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Callison v. C&C Personnel, LLC

Court of Appeals of Texas, Ninth District, Beaumont

July 11, 2019


          Submitted on May 30, 2019

          On Appeal from the 410th District Court Montgomery County, Texas Trial Cause No. 18-09-11766-CV

          Before McKeithen, C.J., Kreger and Johnson, JJ.



         In this interlocutory appeal, we are once again asked to decide the applicability of the Texas Citizens' Participation Act (TCPA) to tort claims in a business setting. See Tex. Civ. Prac. & Rem. Code Ann. §§ 27.001-.011 (West 2015). In this case, the trial court failed to rule on Appellant Rosella Lee Callison's TCPA motion to dismiss Appellees' wrongful use of trade secrets claims within the time frame permitted by the statute, and the motion was denied by operation of law. Id. § 27.008(a).[1] On appeal, Callison contends the trial court's implicit denial of her TCPA motion to dismiss was error because: (1) the Act applies to the plaintiff's allegations being made against her; and (2) once the burden of proof shifted, the nonmovant failed to present clear and specific evidence establishing a prima facie case for each of its claims. As part of her second issue, Appellant contends certain alleged "deemed admissions" and the terms of an agreed temporary injunction signed by the trial court should not be considered by the trial court as evidence to meet nonmovant's threshold burden of proof.

         I. Background

         In 2013, Callison started C&C Personnel with Ryan Conley. C&C provided staffing services for the light industrial business sector. Callison handled sales and brought in new clients, and Conley handled recruiting, accounting, bookkeeping, taxes, and company payroll. According to Callison, Conley abruptly left the business, taking with him critical financial records, passwords to the company's bank accounts, as well as key employees, the company CPA and chief recruiter. Conley immediately began a new staffing company, and Callison alleged that several C&C clients left to sign contracts with Conley's company.

         Facing an immediate budgetary shortfall and inability to pay C&C's employees in the wake of Conley's departure, Callison agreed to sell C&C Personnel to Dameron Joubert and David Stephenson at "a deeply discounted valuation" of $35, 000.00.[2] Following the sale, Joubert and Stephenson hired Callison to act as their Director of Sales. Appellees asserted they gave Callison this position as part of the agreement to purchase the business, which Callison disputed. After the sale, Callison forfeited her access as an administrator on all company email accounts. Appellees accused Callison of misappropriating trade secret information obtained through company emails containing confidential client customer folders and misusing the information for her personal gain to "unlawfully compete and convert business of C & C." Appellees employed the words "use" and "conduct" in their petition, while avoiding any form of the word "communicate." They acknowledged Callison's misuse involved disclosure.

         Callison admittedly set up an automatic forward of company emails to her private account while she owned C&C. However, after the sale of the business, Callison claimed she did not want the emails, but she no longer had the administrative rights to stop the forwarding of the emails. She averred in her affidavit that she repeatedly advised Appellees to stop "spamming" her with C&C emails. Callison further denied that she solicited former clients of C&C or worked on such accounts for her new employer. Rather, she contended the former clients did not have exclusive contracts with C&C Personnel for their staffing needs and simply stopped using C&C due to Joubert and Stephenson's mismanagement.

         Appellees sent Callison a letter demanding the return of the alleged misappropriated information, and Callison failed to respond. In the same pleading as their original petition, Appellees sought a temporary restraining order prohibiting Callison from "using or disclosing" confidential or proprietary information. Upon filing their initial pleading, Appellees contemporaneously sought expedited discovery from Callison, which the trial court allowed, making Callison's discovery responses due prior to her answer date. Appellees argued to the trial court they needed the discovery before the temporary injunction hearing. They claimed they required the discovery to determine, among other things, to what extent Callison used their "confidential information to perform services for a competitor of Plaintiffs or for her own personal gain and benefit." In the trial court, Appellees also filed an emergency motion for forensic examination of electronically stored information alleging "Callison used that [confidential] information to acquire Plaintiffs' former clients causing Plaintiffs $766, 644.42 of lost revenue." The trial court granted an ex parte temporary restraining order and scheduled a hearing for a temporary injunction. Prior to the scheduled hearing date, the parties negotiated and entered into an agreed temporary injunction. The agreed temporary injunction provided, in part:

[w]hile Defendant has not, by entering into this Agreed Temporary Injunction, stipulated to any factual findings against Defendant, Defendant acknowledges, for purposes of the entry of this Order that Plaintiffs have shown a probable right to injunctive relief based on the theory of misappropriation of trade secrets, breach of fiduciary duties and civil theft of property, and the right to injunctive relief set forth in the Texas Uniform Trade Secrets Act[.]

         The parties dispute whether these negotiations contained an agreement to "reset discovery deadlines" in light of the agreed temporary injunction.

         The allegations against Appellant in Appellees' original petition incorporated the demand letter's assertions, including "accessing and forwarding to her personal email C & C and SWSS company folders of confidential and proprietary information which she has used to unlawfully compete and convert business of C & C and SWSS[.]" Appellees attached the demand letter to the verified application for TRO and original petition, which alleged Callison forwarded company emails to herself "comprised of confidential and proprietary information" and that she "us[ed] that information to unlawfully compete and convert business[.]" Appellees sought damages for lost business in the amount of $766, 644.42. The overarching theme of Appellees' claims is that Callison misappropriated their confidential and proprietary information contained in emails, then unfairly used that information to acquire their customers.

         In her TCPA motion to dismiss, Callison asserted "Plaintiffs' entire basis for their Trade Secret Claims center upon Callison's communication with prospective client companies[.]" Callison also argued the following:

56. "Sales Tradecraft IS Communication." In order for Plaintiffs to bring a suit against someone in the staffing sales industry for trade secret theft, the premise begins with the allegation that the accused is engaging in misuse of those secrets. How else does a salesperson engage in tradecraft other than by communication, and such communication as defined by the TCPA. Not only is the implication leveled against Callison for "communicating" with prospective clients and others in the staffing industry, but the means by which Callison is accused of "stealing" this so-called trade secret ...

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