidence to support damages for conversion, we reverse that part of the court of appeals' judgment and render judgment that UMN take nothing against the Deatons. Otherwise, we affirm the court of appeals' judgment.
In 1990, UMN purchased Ronny's two-way radio business for $1.5 million. UMN paid $450,000 for Ronny's customer list as part of the purchase. Ronny agreed to continue to manage part of the business for five years. Their employment agreement included a covenant that Ronny would not compete for three years after leaving UMN. In November 1993, Ronny voluntarily left UMN. UMN agreed to allow Ronny to continue selling radios independently, provided that the radios would be programmed into UMN's system. Except for selling radios, however, UMN insisted that Ronny continue to comply with the noncompete covenant. When he left UMN, Ronny took a copy of UMN's customer list. In January 1994, UMN informed Ronny he was violating the noncompetition agreement and directed him to stop selling radios. UMN does not dispute that Ronny did not sell any more radios after this time.
After Ronny left UMN, his wife, Barbara, and their two sons remained employed by UMN. In December 1993, UMN fired Barbara because of an alleged conflict with a UMN salesman. Immediately thereafter, Barbara applied to the FCC for licenses to establish a system to compete with UMN. She also opened a business to sell two-way radios. Barbara's new business employed Ronny.
In March 1994, UMN sued for a declaration that the noncompetition agreement was valid and enforceable against Ronny. UMN also sought an injunction against Ronny for breach of the noncompetition agreement. UMN later added Barbara as a defendant. UMN sought damages from Ronny and Barbara for conversion, tortious interference, breach of fiduciary duty, breach of contract, breach of lease and civil conspiracy. The Deatons counterclaimed, alleging illegal restraint of trade and an illegal monopoly.
The jury found that: (1) Ronny and UMN agreed that the noncompetition agreement remained in effect after he voluntarily left UMN, (2) Ronny breached the covenant, (3) Ronny converted a copy of UMN's customer list, (4) UMN should recover damages for breach of the noncompetition agreement and conversion and (5) Barbara and Ronny Deaton entered into a civil conspiracy. The trial court reformed the noncompetition agreement's geographic boundaries and entered judgment for $100,000 for UMN on its breach of the noncompetition agreement claim. The trial court also rendered judgment on UMN's conversion claim, rendering judgment for $500,000 damages. The trial court also rendered judgment on UMN's civil conspiracy claim and imposed joint and several liability against Ronny and Barbara for the entire judgment.
The court of appeals upheld the trial court's geographic reformation of the noncompetition agreement. However, the court of appeals held that reformation of the area precluded the recovery of damages for breach of the noncompetition agreement before the reformation. See TEX. BUS. & COM.CODE § 15.51(c)(reformation of geographic area precludes...
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