Oak Mortgage Group, Inc. Michael H. Nasserfar Michael E. Task And Tycord R. Gosnay v. Ameripro Funding, Inc. ( 2015 )

ACCEPTED
03-15-00416-CV
7272571
THIRD COURT OF APPEALS
AUSTIN, TEXAS
10/7/2015 2:22:25 PM
JEFFREY D. KYLE
CLERK
NO. 03-15-00416-CV
FILED IN
3rd COURT OF APPEALS
IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
AUSTIN, TEXAS 10/7/2015 2:22:25 PM
JEFFREY D. KYLE
Clerk
OAK MORTGAGE GROUP, INC.; MICHAEL H. NASSERFAR;
MICHAEL E. TASK; and TYCORD R. GOSNAY,
Appellants,
v.
AMERIPRO FUNDING, INC.,
Appellee.
On Appeal from the 345th District Court of Travis County, Texas
Hon. Gisela D. Triana, Presiding
BRIEF OF APPELLEE
AMERIPRO FUNDING, INC.
Susan P. Burton
State Bar No. 03479350
sburton@gdhm.com
Eric G. Behrens
State Bar No. 02050700
ebehrens@gdhm.com
GRAVES, DOUGHERTY, HEARON & MOODY, P.C.
401 Congress Ave., Suite 2200
Austin, Texas 78701
Telephone: (512) 480-5600
Facsimile: (512) 480-5838
ATTORNEYS FOR APPELLEE AMERIPRO FUNDING, INC.
October 7, 2015
IDENTITY OF PARTIES AND COUNSEL
Appellants/Plaintiffs/ Attorneys for Appellants/Plaintiffs/
Counter-Defendants Counter-Defendants
Oak Mortgage Group, Inc. Wm. Charles Bundren
Michael H. Nasserfar WM. CHARLES BUNDREN & ASSOCIATES
Michael E. Task Law Group, PLLC
Tycord R. Gosnay 2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
(214) 808-3555 (Telephone)
(972) 624-5340 (Facsimile)
Charles@bundrenlaw.net
Appellee/Defendant/ Attorneys for Appellee/Defendant
Counter-Plaintiff Counter-Plaintiff
Ameripro Funding, Inc. Susan P. Burton
Eric G. Behrens
GRAVES, DOUGHERTY, HEARON & MOODY, P.C.
401 Congress Avenue, Suite 2200
Austin, Texas 78701
(512) 480-5600 (Telephone)
(512) 536-9908 (Facsimile)
sburton@gdhm.com
ebehrens@gdhm.com
ii
ABBREVIATIONS AND RECORD CITATIONS
The following abbreviations and notations are used in this Brief:
CR; 1CR; 2CR References to the Clerk’s Record (record,
supplement I, and supplement II).
1RR; 2RR; 3RR References to the Reporter’s Record (three
volumes – Index, Transcript).
AX; PX; CX References to the exhibits (in Vol. 4 of the
Reporter’s Record: Applicant Ameripro’s
exhibits, Plaintiffs’ exhibits, Court exhibit).
App. Br. References to Brief of Appellants.
iii
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ...............................................................................ii
ABBREVIATIONS AND RECORD CITATIONS ...................................................................iii
TABLE OF CONTENTS .................................................................................................... iv
TABLE OF AUTHORITIES ................................................................................................ ix
STATEMENT OF THE CASE ...........................................................................................xiv
STATEMENT REGARDING ORAL ARGUMENT ............................................................... xv
ISSUES PRESENTED ......................................................................................................xvi
STATEMENT OF FACTS ................................................................................................1
I. Introduction: overview of the conduct which led to the injunction........1
II. Ameripro’s creation of the Lakeway branch office, and
the Individual Appellants’ fiduciary roles for Ameripro ........................4
III. The non-solicitation clauses and ownership
provisions in the Ameripro contracts ......................................................4
A. Ameripro’s confidential information includes each
category outlined in the Temporary Injunction..............................5
B. Brohn, Clark Wilson, and Seaholm were Ameripro
customers under the contractual non-solicitation clauses..............5
C. Oak Mortgage’s actual knowledge of the contract provisions ......7
IV. The Individual Appellants admitted that they took Ameripro’s
confidential information and provided it to Ameripro’s
competitor. They began doing so months before they resigned ............7
iv
A. Appellants also downloaded and copied Ameripro’s
financial and customer data from its office and computers ...........8
B. The confidential information that Appellants took from
Ameripro enabled them to jumpstart a competing office ............12
V. Appellants began soliciting Ameripro’s customers for
Oak Mortgage, even before the Individual Appellants
had resigned from Ameripro..................................................................13
A. One month before the Individual Appellants resigned as
fiduciaries, Oak Mortgage agreed to indemnify them against
Ameripro, and told them they could solicit its customers ...........13
B. While they were Ameripro’s fiduciaries, the Individual
Appellants began soliciting Ameripro customers for a
competitor. Oak Mortgage sent “scripts” for them to use ..........14
VI. In addition to transmitting confidential data to Oak Mortgage
before they resigned, the Individual Appellants removed over
20,000 Ameripro files and kept them as agents of Oak Mortgage .......16
VII. The Individual Appellants destroyed Ameripro documents,
including its customer files, and destroyed files after the
district court issued a TRO compelling their return..............................17
VIII. Appellants’ successful disruption of Ameripro’s business...................19
SUMMARY OF THE ARGUMENT .................................................................................... 20
ARGUMENT ...............................................................................................................22
I. The Temporary Injunction satisfies the requirements of Rule 683 ......22
A. The reasons stated in the Temporary Injunction, which
Appellants do not address or even mention in their brief ............22
v
B. The reasons stated in the Temporary Injunction go further
than is required by Rule 683, as shown by multiple decisions ....23
C. The decisions cited by Appellants do not assist them.
One such decision lists the language from this Temporary
Injunction as examples that “comply with rule 683” ...................28
II. Appellants’ own admissions establish that Ameripro’s builder
clients are “customers” under the non-solicitation clauses...................30
A. Appellants make no attempt to address the testimony
(including their own sworn admissions) that customers
include borrowers and “builder customers”.................................30
B. The evidence regarding builder customers is
consistent with the non-solicitation clause. .................................32
C. Appellants’ argument that the definition of “customers”
should be construed against Ameripro conflicts with the
contracts, which disclaim that either party is sole drafter............34
III. Injunctive relief was also independently warranted because
Appellants were barred from soliciting Ameripro customers
for a competitor in breach of fiduciary duties, separate and
apart from their breaches of contract and misappropriation .................35
A. Appellants did not merely take the names of builder customers.
They took pricing, lender credit data, compilations of builder
preferences, and multiple other data from computers .................36
B. Appellants’ solicitation of Ameripro customers and use of
confidential information for that purpose, even while the
Individual Appellants were still Ameripro’s fiduciaries..............37
C. Even if Appellants supposedly could have publicly obtained
some of the data they took from Ameripro computers, they
tortiously downloaded Ameripro’s work product........................40
vi
IV. Appellants’ argument that they had returned all confidential
information of Ameripro prior to the hearing is also false ...................42
A. Appellants did not return all confidential information,
they violated the TRO, and they specifically stripped out
system metadata from the documents they did provide ...............43
B. Appellants destroyed documents even after
a TRO commanded their return....................................................44
C. The fact that a competitor misappropriated confidential
information at all also supports issuing the injunction ................45
D. Appellants used Ameripro’s confidential information,
but taking such data was also wrongful misappropriation...........46
V. The district court correctly found that Ameripro does not
have an adequate legal remedy..............................................................47
A. The district court found Ameripro has a likelihood of
success on multiple tort theories for which injunction
is the only effective relief, not just breach of contract.................49
B. Even in pure contract cases, findings of inadequate remedy
will be upheld where, as here, some evidence supports it ...........50
C. Injunctive relief is consistent with Ameripro’s
claim for damages for Appellants’ past conduct .........................51
D. Appellants’ argument, in addition to being baseless, is
outside the hearing record and should be disregarded.................53
VI. The Temporary Injunction is not overly broad, and instead is
narrowly tailored to protect against imminent irreparable harm ..........54
PRAYER ......................................................................................................................... 59
CERTIFICATE OF COMPLIANCE ...................................................................................... 60
vii
CERTIFICATE OF SERVICE.............................................................................................. 60
APPENDIX
Temporary Injunction Order........................................................................Tab 1
Highlighted testimony cited in this brief
from Volume 2 of the Reporter’s Record (2RR) ........................................Tab 2
Highlighted testimony cited in this brief
from Volume 3 of the Reporter’s Record (3RR) ........................................Tab 3
(Exhibits cited in this brief are bookmarked.)
viii
TABLE OF AUTHORITIES
CASES PAGE(S)
Amalgamated Acme Affiliates, Inc. v. Minton,
33 S.W.3d 387 (Tex. App. – Austin 2000, no pet.) ......................................27
American Precision Vibrator Co. v. National Air Vibrator Co.,
764 S.W.2d 274 (Tex. App. – Houston),
appeal stayed, 771 S.W.2d 562 (Tex. App. – Houston 1989) ...............41, 42
Branch Banking & Trust Co. v. TCI Luna Ventures, LLC,
2013 WL 1456651 (Tex. App. – Dallas Apr. 9, 2013, no pet.) ...................53
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ..........................................................................52
Byrd Ranch, Inc. v. Interwest Savings Association,
717 S.W.2d 452 (Tex. App. – Fort Worth 1986, no writ) ...........................28
Cardinal Health Staffing Network, Inc. v. Bowen,
106 S.W.3d 230 (Tex. App. – Houston [1st Dist.] 2003, no pet.) ..........52, 53
Conley v. DSC Commun. Corp.,
1999 WL 89955 (Tex. App. – Dallas Feb. 24, 1999, no pet.) .....................26
Cornelison v. Offshore Entertain. Corp.,
2002 WL 34231619 (Tex. App. –
Corpus Christi Dec. 5, 2002, no pet.) ...........................................................29
Correa v. Houston Surg. Asst. Serv., Inc.,
2013 WL 3958499 (Tex. App. –
Houston [14th Dist.] July 30, 2013, no pet.) .................................................55
ERI Consult. Engrs., Inc. v. Swinnea,
318 S.W.3d 867 (Tex. 2010) ........................................................................35
Fasken v. Darby,
901 S.W.2d 591 (Tex. App. – El Paso 1995, no pet.) ..................................29
ix
Flake v. EGL Eagle Global Logistics, L.P.,
2002 WL 31008136 (Tex. App. –
Houston [14th Dist.] Sept. 5, 2002, no pet.) .................................................49
Fox v. Tropical Warehouses, Inc.,
121 S.W.3d 853 (Tex. App. – Fort Worth 2003, no pet.) ............................25
Frequent Flyer Depot, Inc. v. American Airlines, Inc.,
281 S.W.3d 215 (Tex. App. – Fort Worth 2009,
pet. denied), cert. denied, 559 U.S. 1036 (2010) ...................................50, 56
Gallagher Headquarters Ranch Dev., Ltd. v. City of San Antonio,
303 S.W.3d 700 (Tex. 2010) ........................................................................34
Garth v. Staktek Corp.,
876 S.W.2d 545 (Tex. App. – Austin 1994, writ dism’d w.o.j.) ...........49, 58
General Homes, Inc. v. Wingate Civic Ass’n,
616 S.W.2d 351 (Tex. Civ. App. –
Houston [14th Dist.] 1981, no pet.) .............................................................29
Guy Carpenter & Co. v. Provenzale,
334 F.3d 459 (5th Cir. 2003) .........................................................................58
Hartwell’s Office World, Inc. v. Systex Corp.,
598 S.W.2d 636 (Tex. Civ. App. –
Houston [14th Dist.] 1980, writ ref’d n.r.e.) ................................................50
Hill v. McLane Co., Inc.,
2011 WL 56061 (Tex. App. – Austin Jan. 5, 2011, no pet.) 26, 42,48, passim
Hunter Bldgs. & Mfg., LP v. MBI Global, LLC,
436 S.W.3d 9 (Tex. App. – Houston [14th Dist.] 2014, pet. denied) .....35, 37
IAC, ltd. v. Bell Helicopter Textron, Inc.,
160 S.W.3d 191 (Tex. App. – Fort Worth 2005, no pet.).................24, 25, 26
x
Inex Indus., Inc. v. Alpar Resources, Inc.,
717 S.W.2d 685 (Tex. App. – Amarillo 1986, no writ)................................27
In re Longview Energy Co.,
464 S.W.3d 353 (Tex. 2015) ........................................................................35
International Brotherhood of Elect. Workers v. Becon Construct. Co., Inc.,
104 S.W.3d 239 (Tex. App. – Beaumont 2003, no pet.) .............................29
Intercontinental Terminals Co., LLC v. Vopak North America, Inc.,
354 S.W.3d 887 (Tex. App. –
Houston [1st Dist.] 2011, no pet.) ...........................................................29, 30
Kotz v. Imperial Cap. Bank,
319 S.W.3d 54 (Tex. App. – San Antonio 2010, no pet.).............................29
Lasser v. Amistco Separation Prods., Inc.,
2014 WL 4952501 (Tex. App. –
Houston [1st Dist.] Oct. 2, 2014, no pet.) .....................................................46
Lynd v. Bass Pro Outdoor World, Inc.,
2014 WL 1010120 (Tex. App. – Dallas 2014, pet. denied)..........................45
Matrix Network, Inc. v. Ginn,
211 S.W.3d 944 (Tex. App. – Dallas 2007, no pet.) ....................................58
Miller Paper Co. v. Roberts Paper Co.,
901 S.W.2d 593 (Tex. App. – Amarillo 1995, no pet.) .........................49, 56
Monsanto Co. v. Davis,
25 S.W.3d 773 (Tex. App. – Waco 2000, writ dism’d w.o.j.) .....................29
Moreno v. Baker Tools, Inc.,
808 S.W.2d 208 (Tex. App. – Houston [1st Dist.] 1991, no pet.) ...............29
Pinebrook Properties, Ltd. v. Brookhaven Lake Property Owners Ass’n,
77 S.W.3d 487 (Tex. App. – Texarkana 2002, pet. denied) ........................28
xi
Reach Group, LLC v. Angelina Group,
173 S.W.3d 834 (Tex. App. – Houston [14th Dist.] 2005, no pet.) ........52, 53
Reliant Hosp. P’ship, LLC v. Cornerstone Healthcare Group Holdings, Inc.,
374 S.W.3d 488 (Tex. App. – Dallas 2012, pet. denied) .............................41
Renewdata Corp. v. Strickler,
2006 WL 504998 (Tex. App. – Austin 2006, no pet.)..................................42
Rimkus Consult. Group, Inc. v. Budinger,
2001 WL 619067 (Tex. App. –
Houston [14th Dist.] June 7, 2001, no pet.) ............................................57, 58
Rugen v. Interactive Business Systems, Inc.,
864 S.W.2d 548 (Tex. App. – Dallas 1993, no pet.) ....................................24
Salas v. Chris Christensen Sys., Inc.,
2011 WL 4089999 (Tex. App. – Waco Sept. 14, 2011, no pet.) ...........50, 58
Sharma v. Vinmar Int’l, Ltd.,
231 S.W.3d 405 (Tex. App. – Houston [14th Dist.] 2007, no pet.) ..............57
State v. Cook United, Inc.,
464 S.W.2d 105 (Tex. 1971) ........................................................................29
Stoner v. Thompson,
553 S.W.2d 150 (Tex. Civ. App. –
Houston [1st Dist.] 1977, writ ref’d n.r.e.) ...................................................29
Texas Tech University Health Sciences Center v. Rao,
105 S.W.3d 763 (Tex. App. – Amarillo 2003, pet. dismissed) ....................27
Topheavy Studios, Inc. v. Doe,
2005 WL 1940159 (Tex. App. –
Austin Sept. 14, 2005, no pet.) ...............................................................26, 52
Tranter, Inc. v. Liss,
2014 WL 1257278 (Tex. App. –
Fort Worth March 27, 2014, no pet.) ............................................................25
xii
Universal Health Serv. v. Thompson,
24 S.W.3d 570 (Tex. App. – Austin 2000, no pet.) ..........................33, 34, 51
University Interschol. League v. Torres,
616 S.W.2d 355 (Tex. Civ. App. – San Antonio 1981, no pet.) ..................29
Walling v. Metcalfe,
863 S.W.2d 56 (Tex. 1993) ..........................................................................51
W.R. Grace & Co. v. Henson,
2007 WL 2389547 (Tex. App. –
Corpus Christi Aug. 23, 2007, no pet.) ..................................................52, 53
STATUTES AND RULES
12 C.F.R. § 1016, et seq. (Regulation P).................................................................10
Tex. Civ. Prac. & Rem. Code § 134A.002(3) & (6)
(Texas Uniform Trade Secrets Act (“TUTSA”)) .......................................36, 37, 47
Tex. R. Civ. P. 683................................................................... 20, 22, 23, 24, passim
xiii
STATEMENT OF THE CASE
This is an interlocutory appeal from a Temporary Injunction that the district
court issued in favor of Appellee, Ameripro, on June 16, 2015. CR 223-27.
Ameripro filed an application for injunctive relief and counterclaim against
Appellants on April 1, 2015, for misappropriation, conversion, breach of fiduciary
duty (and aiding and abetting those breaches), breach of contract (and tortious
interference with contract), and conspiracy. CR 44-68. The district court granted
a Temporary Restraining Order against Appellants on May 11, 2015. CR 95-98.
The district court conducted a two-day evidentiary hearing on Ameripro’s
application for temporary injunction on May 26-27, 2015. At the conclusion of
the hearing, the district court orally granted Ameripro’s application and dictated
the parameters of the injunction. 3RR 208-14. The parties submitted forms of
order. CR 160-81; CR 182-202; CR 207-22. The court entered a Temporary
Injunction Order in favor of Ameripro on June 16, 2015, and entered a separate
order denying Appellants’ application for a temporary restraining order. CR 223-
27; CR 228-29.
xiv
STATEMENT REGARDING ORAL ARGUMENT
(ORAL ARGUMENT NOT NECESSARY)
Appellee believes that the record clearly shows that the district court did not
abuse its discretion in entering the temporary injunction at issue, and that oral
argument is not necessary. The district court heard two days of evidence and had
full briefing, and as cited below, ample evidence supports its issuance of the
injunction. If the Court of Appeals grants oral argument, Appellee does not waive
argument, but will appear and argue for affirmance.
xv
ISSUES PRESENTED
1. Does the Temporary Injunction’s list of reasons why there is
imminent and irreparable injury — including Appellants’ attempts “to permanently
destroy Ameripro documents,” their misappropriation of “confidential and
proprietary information” from “Ameripro’s computer network and premises,” their
commission of breach of contract and multiple torts, and the multiple findings of
inadequacy and difficulty of quantifying damages — satisfy Rule 683
requirements, and does the evidence support those findings?
2. Did the district court correctly determine that builders are
“customers” of Ameripro under the contracts with Ameripro, in light of the
evidence of Appellants’ admissions, Ameripro’s testimony, and the text of the
contracts, and does evidence of Appellants’ breach of fiduciary duty serve as an
independent basis for the injunction?
3. Are the Temporary Injunction’s findings that Appellants
misappropriated confidential information “stored on Ameripro’s computer
network,” including “customer and referral lists and contact information,” “pricing
information,” compilations of “builder preferences,” “general ledgers,” and other
customer and financial data, supported by the evidence?
4. Did the district court properly issue a Temporary Injunction despite
Appellants’ claim that they returned the confidential records prior to the hearing,
in light of the evidence that they stripped out metadata from the copies of
documents they returned, destroyed Ameripro client files after the TRO had
issued, and their admissions that they still retained Ameripro records?
5. Is there evidence to support the Temporary Injunction’s findings that
Ameripro “does not have a legal remedy that is adequate,” that the full extent of its
injury would “be very difficult to ascertain or quantify,” that an award of damages
“would not fully or adequately compensate Ameripro,” and its related findings?
6. Did the district court abuse its discretion in tailoring the terms of the
injunction to track the threat of imminent and irreparable injury to Ameripro?
xvi
STATEMENT OF FACTS
I. Introduction: overview of the conduct which led to the injunction.
Appellee Ameripro Funding, Inc. (“Ameripro”) is an Austin-based
residential mortgage lender. 2RR 41-42, 44. By the nature of its lending business,
Ameripro receives borrower loan applications, social security numbers, credit
reports, and other confidential consumer information, the privacy of which is
statutorily protected. 2RR 86, 143-45, 160-61, 169-72; 3RR 30, 39.
Appellants Michael H. Nasserfar, Michael E. Task, and Tycord R. Gosnay
(the “Individual Appellants”) are former agents and employees who worked at
Ameripro’s branch office in Lakeway, Texas. 2RR 45. Each of the Individual
Appellants owed formal fiduciary duties to Ameripro during his employment with
the company, including a duty of loyalty. 2RR 182-83, 194; 3RR 38-39, 58.
On January 15-16, 2015, the Individual Appellants resigned from Ameripro
without prior notice. 2RR 52-54, 154; AX 2-4. The following Monday, they
opened a new branch office for Ameripro’s competitor, Appellant Oak Mortgage,
in the same office complex. 2RR 60-61, 154; 3RR 31-32.
Ameripro subsequently discovered that the Individual Appellants had been
secretly transmitting copies of its confidential records to Oak Mortgage, beginning
over two months before they resigned (during a time when they were still
fiduciaries for Ameripro). E.g., 3RR 44-46 & AX 27. Oak Mortgage actively
1
solicited that information from the Individual Appellants, and scanned and
downloaded copies of Ameripro reports onto Oak Mortgage’s own computer
network. 3RR 44-46, 127-28; 2RR 88-94; AX 27; AX 70 at 890-93.1
The Individual Appellants also secretly downloaded and printed Ameripro’s
confidential customer and financial records, and personnel files of other Ameripro
employees, without Ameripro’s (or the customers’ or other employees’)
knowledge or authorization. 2RR 154-60, 170-75, 178, 184; 3RR 45-46, 127-28.2
The Individual Appellants admitted that the Ameripro records were confidential,
that they gave copies of those confidential records to Ameripro’s competitor, Oak
Mortgage, and that they continued to keep copies of all those records once they
1
See, e.g., 3RR 45-46 (“Q. Exhibit 27 is an example of AmeriPro’s competitor asking you for
confidential information without AmeriPro’s knowledge, correct? A. Correct. They asked for
information in that e-mail. … Q. You did give him a copy of a profitability report, didn’t you?
A. I don’t remember the exact title of the report, but I gave him the report,” adding that at a
November 17, 2014 meeting “I did give him the report.”); 3RR 46 (Nasserfar provided the report
“in direct response to Oak Mortgage asking you for the profit and loss statement of AmeriPro”);
3RR 39-41 (“Question, Line 9: ‘And earlier we talked about this, and you testified that a general
ledger would be confidential; is that correct?’ Answer: ‘A general ledger would be confidential
information.’ … Question: ‘So your testimony is that either you or Mr. Task provided Exhibit
12 [AX 28], which is the general ledger by branch to Oak Mortgage?’ Answer: ‘Correct.’”).
2
See, e.g., 2RR 156-57 (“Q. You didn’t ask anyone’s permission at AmeriPro to take this
information home with you, did you? A. I did not. … Q. The day before – the day before you
resigned from AmeriPro, you filled a bankers box with these monthly general ledgers and several
other Ameripro financial records to take with you, correct? A. I made copies. … Q. And you
had copies of personnel records of other employees of AmeriPro at your house even after you
resigned from the company, correct? A. I had copies, correct.”); 2RR 174-75 (downloaded
Ameripro’s confidential financial records “off of AmeriPro’s computer network that you had to
access through a password”); 2RR 184 (“Q. You never once asked any of the consumers, whose
information you took home with you, you didn’t ask any of them for permission to take their
financial nonpublic data home with you, did you? A. I did not.”).
2
became officers and agents of Oak Mortgage. 2RR 163-71, 174-75, 177-78, 183-
84; 3RR 39-41; see also 2RR 80-81.3 At the hearing, Appellants’ counsel told the
district court that Appellants “returned over 20,000 – I think it’s over 20,000
electronic files” to Ameripro on April 27, 2015 alone. 2RR 22.
In addition to taking customer data from Ameripro’s computers, the
Individual Appellants also began secretly soliciting customers on behalf of Oak
Mortgage, despite their fiduciary relationships and non-solicitation agreements
with Ameripro. One month before they resigned, Oak Mortgage instructed them
that they could “solicit to your book of business and your builder/realtor
relationships” and “solicit to your past customer database.” 2RR 191-93; AX 56.
They proceeded to do so. In December 2014, for example, Nasserfar reported to
Oak Mortgage that he was driving almost 200 miles to contact all Ameripro
builder customers — even though he was still serving as a Branch Manager and
fiduciary for Ameripro at that same time. 3RR 58; AX 63.4
3
See, e.g., 3RR 127-28 (“Q. You gave copies of that bankers box full of financial information
from AmeriPro to Mr. Gosnay to scan at Oak Mortgage’s offices, correct? A. We scanned them,
correct.”); 2RR 155-56 (“Question: ‘And you knew you still had those AmeriPro financial
records, those confidential records, ever since you’ve resigned, correct? It’s not something you
just forgot you had?’ Answer: ‘No, I had not forgotten.’”).
4
3RR 58 (“Q. And you told Oak Mortgage, the competitor of the company you were working
for, that you had driven almost 200 miles and were dropping in on all builder contacts, correct?
A. Correct. Q. You were still under a duty of loyalty to AmeriPro at that time, correct? A. Yes,
sir.”).
3
II. Ameripro’s creation of the Lakeway branch office, and the Individual
Appellants’ fiduciary roles for Ameripro.
Ameripro was founded as a residential mortgage lending company in 2003,
headquartered in Austin. 2RR 41-42.
At the request of Michael Nasserfar, Ameripro created a branch office in
Lakeway, Texas, in 2014. 2RR 46-47. Ameripro promoted Nasserfar to be its
Branch Manager at that location. 2RR 47. Michael Task served as Sales
Manager, and Tycord Gosnay served as a Loan Officer and agent, at the same
location. 2RR 45. The Individual Appellants were Ameripro’s only three
employees at its Lakeway office. 2RR 45.
III. The non-solicitation clauses and ownership provisions in the Ameripro
contracts.
As a condition to their employment, and before they could receive access to
any of Ameripro’s confidential information, the Individual Appellants were
required to sign employment and confidentiality agreements with Ameripro. 2RR
63, 77. The Individual Appellants contractually agreed:
(a) that Ameripro is the exclusive owner of all information they created
or to which they were given access during their employment,
(b) that they would protect the confidentiality of all such information,
and would not use or disclose it except to perform their duties, and
(c) that upon their termination, they would return all such information to
4
Ameripro, and would not retain any portions for any purpose.
AX 7-11, 13-19, 21-24.
A. Ameripro’s confidential information includes each category
outlined in the Temporary Injunction.
After the Individual Appellants signed their employment contracts,
Ameripro gave them access to confidential information, including the records
listed in the Temporary Injunction. 2RR 66-67, 70-71, 80-82, 88-94, 142-43, 183-
84. That information would give others a competitive advantage if used or
disclosed, and Ameripro had multiple security systems in place to protect its
secrecy, including consumer data. 2RR 66-68, 70-71, 81-82, 89-91, 99, 143.
Ameripro never gave them permission to take or disclose any of its
information, let alone to a competitor. 2RR 81-82, 88-89, 92-94.
B. Brohn, Clark Wilson, and Seaholm were Ameripro’s customers
under the contractual non-solicitation clauses.
Although Appellants argue that “customers” under the Ameripro contracts
does not include builders, Nasserfar admitted that part of his job at Ameripro was
to build goodwill with Ameripro’s “builder customers,” and stated that Ameripro
was the “exclusive lender” for Brohn and Clark Wilson. 3RR 50-53; AX 67.
Likewise, Task understood that Ameripro’s “customers” as used in the contracts
he signed included its builders and other referral sources, whom he was
contractually barred from soliciting, and admitted that Ameripro’s “clients”
5
included builders. 2RR 185-86; AX 55. Nasserfar admitted that he developed a
“builder centric model” for Ameripro. 3RR 48-50; AX 75.
Builders Brohn Homes, Clark Wilson Builders, and Seaholm Residences, in
particular, were customers of Ameripro. 2RR 50, 69-70, 100-02; 3RR 51-52, 67-
68.5 Nasserfar and Task did not have a customer relationship with them until after
they were employed at Ameripro. 2RR 100-02, 201; 3RR 67-68, 177-78. Prior to
when Nasserfar and Task resigned from Ameripro, neither did Oak Mortgage.
2RR 52.
Nasserfar and Task contractually agreed that for one year following their
termination, they would not solicit similar business from “any customer” who was
doing business with Ameripro as of his termination, or “otherwise knowingly
interfere with the business of the Company.” AX 11, AX 17.
Each of the Individual Appellants also contractually agreed that “all leads
and loans in process are Company’s property,” they would not take any action to
divert loan business “to a competitor or away from Company,” and they would
provide Ameripro a “written account of any and all open leads, business prospects,
and/or loans in process as of the date” of his termination. AX 11; AX 17-18.
5
E.g., 2RR 100-102 (Brohn became a “customer of Ameripro,” and identifying Seaholm as a
customer); 3RR 51-52 (Nasserfar admits Ameripro was the lender for Clark Wilson and Brohn
Homes); 2RR 50 (Ameripro’s business relationship with “builders or other corporate
customers”).
6
C. Oak Mortgage’s actual knowledge of the contract provisions.
At least as early as December 10, 2014 (more than one month before the
Individual Appellants resigned from Ameripro), they gave Oak Mortgage copies
of their employment agreements with Ameripro, which Oak Mortgage reviewed.
AX 56. Oak Mortgage consequently had actual knowledge of the confidentiality,
exclusive ownership, and non-solicitation provisions in the Ameripro contracts.
IV. The Individual Appellants admitted that they took Ameripro’s
confidential information and provided it to Ameripro’s competitor.
They began doing so months before they resigned.
Oak Mortgage is a direct competitor of Ameripro. 2RR 60. Prior to 2015, it
did not have an office in the Austin area. 3RR 32-33; 2RR 60. In September
2014, Nasserfar began negotiating with Oak Mortgage about becoming its branch
manager at the same location where he managed Ameripro’s branch. 3RR 43.
More than two months before the three Ameripro fiduciaries resigned,
Nasserfar began funneling copies of Ameripro’s confidential information to Oak
Mortgage. On November 12, 2014, for example, Oak Mortgage’s Senior Vice
President e-mailed Nasserfar that Oak Mortgage “will need some more
information from you,” including Ameripro’s product mix and detailed
breakdowns, “compensation” of other Ameripro employees, copies of Ameripro’s
2013 and 2014 profit and loss statements (so Oak Mortgage would know the
“monthly expenses”), and Ameripro “Pricing” on deals so Oak Mortgage could
7
“compare it to our pricing.” AX 27; 3RR 44-45.
Nasserfar admitted that “AmeriPro’s competitor [was] asking you for
confidential information without AmeriPro’s knowledge,” and that he provided it
to Oak Mortgage. 3RR 45-46; AX 70 at 890-93. At least one month before they
resigned as fiduciaries, the Individual Appellants also transmitted an electronic
copy of Ameripro’s Loan Profitability Report to Oak Mortgage, listing Ameripro’s
revenues and margins for every loan at its Lakeway branch, together with
consumer names and account numbers. Oak Mortgage then analyzed the report
for several hours on December 17, 2014. AX 49-50; 2RR 230-32.
A. Appellants also downloaded and copied Ameripro’s financial and
customer data from its office and computers.
In the month before they resigned, the Individual Appellants also removed
electronic and paper copies of virtually every category of confidential financial
and customer information from Ameripro’s Lakeway office. Testimony at the
hearing established:
i) The day before they resigned, Task filled a bankers box full of Ameripro
financial records for the past year. He and Gosnay scanned them at Oak
Mortgage’s offices. 2RR 156-57; 3RR 127-28.6 Task admitted his
6
2RR 156-57 (Task “filled a bankers box with these monthly general ledgers and several other
Ameripro financial records to take with you.”); 3RR 127-28 (“Q. You have copies of that
8
contracts barred him from taking the records, but he took them anyway,
without Ameripro’s knowledge. 2RR 158-59, 166-67, 174.
ii) Nasserfar likewise downloaded Ameripro confidential documents onto a
USB device, and kept it when he became Oak Mortgage’s Vice
President. 2RR 178.
iii) Appellants also downloaded confidential profit and loss reports from
Ameripro’s computer network. 2RR 177-78.7
iv) Appellants took electronic and hard copies of Ameripro’s monthly
general ledgers for 2014, admitted that the ledgers were Ameripro’s
confidential information, and admitted that they gave the ledgers to Oak
Mortgage. 2RR 156-57, 164-65; 3RR 42.8 Oak Mortgage even
produced copies in discovery. AX 28; PX 6.
v) Task and Nasserfar “intentionally” took lists of Ameripro borrowers
(including their social security numbers) when they resigned from
bankers box full of financial information from AmeriPro to Mr. Gosnay to scan at Oak
Mortgage’s offices, correct? A. We scanned them, correct.”).
7
2RR 177-78 (“Q. The day before you resigned from AmeriPro, you also took copies of its
profit and loss reports off the computer system, correct? A. Correct,” but he is not sure of date).
8
2RR 156-57 (they took Ameripro’s “monthly general ledgers”); 3RR 42 (“Q. And you
answered ‘correct’ when she asked you if you or Mr. Task gave it [AX 28] to Oak Mortgage,
correct? A. Correct.”); 2RR 164-65 (“Q. And then the question: ‘This is information you
obtained electronically on AmeriPro’s computer network, correct?’ Answer: ‘Correct.’ …
Question: ‘And you understood then that it was AmeriPro’s confidential information that you
have in these general[] ledgers, correct?’ Answer: “I would agree.’”).
9
Ameripro. Task admitted that they obtained those records from
Ameripro’s secure network, and that federal regulations barred them
from doing so. 2RR 160-61, 167-72; 12 C.F.R. § 1016, et seq.9 They
also failed to obtain permission from any of the borrowers before
removing their private financial information from Ameripro. 2RR 184.10
vi) Appellants downloaded still other borrower information onto a thumb
drive, including nonpublic lists of loans that had not closed yet, and
admitted that federal regulation barred that conduct. 2RR 170-71.11
Nasserfar sent a similar “pipeline” report of unclosed Ameripro loans to
9
2RR 160-61 (“Q. Now, both you and Mr. Nasserfar intentionally took list of AmeriPro
borrowers including their loan numbers and other financial information with you when you
resigned from AmeriPro, correct? A. Correct.”); 2RR 168-69 (“Q. You understood that the
social security number of a borrower of AmeriPro is confidential information, didn’t you? A. I
understand that. Q. And you understand that federal regulations prohibits you from taking that
information, don’t you? A. I do now, yes, sir.”); 2RR 171-72 (“Q. All of the information you
took when you resigned relating to AmeriPro borrowers was information you obtained off of
AmeriPro’s computer system, correct? A. Correct. Q. You didn’t obtain any of that information
from public sources, did you? A. No. … Q. Under Regulation P, you derived that information
from something a borrower submitted to the lender. You’re not allowed to take that. It’s
protected too. Do you understand that? A. I do now. … Q. You took it all off of AmeriPro’s
protected website and computer network, correct? A. From their network.”).
10
2RR 184 (“Q. You never once asked any of the consumers, whose information you took
home with you, you didn’t ask any of them for permission to take their financial nonpublic data
home with you, did you? A. I did not.”).
11
2RR 170-71 (“Q. And the day before you resigned from AmeriPro, you also, in addition to
this bankers box, downloaded on a thumb drive information about a AmeriPro borrowers and
loans that hadn’t even closed yet, correct? A. Correct. … Q. And you understand that under
Regulation P that’s nonpublic private financial information of those borrowers that you had in
your possession, correct? A. I had it in my possession. Q. And you took it home too, correct?
A. Correct.”). As quoted above, they scanned the entire box of records at Oak Mortgage.
10
Oak Mortgage, also in violation of federal regulations. 2RR 85-86.
vii) Appellants took Ameripro’s Funded Loan Report for 2014, which
included the names of each consumer whose loan was processed through
Ameripro’s Lakeway branch, their account numbers, and the fees they
paid, in violation of federal regulations. 2RR 92-93.12 Oak Mortgage
produced a copy in discovery. AX 30; PX 7; 2RR 92.
viii) The Individual Appellants printed and gave Oak Mortgage a copy of
Ameripro’s Statement of Income reports for 2014. Oak Mortgage
produced copies in discovery. AX 29; AX 33-34; PX 5; 2RR 91-92.
ix) Task took copies of Ameripro’s internal pro forma reports, outlining
Ameripro’s future plans for the Lakeway office. 2RR 183-84.
x) On January 13, 2015 (the day before he resigned, and while still a
fiduciary), Gosnay downloaded and e-mailed to his personal gmail
account a copy of Ameripro’s computer compilation of contact
information and loan preferences for three Ameripro builder customers,
including Brohn Homes and Clark Wilson Builders, their fees and tax
rates (broken down by community), working capital, and closing
12
2RR 92-93 (“Q. So is it your understanding these [AX 28-30] were produced in discovery by
Oak Mortgage? A. Yes. Q. Okay. Any reason – any legitimate reason why Oak Mortgage
should have these exhibits like Exhibit 30? A. No.” It included borrower names, “all the
11
preferences, requirements, and nonpublic lender credit arrangements
Ameripro made with those customers. He also downloaded and sent to
his personal e-mail Ameripro rate information, and Ameripro templates
and forms. AX 35-36, 38; 2RR 93-94, 96-98.
Appellants knew they did not have Ameripro’s consent to take its
information, and knew that their contracts prohibited it. 2RR 158-59, 170-71.13
In their haste in downloading and using Ameripro’s documents, Appellants
even forgot to remove Ameripro’s address from the templates they took.
Appellants began using exactly the same forms at their new business, with Oak
Mortgage’s logo, but with Ameripro’s address still affixed. 2RR 96-98; compare
AX 36 (the attachment Gosnay e-mailed to his gmail account) with AX 37.
B. The confidential information that Appellants took from Ameripro
enabled them to jumpstart a competing office.
Access to Ameripro’s records and data would give a competitor “a head
start in starting a new location” in an accelerated time frame. 2RR 81, 90, 99. For
example, it took 10-12 months of time and expense to launch Ameripro’s Lakeway
revenue associated to the specific loan,” expenses specifically related to it, and “total
loan/income,” and that “None of that is publicly available.”).
13
2RR 158 (“Q. You chose not to comply with your contract provisions with AmeriPro and
took its financial information and borrower list to your house instead, correct? A. I made
copies.”); 2RR 170-71 (“Q. You knew that you were taking AmeriPro information home with
you for a purpose other than what AmeriPro had given you consent for, correct? A. Correct.”).
12
office. 2RR 47-48. In contrast, after misappropriating substantially all of that
data, Appellants were able to open a new branch in the same complex within one
business day after the Individual Appellants resigned. 3RR 31-32; 2RR 154.
Similarly, Ameripro developed its proprietary forms over the course of
twelve years. 2RR 98-99. By simply downloading all of that information en
masse, Appellants were able to use the product of Ameripro’s forms, templates,
and customer compilations the same month they opened their branch. AX 35-38.
By transmitting the details of Ameripro’s builder preferences, lender credits
for loans, product mix, pricing, rates, fees, margins, and other internal records to a
competitor (e.g. AX 27-38), Appellants consequently had the benefit of that data
when they solicited Ameripro’s customers at their jumpstarted branch. The
builder customer data, in particular, would aid a competitor in soliciting Ameripro
customers because it would show the type and amount of business obtained
through each builder. 2RR 70-71.
V. Appellants began soliciting Ameripro’s customers for Oak Mortgage,
even before the Individual Appellants had resigned from Ameripro.
A. One month before the Individual Appellants resigned as
fiduciaries, Oak Mortgage agreed to indemnify them against
Ameripro, and told them they could solicit its customers.
On December 10, 2014 (over one month before the Individual Appellants
resigned from their fiduciary roles at Ameripro), Oak Mortgage wrote Nasserfar
13
and Task that it had reviewed their employment agreements, and that they could
“solicit to your book of business,” solicit their “past customer database,” and
solicit from the “builder/realtor relationships.” 2RR 191-93; AX 56.
The next day, December 11, 2014, Oak Mortgage agreed to indemnify them
in litigation with Ameripro. 2RR 193; AX 53; AX 81.14 They nevertheless
continued to serve as fiduciaries at Ameripro for a full month. 2RR 182-83, 194.15
B. While they were Ameripro’s fiduciaries, the Individual
Appellants began soliciting Ameripro customers for a competitor.
Oak Mortgage sent “scripts” for them to use.
One week after Oak Mortgage told Ameripro’s employees they could solicit
its “customers,” Nasserfar e-mailed Task a list of major Ameripro builder
customers, including principal employees. AX 59. A few days later, Nasserfar e-
mailed Oak Mortgage and reported he was “dropping in on all builder contacts,”
driving almost 200 miles to do so. AX 63. Nasserfar admitted he reported his
progress to “the competitor of the company you were working for,” at a time when
14
AX 53 and AX 81 are Oak Mortgage’s Offer Package to Nasserfar and Task, and state: “Per
the phone conversation held on December 11, 2014,” Oak Mortgage Group “agrees to provide
Michael with legal support and protection (‘Legal Support and Protection’) in the event a law suit
is filed against Michael by Michael’s previous employer, AmeriPro Funding, Inc. … by covering
the cost of Michael’s legal fees associated with defending the law suit filed by Ameripro.”
15
2RR 182-83 (“Q. After the December 11 conversation, you continued working as a fiduciary
for AmeriPro for another month, correct? A. I did continue to work for AmeriPro for another
month, yes. … Q. And not only were you a fiduciary for AmeriPro, you were also the co-
manager at the Lakeway branch for that full month, correct? A. Correct.”).
14
Nasserfar admitted he still owed a duty of loyalty to Ameripro itself. 3RR 58.16
On January 8, 2015, while Nasserfar was still a fiduciary to Ameripro, Oak
Mortgage also sent him “scripts” to use for “All previous clients & database,”
“Borrowers in Pipeline,” “Realtors in Pipeline,” and “All other Realtors.” AX 78.
Nasserfar also contacted principals and employees of Ameripro’s existing
customers about his plan to open a competing office with Oak Mortgage – at the
same time Nasserfar was paid by Ameripro to help build goodwill with those same
builder customers. 3RR 53, 58-59, CX 1 at 15-16. Despite the non-solicitation
provisions in his contracts with Ameripro, Nasserfar prepared a “To Dos” list on
January 5, 2015, which included drafting a “new intro email to be sent to clients
(both new and old),” and continued to notify Ameripro customers (but not
Ameripro itself) about his plans. AX 58, 80; 3RR 55-57, 60-61.17 As noted
above, Gosnay downloaded customer compilations and forms and e-mailed them
to his personal account. AX 35-36, 38.
Although the Individual Appellants contractually agreed that Ameripro
16
3RR 58 (“Q. And you told Oak Mortgage, the competitor of the company you were working
for, that you had driven almost 200 miles and were dropping in on all builder contacts, correct?
A. Correct. Q. You were still under a duty of loyalty to AmeriPro at that time, correct? A. Yes,
sir.”). Nasserfar sent that update in response to Oak Mortgage’s e-mail about celebrating their
“next chapter” and “all the work put in to serve all those clients, referral partners!” AX 63.
17
At 3RR 60-61, Nasserfar was impeached with his prior testimony, in which he admitted that
a text from one such customer went to him personally. Nasserfar then testified that he never saw
15
owned “all leads” (AX 11; AX 17-18), they also met with business prospects
while they fiduciaries of Ameripro (but to benefit Oak Mortgage, not Ameripro),
and scheduled future meetings to occur on dates when they would be working at
Oak Mortgage. AX 60-62, 2RR 203-05.
Despite the non-solicitation clause in Nasserfar’s and Task’s contracts, Oak
Mortgage also e-mailed them instructions on how to evade detection of such
violations. For example, Oak Mortgage e-mailed Nasserfar and Task on January
8, 2015: “Just have Ty [Gosnay] resign PRIOR to the Michaels. As long as he
resigns before we are ok. … Wait 1 month before you go after the other person.”
AX 57; 2RR 196-97.18
VI. In addition to transmitting confidential data to Oak Mortgage before
they resigned, the Individual Appellants removed over 20,000 Ameripro
customer and financial files and kept them as agents of Oak Mortgage.
On January 19, 2015, Nasserfar became the Vice President for Oak
Mortgage, Task became Oak’s Mortgage’s Austin Area Sales Manager, and
Gosnay became its Mortgage Banker in Austin. As of that date, they were Oak
Mortgage’s entire sales force in Austin. AX 67; AX 69; AX 81.
it. On the face of AX 58, however, Nasserfar not only received the text but also responded to it,
and the context makes clear he had previously advised the customer about his competing office.
18
2RR 196-97 (Task impeached: “Q. Question: ‘Is there any business reason that you can think
of about waiting one month before you go after the other person, other than to make it appear that
it’s not a solicitation?’ Answer: ‘You’d have to ask him. No.’”).
16
Once they formally became officers and agents of Oak Mortgage, they
continued to keep possession of all of the confidential and customer data they had
taken from Ameripro’s computer network and offices. 2RR 54, 75-78, 159, 178.
Counsel for Appellants told the district court that “on April the 27th [2015]
we returned over 20,000 – I think it’s over 20,000 electronic files to them.” 2RR
22 (emphasis added). Those 20,000+ Ameripro files were “returned” only after
Ameripro filed applications for injunction to get back its internal files. CR 44-68.
Task returned the bankers box of records even later, on May 5, 2015 (six
days before the initial injunction hearing). PX 34; CR 95-98. After the district
court issued a TRO on May 11, 2015, Appellants produced still more Ameripro
records they had stored on ten different thumb drives, laptops, and external storage
devices, but stripped out the system metadata. AX 48; 2RR 226-27. Appellants
had the use of those thousands of Ameripro records during the intervening months.
VII. The Individual Appellants destroyed Ameripro documents, including its
customer files, and destroyed files after the district court issued a TRO
compelling their return.
Appellants discussed the prospect of litigation with Ameripro at least as
early as December 11, 2014, when Oak Mortgage agreed to indemnify them. AX
53; AX 81. Task nevertheless manually deleted all of his text messages through
January 20, 2015, after he left the company, including all of the texts he
17
exchanged with Ameripro customers and the other Appellants. 2RR 182-83.19
On January 15, 2015 (the day before he resigned), Task also inserted a USB
device in the laptop Ameripro had issued to him for work, to download the
documents stored on it, and then deleted 911 “ameriprofunding-clients” files from
the laptop before giving it back to Ameripro. 2RR 217-21; AX 3 (laptop return);
AX 43 (expert analysis). Task had previously moved those files to the local drive
of the laptop, so that information would not be backed up on Ameripro’s network,
would not be accessible to its IT personnel, and documents transmitted to Oak
Mortgage could not be detected. 2RR 174, 219.20
Appellants also destroyed documents subject to the TRO. The TRO issued
on May 12, 2015. CR 95-98. Two days later, Appellants deleted 140 folders from
a USB hard drive labeled “Nasserfar External Drive.” 2RR 233-36; AX 46. The
pathnames for the deleted folders show they were part of what the TRO
commanded to be returned to Ameripro, including: “AMB Loan Funded Report
Jan-Aug” files, “AMB Profit & Loss Jan-Aug” files, “APF Accounting System
19
2RR 182-83 (Task knew of prospective litigation with AmeriPro on December 11, 2014, and
admitted: “Q. And after that, you deleted every text message that existed before then, all the way
through January 20, after you left the company, correct? A. Yes.”).
20
2RR 174 (“Q. – Ameripro wouldn’t be able to tell if you sent it, for instance, to Oak
Mortgage, would it? A. They would not have been able to, I guess. Q. So by having it on the
local drive of your computer, you were able to send it any where you want without being
detected, correct? A. If I chose to, I believe.”).
18
Loan Details '14,” “Monthly Pipeline Details,” and “Loan_files” and “Loan
Details” for several months. AX 46.
VIII. Appellants’ successful disruption of Ameripro’s business.
When the Individual Appellants left Ameripro, they still had loans in the
process of being closed. CX 1 at 18. Despite the clause in their contracts
regarding being “available to help with and participate in the closing process when
requested” (AX 11, AX 17-18), the Individual Appellants did not return telephone
calls or cooperate on the transition of the pending loans. 2RR 53, 55; 3RR 56.
The Individual Appellants’ contracts also required them to provide a
“written account” of all open leads, business prospects, and loans in process as of
their termination. AX 11, AX 17-18. Those provisions were designed to “make a
smooth transition for the current customers in the company’s pipeline.” 2RR 78-
79. They did not provide those lists, however, and did not inform Ameripro of
their conversations with borrowers. 2RR 55-56, 79-80. One major builder
described the impact that the breach had on Ameripro’s goodwill, including that
“there’s been a much higher level of complaint” for the loans Nasserfar handled
and left, some of the loans did not close, and in the resulting confusion Ameripro
was rated “very low” on borrower surveys relating to those loans. CX 1 at 19-21.
In sum, Appellants took the entirety of Ameripro’s confidential financial
and customer data for the Lakeway branch, and used Ameripro’s confidential
19
information to compete for the very customers they had contractually agreed not to
solicit. Ameripro’s pipeline of business at the Lakeway office fell off
dramatically, and its Lakeway branch closed down. 2RR 45-46.
SUMMARY OF THE ARGUMENT
The district court did not abuse its discretion in entering the Temporary
Injunction. This is a case of blatant misappropriation of Ameripro’s confidential
information and solicitation of its customers for a competitor, which began at the
behest of Oak Mortgage while the Individual Appellants were still fiduciaries of
Ameripro. The evidence amply supports that each of the Appellants conspired and
participated in those violations of common law, statute, and contract.
Appellants’ argument that the Temporary Injunction does not provide “any
explanation or description” to satisfy Rule 683 is without merit. Nowhere in
Appellants’ brief do they mention the Temporary Injunction findings that they
attempted to “permanently destroy Ameripro documents and files,” removed
“confidential and proprietary information belonging to Ameripro,” took builder
customer and other confidential data from “Ameripro’s computer network and
premises,” or the multiple specific findings regarding imminent irreparable harm.
Case law shows that the district court’s reasons satisfy Rule 683.
Appellants’ own testimony confirms that the three builders listed in the
20
Temporary Injunction are “customers” of Ameripro, including under the non-
solicitation provision of the contracts. That evidence is consistent with the
contract language as well.
Appellants did not merely take names of builders from Ameripro.
Appellants misappropriated Ameripro’s confidential compilations of multiple
categories of pricing, customer, and financial data (including those listed in the
Temporary Injunction, none of which Appellants mention or address in their
brief). They downloaded that data from Ameripro’s computers. Independent of
the non-use, non-disclosure, and non-solicitation provisions of the contracts, their
conduct was an egregious breach of fiduciary duty, in which Oak Mortgage
knowingly participated, and independently supported issuance of an injunction.
The record establishes that Appellants had not returned all of Ameripro’s
confidential information as of the hearing. Instead, Appellants destroyed
documents after the TRO issued, stripped out metadata from copies they
“returned,” and still retained documents. Even for the documents they did return,
their wrongful retention and use of thousands of that information in a competing
business for several months separately supports issuance of the injunction.
The evidence supports the district court’s multiple findings that Ameripro
does “not have a legal remedy that is adequate,” that damages “would not fully or
adequately compensate Ameripro” and would be “very difficult to ascertain or
21
quantify,” and related findings about the inadequacy of any remedy at law.
Appellants do not mention or address those findings anywhere in their brief, or
any of the evidence relating to them.
The district court narrowly tailored the Temporary Injunction, and its
exercise of discretion in fashioning the injunctive relief is tied to the imminent
irreparable harm as shown by the evidence.
ARGUMENT
I. The Temporary Injunction satisfies the requirements of Rule 683.
Appellants argue that the Temporary Injunction states mere conclusions and
does not provide “any explanation or description” why an injunction is needed to
prevent irreparable injury to Ameripro. [App. Br. 25.] Based on that false
premise, they argue that the Temporary Injunction does not comply with Rule 683.
A. The reasons for issuance stated in the Temporary Injunction,
which Appellants do not address or even mention in their brief.
Appellants’ argument is false on its face. The Temporary Injunction states
that Appellants “attempted to permanently destroy Ameripro documents,” that
they “have taken from Ameripro’s computer network and premises confidential
and proprietary information belonging to Ameripro,” and it itemizes several
categories of confidential customer and financial files that Appellants wrongfully
took from “Ameripro’s computer network and premises,” including “customer and
22
referral lists,” “builder preferences,” and multiple categories of internal financial
data ranging from Ameripro’s “general ledgers” to its “pricing information.” CR
223-24. The Temporary Injunction expressly adds:
“The Court further finds, based upon the evidence, that Ameripro has
met its burden to establish that it will suffer a probable, imminent, and
irreparable injury until trial on the merits, absent entry of a temporary
injunction, in that Ameripro has shown that the full extent of injury to
Ameripro if this Order did not issue would be very difficult to ascertain
or quantify, a future award of damages would not fully or adequately
compensate Ameripro, Ameripro does not have a legal remedy that is
adequate in lieu of injunctive relief, and even to the extent that a legal
remedy might be available, its redress will be limited and inadequate.
The Court further finds that the balancing of the equities as between
Ameripro and Counter-Defendants … favors the issuance of this
temporary injunction, and that this temporary injunction is necessary to
preserve the status quo between the parties pending trial on the merits.”
CR 224 (emphasis added).
None of the foregoing detailed reasons — stated directly in the Temporary
Injunction — are mentioned anywhere in Appellants’ brief. Appellants simply
ignore them. Their argument that the Temporary Injunction does not give “any
explanation or description” of its reasons is without merit.
B. The reasons stated in the Temporary Injunction go further than
is required by Rule 683, as shown by multiple decisions.
As a matter of law, the reasons set out in the Temporary Injunction satisfy
Rule 683 requirements, as illustrated by multiple decisions (including those cited
by Appellants).
23
In IAC, ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191 (Tex. App. –
Fort Worth 2005, no pet.), the court rejected a similar challenge under Rule 683.
In affirming a temporary injunction, the IAC court stated:
“When a defendant possesses trade secrets and is in a position to use
them, harm to the trade secret owner may be presumed. [Citations
omitted.] The threatened disclosure of trade secrets constitutes
irreparable injury as a matter of law.”
160 S.W.3d at 200 (emphasis added). In fact, “At times, an injunction is the only
effective relief an employer has when a former employee possesses confidential
information.” Rugen v. Interactive Business Systems, Inc., 864 S.W.2d 548, 552
(Tex. App. – Dallas 1993, no pet.) (emphasis added).
Just as importantly, the IAC court noted that the same reasons contained in
the Temporary Injunction satisfied Rule 683: “The injunction further states that
Bell’s injury is irreparable because ‘it cannot be adequately compensated in
damages or the damages cannot be measured by any pecuniary standard’ and that
‘a legal remedy may be also inadequate since an award of damages may come too
late.’ Accordingly, we hold that the injunction adequately sets forth the reasons
for its issuance by identifying Bell’s harm and explaining why it is irreparable.”
160 S.W.3d at 201.21
21
Here, Appellants actually used Ameripro’s confidential information. Oak Mortgage
analyzed a copy of Ameripro’s profitability report for several hours, even while the Individual
Appellants (who supplied the report) were still Ameripro fiduciaries. AX 49-50; 2RR 230-32.
24
Here, the Temporary Injunction includes the reasons found sufficient in
IAC, but also recites much more egregious conduct. For example, Appellants’
attempts to “permanently destroy Ameripro documents and files,” and their
possession of confidential information belonging to Ameripro, describe threats of
irreparable injury as a matter of law.22
So too does the Individual Appellants’ breaches of contract, with which Oak
Mortgage tortiously interfered. CR 223. Tranter, Inc. v. Liss, 2014 WL 1257278
*9 (Tex. App. – Fort Worth March 27, 2014, no pet.) (quoting with approval, “‘In
Texas, injury resulting from breach of non-compete covenants is the epitome of
irreparable injury.”). The Temporary Injunction also found that Appellants took
Ameripro’s “customer and referral lists and contact information,” compilations of
“builder preferences,” its “pricing information,” and other specific examples of
customer and financial data which would epitomize irreparable harm if placed in
the hands of a competitor. CR 224.
Even if the district court had not explicitly found the likelihood that
Compare: Fox v. Tropical Warehouses, Inc., 121 S.W.3d 853, 860 (Tex. App. – Fort Worth
2003, no pet.) (“TWI is not required to prove that Fox is actually using the information; it need
only prove that he is in possession of the information and is in a position to use it”).
22
The record supports those reasons as well. 2RR 217-21 & AX 43 (over 900
“ameriprofunding-clients” files destroyed from Ameripro laptop); 2RR 233-36 & AX 46 (140
“loan files,” “pipeline,” and other Ameripro files destroyed); 2RR 182-83 & AX 53 (Task
manually deleted all text messages that existed during his employment, after Oak Mortgage
agreed to indemnify him in litigation against Ameripro).
25
Appellants engaged in misappropriation and destructive behavior, their wrongful
acquisition of Ameripro’s confidential information, by itself, also gives rise to a
presumption of irreparable harm. Hill v. McLane Co., Inc., 2011 WL 56061 *5
(Tex. App. – Austin Jan. 5, 2011, no pet.) (where appellant “acquired” trade secret
information, a plaintiff “need not demonstrate” actual misappropriation before
trial, and “[i]nstead, ‘harm to the trade secret owner may be presumed,” citing
IAC); Conley v. DSC Commun. Corp., 1999 WL 89955 *5 (Tex. App. – Dallas
Feb. 24, 1999, no pet.) (although “no evidence shows any misconduct” by a
former employee, that did “not change the fact that the employee is in possession
of confidential, proprietary information,” and did “not bar the trial court from
entering a temporary injunction.”).
Moreover, the Temporary Injunction findings that i) “the full extent of
injury to Ameripro if this Order did not issue would be very difficult to ascertain
or quantify,” ii) a future award of damages “would not fully or adequately
compensate Ameripro,” iii) Ameripro “does not have a legal remedy that is
adequate in lieu of injunctive relief,” and iv) “even to the extent that a legal
remedy might be available, its redress will be limited and inadequate,” are
independent reasons why irreparable harm would result which satisfy Rule 683,
and as shown in Section V below, are fully supported by the record. Topheavy
Studios, Inc. v. Doe, 2005 WL 1940159 *6 (Tex. App. – Austin Sept. 14, 2005, no
26
pet.) (“A party proves irreparable harm by showing an injury for which there can
be no real legal measure of damages or for which damages cannot be ascertained
with a sufficient degree of certainty.”).
In sum, the district court’s reasons for issuance, as stated in the Temporary
Injunction, are much more detailed than Rule 683 requires. See also Amalgamated
Acme Affiliates, Inc. v. Minton, 33 S.W.3d 387, 397 (Tex. App. – Austin 2000, no
pet.) (injunction satisfied Rule 683 when it stated the appellant misrepresented
itself with intent to interfere, and in the same order, stated that “without the
issuance of this temporary injunction, said Defendant will alter the status quo and
Plaintiffs will be without any adequate remedy at law”); Inex Indus., Inc. v. Alpar
Resources, Inc., 717 S.W.2d 685, 688 (Tex. App. – Amarillo 1986, no writ) (cited
with approval by this Court in Amalgamated as holding “the trial court sufficiently
stated its reasons ‘that Wallace and Inex would, if allowed to continue, alter the
status quo, tend to make ineffectual a judgment in favor of Alpar, and leave Alpar
without an adequate remedy at law,’” and that “these recitations were held to
satisfy Rule 683 as interpreted by the supreme court”); Texas Tech University
Health Sciences Center v. Rao, 105 S.W.3d 763, 768 (Tex. App. – Amarillo 2003,
pet. dismissed) (“a recitation of the reasons an injunction issued was because the
defendants had no adequate remedy at law, the rights involved were unique and
irreplaceable, and money damages would not be a sufficient remedy were
27
sufficient to meet Rule 683 requisites,” and adding, “We agree with that holding”)
(citing Pinebrook Properties, Ltd. v. Brookhaven Lake Property Owners
Association, 77 S.W.3d 487, 504-05 (Tex. App. – Texarkana 2002, pet. denied)).
C. The decisions cited by Appellants do not assist them. One such
decision lists the language from this Temporary Injunction as
examples that “comply with rule 683.”
The authority that Appellants cite at pages 22-24 of their brief actually
defeat their argument: one decision listed some of the same reasons contained in
this Temporary Injunction, and described them as examples that have “been held
sufficient to comply with rule 683.” The remaining decisions that Appellants cite
are inapposite — the language in those orders did not recite any reasons at all, and
in several instances did not even mention the word “injury.”
Appellants cite Byrd Ranch, Inc. v. Interwest Savings Association, 717
S.W.2d 452, 454-55 (Tex. App. – Fort Worth 1986, no writ). The Byrd court,
however, contrasted its facts with examples from decisions where “an order has
been held sufficient to comply with rule 683,” including:
• “the conduct ‘would alter the status quo and tend to make a final
judgment in favor of appellees impossible or difficult to enforce;’”
• The “moving party ‘would be harmed unless the temporary injunction
were issued, as the status quo could not be maintained without the
injunction;’”
• “or that the moving party ‘will probably sustain irreparable injury and
damage to its business’ if the conduct continues.”
28
Here, the district court states “Ameripro will suffer a probable, imminent,
and irreparable injury,” and then proceeds to list those same reasons. CR 224. In
addition, the Temporary Injunction states multiple other reasons as well, as quoted
above. CR 223-24.
The other decisions that Appellants cite are inapposite, because the
temporary injunction orders in those decisions did not list any reasons for
issuance, and in several instances did not mention “injury” at all.23
As stated in Intercontinental Terminals Company, LLC v. Vopak North
America, Inc., 354 S.W.3d 887, 899 (Tex. App. – Houston [1st Dist.] 2011, no
pet.), which Appellants cite in their brief, “An explanation of the pending harm to
23
Moreno v. Baker Tools, Inc., 808 S.W.2d 208, 211 (Tex. App. – Houston [1st Dist.] 1991, no
pet.) (order does not mention “injury” or otherwise state why an injunction was issued); Fasken
v. Darby, 901 S.W.2d 591, 593 (Tex. App. – El Paso 1995, no pet.) (the order “makes no effort”
to list any reason and does not even mention “injury”); Monsanto Co. v. Davis, 25 S.W.3d 773,
789 (Tex. App. – Waco 2000, writ dism’d w.o.j.) (order states there is “probable injury” but does
not state that it is “irreparable” nor attempt to state any reasons); Cornelison v. Offshore
Entertain. Corp., 2002 WL 34231619 *2 (Tex. App. – Corpus Christi Dec. 5, 2002, no pet.)
(states there will be “irreparable injury,” but “wholly fails to identify” any); International
Brotherhood v. Becon Construct. Co., Inc., 104 S.W.3d 239, 244 (Tex. App. – Beaumont 2003,
no pet.) (order does not attempt to state any reasons why there might be irreparable injury);
University Interschol. League v. Torres, 616 S.W.2d 355, 356-58 (Tex. Civ. App. – San Antonio
1981, no pet.) (same); General Homes, Inc. v. Wingate Civic Ass’n, 616 S.W.2d 351, 353 (Tex.
Civ. App. – Houston [14th Dist.] 1981, no pet.) (order states there will be irreparable injury, but
no reasons recited); Stoner v. Thompson, 553 S.W.2d 150, 151 (Tex. Civ. App. – Houston [1st
Dist.] 1977, writ ref’d n.r.e.) (order stated the situation was “harmful,” but failed to state any
reason); Kotz v. Imperial Cap. Bank, 319 S.W.3d 54, 56 (Tex. App. – San Antonio 2010, no pet.)
(“Merely stating that ‘irreparable injury will result,’” without more, insufficient); State v. Cook
United, Inc., 464 S.W.2d 105, 106-07 (Tex. 1971) (The Supreme Court reinstated the temporary
29
the temporary injunction applicant, along with a specific recitation of the conduct
enjoined, is all that is necessary to achieve Rule 683’s purpose.” This Temporary
Injunction does so in detail.24
II. Appellants’ own admissions establish that Ameripro’s builder clients
are “customers” under the non-solicitation clauses.
Appellants state in their brief that they disagree with the “district court’s
construction of the employment contract term ‘customer’ to include residential
homebuilders,” such as Brohn, Clark Wilson, and Seaholm. App. Br. 30. They
argue that when the non-solicitation provisions in their contracts refer to
“customers,” they had intended to use the narrower phrase “borrowers” instead.
Appellants’ argument, however, is without merit for several reasons.
A. Appellants make no attempt to address the testimony (including
their own sworn admissions) that customers include borrowers
and “builder customers.”
First, Appellants’ argument is contradicted by their own admissions. At the
injunction hearing, Nasserfar admitted that part of his job at Ameripro was to build
goodwill with Ameripro’s “builder customers,” and that he would submit expense
injunction, despite no reference to “injury,” because the violated “statute itself declares the
injury” and “the “order need not restate the words of the statute”).
24
Appellants’ reasons for citing Intercontinental are particularly unclear: that court affirmed a
temporary injunction despite the fact that the trial court (unlike the instant case) “struck-through”
a paragraph relating to the applicant’s “probable right of recovery.” 354 S.W.3d at 898-99.
30
reports to Ameripro for entertaining them. 3RR 52-53.25 Task admitted that
Ameripro “customers,” as used in the contracts, included referral sources, and that
he was contractually barred from soliciting them unless they were his customers
before he joined Ameripro. 2RR 185-86.26
Nasserfar further stated that Ameripro was the “exclusive lender” for Brohn
and Clark Wilson. 3RR 50-52; AX 67. In fact, Nasserfar admitted that as
Ameripro’s branch manager, he developed a “builder centric model” for Ameripro.
3RR 48-50; AX 75. In social media, Task as well admitted that Ameripro
“clients” included builders. AX 55.
In addition, Ameripro’s President testified that Ameripro’s customer base
included “builders” with whom Ameripro had business relationships (including for
lender credits on loan transactions), and who served as referral sources. 2RR 68-
71, 142-43. Brohn Homes, Clark Wilson Builders, and Seaholm Residences (the
only builders listed in the Temporary Injunction) in particular were “customers” of
25
3RR 52-53 (He asked Ameripro to reimburse him for lunches and dinners with “Centerra,
Brohn, and other clients.” “Q. Part of what AmeriPro paid you to do was to build goodwill with
its builder customers, correct? A. It wasn’t in my employment agreement. Q. But that’s part of
what you did as your job was to build goodwill with these customers, right? A. I believe so.”).
26
2RR 185-86 (“Q. On Page 112, Line 22, ‘If you developed a relationship with a referral
source after you began at AmeriPro, do you believe you can solicit to them?’ … Answer: ‘If it
was a new referral source, I wouldn’t solicit them. They can solicit me. They can call me, but I
can’t solicit them.’ Question: ‘And you can’t solicit them under the employment agreement as
you understand them’ – ‘understood them, correct?’ Answer: ‘It’s my understanding for 12
31
Ameripro when the Individual Appellants worked there, 2RR 50, 69-70, 100-02;
3RR 67-68, and therefore fell within the terms of the non-solicitation provisions.
Contrary to statements in Appellants’ brief, Nasserfar and Task did not have
a customer relationship with those three entities until after they were employed at
Ameripro, so as to fit within any exception to the non-solicitation clauses. 2RR
100-02, 201; 3RR 67-68, 177-78. Neither did Oak Mortgage. 2RR 52.
B. The evidence regarding builder customers is consistent with the
non-solicitation clause.
Appellants also argue that a reference in the employment agreements to
“customer and their loan” means that the court should substitute the narrower
phrase “borrower” in place of the broader term “customer.” The “customers” of
Ameripro’s lending business, however, encompassed services for both builders
and borrowers, not one or the other. In addition to stating that Ameripro was the
“exclusive lender” for builders Brohn and Clark Wilson, Nasserfar wrote that the
“builder centric model” at Ameripro led to “timely closings, and assisting on
making sales for our builder partners.” AX 75; see also 2RR 50-51, 68-71, 142-
43. Appellants’ own admissions show that the reference to “loan” is consistent
with the district court’s belief that “customers” as used in the contracts was
months.’ … Question: ‘Who do you believe you can solicit business from?’ Answer: ‘Any
client, customer, business referral, realtor source that I knew prior to AmeriPro Funding.’”).
32
intended to include builder customers. Moreover, the one-year non-solicitation
would be meaningless if restricted to homebuyers, given the unlikelihood that a
typical buyer would purchase another home so quickly after their last purchase, in
contrast to the continuous business relationship that Ameripro had with its builder
customers.
In their brief, Appellants make no attempt to explain or otherwise address
any of the above testimony and documentary evidence. They make no attempt to
explain their prior admissions that “customers” under the contracts include
builders, or the testimony that Ameripro’s “customers” specifically included
Brohn, Clark Wilson, and Seaholm. They simply ignore it.
Appellants’ wholesale failure to mention any of the evidence which
contradict their arguments should be fatal to their appeal. A reviewing court
“cannot reverse a trial court’s order if the trial court was presented with conflicting
evidence and the record includes evidence that reasonably supports the trial
court’s decision.” Universal Health Serv. v. Thompson, 24 S.W.3d 570, 576 (Tex.
App. – Austin 2000, no pet.). “The evidence is viewed in the light most favorable
to the trial court’s order, indulging every reasonable inference in its favor,” and
the reviewing court may reverse only if the district court’s order “was so arbitrary
as to exceed the bounds of reasonable discretion.” Id.
33
C. Appellants’ argument that the definition of “customers” should
be construed against Ameripro conflicts with the plain language
of the contracts, which disclaim that either party is sole drafter.
Appellants also argue that the employment agreements do not define
“customer,” and therefore the phrase should be construed against Ameripro. The
contracts themselves, however, negate Appellants’ argument.
Nasserfar and Task agreed that “no party shall be deemed to be the drafter”
and the provisions shall not be construed “against either party as the drafter.” AX
11, 17. Gosnay likewise agreed that his contract “shall be construed as if both
Parties had equal say in its drafting, and thus shall not be construed against the
drafter.” AX 18.
Appellants’ argument also fails because it disregards the applicable standard
of review, which indulges every reasonable inference in favor of the trial court’s
ruling, not against it. Universal, 24 S.W.3d at 576. Their latent ambiguity
argument is unsound for the same reason: Gallagher Headquarters Ranch Dev.,
Ltd. v. City of San Antonio, 303 S.W.3d 700 (Tex. 2010) was a summary judgment
appeal, and therefore applied an appellate standard opposite that of temporary-
injunction review.
Nor would a drafter’s rule aid Appellants. Appellants’ brief states that
customer is “generally defined” as one who regularly has “‘business dealings”
with a business or “‘who customarily has dealings with a business establishment.’”
34
App. Br. 32. That plain English definition, however, supports the district court’s
finding, and is consistent with testimony from both sides which construes
“customers” to include Ameripro’s “builder customers.”
III. Injunctive relief was also independently warranted because Appellants
were barred from soliciting Ameripro customers for a competitor in
breach of fiduciary duties, separate and apart from their breaches of
contract and misappropriation.
Appellants also argue that the identity of builders is not “secret” or
confidential information. Appellants’ overly simplistic argument, however,
mischaracterizes the customer information they actually stole from Ameripro,
which was far more extensive, and how they went about taking it.
Just as importantly, Appellants ignore the district court’s findings that they
violated multiple other tort and contract duties, which Appellants do not address in
their brief. The district court’s findings of “breach of fiduciary duty,” breach of
contract, tortious interference, conversion, and misappropriation, each separately
and independently warranted injunctive relief. ERI Consult. Engrs., Inc. v.
Swinnea, 318 S.W.3d 867, 873 (Tex. 2010) (“courts may fashion equitable
remedies” when a fiduciary “competes with a principal” or usurps an opportunity);
In re Longview Energy Co., 464 S.W.3d 353, 361 (Tex. 2015) (same); Hunter
Bldgs. & Mfg., LP v. MBI Global, LLC, 436 S.W.3d 9, 15 (Tex. App. – Houston
[14th Dist.] 2014, pet. denied) (claimant “has the same equitable remedies” against
35
a party who knowingly “participates” in another’s breach of fiduciary duty).
A. Appellants did not merely take the names of builder customers.
They took pricing, lender credit data, compilations of builder
preferences, and multiple other computer data.
Ameripro’s confidential customer information is not simply builders’ names
and telephone numbers, but includes the lender credits for loans, and its
compilation of builder closing preferences and other details which Ameripro has
aggregated over time — all of which Appellants fail to mention anywhere in their
brief.
The Temporary Injunction specifically lists Ameripro’s “pricing
information,” “builder preferences,” and “transaction details,” among the data that
Appellants misappropriated from its computer network and premises. CR 224.
Appellants’ brief makes no mention anywhere of those findings. Ameripro’s
lender credits for loans and customer compilations, for example, are not publicly
available information, Ameripro made reasonable efforts to maintain secrecy of
that information, and disclosure of that information would give an economic
advantage to a competitor. 2RR 66-68, 70-71, 81-82, 89-91, 99, 143. That would
appear to be why Appellants secretly downloaded it from Ameripro’s computers in
the first place.
For the same reasons, that evidence also satisfies the Texas Uniform Trade
Secrets Act’s (“TUTSA”) elements of a “trade secret,” which explicitly includes a
36
“compilation,” “financial data,” or “list of actual or potential customers” which
have economic value and for which reasonable efforts were made to maintain
secrecy. Tex. Civ. Prac. & Rem. Code § 134A.002(6).
B. Appellants’ solicitation of Ameripro customers and use of
confidential information for that purpose, even while the
Individual Appellants were still Ameripro’s fiduciaries.
Appellants also ignore the Temporary Injunction findings that they engaged
in multiple other tort and contract violations, which independently support the
Temporary Injunction.
Appellants’ sole reference to “fiduciary” is to claim that Oak Mortgage did
not owe a duty itself. App. Br. 57. However, the evidence shows that Oak
Mortgage was a knowing participant in the Individual Appellants’ breaches of
fiduciary duty, and also conspired with them, which makes it “jointly liable” for
that conduct. Hunter, 436 S.W.3d at 15; Sharma v. Vinmar Int’l, Ltd., 231 S.W.3d
405, 429 (Tex. App. – Houston [14th Dist.] 2007, no pet.) (injunctive relief by
necessity must be full and complete so that those who have “‘breached their
fiduciary relationship, as well as those who willfully and knowingly have aided
them in doing so, will be effectively denied the benefits and profit flowing from
the wrongdoing’”) (emphasis added).
Appellants’ failure to address breach of fiduciary duty is particularly
amazing, given that it was a focal point of evidence and argument below. 2RR
37
182-83, 192-94; 3RR 38-39, 187-88, 193. On December 10, 2014, well before the
Individual Appellants resigned from their fiduciary roles, Oak Mortgage wrote
them that they could “solicit to your book of business,” solicit their “past customer
database,” and solicit from the “builder/realtor relationships.” 2RR 191-92; AX
56. The next day, December 11, 2014, Oak Mortgage agreed to indemnify them in
future litigation with Ameripro. AX 53; AX 81.27 Even after securing a
competitor’s agreement to indemnify them against their principal, they continued
serving as fiduciaries for Ameripro for another month. 2RR 182-83, 194.
While he was still Ameripro’s fiduciary, Nasserfar reported to Oak
Mortgage that he was “dropping in on all builder contacts,” having driven almost
200 miles to do so. AX 63 (emphasis added). Nasserfar admitted he reported that
solicitation progress to “the competitor of the company you were working for,”
and that he still owed a duty of loyalty to Ameripro at the time. 3RR 58.
On January 8, 2015 – again while Nasserfar was still a fiduciary to
Ameripro – Oak Mortgage also sent him “scripts” to use for “All previous clients
& database,” “Borrowers in Pipeline,” “Realtors in Pipeline,” and “All other
Realtors.” AX 78; 3RR 59. Nasserfar also contacted principals and employees of
Ameripro’s existing customers about his plan to open a competing office with Oak
27
AX 53 and AX 81 are Oak Mortgage’s Offer Package to Nasserfar and Task, and
38
Mortgage (even as he was paid to build goodwill for his principal, Ameripro).
3RR 53, 56-57; CX 1 at 15-16.
The confidential information Appellants stole was also intertwined with
their solicitation of Ameripro customers in violation of fiduciary duties and the
non-solicitation clauses. They downloaded Ameripro’s computer compilations for
three Ameripro builder customers, including Brohn Homes and Clark Wilson
Builders, their fees and tax rates (broken down by community), working capital,
and closing preferences, requirements, lender credits for loans, and other non-
public customer information. AX 35; 2RR 93-94. They met with business
prospects for the benefit of Oak Mortgage – while they were still fiduciaries of
Ameripro – and scheduled future meetings to occur on dates when they would be
working at Oak Mortgage. 2RR 203-05; AX 60-62.
Oak Mortgage also e-mailed them instructions on how to evade detection of
their violations. AX 57. Task could not think of an explanation for the
instructions, except to make it appear they were not soliciting. 2RR 196-97.28
None of this evidence is even mentioned anywhere in Appellants’ brief.
They simply ignore it. The evidence does not support their argument that they
memorializes the December 11, 2014 agreement.
39
merely took and used only publicly-available names of builders.
Appellants also completely ignore the multiple other categories of
confidential information listed in the Temporary Injunction, which would equally
assist them in unfairly competing. Their brief makes no reference to “general
ledgers,” “profitability,” “pro forma,” and other categories of data they not only
stole, but that Oak Mortgage uploaded and analyzed. AX 28-36, 49. Appellants’
counsel told the district court that Appellants had returned “over 20,000 electronic
files” to Ameripro on April 27, 2015 alone — meaning that those competitors not
only took Ameripro’s information, but had held it for several months after they
opened their competing office. 2RR 22.
In sum, Appellants’ argument that someone can do a Google search to find a
builder’s name does not begin to scratch the surface of the confidential
information they downloaded and gave to a competitor, nor does it address the
several categories of tort and contract duties the district court found they violated.
C. Even if Appellants supposedly could have publicly obtained some
of the data they took from Ameripro computers, they tortiously
downloaded Ameripro’s work product.
Appellants’ argument that they could have conducted public searches to
28
2RR 196-97 (Task impeached: “Q. Question: ‘Is there any business reason that you can think
of about waiting one month before you go after the other person, other than to make it appear that
it’s not a solicitation?’ Answer: ‘You’d have to ask him. No.’”).
40
compile the customer information stored on Ameripro’s computers, aside from
being false, does not defeat the trade secret status of Ameripro’s data. Nor would
that possibility give them license to thieve copies from Ameripro’s computers.
In Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group
Holdings, Inc., 374 S.W.3d 488, 500-01 (Tex. App. – Dallas 2012, pet. denied),
the appellants argued that a “compilation” of target market opportunities was not
secret because “such information was readily available through the internet or by
exerting minimal effort to talk with others.” 374 S.W.3d at 500-01. Unlike the
instant case, the appellants in Reliant were not restricted by a non-solicitation
clause. But the Reliant court rejected their argument, noting “the question is not
‘How could he have secured the knowledge?’ but ‘How did he?’” Id. The court
held that the compilation of market targets constituted a “trade secret” which one
of the appellants obtained while still employed by his prior employer. Id.
Similarly, in American Precision Vibrator Co. v. National Air Vibrator Co.,
764 S.W.2d 274, 277 (Tex. App. – Houston), appeal stayed, 771 S.W.2d 562 (Tex.
App. – Houston 1989), the court rejected the appellant’s argument that “customer
lists” were not trade secret because the information was “readily accessible from
other sources.” The court stated that “‘the mere fact that such lawful acquisition is
available does not mean that he may, through a breach of confidence, gain the
information in usable form and escape the efforts of inspection and analysis,’” and
41
noted that while some of the information at issue was publicly available, evidence
showed that “not all” of it was. 764 S.W.2d at 277.
The Individual Appellants’ conduct not only breached the employment
contracts, but also their common law duties. Oak Mortgage actively participated
in both. In Hill, this Court quoted with approval, “‘But it is well established that
even without an enforceable contractual restriction, a former employee is
precluded from using for his own advantage, and to the detriment of his former
employer, confidential information or trade secrets acquired by or imparted to him
in the course of his employment.’” 2011 WL 56061 at *2; Renewdata Corp. v.
Strickler, 2006 WL 504998 *12 (Tex. App. – Austin 2006, no pet.) (same). The
fact that the Individual Appellants were fiduciaries when they committed their
acts, and had signed contracts under which Ameripro is sole owner of the records
they took, makes their conduct particularly inexcusable.
IV. Appellants’ argument that they had returned all confidential
information of Ameripro prior to the hearing is also false.
Appellants also argue “all confidential information of Ameripro – both
paper and electronic – was returned to Ameripro prior to the temporary injunction
hearing,” and there is no harm caused by their “previous possession of confidential
information of Ameripro.” App. Br. 27, 39-40, 47. Those admissions confirm that
Appellants took “confidential information of Ameripro” in the first place.
42
Their claim that they “returned” all of it before the hearing, however, is
false in several respects, in terms of Ameripro documents they kept and did not
return, the system metadata they stripped out of the Ameripro documents, and the
documents Appellants destroyed even after a TRO commanded their return.
A. Appellants did not return all confidential information, they
violated the TRO, and they specifically stripped out system
metadata from the documents they did provide.
Appellants did not return all of the confidential information they
downloaded from Ameripro’s computers and removed from its premises, as they
tried to argue in the district court.
When the TRO issued, Appellants were commanded to return Ameripro’s
confidential documents “in whatever medium such documents and information
exists.” CR 97. Appellants disobeyed that command, however, by keeping all of
the media on which those documents had been downloaded, and instead sending
Ameripro only copies, of selectively picked portions, with all of the system
metadata stripped out. 2RR 227 (expert discusses “‘selective production’” and
“file system metadata or any other artifacts” which is missing even for the
documents that were provided).
At the temporary injunction hearing, Appellants’ counsel admitted that
Appellants had not returned the media, and argued that Ameripro could “come to
my office, we’ll arrange to make that available for their [Ameripro’s] forensics to
43
look at it.” 2RR 28. To avoid a repeat of the TRO violation, the district court
included detailed instructions about the forensic images that Appellants were
required to return to Ameripro. CR 224-25.
When the district court announced her ruling from the bench at the
temporary injunction hearing, Appellants’ counsel confirmed that the court ruled
that his forensic expert “is going to provide” the forensic images, and added, “All
those files will be returned, if they haven’t already been returned.” 3RR 206.
In short, the court was not required to accept Appellants’ inconsistent
statements that they had already returned all of the information, in the face of
evidence which clearly showed they had not. That is particularly so, given their
pattern of misconduct: they previously tried to evade detection of their solicitation
activities, while they were still fiduciaries, violated federal regulations, and hid
from Ameripro that they had taken its confidential records. AX 57; 2RR 155-56,
160-61, 167-72, 174, 184, 196-97.
B. Appellants destroyed documents even after a TRO commanded
their return.
In addition, Appellants destroyed customer files that the court previously
commanded them to return to Ameripro. That was a continuation of the practice
Appellants had engaged in before, where they attempted to “permanently destroy
Ameripro documents and files.” CR 223. Instead of returning all Ameripro
44
documents prior to the temporary injunction hearing, Appellants busily engaged in
committing additional violations.
The TRO commanded Appellants to “return to Ameripro all confidential
documents and information they removed from Ameripro, in whatever medium
such documents and information exists.” CR 97. Two days after the TRO issued,
Appellants deleted 140 folders from a USB device they had labeled “Nasserfar
External Drive.” 2RR 233-36; AX 46. The pathnames for the deleted folders
show that they were part of what the TRO commanded to be returned to Ameripro,
including: “AMB Profit & Loss Jan-Aug” files, “APF Accounting System Loan
Details '14,” “Monthly Pipeline Details,” and “Loan_files” and “Loan Details” for
several months. AX 46. In Lynd v. Bass Pro Outdoor World, Inc., 2014 WL
1010120 *8 (Tex. App. – Dallas 2014, pet. denied), the court held that “the trial
court did not err by implicitly finding that the harm was imminent and not
speculative,” noting that the conduct had continued up “until the entry of the
temporary restraining order” and appellant was forced to stop. Here, even a TRO
did not dissuade Appellants from continuing their misconduct.
C. The fact that a competitor misappropriated confidential
information at all also supports issuing the injunction.
Leaving aside Appellants’ failure to return Ameripro’s confidential
information, the fact that they took Ameripro’s protected property in the first place
45
warranted injunctive relief. Lasser v. Amistco Separation Prods., Inc., 2014 WL
4952501 *8-9 (Tex. App. – Houston [1st Dist.] Oct. 2, 2014, no pet.) (inclusion of
a requirement the appellant “has already performed” was appropriate under Rule
683, helps “prevent the repetition of the offending conduct,” and prevents the need
to revise the order “should it be discovered … that [appellant] has any additional
confidential information”).
Appellants also argue that they should not be enjoined because they “do not
need” Ameripro’s confidential information given their “extensive industry
knowledge.” App. Br. 40. Again, that begs the question why Appellants
misappropriated over 20,000 confidential documents from Ameripro in the first
place, and why its competitor, Oak Mortgage, specifically requested those records.
For example, when Nasserfar was still acting as Ameripro’s fiduciary, Oak
Mortgage wrote him that it needed “some more information from you,” including
Ameripro’s “Product Mix,” profit and loss statements, “Pricing” so Oak Mortgage
could “compare it to our pricing,” and other employees’ compensation. AX 27;
3RR 44-46. The district court was not required to accept Appellants’
representation, particularly given the evidence of its falsity.
D. Appellants used Ameripro’s confidential information, but taking
such data was also wrongful misappropriation.
Appellants’ argument that “Ameripro offered no evidence of any past
46
improper use of any alleged confidential information by Appellants” is also false.
App. Br. 41. For example, after Nasserfar gave Oak Mortgage a copy of
Ameripro’s profitability report, Oak Mortgage uploaded and analyzed it for
several hours. They engaged in that misappropriation even before Nasserfar had
resigned his fiduciary role. AX 49-50; 2RR 230-32. Appellants even forgot to
remove Ameripro’s address before they began using its proprietary forms. 2RR
96-98; AX 36-37. The district court acted within its discretion in rejecting
Appellants’ argument as not credible.
Appellants’ argument is also legally incorrect. Misappropriation is not
limited only to “use,” but also occurs when there has been an “acquisition” or
“disclosure or use” of confidential information through improper means, each of
which is prohibited conduct. Tex. Civ. Prac. & Rem. § 134A.002(3). Appellants
have not even challenged the evidence that they wrongfully acquired Ameripro’s
confidential information.
V. The district court correctly found that Ameripro does not have an
adequate legal remedy.
The district court also properly found based on the evidence that “a future
award of damages would not fully or adequately compensate Ameripro,” that the
“full extent of injury to Ameripro” would be “very difficult to ascertain or
quantify,” and that “Ameripro does not have a legal remedy that would be
47
adequate in lieu of injunctive relief.” CR 224.
Those findings are supported by the record. Ameripro’s competitors
misappropriated over 20,000 of its confidential records, ranging from its customer
data to its pro formas, and used their fiduciary positions to solicit customers for a
competitor in violation of common law duties and the contracts. 2RR 22, 85-85,
91-94, 96-99, 156-61, 164-72, 174, 177-78, 183-84, 203-05; 3RR 42, 53, 55-61,
127-28; CX1 at 15-16; AX 28-38, 58, 59-63, 78, 80. Ameripro’s President
testified that Ameripro could not trace and calculate the resulting damages, that
the injury were “ongoing,” and that Appellants used Ameripro’s confidential
information “specifically to open up a new location in direct competition with us.”
2RR 101-03. And again, Ameripro presented evidence of multiple cat-and-mouse
examples where Ameripro caught Appellants giving instructions on how to evade
detection, destroying evidence, placing information on a local drive where
Ameripro would not find it, and secretly soliciting and taking Ameripro’s
confidential data. AX 27, 43, 46, 49-50, 57; 2RR 155-56, 160-61, 167-72, 174,
182-83, 196-97, 217-21, 230-36.
By their nature, those are injuries the full extent of which would be difficult
to ascertain or quantify (or fully uncover), and for which a future award would not
be complete or adequate. In Hill, for example, this Court noted that the appellant
“possessed confidential information belonging to” the appellee, and that “harm to
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the trade secret owner may be presumed.” 2011 WL 56061 at *5. Hill noted that
“if” the appellants “were to impermissibly use McLane’s trade secrets” or disclose
them, “the resulting damages would be difficult to calculate,” and that the “very
purpose of the injunction” is to prevent such violations from occurring. 2011 WL
56061 at *5. See also Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593,
602 (Tex. App. – Amarillo 1995, no pet.) (employees took confidential
information and “began to resolicit the businesses,” agreeing that a “legal remedy
is inadequate” and damage “cannot be easily calculated”).
A. The district court found Ameripro has a likelihood of success on
multiple tort theories for which injunction is the only effective
relief, not just breach of contract.
Moreover, this case is not limited to a simple breach of contract action:
Appellants’ theft of thousands of confidential records, and using Ameripro’s
existing fiduciaries to solicit customers and business for a competitor, sound under
multiple tort theories. As this Court noted in Garth v. Staktek Corp., 876 S.W.2d
545 (Tex. App. – Austin 1994, writ dism’d w.o.j.), “injunctions against trade
secret violations may be necessary to provide meaningful legal protection to the
owners of intellectual property,” and monetary damages may not sufficiently
protect “from unfair competition by those who improperly appropriate confidential
information.” 876 S.W.2d at 550. See also Flake v. EGL Eagle Global Logistics,
L.P., 2002 WL 31008136 *4 (Tex. App. – Houston [14th Dist.] Sept. 5, 2002, no
49
pet.) (“A legal remedy is inadequate if damages are difficult to calculate or their
award may come too late. … Although any damages Eagle stands to suffer or has
suffered are compensable through money damages, ‘[i]njunctive relief is property
to prevent a party, that has appropriated another’s trade secrets, from gaining
unfair market advantage,’” and finding a temporary injunction “the only effective
relief available”); Frequent Flyer Depot, Inc. v. American Airlines, Inc., 281
S.W.3d 215, 228-29 (Tex. App. – Fort Worth 2009, pet. denied), cert. denied, 559
U.S. 1036 (2010) (a “remedy is not adequate simply because some of the proven
damages are calculable,” and a dollar value “may not easily be assigned” to
business disruption, “loss of clientele,” “office stability,” “marketing techniques,”
and other intangible injuries).29
B. Even in pure contract cases, findings of inadequate remedy will
be upheld where, as here, some evidence supports it.
Even in cases where the claims are limited to breach of contract (unlike the
instant case, where district court found likelihood of success on multiple theories),
courts defer to the trial court’s determination that damages will not fully
29
See also Hartwell’s Office World, Inc. v. Systex Corp., 598 S.W.2d 636, 639 (Tex. Civ. App.
– Houston [14th Dist.] 1980, writ ref’d n.r.e.) (“mere reimbursement of profits would not afford
complete, final and equal relief because appellees would still be able to compete in the area in
violation of the express agreement not to compete,” finding denial of temporary injunction an
abuse of discretion); Salas v. Chris Christensen Sys., Inc., 2011 WL 4089999 *8 (Tex. App. –
Waco Sept. 14, 2011, no pet.) (potential damages caused by “actions of appropriating and
50
compensate the claimant or would be difficult to measure.
For example, this Court in Universal noted that the only wrongful conduct
alleged in that case was “breach of contract,” but nevertheless upheld the trial
court’s conclusion that damages would be difficult to calculate and damages might
not afford complete relief. 24 S.W.3d at 577-78 & n. 5. Similarly, in Walling v.
Metcalfe, 863 S.W.2d 56 (Tex. 1993), the Texas Supreme Court reinstated a
temporary injunction – despite the fact that the applicant’s only cause of action
was for breach of contract and did not ask for permanent injunctive relief. The
Court rejected the court of appeals’ conclusion that a “cause of action for money
damages alone” was not sufficient to support an injunction, adding, “Simply
because the applicant for a temporary injunction asks only for damages as ultimate
relief does not guarantee that damages are completely adequate as a remedy.” 863
S.W.2d at 57-58.
C. Injunctive relief is consistent with Ameripro’s claim for damages
for Appellants’ past conduct.
Ameripro’s request for damages based on Appellants’ past violations is
consistent with the district court’s findings of imminent irreparable harm and
inadequate legal remedies if Appellants were not enjoined.
implementing” confidential information for the “benefit of…competitors in the future arguably
are not complete and cannot be easily calculated; therefore, a legal remedy is inadequate”).
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In Topheavy, the appellant argued that “any potential harm … has already
occurred,” because 80,000 games with appellee’s likeness were already in
circulation. 2005 WL 1940159 *6. This Court noted that the appellee was “also
seeking damages,” but explained that “the mere fact that Doe has already been
injured does not necessarily mean that further distribution of the game would not
exacerbate the preexisting injury or create new injuries altogether,” nor would the
injury be any more ascertainable with a sufficient degree of certainty. An
injunction to prevent “additional irreparable injury” was not an abuse of
discretion. Id. So it is the case here.
The decisions Appellants cite are inapposite. In Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002), the Texas Supreme Court reinstated a temporary
injunction that had been dissolved on appeal, finding that although it was a
contract action, the applicant desired a specific piece of property, and the district
court did not abuse its discretion in finding no adequate legal remedy. 84 S.W.3d
at 211. In Reach Group, LLC v. Angelina Group, 173 S.W.3d 834 (Tex. App. –
Houston [14th Dist.] 2005, no pet.), Cardinal Health Staffing Network, Inc. v.
Bowen, 106 S.W.3d 230 (Tex. App. – Houston [1st Dist.] 2003, no pet.), and W.R.
Grace & Co. v. Henson, 2007 WL 2389547 (Tex. App. – Corpus Christi Aug. 23,
2007, no pet.), the courts addressed whether the trial courts abused their discretion
when they denied a temporary injunction. Unlike the instant case, the applicant in
52
Grace admitted it “knew of no misuse of information” and there was “no evidence
of wrongful acts.” 2007 WL 2389547 *3. The applicant in Reach acknowledged
that damages “were capable of precise measurement,” and that its potential
damages were “also capable of being calculated,” and given those admissions the
court did not abuse its discretion. 173 S.W.3d at 838. The court in Cardinal
observed that it must view evidence in the light “most favorable” to the court’s
decision, not against it; the applicant admitted it “did not know whether [it] had
suffered any economic damages,” and that its sales had “doubled.” 106 S.W.3d at
235-36. None of those decisions support that this Court should substitute its
factual findings for the trial court’s based on this record.
D. Appellants’ argument, in addition to being baseless, is outside the
hearing record and should be disregarded.
Finally, Appellants improperly purport to rely on pleadings and discovery
served after the Temporary Injunction, which were not part of the hearing record.
App. Br. 46, 54. Ameripro’s request for damages is consistent with the Temporary
Injunction. Nevertheless, Appellants’ arguments outside the record should not be
considered. Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, 2013 WL
1456651 *4 n. 4 (Tex. App. – Dallas Apr. 9, 2013, no pet.) (sale “occurred after”
the temporary injunction and “Accordingly we do not consider TCI Luna’s
arguments that are outside the temporary injunction hearing record.”).
53
VI. The Temporary Injunction is not overly broad, and instead is narrowly
tailored to protect against imminent irreparable harm.
Appellants’ argument that the Temporary Injunction is overly broad is
without merit. It is narrowly tailored to protect against imminent irreparable harm.
Appellants argue that the injunction covers media in their possession, but
the district court tailored the Temporary Injunction to “media that contains or did
contain Ameripro files or information” — in other words, the information which
the Temporary Injunction found Appellants had attempted to “permanently
destroy” and had “taken from Ameripro’s computer network and premises.” CR
223-24. In addition to common law protection of Ameripro’s confidential
information, the Individual Appellants contractually agreed that Ameripro is the
sole owner of those records, and that they would not retain any copies of that
information. AX 11, 17-18. They not only retained copies of Ameripro’s records,
however, but gave them to a competitor. (That evidence is cited and quoted in
detail at pp. 7-13 of the Statement of Facts.)
The district court’s ruling that the original media should be held by
Appellants’ counsel is also reasonable and supported by the evidence. Appellants
engaged in deliberate efforts to conceal which items stored on those media
consisted of Ameripro records. For example, one of Nasserfar’s electronic files
was labeled “Nasserfar personal e-mail,” but consisted instead of Ameripro
54
borrowers’ credit reports and loan applications. 3RR 174-75. As cited above,
Appellants also tried to conceal their thefts of information, and their solicitation
efforts. Leaving aside Appellants’ prior efforts to destroy Ameripro files, they
destroyed Ameripro files stored on the electronic media even after the district
court issued a TRO compelling those files to be returned. Appellants also initially
denied that they possessed any Ameripro confidential records, 2RR 163, despite
their subsequent return of over 20,000 such files after suit was filed, and despite
evidence that Oak Mortgage used that media to analyze the stolen data. Finally,
Appellants made the choice to store the confidential information they stole from
Ameripro on that media. The district court was well within its discretion in
requiring Appellants’ counsel to keep possession of the media as Attorneys’ Eyes
Only.
The district court also narrowly tailored the injunction to three customers
whom Appellants solicited in breach of contract and fiduciary duties. (The district
court chose to exclude a fourth customer from the injunction. 3RR 209.) Correa
v. Houston Surg. Asst. Serv., Inc., 2013 WL 3958499 *12 (Tex. App. – Houston
[14th Dist.] July 30, 2013, no pet.) (injunction was “specifically tailored to prevent
appellants from usurping the competitive advantage derived from HSAS, Inc.’s
confidential information,” as it was “appropriately limited to specific hospitals”
with whom “the appellants actually worked.”).
55
Appellants argue that Oak Mortgage should not be restrained because there
“is no contract or fiduciary relationship” between it and Ameripro. However, as
discussed on pp. 35-37 above, Oak Mortgage’s knowing participation in breaches
of fiduciary duty and tortious interference makes it jointly liable.
Oak Mortgage’s argument that its “officers and employees” should not be
enjoined is also meritless. Rule 683 expressly states injunctions are binding on
parties and “their officers, agents, servants, employees.” Miller, 901 S.W.2d at
600 n. 2 (the “court was also permitted to extend the injunction to the employer’s
other employees,” and the appellants argument that “only two acted
inappropriately lack merit”). Moreover, it is Oak Mortgage’s officers who
encouraged Nasserfar, Task, and Gosnay to breach their fiduciary duties and
contracts, who analyzed the stolen data, and who suggested how to evade
detection. AX 27, 49, 56-57, 78. The injunction against Oak Mortgage would be
ineffectual if the agents through whom it acts were free to violate the terms.
Finally, the district court acted within its discretion in preserving the status
quo through trial, instead of providing for the injunction to end on January 16,
2015. The purpose of an injunction is to preserve the status quo pending a trial.
The “status quo” is the “the last, actual, peaceable, noncontested status which
preceded the pending controversy,” before the activities “in violation of its
agreements” began. Frequent Flyer, 281 S.W.3d at 222-23. Appellants are not
56
entitled to a credit on the non-solicitation period for the several months when they
were actively violating it; those violations began before the fiduciaries left
Ameripro, and continued at least four months afterward. As the court in Sharma
stated:
“It is well settled that injunctive relief ‘must, of necessity, be full and
complete so that those who have acted wrongfully and have breached
their fiduciary relationship, as well as those who willfully and
knowingly have aided them in doing so, will be effectively denied the
benefits and profits flowing from the wrongdoing. … Far from being
an overbroad order that forbids lawful competition, the trial court’s
order is narrowly tailored to preserve the status quo by protecting the
secrecy of Vinmar’s trade secrets and remedying the violence to the
confidential relationship through which the Rew appellants acquired
those trade secrets.”
231 S.W.3d at 429.
When the district court entered a temporary injunction to maintain the status
quo, it specifically rejected imposing a January 15 cut-off, noting that Ameripro
can “argue that since they have been not complying” with the provision, “it
shouldn’t run.” 3RR 213-14. Preserving the status quo as it existed before the
violations began was within the district court’s equitable discretion. Rimkus
Consult. Group, Inc. v. Budinger, 2001 WL 619067 *4 (Tex. App. – Houston [14th
Dist.] June 7, 2001, no pet.) (rejecting argument that “because the original time for
expiration of the covenant not to compete has expired, this court should decline to
enforce it,” noting it would “be inequitable to allow” the pendency of litigation “to
57
deprive [Rimkus] of the benefit of injunctive relief”); Guy Carpenter & Co. v.
Provenzale, 334 F.3d 459, 464 (5th Cir. 2003) (“the district court has the power
under Texas law to craft an injunction that extends beyond the expiration of the
non-solicitation covenant,” and agreeing that courts in equity “may impose
injunctions that last beyond a contract provision’s expiration date”).
Second, the injunction is not based solely on the non-solicitation clause, but
also on the Individual Appellants’ conduct in soliciting the customers for Oak
Mortgage while they were still fiduciaries, as well as violations of non-use and
confidentiality provisions in taking customer information which do not expire on
January 15. Matrix Network, Inc. v. Ginn, 211 S.W.3d 944, 946-47 (Tex. App. –
Dallas 2007, no pet.) (leaving aside non-solicitation provision, parties used
confidential information to compete unfairly in violation of the non-use and non-
disclosure provisions, and “In such circumstances, we cannot conclude the
expiration of the non-compete clause … renders this matter moot”); Garth, 876
S.W.2d at 548 (by appropriating confidential information, appellant was able to
use it to gain a market advantage, and therefore “injunctive relief beyond the date”
the technology became public was “an appropriate remedy”); Salas, 2011 WL
4089999 at *8 (“Injunctive relief is also proper to prevent a party, which has
appropriated another's trade secrets, from gaining an unfair market advantage.”).
58
PRAYER
For the foregoing reasons, Ameripro Funding, Inc. respectfully prays that
this Court affirm the district court’s Temporary Injunction Order, and that
Ameripro have such other and further relief to which it may be justly entitled.
Respectfully submitted,
/s/ Susan P. Burton
Susan P. Burton
State Bar No. 03479350
sburton@gdhm.com
Eric G. Behrens
State Bar No. 02050700
ebehrens@gdhm.com
GRAVES DOUGHERTY HEARON & MOODY, P.C.
401 Congress Avenue, Suite 2200
Austin, Texas 78701
Telephone: (512) 480-5600
Facsimile: (512) 480-5862
ATTORNEYS FOR APPELLEE AMERIPRO FUNDING,
INC.
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CERTIFICATE OF COMPLIANCE
This motion complies with the type-volume limitations of Rule 9.4(i)(2)(B),
Tex. R. App. P., because it contains no more than 14,228 words, excluding the
parts of the brief exempted by Rule 9.4(i)(1), Tex. R. Civ. P.
This brief complies with the typeface requirements of Rule 9.4(e), Tex. R.
Civ. P., because it has been prepared in a proportionally spaced typeface using
Microsoft Word in fourteen-point Times New Roman font in text, and twelve-
point Times New Roman font in footnotes.
/s/ Susan P. Burton
Susan P. Burton
CERTIFICATE OF SERVICE
I certify that on October 7, 2015, a true and correct copy of this Brief of
Appellee Ameripro Funding Inc., was served via electronic service on the party as
shown below:
Wm. Charles Bundren, Esq.
WM. CHARLES BUNDREN & ASSOCIATES LAW GROUP, PLLC
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
/s/ Susan P. Burton
Susan P. Burton
60