Roberts v. Overby-Seawell Company et alBrief/Memorandum in SupportN.D. Tex.June 16, 2017IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION DAVID ROBERTS § § Plaintiff, § § vs. § Civil Action No. 3:15-CV-1217 § OVERBY-SEAWELL COMPANY, § BRECKENRIDGE INSURANCE § GROUP, INC., and § BRECKENRIDGE IS, INC. § § Defendants. § PLAINTIFF’S BRIEF IN SUPPORT OF HIS MOTION FOR SUMMARY JUDGMENT LAW OFFICES OF BRAD JACKSON 3701 Turtle Creek Boulevard Suite 12G Dallas, Texas 75219 Brad Jackson State Bar Card No. 10496460 brad@bradjackson.com Cheryl L. Mann State Bar Card No. 00794220 cheryl@bradjackson.com Telephone No. 214/526-7800 Telefax No. 214/526-1955 ATTORNEYS FOR PLAINTIFF DAVID ROBERTS Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 1 of 46 PageID 703 TABLE OF CONTENTS TABLE OF CONTENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii SUMMARY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PROCEDURAL BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 UNDISPUTED FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 No Issue of Material Facts Exists as to Roberts’ Breach of Contract Claim. . . . . . . . . . . . . . . . . . 9 OSC and Breckenridge IS Have No Evidence to Support Their Counterclaims. . . . . . . . . . . . . . 16 Defendants Have No Evidence of Their Affirmative Defenses.. . . . . . . . . . . . . . . . . . . . . . . . . . 29 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 PRAYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ii Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 2 of 46 PageID 704 INDEX OF AUTHORITIES CASES PAGE Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Blankinship v. Brown, 399 S.W.3d 303 (Tex.App.-Dallas 2013, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Burrell v. Dr. Pepper/Seven Up Bottling Grp., Inc., 482 F.3d 4080 (5th Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Celotex Corp. v. Catrett, 477 U.S. 317 (1986).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10 City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515 (Tex. 1968) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 City of The Colony v. North Texas Mun. Water Dist., 272 S.W.3d 699 (Tex.App.-Ft. Worth 2008, pet dism’d). . . . . . . . . . . . . . . . . . . . . . . . . 40 Cooper v. Cochran, 288 S.W.3d 522 (Tex.App.-Dallas 2009, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Davis v. Grammar, 750 S.W.2d 766 (Tex.1988).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Ferguson v. Building Materials Corp., 295 S.W.3d 642 (Tex. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Flath v. Garrison Pub. Sch. Dist., 82 F.3d 244 (8th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Foley v. Daniel, 346 S.W.3d 687 (Tex. App.-El Paso 2009, no pet.) .. . . . . . . . . . . . . . . . . . . . . . . . 10, 24 Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388 (5th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Graham Mortg. Corp. v. Hall, 307 S.W.3d 472 (Tex. App.-Dallas 2010, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Harris County v. Smoker, 934 S.W.2d 714 (Tex.App.-Houston[1st Dist] 1996, writ denied). . . . . . . . . . . . . . . . . . 31 iii Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 3 of 46 PageID 705 Honeycutt v. Billingsley, 992 S.W.2d 570 (Tex.App.-Houston[1st Dist.] 1999, pet. denied).. . . . . . . . . . . . . . . . . 32 Hycarbex, Inc. v. Anglo-Suisse, Inc., 927 S.W.2d 103 (Tex.App.-Houston[14th Dist.] 1996, no writ). . . . . . . . . . . . . . . . . . . 33 J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245 (1st Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Johnson & Higgins v. Kenneco Energy, Inc., 962 S.W2d 507 (Tex. 1998).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Lopez v. Munoz, Hockma & Reed, L.L.P., 22 S.W.3d 857 (Tex. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Mandell v. Hamman Oil and Ref. Co., 822 S.W.2d 153 (Tex.App.-Houston [1st Dist.] 1991, writ denied). . . . . . . . . . . . . . . . 35 Mathews v. Sun Oil Co., 411 S.W.2d 561 (Tex.App.-Amarillo 1966), aff’d, 425 S.W.2d 330 (Tex. 1968). . . . . . 38 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Money v. Dameron, 70 S.W.2d 291 (Tex. Civ. App.--Amarillo 1933, writ refused).. . . . . . . . . . . . . . . . . . . . 35 Nagle v. Nagle, 633 S.W.2d 796 (Tex. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Paciwest, Inc. v. WarnerAlan Properties, LLC, 266 S.W.3d 559 (Tex.App.-Fort Worth 2008, pet. denied). . . . . . . . . . . . . . . . . . . 7, 8, 31 Priem v. Shires, 697 S.W.2d 86 (Tex.App.-Austin 1985, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Soto v. William's Truck Serv., Inc., 2013 WL 487070, at *3 (N.D.Tex. Feb.8, 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 iv Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 4 of 46 PageID 706 Stowers v. Harper, 376 S.W.2d 34 (Tex.App.-Tyler 1964, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . 39 TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754 (5th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Transamerica Ins. Co. v. Avenell, 66 F.3d 715 (5th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Triton 88, L.P. v. Star Elec., L.L.P., 411 S.W.3d 42 (Tex.App.-Houston[1st Dist.] 2013, no pet.). . . . . . . . . . . . . . . . . . . . . . 30 Truly v. Austin, 744 S.W.2d 934 (Tex.1988).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Twister B.V. v. Newton Research Partners, LP, 364 S.W.3d 428 (Tex. App. -Dallas 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773 (Tex. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Williams v. Colthurst, 253 S.W.3d 353 (Tex.App.-Eastland 2008, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Winegar v. Martin, 304 S.W.3d 661 (Tex.App.-Fort Worth 2010, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . 34 STATUTES Fed. R. Civ. P. 30(b)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Fed. R. Civ. P. 56(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9 Tex. Civ. Prac. & Rem. Code §33.002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Tex. Civ. Prac. & Rem. Code §134A.002(6).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 v Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 5 of 46 PageID 707 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION DAVID ROBERTS § § Plaintiff, § § vs. § Civil Action No. 3:15-CV-1217 § OVERBY-SEAWELL COMPANY, § BRECKENRIDGE INSURANCE § GROUP, INC., and § BRECKENRIDGE IS, INC. § § Defendants. § PLAINTIFF’S BRIEF IN SUPPORT OF HIS MOTION FOR SUMMARY JUDGMENT Plaintiff, David Roberts hereby submits his Plaintiff’s Brief in Support of His Motion for Summary Judgment against Defendants Overby-Seawell Company (“OSC”), Breckenridge Insurance Group, Inc. (“Breckenridge Insurance Group”) and Breckenridge IS, Inc. (“Breckenridge IS”). SUMMARY Plaintiff David Roberts seeks summary judgment on his claim for breach of contract. Roberts shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law on his breach of contract claim. Specifically, there is a valid contract, the April 1, 2014 OSC Commission Structure, and despite Roberts’ performance, Defendants breached the contract by failing to pay Roberts commissions in accordance with the contract. Roberts seeks summary judgment on OSC and Breckenridge IS’ claims for breach of fiduciary duty, fraud by non-disclosure, misappropriation of trade secrets, and breach of contract. Specifically, as to the breach of fiduciary duty claim, Breckenridge IS has no evidence Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 6 of 46 PageID 708 that a fiduciary duty exists between it and Roberts. Neither OSC nor Breckenridge IS have any evidence to support that Roberts breached his fiduciary duty. There is no evidence to support OSC and Breckenridge’s allegations of breach that Roberts: (1) formed competing entities; or (2) usurped business opportunities from OSC and Breckenridge IS for his own gain. OSC and Breckenridge IS’ third allegation that Roberts breached his fiduciary duty by demanding payment for commissions he was not due is without merit. There is no evidence of damages. With respect to fraud by non-disclosure, there is no evidence that Roberts was provided any trade secrets. And, even if he were provided trade secrets, there is no evidence Roberts used trade secrets without authorization. There is no evidence of damages. Regarding OSC and Breckenridge IS’ claim for breach of contract, first Breckenrige IS is not a party to the Confidentiality Agreement which is the contract Roberts allegedly breached. Further, there is no evidence that Roberts breached the agreement. While, in their counterclaim, OSC and Breckenridge list the sections of the agreement and allege breach of each one, there is no evidence that Roberts breached any section of the agreement. Lastly, Roberts seeks summary judgment on Defendants’ affirmative defenses where Defendants bear the ultimate burden of proving the defense because Defendants are unable to establish each essential element of the defenses as outlined below. PROCEDURAL BACKGROUND 1. On March 24, 2015, Roberts filed his Plaintiff’s Original Petition in Dallas County, Texas district court. Defendants removed the case to this Court. 2 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 7 of 46 PageID 709 2. On September 23, 2015, Roberts filed his Plaintiff’s Second Amended Complaint. (Doc. 19) In the second amended complaint, Roberts asserted claims for breach of contract, promissory estoppel, quantum meruit and declaratory judgment. 3. On October 14, 2015, Defendants filed their Defendants’ Answer to Plaintiff’s Second Amended Complaint and Overby-Seawell Company and Breckenridge IS’ Counterclaims Against Plaintiff. (Doc. 20) The counterclaims asserted by Defendant OSC and Breckenridge IS against Roberts are for breach of fiduciary duty, fraud by non-disclosure, misappropriation of trade secrets, and breach of contract. UNDISPUTED FACTS 4. OSC is a Managing General Agency (MGA) which works with banks, credit unions, mortgage servicers and real estate investors to provide coverage on cars, residential housing, commercial buildings and other types of collateral. Roberts Dec., ¶3, APP. 001. The “parent company” with whom OSC and Breckenridge Insurance Group are affiliated is Breckenridge IS. Roberts Dec., ¶3, APP. 001. OSC provides “force placed”1 insurance coverage. Roberts Dec., ¶3, APP. 002. Roberts has worked in this area of the insurance industry for 20 years. Roberts Dec., ¶3, APP. 002. His primary focus is on large accounts in the mortgage servicing space. Roberts Dec., ¶3, APP. 002. Roberts started work with Breckenridge IS, OSC and Breckenridge Insurance Group2 in May of 2011. Roberts Dec., ¶3, APP. 002. He was 1Force-placed insurance is an insurance policy placed by a lender, bank or loan servicer on collateral when the collateral owners’ own insurance is cancelled, has lapsed or is deemed insufficient and the borrower does not secure a replacement policy. This insurance allows the lender to protect its financial interest in the collateral. 2Roberts was paid by and entered in a “Confidentiality Agreement” with OSC at the inception of his employment. Roberts Dec., ¶2, Ex. 3, APP. 002. Roberts’ termination letter was from Breckenridge Insurance Group but was signed by James Robertson, his immediate supervisor and an employee of OSC. 3 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 8 of 46 PageID 710 compensated under a base plus commission plan. Roberts Dec., ¶3, APP. 002. 5. Roberts brought in approximately $1,000,000 in premiums his first year. Roberts Dec., ¶4, APP. 002. In January of 2012, Roberts signed his largest account Shellpoint Loan Servicing (“Shellpoint”). Roberts Dec., ¶4, APP. 002. Shellpoint accounted for $9,000,000 in premiums in 2012 and grew to an annual premium exceeding $20,000,000. Roberts Dec., ¶4, APP. 002. 6. Initially, Defendants paid Roberts in accordance with their commission agreement.3 Roberts Dec., ¶5, APP. 002. Beginning in October 2013, Roberts had questions about whether he was being paid correctly. Roberts Dec., ¶5, APP. 002. In the Fall of 2013 and Spring of 2014, Defendants sought salespeople’s input relating to a new commission structure and a OSC implemented a new structure effective on April 1, 2014. Roberts Dec., ¶5, APP. 002. 7. Beginning in May 2014, the Shellpoint business no longer included a subagent commission. Roberts Dec., ¶6, APP. 003. As a result, under OSC’s commission structure, Roberts’ commission percentage was to increase from 5% to 12.5%.4 Roberts Dec., ¶6, APP. 003. Defendants did not want to pay Roberts 12.5% as required by the Commission Agreement. Roberts Dec., ¶6, APP. 003. Defendants contended that the elimination of the subagent translated into increased expenses for Defendants and, although their agreement did not provide for it, Defendants attempted to negotiate a reduction in commissions with Roberts. Roberts Dec., Breckenridge IS has filed counterclaims against Roberts in this case. (Doc. 20); Roberts Dec., ¶2, Ex. 4, APP. 002. 3A copy of the original written commission agreement covering Roberts, while not at issue in this case, is contained in the Appendix for comparison purposes. Roberts Dec., ¶5, Ex. 1; APP. 002. 4A copy of the April 1, 2014 OSC Commission Structure (“Commission Agreement”) is contained in the Appendix. Roberts Dec., ¶5, Ex. 2; APP. 002. 4 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 9 of 46 PageID 711 ¶6, APP. 003. In an effort to ascertain the validity of Defendants’ position, Roberts asked questions and requested specific information. Roberts’ questions were never answered to his satisfaction and the information provided was insufficient or inconsistent with the position asserted by Defendants. Roberts Dec., ¶6, APP. 003. No agreement was reached. Roberts Dec., ¶6, APP. 003. Nonetheless, Defendants unilaterally reduced Roberts’ commission checks by $35,000 per month, purportedly to account for the increased expenses, in contravention of the clear terms of the commission agreement. Roberts Dec., ¶6, APP. 003. 8. Further, along with the initial or “front end” commission, Defendants receive additional revenue through contingent commissions, also called profit commission. Roberts Dec., ¶8, APP. 004. Contingent commissions are based on the profitability of the insurance carrier due to the business generated for them by Defendants. Roberts Dec., ¶8, APP. 004. The Commission Agreement provided that Roberts would be paid a percentage of all revenue generated by the business he sold. Roberts Dec., ¶8, APP. 004. Defendants have refused to pay Roberts any commission for the contingent commission revenue received by Defendants, even though Roberts’ Commission Agreement clearly provides that he is entitled to a percentage of all revenue received by Defendants. Roberts Dec., ¶8, APP. 004. 9. Defendants terminated Roberts’ employment on March 20, 2015. Roberts Dec., ¶9, APP. 005. Defendants alleged misconduct against Roberts in his termination letter and threatened him with both civil and criminal legal actions. Roberts Dec., ¶9, APP. 005. Roberts subsequently sued Defendants for his unpaid commissions. Roberts Dec., ¶9, APP. 005. Defendants asserted counterclaims alleging that Roberts had surreptitiously competed with Defendants using Defendants’ confidential information, which Roberts denies. Roberts Dec., ¶9, 5 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 10 of 46 PageID 712 APP. 005. Among other things, Defendants asserted a claim against Roberts claiming that certain entities that Roberts owned in whole or part, specifically: EquiGuard Agency, Inc., Tech2ROI LLC, Consolidated Platform Resources LLC, Amerifirst Direct, Pacific Southwest LLC, Lendwell, LLC and DFR Properties, LLC., were competing against Defendants and that Roberts was using Defendants alleged trade secrets and spending his time working for the entities to Defendants detriment. Roberts Dec., ¶9, APP. 005. 10. Plaintiff formed Equiguard Agency, Inc. (“Equiguard Agency”) in 2003. Roberts Dec., ¶10, APP. 005 Equiguard Agency has sold, in the past, Landlord Package policies, life insurance, annuities and related products but these programs were discontinued by 2010. Roberts Dec., ¶10, APP. 005. Equiguard Agency’s only current product is a mortgage lien protection product. Roberts Dec., ¶10, APP. 006. 11. Roberts also uses the Equiguard Agency’s website as a lead generation tool.Roberts Dec., ¶11, APP. 006. Equiguard Agency’s website advertises programs such as force placed insurance, tracking services and voluntary homeowner’s coverage but Roberts has sold these programs through his employers, including his previous employers and subsequently for OSC. Roberts Dec., ¶11, APP. 006. During Roberts employment with OSC, Roberts obtained three leads from the Equiguard Agency site, all of which he provided to and placed through OSC: First Republic Investments, Alaska Financial Group d/b/a/ McKinley Mortgage Co., and Colonial Funding Group. Equiguard Agency was also contacted by Drexler Insurance Agency requesting information about a certain insurance product involving voluntary homeowner’s coverage. Roberts Dec., ¶11, APP. 006. Roberts responded that OSC had such a product that would be available in the near future and forwarded information regarding a 6 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 11 of 46 PageID 713 program that was under development but which had not yet been launched by OSC. Roberts Dec., ¶11, APP. 006. 12. Amerifirst Direct was a d/b/a for Equiguard Agency filed in Dallas, Collin, Tarrant, Smith and Denton counties for the purpose of selling annuities. Roberts Dec., ¶12, APP. 007. Equiguard Agency’s annuity program was discontinued in May of 2009. Roberts Dec., ¶12, APP. 007. 13. Pacific SW LLC (“Pacific”) was formed by Roberts in 2007 with the intent of purchasing investment real estate. Roberts Dec., ¶13, APP. 007. Plaintiff filed a d/b/a for Pacific in Collin County named DFR Properties. Roberts Dec., ¶13, APP. 007. Roberts opened a bank account for Pacific but has never transacted any business under this entity. Roberts Dec., ¶13, APP. 007. 14. Tech2ROI, LLC (“Tech2ROI”) was formed in 2010 with a business partner to invest in technology ventures. Roberts Dec., ¶14, APP. 007. Those business include Consolidated Platform Resources and Lendwell. Roberts Dec., ¶14, APP. 007. Consolidated Platform Resources was never an operating business. Roberts Dec., ¶14, APP. 007. Lendwell is still in the development stage. Roberts Dec., ¶14, APP. 007. ARGUMENT Summary Judgment Standard Summary judgment is proper in any case where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552 (1986). Summary judgment is proper if “the pleadings, depositions, answers to interrogatories, 7 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 12 of 46 PageID 714 and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; there must be an absence of any genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505 (1986). An issue is “material” if its resolution could affect the outcome of the action. Burrell v. Dr. Pepper/Seven Up Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007). “[A]nd a fact is genuinely in dispute only if a reasonable jury could return a verdict for the non-moving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving party bears the initial burden of informing the court of all evidence demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). Only when the moving party has discharged this initial burden does the burden shift to the non-moving party to demonstrate that there is a genuine issue of material fact. Id. at 322. “For any matter on which the non-movant would bear the burden of proof at trial . . . , the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial.” Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718-19 (5th Cir. 1995); see also Celotex, 477 U.S. at 323-25. To prevent summary judgment, “the non-moving party must come forward with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348 (1986) (quoting Fed. R. Civ. P. 56(e)). The non-movant cannot avoid summary judgment simply by presenting “conclusory allegations and denials, speculation, improbable inferences, 8 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 13 of 46 PageID 715 unsubstantiated assertions, and legalistic argumentation.” TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). A defendant who seeks summary judgment on a plaintiff’s claim must demonstrate the absence of a genuine issue of material fact by either 1) submitting summary-judgment evidence that negates the existence of a material element of plaintiff’s claim or 2) showing there is no evidence to support an essential element of plaintiff’s claim. J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251(1st Cir. 1996); see Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. at 2552. Summary judgment is also proper when the questions to be decided are issues of law. Flath v. Garrison Pub. Sch. Dist., 82 F.3d 244, 246 (8th Cir. 1996). A plaintiff moving for summary judgment on an affirmative defense, where defendant bears the ultimate burden of proving the defense, may satisfy its burden by showing the absence of evidence for an essential element of the defense. See Soto v. William’s Truck Serv., Inc., 2013 WL 487070, at *3 (N.D.Tex. Feb.8, 2013) (citing F.D.I.C. v. Giammettei, 34 F.3d 51, 54 (2d Cir.1994); Celotex Corp., 477 U.S. at 323-24). No Issue of Material Facts Exists as to Roberts’ Breach of Contract Claim Roberts is entitled to summary judgment on his breach of contract claim against Defendants. “The elements of a claim for breach of contract are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App.-El Paso 2009, no pet.). Further, “It is the general rule of the law of contracts that where an unambiguous writing has been entered into between the parties, the 9 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 14 of 46 PageID 716 Courts will give effect to the intention of the parties as expressed or as is apparent in the writing.” City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex. 1968). “In the usual case, the instrument alone will be deemed to express the intention of the parties for it is objective, not subjective, intent that controls.”5 Id. The Commission Agreement The contract at issue is the April 1, 2014 Commission Agreement, which was drafted by OSC and presented to Roberts. Roberts Dec., ¶005, Ex.1; APP. 002, 012. No party disputes the validity of the agreement as the parties acted under the agreement for several months. Additionally no party disputes that Roberts is entitled to and earned commissions under the Commission Agreement. Roberts Dec., ¶5, APP. 002. The dispute arises over whether Roberts is owed commissions on contingent commission payments to OSC and whether the reduction of his commissions for the Shellpoint account was allowed under the Commission Agreement. Roberts alleges that Defendants breached their agreement by: (1) failing to pay him commission on the contingent commissions received by OSC; and (2) unilaterally reducing his commission by $35,000 per month on the Shellpoint account. Roberts’ claim is based on the plain wording of the Commission Agreement. With regard to contingent commissions, the Commission Agreement provided that Roberts was to be paid a percentage of “OSC Gross Revenue.” Roberts Dec., ¶005, Ex.1; APP. 002, 012. With regard to the Shellpoint account, the Commission Agreement provided that Roberts was to be paid a commission of 12.5% of “OSC Gross Revenue.” Roberts Dec., ¶005, Ex.1; APP. 002, 012. Contingent Commissions 5No party has pleaded ambiguity. 10 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 15 of 46 PageID 717 What is a contingent commission? Is it revenue? According to Defendants’ executives, including Eugene Norton6, OSC’s Vice-President of Accounting, contingent commission is something that is “calculated contingent on the profitability of a business, of a book of business...” Norton Depo. at 83:10-83:12; APP. 176. And, Norton testified that contingent commissions are revenue: Q. So there’s -- there may be more than this, but there’s at least a couple of different revenue sources to OSC for writing business, that would be the front-end commission? A. Yes. Q. And then the contingent commission? A. Yes. Norton Depo. at 83:14-83:20; APP. 176. Keith Gilroy, OSC’s President, agreed, testifying in his deposition that a contingent commission is an “additional type of revenue.” Gilroy Depo at 24:17; APP. 081. Thus, there is no legitimate factual dispute: contingent commissions are revenue to OSC. Because the Commission Agreement clearly provides that Roberts is entitled to a percent of the “gross revenue,” he is owed commission on the contingent commissions received by OSC. Defendants have asserted various arguments relating to the payment of contingent commissions. Originally, their contention was Roberts was not entitled to contingent commissions. Now, in discovery, their contention is the contingent commission amount cannot be calculated for an individual salesperson.7 However, Defendants’ executives have admitted 6 Mr. Norton was designated to testify on behalf of the Defendants to “[t]he structure and calculation of contingent payments.” 7Defendants use the terms “sales person” and “producer” interchangeably. 11 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 16 of 46 PageID 718 that the contingent commission amount can be calculated for an individual salesperson,8 i.e. Roberts. Mark Pearce, Head of the Underwriting Department for OSC testified: Q. What are contingent commissions? A. Contingent commission in our world is -- well, there’s two pieces of the commission process. You get what they call front commission, which is commission that an agent or an agency earns as premium comes in the door. When policies -- when policies are paid for, contingent commission then is an additional piece of premium that an agency can earn if the portfolio of business that you write performs well below certain pre-established loss limits and -- and that’s -- it’s just an additional deal that you look after the fact. You say, okay, here’s -- here’s a year’s worth of business. How did we do? We took in this much premium, we had this many losses. And based on the calculation then as described by each carrier that you have a relationship with -- and there is a calculation that occurs after on a retrospective basis. Q. And if the company wanted to, they could drill down and figure out how much of that was related to each individual salesperson’s production? A. Oh, yeah, I would think so. Yeah. We certainly keep track of -- we certainly keep track of premium and losses at a client level, policy level. Pearce Depo. pp. 16:24-17:15; 17:25-18:5; APP. 218-219. Mr. Norton testified: Q. What is a contingent commission? A. A contingent commission is something that is calculated contingent on the profitability of a business, of a book of business that’s paid to the - someone like us. A general agent from the carrier. Q. So there’s -- there may be more than this, but there’s at least a couple of different revenue sources to OSC for writing business, that would be the front-end commission? A. Yes. Q. And then the contingent commission? A. Yes. Q. And the contingent commissions have been -- there’s been a contingent 8Roberts has a motion to compel pending seeking an order compelling Defendants to provide the amount of contingent commissions attributable to business generated by Roberts. (Doc. 66) 12 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 17 of 46 PageID 719 commission spreadsheet -- maybe more than one -- provided to us. Are you aware of those? A. Yes. Q. Where did those come from? A. As far as the calculation, it comes from the carrier. Q. Does that spreadsheet come from the carrier, the spreadsheet that was provided to us, or -- A. Which spreadsheet are you talking about? Is it this one right here? Yeah, that comes from the carrier, yes. Norton Depo. 83:9-84:9: APP. 176. Q. Okay. And what are all these listing of names under this heading premiums and commissions, ITD-ALL? A. Those were all the lenders for that particular carrier. Q. Okay. And which -- is this for a particular carrier? A. Yes. That’s for Great American. Q. Okay. And when you say all the lenders, these would be mortgage companies that policies were written to cover or -- A. Mortgage companies, banks. You know, there’s a lot of different types in there. Q. So the -- this segment of the business had to do with force-placed insurance; correct? A. Yes. Q. And force-placed insurance is where somebody lets their insurance lapse on collateral and the lender has the right to put insurance in place to protect its interest. Is that a fair assessment of -- A. That is correct, yes. Norton Depo. 85:24-86:20.; APP. 176-177. Q. Okay. And so on this spreadsheet for Great American -- A. Uh-huh. Q. -- how many different producers at OSC does this represent payments for? A. I would say all of them. Q. Okay. So who wrote -- A. Probably. I mean. 13 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 18 of 46 PageID 720 Q. Do you know who wrote policies through Great American, which -- who was responsible for producing the clients who were responsible for these payments or these accounts that are listed under premiums and commissions? A. I don’t specifically know who was responsible for those, you know. We do have producers that have come and gone, you know. So, in that particular year I couldn’t tell you specifically who they were. Q. It would be possible to determine that, though, wouldn’t it? A. Yeah, probably. Q. Okay. A. I mean, you could go back through payroll records and see who was employed at the time. Q. And you could do that given the time and manpower? A. Well, I would go to the HR department, yeah. I don’t have access to those records. Q. Okay. Have you been asked to do that? A. No. Norton Depo. 90:4 to 91:8.; APP. 178. Thus, there is no legitimate factual dispute that contingent commissions are revenue and that the Commission Agreement provides that Roberts is entitled to a percent of gross revenue. Further, there is no factual dispute that the contingent commission received by Defendants which is attributable to business sold by Roberts can be calculated by Defendants. Thus, Roberts’ entitlement to his commission on contingent commissions is established as to both liability and causation as a matter of law and summary judgment on this issue is proper. Shellpoint Commission With respect to the Shellpoint account, there was no legitimate dispute that as of May 2014, Roberts was entitled to 12.5% commission. Roberts Dec., ¶006, Ex.2; APP. 002, 003; APP. 022-023.9 Shellpoint stopped taking a subagent commission and under the plain wording 9APP. 022-023 is a true and correct copy of a document produced by Defendants. 14 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 19 of 46 PageID 721 of the Commission Agreement, Roberts was due 12.5% commission on accounts with no subagent commission. Roberts Dec., ¶006, Ex.2; APP. 002, 003; APP. 022-023. Defendants claimed that they would incur “extraordinary expenses” as a result of Shellpoint no longer taking a subagent commission. Roberts Dec., ¶006, APP. 003. However, the Commission Agreement does not contemplate or allow for the deduction of any expenses from Roberts’ commission. Roberts Dec., ¶005, Ex.2; APP. 002. According to Keith Gilroy, OSC’s President, no other salespeople were charged expenses against their commissions Q. (By Mr. Jackson) Were any other commissions, salespeople for the company, charged expenses against their commissions? A. No. Gilroy Depo. 43:13-43-16; APP. 86. Yet, OSC unilaterally deducted $35,000.00 per month from Roberts’ commission check. In an effort to appease his employer, Roberts was open to discussing some deduction from his commission of “extraordinary expenses” and requested documentation reflecting the nature and amount of these alleged “extraordinary expenses.” Roberts Dec., ¶006, APP. 003. However, Roberts never received the information he requested, and therefore he never agreed to any reduction. Roberts Dec., ¶006, APP. 003. In fact, to date, Defendants have not produced any evidence of expenses beyond what appear to be ordinary expenses for an account like Shellpoint, and which were previously billed as cost recovery on the Shellpoint account. Roberts Dec., ¶006, APP. 003. Interestingly, Defendants’ expert witness agrees that ordinary expenses should not be deducted from Roberts’ commissions. (Doc. 76, APP. 002) Irrespective of Roberts willingness to discuss this issue, no agreement was reached to alter the plain language of the Commission Agreement. Roberts Dec., ¶006, APP. 003. When OSC unilaterally began deducting $35,000 per 15 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 20 of 46 PageID 722 month from Roberts’ commission in October 2014, retroactive to June, 2014, and continued to do so for a total of 10 months, they did so in violation of the terms of the Commission Agreement. Roberts Dec., ¶006, APP. 004. In total, Defendants deducted $350,00.00. Thus, Defendants breached their contract with Roberts by deducting the $350,00.00 from Roberts’ commission and he is entitled to summary judgment on his breach of contract claim related to Shellpoint commissions in that amount. OSC and Breckenridge IS Have No Evidence to Support Their Counterclaims Roberts is Entitled to Summary Judgment on OSC and Breckenridge IS’ Claim for Breach of Fiduciary Duty The elements of a cause of action for breach of fiduciary duty are the following: (1) plaintiff and defendant had a fiduciary relationship; (2) defendant breached its fiduciary duty to the plaintiff; (3) defendant’s resulted in injury to the plaintiff or benefit to the defendant. Graham Mortg. Corp. v. Hall, 307 S.W.3d 472, 479 (Tex. App.-Dallas 2010, no pet.). There is no fiduciary relationship between Roberts and Breckenridge IS. The counterclaim asserts Roberts was an employee of OSC, but does not assert he was an employee of Breckenridge IS. See fn. 2. (Doc 20, p. 7). There are no allegations in the counterclaim of a formal or informal fiduciary relationship between Roberts and Breckenridge IS and there is no evidence of either type fiduciary relationship. Therefore, Breckenridge IS’ claim against Roberts fails as a matte of law and summary judgment is proper. There is no evidence that Roberts breached his fiduciary duty to OSC (or to Breckenridge IS if any such duty existed). In their pleading Defendants allege Roberts breached his fiduciary 16 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 21 of 46 PageID 723 duty by: (1) forming competing entities10; (2) usurping business opportunities from OSC and Breckenridge IS for his own gain; and (3) demanding payment for commissions he was not due. Doc. 20, p. 7, ¶12. Yet, despite filing their counterclaim in October, 2015, Defendants have no evidence to support their contentions, because the allegations are untrue and unsupportable. All telling is the lack of knowledge on the topics by James Robertson, Plaintiff’s direct supervisor, who was designated as Defendants’ Fed. R. Civ. P. 30(b)(6) corporate representative to testify concerning “Defendant’s Answer to Plaintiff’s Second Amended Complaint and Overby-Seawell Company and Breckenridge IS’ Counterclaims Against Plaintiff.” He had no comments on any of the counterclaims. Q. All right. And so the company’s also brought counterclaims. The company is suing David back, basically. You understand that? A. I was aware of that but I don’t know the substance of it all. Q. Okay. And so do you know anything about the factual basis of those counterclaims? A. No. Robertson Depo. 214:22-215:4.; APP. 331. While the designated representative testified he did not know anything about the factual basis of the counterclaims, Roberts will address the testimony from other witnesses as to these allegations, which support Roberts’ contention that there is no evidence supporting OSC and Breckenridge IS’ counterclaims. The oral testimony, written discovery and documents produced do not support OSC and Breckenridge IS’ claim for breach of fiduciary duty. 10Defendants refer to entities in which Roberts has invested as “competing entities,” there is no evidence any one of the entities competed with Defendants. 17 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 22 of 46 PageID 724 The only evidence that has been developed in this case is that Roberts does not have any competing entities. The entities Defendants allege to have competed with Defendants did not compete with Defendants. Roberts Dec., ¶10-16, APP. 005-008. And, there is no evidence to the contrary. Similarly, there is no evidence that Roberts usurped any business opportunity and none has been identified in discovery. Gilroy,11 OSC’s president, testified: Q. Okay. And there’s an allegation that David Roberts funneled business opportunities to these companies. Are you aware at this time of any business opportunity funneled to these companies from OSC, or from the companies? A. Again, not having the list at this time we are not specifically aware of the companies, we’re waiting to get that information. Q. Are you aware of any? A. Not at this time. Gilroy Depo. 124:1-124:10; APP. 106. The only evidence is Roberts’ testimony that he did not take any opportunity from OSC and direct it to one of the companies alleged to be a “competing entity.” Roberts Dec., ¶016, APP. 007-008. It is unclear why Defendants claim that Roberts demanding commission from Defendants could be a breach of fiduciary duty. Roberts has only demanded commissions on revenue he brought to Defendants, revenue on which he is due commissions pursuant to the express terms of his Commission Agreement. Roberts has not demanded commissions that were not due him. 11Gilroy and Scott Severson, former Breckenridge IS executive, were the designated corporate representative for the interrogatory responses contained in the Appendix. Whenever their testimony is cited in this brief, it is based on deposition testimony given related to the referenced interrogatory responses or related questions. A true and correct copy of the referenced interrogatory responses is contained in the Appendix at 024-074. 18 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 23 of 46 PageID 725 And, even if he did, a dispute between Roberts and Defendants as to the amount of commission due him is not a breach of fiduciary duty. OSC and Breckenridge can assert a defense to his breach of contract claim - merely asserting a right is not a breach of fiduciary duty. Finally, since Roberts has not breached his fiduciary duty to OSC and does not owe one to Breckenridge IS, there can be no damages. Even if OSC or Breckenridge could establish a breach, there no evidence of damages. OSC’s President, Keith Gilroy, testified on February 27, 2017, he was aware of no damages. Q. Does the company know of any damages? A. Not at this time. Gilroy Depo. 156:1-156:2; APP. 114. For these reasons, summary judgment should be granted against OSC and Breckenridge IS on their claim for breach of fiduciary duty. Roberts is Entitled to Summary Judgment on OSC and Breckenridge IS’ Claim for Fraud by Non-Disclosure The elements of a cause of action for fraud by non-disclosure are the following: (1) defendant concealed from or failed to disclose certain facts to the plaintiff; (2) defendant had a duty to disclose the facts to the plaintiff; (3) the facts were material; (4) defendant knew the plaintiff was ignorant of the facts and plaintiff did not have an equal opportunity to discover the facts; (5) defendant was deliberately silent when it had a duty to speak; (6) by failing to disclose the facts, the defendant intended to induce the plaintiff to take some action or refrain from acting; (7) plaintiff relied on the defendant’s non-disclosure; and (8) plaintiff was injured as a result of acting without the knowledge of the undisclosed facts. Blankinship v. Brown, 399 S.W.3d 303, 308 (Tex.App.-Dallas 2013, pet. denied). 19 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 24 of 46 PageID 726 In the counterclaim, the factual statements alleged by Counter-Plaintiffs to support their fraud by non-disclosure claim relate to Roberts allegedly working for the “Competing Entities.” (Doc. 20) Counter-Plaintiffs can not present evidence on the elements of the fraud by non- disclosure claim, because (1) Roberts did not form or work for “competing” entities while employed by Defendants; (2) Roberts was not employed by any of the alleged “Competing Entities”; (3) Roberts informed James Robertson and Larry Overby that he had other interests; (4) Roberts did not hide or conceal his ownership in these entities12; (5) OSC and Breckenridge were not ignorant of the facts; and (6) Roberts did not remain silent. As set forth above, Robertson, the corporate representative who was designated to speak on the counterclaim, had no facts to support the claim. Further, Gilroy, OSC’s President, testified as follows: Q. Fraud by nondisclosure. Is that the same -- A. Not disclosing the fact that he had these multiple entities of which were competing with OSC, correct. Gilroy Depo. 103:9-103:13: APP. 101. As addressed above, these entities did not compete with Defendants and Defendants have no evidence that they did. Because Defendants have no evidence to establish essential elements of their claim of fraud by nondisclosure, Roberts is entitled to summary judgment on that claim. 12Defendants “discovered” the allegedly competing entities through a search of public records. Q. All right. And this information was all determined through public records, wasn't it? A. I would assume public records, yeah. Gilroy Depo. 183:12-183:14; APP. 121. 20 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 25 of 46 PageID 727 Roberts is Entitled to Summary Judgment on OSC and Breckenridge IS’ Claim for Misappropriation of Trade Secrets To prevail on a claim for misappropriation of trade secrets, a plaintiff must establish: (1) the trade secret existed; (2) the trade secret was acquired through breach of a confidential relationship or was discovered by improper means; (3) the defendant used the trade secret without authorization; and (4) that plaintiff suffered damages as a result. Twister B.V. v. Newton Research Partners, LP, 364 S.W.3d 428 (Tex. App. -Dallas 2012) A trade secret is any information that: (1) the plaintiff has taken reasonable efforts to keep secret, and (2) has actual or potential independent economic value to third parties because it is generally unknown and not readily ascertainable by proper means. Tex. Civ. Prac. & Rem. Code §134A.002(6). Defendants have no evidence to support a misappropriation of trade secrets claim, including no evidence that (1) a trade secret existed; (2) a trade secret was acquired by Roberts through breach of a confidential relationship or was discovered by improper means; (3) Roberts used the trade secret without authorization; or (4) that Defendants suffered damages as a result. Defendants pleaded that “Roberts sent confidential electronic files to his personal email address” and that Roberts “willfully and maliciously misappropriated the trade secrets by using them in the Competing Entities for his own benefit against OSC & Breckenridge IS.” Gilroy, OSC’s President, testified: Q. Misappropriation of trade secrets. Can you tell me what trade secrets David Roberts has misappropriated? A. Again, the pricing and the marketing of our Home Choice product and its -- our marketing campaign in a sense was known by David and then used to create those other businesses in direct competition with that. Gilroy Depo. 103:16-103:23; APP. 101. 21 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 26 of 46 PageID 728 “Home Choice” the one product addressed by Gilroy, did not even have a final name nor was it fully developed at the time Roberts was employed by OSC. Mark Pearce, Head of Underwriting for OSC testified: Q. -- are you aware of a product that was being put together by the company for voluntary homeowner’s policies? A. Yeah. I was putting it together probably. Q. David was aware of that? A. I would imagine so. It was -- it was, you know, discussed I think fairly widely at -- within the organization, sure. Q. All right. So if David told somebody in, say, March of 2015 that there was a voluntary homeowner’s product that wasn’t ready yet but that was coming soon, would that have been consistent with the product that we’re talking about? A. I can’t tell you the timing exactly but, yeah, that was -- I mean, it was probably under development at that point. I -- I just can’t tell you for sure time frames. Q. And was that product called Home Choice? A. Well, it ended up with a different -- a different name, I think, but, yeah, it was -- at one point it had a name like that, yes. Pearce Depo. 10:14-11:9: APP. 217. Defendants asked Roberts in his deposition about Home Choice and he testified: Q. What was the homeowners product you were developing at OSC? A. I believe the name was Home Choice. Q. What was Home Choice designed to do, at least to your knowledge, before you left? A. It was a limited underwriting program to mitigate force-placed insurance for borrowers that were being force placed but would otherwise pay for insurance if they had a viable option. There’s a segment of the market that will actually buy insurance but they can’t find somebody to write them. So Mark and I - Mark Pearce and I developed this product years before at Tristar, and we were trying to do it again at OSC. Roberts Depo. 191:22-192:9; APP. 274. 22 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 27 of 46 PageID 729 Thus, there is no evidence that Roberts misappropriated any trade secret of non-employer Breckenridge IS or of OSC.13 The product being developed for OSC had been developed for a prior employer, years before. Defendants have no evidence that Roberts used any alleged trade secret of Defendants or that Defendants suffered any damages. Therefore, summary judgment is proper on Defendants’ misappropriation of trade secret counterclaim. Roberts is Entitled to Summary Judgment on OSC and Breckenridge IS’ Claim for Breach of Contract As stated above, “The elements of a claim for breach of contract are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App.-El Paso 2009). 13OSC and Breckenridge IS’ response to an interrogatory seeking the identity of trade secrets and the use of the trade secrets in the “competing” entities was only vaguely answered with a promise to supplement at the close of discovery. Neither OSC nor Breckenridge IS supplemented despite discovery closing two weeks ago. Interrogatory: Please identify the “trade secrets” entrusted to Roberts and utilized by Roberts in his Competing Entities as alleged in Defendants’ Answer to Plaintiff’s Second Amended Complaint and Overby-Seawell Company and Breckenridge IS’ Counterclaims Against Plaintiff. Include in your response a description of the trade secrets you allege Roberts utilized in his Competing Entities and how you claim he used them and include all relevant dates. Response: Subject to the foregoing objections, Plaintiff created companies that directly competed with OSC. Plaintiff was aware of OSC’s customer lists, marketing strategies, pricing, technology, product offerings including those of sister companies under the Breckenridge umbrella, client issues vis-a-vis OSC, insurance companies with whom OSC has appointments, future plans for investment or new products, etc. Plaintiff used these trade secrets to create and operate the companies he created for his personal benefit. Defendants are still investigating the trade secrets stolen by Plaintiff when he created competitive companies while he was employed by OSC. Breckenridge IS [OSC] will supplement this response at the close of discovery. 23 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 28 of 46 PageID 730 Breckenridge IS was not a party to the agreement and therefore has no cause of action for breach of the agreement. Regarding the allegation of breach, OSC and Breckenridge allege breach of: (1) the “Best Efforts” section of the Confidentiality Agreement by failing to devote his full time and best efforts to his position and OSC & Breckenridge IS’ business; (2) the “Conflict of Interest” section of the Confidentiality Agreement by performing activities and accepting other employment that interfered with OSC & Breckenridge IS’ business and/or presented a conflict of interest; (3) the “Extent of Service” section of the Confidentiality Agreement by failing to devote his entire working time, energy and attention to his duties in connection with OSC & Breckenridge IS; (4) by disclosing and/or using the Employing Entities’ confidential and proprietary information for his own benefit and/or the benefit of the Competing Entities during his employment with OSC; (5) the “Non-Solicitation of Clients” section of the Confidentiality Agreement by soliciting OSC and/or Breckenridge IS’ clients on behalf of himself and/or the Competing Entities during his employment with OSC; and 6) the “Other Contractual Obligations” section of the Confidentiality Agreement by working with a competitor, soliciting OSC and/or Breckenridge IS’ customers, using confidential information, disclosing trade secrets and/or performing services for OSC & Breckenridge IS’ competitors during his employment with OSC. As set forth above, the corporate representative designated to address the counterclaims did not have any information. OSC’s President Gilroy’s testimony does provide evidence to support a finding of breach of contract. Regarding best efforts, Gilroy testified: Q. Number 15, Please provide the factual basis for your contention that Roberts did not devote his full time and best efforts to his position - says and, I think it meant at - OSC and Breckenridge IS’ business as alleged in the counterclaim, and state how and when you learned of these facts. 24 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 29 of 46 PageID 731 ...And so what the answer is is that he - what the answer that you’ve given is that he created companies that directly competed with OSC and so he couldn’t have been using his full efforts for OSC because of that? A. Correct. Q. And is that -- anything you want to add to that? A. No. Gilroy Depo. 149:12 - 149:24: APP. 112. There is no evidence that Roberts created any company that competed with OSC. There is no evidence that Defendants incurred any damages as a result of this allegation. Regarding conflict of interest, Gilroy testified: Q. All right. Number 16, please provide the factual basis for your contention that Roberts breached the conflict of interest section of the Confidentiality Agreement as alleged in the counterclaim. Include in your response the activities you allege constitutes such breach and the other employment that he accepted. Include all relevant dates and state how and when you learned of the breach. And so this really just goes back to the same answer you’ve given before about creating the additional businesses; true? A. True. He was -- as an employee he was supposed to devote his time and efforts to OSC. Q. Okay. But there’s nothing in addition to that that would be responsive to this? A. No. Gilroy Depo. 151:25-152:17, APP. 112. Gilroy’s testimony does not support a claim of conflict of interest. As discussed throughout, Roberts was not involved with any company that competed with Defendants or that he had any conflict of interest or that Defendants suffered any damages. Roberts Dec., ¶10-16, APP. 005-008. Regarding extent of service, Gilroy testified, Q. Okay. And then the next question is the same except for it talks about the extent of service section as opposed to -- A. Which number are you on, I’m sorry? 25 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 30 of 46 PageID 732 Q. I’m sorry, Number 17. Refers to the extent of service section as opposed to the conflict of interest section. And would your answers again be the same that it has to do with the things we’ve discussed about if he was creating these other businesses he wasn’t using the full extent of his abilities or time? A. Correct. Q. And there would be nothing in addition to that? A. Not that I could think of. Gilroy Depo. 152:18-153:7: APP. 113. Thus, there is no evidence that Defendant suffered any damages as a result of this allegation. Roberts Dec., ¶018, APP. 009. Further, Roberts did his best to generate as much business and thus, revenue for OSC. Roberts has worked in this business for many years. Id. The type of customers Roberts works with control large pieces of business. Id. Much of his business is relationship driven. He did not just work 9:00 a.m. to 5:00 p.m. Id. He worked whenever there was the possibility of developing a relationship that might lead to the generation of business. Id. Id. He went to trade shows and traveled extensively to meet with customers and potential customers. Id. He took customers and potential customers to lunch and dinner and met customers and potential customers for drinks. Id. He did favors for potential customers by introducing them to people he knew who might help them with their business to curry favor with them with the hope that he might generate business for OSC in the future. Id. He took OSC business telephone calls at all hours. If he was not doing something to try and generate business for OSC, it was because he was looking for new opportunities to do so. Id. If he took a personal telephone call during the day, or responded to an email or returned a telephone call that had to do with Equigard Agency or Tech2ROI it did not keep him from or interfere with doing any business for OSC. He knew that those calls could generate a lead for OSC. Id. He was paid on a commission 26 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 31 of 46 PageID 733 basis and thus, made his living by generating business for OSC. Once he obtained business for OSC, OSC had account managers who were supposed to service the accounts. Id. There were times when account managers did not provide the service that my customers expected and so he would intervene. Roberts did everything he knew to do to generate business for OSC. Id. Defendants next allegation is that Roberts disclosed or used the “Employing Entities’ confidential and proprietary information for his own benefit and/or the benefit of the Competing Entities during his employment with OSC.” (Doc. 20, p. 38) As discussed above, Roberts did not compete. As such, he could not have disclosed any confidential or proprietary information to OSC’s detriment. Further, Defendant’s have no evidence that Roberts disclosed or used any confidential or proprietary information for his own benefit. Regarding this allegation, Gilroy testified: Q. All right. Number 18, please provide the factual basis for your contention that Roberts used the employing entities’ -- the companies --confidential and proprietary information for his own benefit as alleged in the counterclaim. Include your -- in your response the confidential and proprietary information he used and how you contend it benefited him or one of his competing entities. Include relevant dates and state how and when you learned of these facts. The answer is plaintiff created companies that directly competed. So this is basically the same response; correct? A. Right. When we pull up the website it was direct competitive to OSC’s products. Q. And OSC did not receive any benefit from any of these websites or competing, what you all call competing businesses, is that -- A. Not to my knowledge. Q. Well -- A. I don’t know of any, no. Gilroy Depo. 153:8-154:3: APP. 113 27 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 32 of 46 PageID 734 Gilroy is simply wrong that no income is generated from those cites for OSC. It is undisputed that First Republic, Alaska Financial and Colonial Funding are all clients of OSC’s that were brought to OSC by Roberts. Roberts ¶11, APP. 006. The leads were generated by Equiguard Agency’s website and Roberts brought the business to OSC. Roberts ¶11, APP. 006. Not only were Defendants not injured by these activities, OSC benefitted. The next alleged breach is of the “Non-Solicitation of Clients” section. Gilroy testified that: Q. ...Please identify each client you contend Roberts solicited on his behalf or on behalf of the competing entities as you allege in the counterclaim. State how and when you learned these facts. Is the answer that the company doesn’t know? A. Correct. We don’t know the full extent of the damages. Q. Well, and again, I’m not trying to quibble with you. Say doesn’t know the full extent of the damages. Does the company know of any damages? A. Not at this time. Gilroy 155:16-156:2; APP. 114. Again, as discussed above, Roberts did not compete with Defendants. Roberts did not solicit any clients of Defendants for his own benefit. Roberts Dec., ¶016, APP. 007-008. Further, Defendants have no evidence that Roberts solicited any clients of Defendants. The final alleged breach is that Roberts violated the “Other Contractual Obligations” section of the Confidentiality Agreement by working with a competitor, soliciting OSC and/or Breckenridge IS’ customers, using confidential information, disclosing trade secrets and/or performing services for OSC & Breckenridge IS’ competitors during his employment with OSC. There are no new allegations in this section and Roberts has addressed each allegation above. 28 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 33 of 46 PageID 735 Roberts Is Entitled to Summary Judgment on Each of OSC And Breckenridge IS’ Claims Because They Have No Damages An element of each of Defendants’ counterclaims is damages. As set forth above, Gilroy, OSC’s President expressly stated the company was not aware of any damages. Gilroy 155:16- 156:2. Robertson, Defendants’ designated corporate representative on the counterclaims was unable to testify to any damages. Simply put, Defendants have not suffered any damage as a result of any act or omission by Roberts and Defendants’ counterclaims should be dismissed in their entirety. Defendants Have No Evidence of Their Affirmative Defenses14 Offset Defendants assert that they are entitled to an offset for damages caused by Roberts’ conduct. (Doc. 20, p. 4) When a defendant asserts it is entitled to an offset, it must prove both the offset and the amount of offset. A defendant bears the burden of proving both that it is entitled to offset and the amount of offset. Triton 88, L.P. v. Star Elec., L.L.P., 411 S.W.3d 42, 60 (Tex.App.-Houston[1st Dist.] 2013, no pet.). In Defendant OSC and Breckenridge IS’s interrogatory responses they state: “Plaintiff’s damages, if any are subject to offset for damages caused by Plaintiff’s conduct. Any damages allegedly owed by Plaintiff are offset by the conduct that is described in Defendant’s Answer and Counterclaims, which can be found at Dkt. No. 20. OSC incorporates by reference its counterclaim.” There is no evidence in this interrogatory response or in the pleading to support a claim of offset. Gilroy was unable to add any additional information on this defense. Gilroy 102:4-102:13. Further, as discussed above, the corporate 14Once again, as set forth above, Defendants designated corporate representative had no information on this defense. 29 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 34 of 46 PageID 736 representative, Robertson, designated to speak to the affirmative defenses did not provide any testimony on the subject. Thus, Defendants are unable to meet their burden and summary judgment is proper. Unclean Hands Unclean hands is an affirmative defense that may bar a party with unclean hands from obtaining equitable relief. Davis v. Grammer, 750 S.W.2d 766, 768 (Tex.1988); Truly v. Austin, 744 S.W.2d 934, 938 (Tex.1988) The party asserting the defense must show it was injured by the unlawful or inequitable conduct. Paciwest, Inc. v. WarnerAlan Properties, LLC, 266 S.W.3d 559, 571 (Tex.App.-Fort Worth 2008, pet. denied). In their interrogatory responses Defendants merely direct Roberts to their counterclaims. APP. 024-074. Severson, in his deposition, when asked his knowledge about the interrogatory response, simply stated: “[t]hat sounds like it relates to the competing entities.” Severson Depo. 78:6-78:24, APP. 346. As discussed above, Defendants counterclaims have no evidentiary support. Further, there is no evidence of any “competing” entities. Even if Defendants had evidence of unclean hands, it is not a defense to Roberts’ breach of contract claim. Summary judgment is proper. Failure to Mitigate The party who caused loss bears the burden of proving lack of diligence on part of the plaintiff, and amount by which damages were increased by failure to mitigate. Harris County v. Smoker, 934 S.W.2d 714 (Tex.App.-Houston[1st Dist] 1996, writ denied). In their interrogatory responses, Defendants state “Plaintiff has failed to mitigate his alleged damages. Plaintiff failed to take any steps to mitigate the amounts allegedly owed to him by Defendants.” Gilroy 30 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 35 of 46 PageID 737 testified: Q. Only to be fair, I only read the first sentence. The second sentence says, “Plaintiff failed to take any steps to mitigate the amounts allegedly owed to him by Defendants.” A. I think at the end of the day we sat down with David on numerous occasions and agreed upon an agreement or a cause of -- you know, steps we would take to calculate, and we felt we abided by those contracts and those agreements. I guess that’s where -- how we’re - Q. All right. But other than that, can you tell me any step that David Roberts failed to take to reduce the amount of damages that would be due him? A. Not other than. Gilroy o. 111:18-112:6. Severson testified: Q. Well, but I’m asking you, is there anything you know of that David should have done that would have lessened the amount of damages he claims he’s entitled to? A. I can’t think of anything. Severson o. 79:13-79:17, APP. 356. Thus, as with their other defenses, Defendants have no evidence to support the defense because there is no evidence of the lack of diligence on Roberts’ part or any amount that Roberts’ damages were increased due to his failure to mitigate and summary judgment is proper. Accord and Satisfaction The affirmative defense of accord and satisfaction rests on a new contract, express or implied, in which the parties agree to discharge the existing obligation. Williams v. Colthurst, 253 S.W.3d 353, 359 (Tex.App.-Eastland 2008, no pet.). The “accord” is a new contract that discharges an existing obligation. Honeycutt v. Billingsley, 992 S.W.2d 570, 576-77 (Tex.App.-Houston[1st Dist.] 1999, pet. denied). The “satisfaction” is the performance of a new 31 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 36 of 46 PageID 738 contract. Id. Because an accord is essentially a separate agreement or contract, the elements necessary to establish a contract - offer, acceptance, and consideration- must be proved. Hycarbex, Inc. v. Anglo-Suisse, Inc., 927 S.W.2d 103, 108 (Tex.App.-Houston[14th Dist.] 1996, no writ). Defendants’ interrogatory responses and Gilroy’s testimony do not provide any evidence supporting this defense. The interrogatory response states: “The claims are barred in whole or part by the doctrine of accord and satisfaction. Any contractual amount owed to Plaintiff was paid in full by OSC. Plaintiff accepted any and all such payments as full satisfaction of all amounts owed.” APP. 024-074. Gilroy testified consistent with the interrogatory response: Q. ...Do you know what accord and satisfaction is? A. No, I'm not familiar with that. Q. And it goes on to say, "Any contractual amount owed to Plaintiff was paid in full by OSC." So, if I understand correctly, looking back at the agreements that David had for payment of commission to him, the company's contention is that David's been paid everything that those agreements entitled him to be paid? A. Correct. Q. Now, he complained about it afterwards, but you contend that he was paid everything he was entitled to; true? A. True. Gilroy Depo. 112:9-112:23, APP.103. There is no evidence of an offer, acceptance and consideration of a new contract. Defendants appear to take the position that they fully performed under the Commission Agreement, not a new agreement. Further, there is no evidence of any new agreement containing all material terms agreed to by Roberts. Thus, the defense of accord and satisfaction is not applicable and summary judgment is proper. 32 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 37 of 46 PageID 739 Mistake Defendants have not pleaded mistake with the specificity required by Fed. R. Civ. P. 9(b) and their affirmative defense of mistake should therefore be dismissed. Should the Court not dismiss Defendants’ affirmative defense of mistake, Roberts is entitled to summary judgment on this issue. Based on Defendants’ discovery responses, Defendants assert mutual mistake. Defendants’ interrogatory response asserts that “[to] the extent any contractual agreement can be interpreted as including contingent commission-an interpretation that Defendants fully dispute-such an interpretation was never intended by the parties and is the product of a mutual mistake.” APP. 024-074. To prove mutual mistake, Defendants must prove that both parties had the same misunderstanding of the same material fact, Winegar v. Martin, 304 S.W.3d 661, 669 (Tex.App.-Fort Worth 2010, no pet.). Defendants do not have evidence to prove this element. Further, Roberts provides evidence that he was not mistaken. Cite It is undisputed that Defendants prepared and presented the Commission Agreement to Roberts containing the representation that he would be paid a percentage of “gross revenue.” See supra. It is undisputed the contingent commissions are “revenue.” See Supra. Roberts was not mistaken about what was to be paid under the Commission Agreement that stated he would be paid a percentage of “gross revenue.” Cite. Novation Defendants assert the defense of novation. A novation is the substitution of a new agreement between the same parties or the substitution of a new party on an existing agreement. See Hidalgo County v. Pate, 443 S.W.2d 80, 89 (Tex.Civ.App.-Corpus Christi 1969, writ ref’d 33 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 38 of 46 PageID 740 n.r.e.). Therefore, only the new obligation may be enforced. Priem v. Shires, 697 S.W.2d 860, 864-65 (Tex.App.-Austin 1985, no writ). The elements of novation are: (1) a previous, valid obligation; (2) an agreement of the parties to a new contract; (3) the extinguishment of the old contract; and (4) the validity of the new contract. Mandell v. Hamman Oil and Ref. Co., 822 S.W.2d 153, 163 (Tex.App.-Houston [1st Dist.] 1991, writ denied). A novation is subject to contractual rules and must be supported by consideration. Money v. Dameron, 70 S.W.2d 291, 293 (Tex. Civ. App.--Amarillo 1933, writ refused). In their interrogatory responses, Defendants state, “[t]o the extent any contractual agreement can be interpreted as including contingent commissions -an interpretation that Defendants fully dispute -the contract was modified by the parties conduct. Plaintiff was never paid contingent commissions and is therefore not owed contingent commissions.” When questioned about novation and the interrogatory response, Gilroy testified: Q. Number 10, “Plaintiff’s claims are barred in whole or in part by the doctrine of novation.” Do you know what novation is? A. I’m not familiar with that doctrine, no. Q. And what it goes on to say is, “To the extent any contractual agreement can be interpreted to include contingent commissions -- an interpretation that Defendants fully dispute -- the contract was modified by the parties conduct.” What conduct modified that agreement, if it says that, which you deny? A. Again, his conduct of not working with the account, his conduct of really not monitoring or keeping up with that account for over a year. Q. Is there anything else? A. He also violated his contracts with the compete -- you know, his business -- competing with his businesses. He violated the contract by not putting his full time and attention to OSC and doing what’s best for the company per his agreements. Q. Anything else on Number 10 about the modification of the parties -- the modification of the contract by the party’s conduct? 34 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 39 of 46 PageID 741 A. Not at this time, no. Gilroy Depo. 115:20:116:18: APP. 103. Defendants have no evidence of the elements of a notation, specifically, there is no evidence of an agreement of the parties to a new contract, the extinguishment of the old contract, the validity of the new contract. There is no evidence of an offer, acceptance and consideration of a new contract. Further, there is no evidence of any new agreement containing all material terms agreed to by Roberts. Roberts is entitled to summary judgment on Defendants’ affirmative defense of novation. Estoppel, Waiver, Duress and Ratification Defendants assert the defenses of estoppel, waiver, duress and ratification in a single sentence in their answer. (Doc. 20, p. 5) In their interrogatory response, they similarly address the defenses collectively stating: “Plaintiff is estopped and or has waived his claims because he accepted payment for all amounts owed to him by OSC.” Cite This contention is nonsensical as it relies on the premise that Defendants are correct and Roberts is incorrect about the merit of his claims for unpaid commissions. Apparently, Defendants contend that Roberts should have refused to accept any commission and gone without any payment at all until his disputes were resolved. As set forth above, Defendants designated corporate representative on Defendants’ counterclaims and affirmative defenses had no testimony to offer. In his deposition, Gilroy testified: Q. Plaintiff’s claims -- this is Number 12. “Plaintiff’s claims are barred by estoppel, waiver, duress and ratification. Plaintiff is estopped and or has waived his claims because he accepted payments of all monies owed him by OSC.” Do you understand that defense? 35 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 40 of 46 PageID 742 A. Yes. Q. Explain that to me, please. A. David signed agreements both verbally and in writing and we abided by those contracts. He was paid to the calculation of those contracts in full and upon his termination the payment stopped as with any other employment. Gilroy Depo. 118:7-118-19, APP. 105. Estoppel, waiver, duress and ratification have different elements and Gilroy’s testimony does not satisfy the elements of any one of them. Based on their limited discovery responses, Roberts contends that Defendants are without evidence and summary judgment should be granted as to each of these defenses. Further, the elements of each of the defenses pleaded collectively by Defendants to which Defendants have no evidence are set forth below: Estoppel Defendants asserted the affirmative defense of estoppel generally without clarifying if it intended the defense of (1) estoppel based in law, i.e. estoppel by record, estoppel by deed, or estoppel by contract; or (2) estoppel based in equity, i.e. equitable estoppel, promissory estoppel or quasi-estoppel. Whichever defense it intended, Roberts moves the Court to dismiss the defense because Defendants does not have evidence of the requisite elements. To establish estoppel by record, Defendants must bring forth evidence to show that Roberts are taking a position contrary to that in an earlier judicial proceeding to gain an unfair advantage. Ferguson v. Building Materials Corp., 295 S.W.3d 642, 643 (Tex. 2009). Defendants have no evidence to establish that Roberts (1) are taking a position contrary to that taken under oath in an earlier judicial proceeding; and (2) to gain an unfair advantage. To establish estoppel by deed, Defendants must bring forth evidence that Roberts is 36 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 41 of 46 PageID 743 denying the truth of matters set forth in a deed the party has offered as grantor or has accepted as grantee. Greene v. White, 153 S.W.2d 575, 583 (Tex. 1941). Defendants are without evidence to show that Roberts (1) is denying the truth of matters set forth in a deed; and (2) offered as grantor or accepted as grantee. To establish estoppel by contract, Defendants must bring forth evidence that Roberts is denying the terms of a valid or fully executed contract that has not been set aside by fraud, accident or mistake. Mathews v. Sun Oil Co., 411 S.W.2d 561, 564 (Tex.App.-Amarillo 1966), aff’d, 425 S.W.2d 330 (Tex. 1968). Defendants are without evidence to show that Roberts: (1) is denying the terms of a valid or fully executed contract; and (2) that the contract has not been set aside by fraud, accident or mistake. Roberts does not dispute the validity of the Commission Agreement and there is no other contract between the parties relating to the commissions owed to Roberts or the reimbursement of expenses to which he is entitled. To establish equitable estoppel, Defendants must bring forth evidence that Roberts: (1) made a false representation to, or concealed a material fact from, Defendants; (2) intended that its representation or concealment be acted on; (3) knew or had the means of knowing the real fact; (4) Defendants neither knew nor had the means of knowing the real facts; and (5) Defendants relied on the representation or concealment to its detriment. See Johnson & Higgins v. Kenneco Energy, Inc., 962 S.W2d 507, 515-16 (Tex. 1998). Defendants have no evidence of any one of the five elements necessary to establish the defense of equitable estoppel against Roberts’ claims for commissions under his Commission Agreement. To establish promissory estoppel as a defense, Defendants must establish that: (1) Roberts made a promise to Defendants; (2) Defendants reasonably and substantially relied on 37 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 42 of 46 PageID 744 Roberts promise to their detriment; (3) Roberts knew or should have known its promise would lead Defendants to some definite and substantial injury; and (4) injustice can be avoided only by enforcing Roberts’ promise. Nagle v. Nagle, 633 S.W.2d 796, 800 (Tex. 1982). Defendants have no evidence of any one of the four elements necessary to establish the defense of promissory estoppel against Roberts. To establish quasi-estoppel as a defense, Defendants must establish that: (1) Roberts acquiesced to or accepted a benefit under a transaction; (2) Roberts present position is inconsistent with its earlier position when he acquiesced to or accepted the benefit of a transaction; and (3) it would be unconscionable to allow Plaintiffs to maintain its present position, which is to another’s disadvantage. Lopez v. Munoz, Hockma & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000). Defendants have no evidence of any one of the three elements necessary to establish the defense of quasi-estoppel against Roberts. Waiver Waiver is an intentional relinquishment of a known right and is either made expressly or indicated by conduct that is inconsistent with an intent to claim the right. Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008). The plaintiff’s intent is the primary factor in determining waiver, and in the absence of a clear intent expressed in words, acts, or conduct, waiver will be implied only to prevent fraud or inequitable consequences. Stowers v. Harper, 376 S.W.2d 34, 40 (Tex.App.-Tyler 1964, writ ref’d n.r.e.). There is no evidence Roberts waived his entitlement to his commissions under the Commission Agreement. Duress Duress occurs when the defendant is compelled to enter into a contract against its will or 38 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 43 of 46 PageID 745 judgment, such as by threat. See Cooper v. Cochran, 288 S.W.3d 522, 533 (Tex.App.-Dallas 2009, no pet.). To prove duress, the defendant must prove: (1) a threat was made; (2) the threat destroyed free agency; (3) restraint was imminent; and (4) defendant had no means of protection. Defendants have no evidence supporting the defense of duress. Ratification Ratification occurs when the plaintiff, after learning all the material facts, confirms or adopts an earlier act that did not then legally bind it and that it could have repudiated. City of The Colony v. North Texas Mun. Water Dist., 272 S.W.3d 699, 732 (Tex.App.-Ft. Worth 2008, pet dism’d). The elements of ratification are: (1) plaintiff’s approval; (2) plaintiff’s knowledge; and (3) plaintiff’s intention. Defendants have provided no factual support, much less evidence, for the elements of this defense. There is no evidence that Roberts learned all the material facts and then approved any change to his Commission Agreement. Contributory, Comparative, and/or Proportionate Negligence, Fault and/or Responsibility Defendants assert the defenses of contributory, comparative, and/or proportionate negligence, fault and/or responsibility, if any, among Plaintiff and each defendant, settling person and responsible third party. As a matter of law, these defenses do not apply to a breach of contract claim, promissory estoppel or quantum meruit claim. These defenses apply to a cause of action based in tort. Tex. Civ. Prac. & Rem. Code §33.002. Therefore these defenses should be dismissed. CONCLUSION For the reasons set forth above, Roberts is entitled to summary judgment on his breach of contract claim, OSC and Breckenridge’s counterclaims and Defendants’ affirmative defenses. 39 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 44 of 46 PageID 746 Defendants have no evidence to defeat this motion and, therefore, Roberts entitled to summary judgment as requested herein. PRAYER Roberts respectfully requests the Court enter partial summary judgment on the claims and defenses as set forth herein and for all relief to which he is entitled. Respectfully submitted, LAW OFFICES OF BRAD JACKSON 3701 Turtle Creek Boulevard Suite 12G Dallas, Texas 75219 Telephone No. 214/526-7800 Telefax No. 214/526-1955 /s/ Cheryl L. Mann Brad Jackson State Bar Card No. 10496460 brad@bradjackson.com Cheryl L. Mann State Bar Card No. 00794220 cheryl@bradjackson.com ATTORNEYS FOR PLAINTIFF DAVID ROBERTS CERTIFICATE OF SERVICE On June 16, 2017, I electronically submitted the foregoing document with the clerk of court for the U.S. District Court, Northern District of Texas, using the electronic case files system of the court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal Rule Civil Procedure 5(b)(2). /s/ Cheryl L. Mann 40 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 45 of 46 PageID 747 41 Case 3:15-cv-01217-L Document 81 Filed 06/16/17 Page 46 of 46 PageID 748
