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Moring v. Inspectorate America Corp.

Court of Appeals of Texas, Fourteenth District

July 25, 2017

SCOTTY MORING, Appellant
v.
INSPECTORATE AMERICA CORPORATION, Appellee

         On Appeal from the 269th District Court Harris County, Texas Trial Court Cause No. 2016-26355.

          Panel consists of Chief Justice Frost and Justices Jamison and Busby.

          OPINION

          Kem Thompson Frost Chief Justice.

         In this appeal of a special-appearance denial, we address personal jurisdiction in the context of allegations that a non-resident former employee wrongfully acquired, used, or transmitted alleged confidential information as part of a scheme to solicit and steal a Texas company's Texas-based customers. The Texas company alleges that the former employee took the information while working in its Louisiana office, went to work for a competitor in Louisiana, and then used the ill-gotten information to compete with the company in Texas. Though the alleged theft occurred in Louisiana, the Texas company alleges the former employee solicited business from Texas customers using the stolen information and later performed work for those customers in Texas. We affirm the trial court's denial of the employee's special appearance.

         Factual and Procedural Background

         Appellant Scotty Moring was working in Louisiana for Waterdraws, LLC, in 2012, when the company's owner Robert LeJeune sold the company's assets to Inspectorate America Corporation. LeJeune, Moring, and other employees then began working for Inspectorate. As a condition of his continued employment, Moring signed a document entitled, "Employee Invention Assignment and Confidentiality Agreement" in which he agreed not to disclose to anyone Inspectorate's confidential information and not to remove, during employment or upon termination of employment, any records that contain confidential information. The agreement defines "confidential information" broadly to encompass strategic information. Strategic information includes "business strategies, pricing, billing information, actual or potential customer lists, contracts, contract terms and conditions, sale lists, process descriptions, financial data, marketing plans . . . trade secrets" as well as other items.

         Moring's Employment with Inspectorate

         Between 2012 and 2014, Inspectorate based Moring out of its Houston, Texas office. Moring prepared bids and quotes that Inspectorate used to get work from Texas customers. During that time, Moring also performed waterdraw calibrations, pipe prover inspections, pipe prover rebuilds, and small volume rebuilds for customers located in Texas. These tasks required Moring's physical presence in Texas. Moring then moved back to Louisiana, where he continued working for Inspectorate until 2015.

         New Employment with Intertek

         In 2015, LeJeune, Moring, and at least three other employees terminated their employment with Inspectorate and began working for Inspectorate's competitor, Intertek USA, Inc. Inspectorate alleges that before he left, Moring took confidential information, including customer lists and base pricing.

         While working for Intertek, Moring completed waterdraw calibrations, pipe prover calibrations, and pipe prover rebuilds for Texas customers. Moring also generated quotes and bids for customers. Many of the Texas customers for whom Moring was performing work and generating bids were the same customers for whom Moring had completed work on Inspectorate's behalf.

         Inspectorate's Claims

         Inspectorate filed suit against Intertek, LeJeune, Moring, and the other employees who left Inspectorate to go work for Intertek, asserting a variety of claims. Against Moring, Inspectorate asserted breach of contract, misappropriation of trade secrets and confidential information, breach of fiduciary duty, tortious interference with existing contracts and prospective business relationships, civil conspiracy, unjust enrichment, and unfair competition.

         Special Appearances

         LeJeune, Moring, and the other employees (Rory Quebedeaux, Kenneth Soileau, and Curt Bowers) filed a special appearance that they later amended. In the First Amended Special Appearance, the movants asserted that they were not subject to suit in Texas. Moring filed an affidavit in which he averred that he is a Louisiana resident, employed in Louisiana. Moring stated that he worked at an Inspectorate office in Texas between 2012 and 2014, but that he returned to Louisiana and was working in Louisiana at the time of the alleged conduct that is the subject of Inspectorate's claims. Inspectorate nonsuited its claims against two of the employees (Quebedeaux and Soileau).

         In its response to the First Amended Special Appearance, Inspectorate asserted that all of the individual defendants purposefully availed themselves of the privilege of conducting business in Texas by directing marketing efforts into Texas in the hope of soliciting sales and performing the same services for Texas customers on behalf of Intertek as they had done for those customers on behalf of Inspectorate.

         The trial court granted the special appearances as to Moring and Bowers and denied LeJeune's special appearance. Inspectorate moved for reconsideration, arguing that Moring's attempt to exploit business opportunities in Texas constituted purposeful availment. Specifically, Inspectorate alleged that Moring misappropriated confidential information and used it as part of a scheme to solicit and steal the Texas company's Texas-based customers. Inspectorate argued that liability rests on whether Moring wrongfully acquired, used, or transmitted the alleged trade secrets. The trial court granted rehearing as to Moring and denied rehearing as to Bowers. Moring now appeals the trial court's denial of his special appearance.

         Issues and Analysis

         Moring raises two appellate issues: (1) Inspectorate waived its objection to the trial court's order granting Moring's special appearance, and (2) Moring is not subject to personal jurisdiction in Texas.

         A. Did Inspectorate waive its right to seek reconsideration of the order granting Moring's special appearance?

         Moring asserts that Inspectorate waived its objection to the trial court's ruling on his special appearance by failing to take an interlocutory appeal from the order granting the special appearance. The Supreme Court of Texas has not addressed this issue, and intermediate appellate courts in Texas are split as to whether a party waives its right to appellate review of an order granting or denying a special appearance if it fails to file an interlocutory appeal of that order. Some courts find waiver when a party fails to take an immediate appeal. See, e.g., GJP, Inc. v. Ghosh, 251 S.W.3d 854, 866-67 (Tex. App.-Austin 2008, no pet.); Matis v. Golden, 228 S.W.3d 301, 305 (Tex. App.-Waco 2007, no pet.) (holding a party waives its right to appellate review by failing to immediately appeal a special appearance order). But, we do not. Under our precedent, a party does not waive its right to appellate review of an order granting or denying a special appearance by failing to take an interlocutory appeal of that order. See DeWolf v. Kohler, 452 S.W.3d 373, 383 (Tex. App.-Houston [14th Dist.] 2014, no pet.).

         Even if Inspectorate had waived appellate review of the trial court's initial order granting Moring's special appearance, that waiver would not prohibit the trial court from reconsidering its initial order. And, that is precisely what happened. A trial court holds plenary power over its judgment until the judgment becomes final. Fruehauf Corp. v. Carrillo, 848 S.W.2d 83, 84 (Tex. 1993) (per curiam). A party's failure to file an interlocutory appeal from an interlocutory order does not make that order final. See Lehman v. Har-Con Corp., 39 S.W.3d 191, 206 (Tex. 2001). The trial court holds continuing authority to reconsider its interlocutory orders while it has plenary power over the case. See Fruehauf, 848 S.W.2d at 84.

         Moring has not cited any authority suggesting Inspectorate waived its ability to ask the trial court to reconsider the denial of Moring's special appearance while the trial court had plenary power over the case. The order granting Moring's special appearance was interlocutory because it did not resolve all claims between and among all parties, so the trial court still held plenary power over the case when it reconsidered its order granting the special appearance. See Lehman, 39 S.W.3d at 206; Fruehauf, 848 S.W.3d at 84. The trial court had plenary power to issue the order denying Moring's ...


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