Texas Theft Liability Act mandates award of attorneys fees to the prevailing party, whether plaintiff or defendant

STATUTORY ATTORNEY'S FEES UNDER THE TTLA 

The availability of attorney's fees under a particular statute is a question of law that we review de novo. Arrow Marble, LLC v. Killion, 441 S.W.3d 702, 705 (Tex. App.-Houston [1st Dist.] 2014, no pet.). Section 134.005(b) of the TTLA provides that "[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees." TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b) (West 2011). The award of fees to a prevailing party in a TTLA action is mandatory. Arrow Marble, 441 S.W.3d at 705; see Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) ("Statutes providing that a party `may recover,' `shall be awarded,' or `is entitled to' attorney fees are not discretionary."). The statute requires attorney's fees to be awarded to a party that successfully prosecutes or defends a TTLA claim, and an award is not dependent on a recovery of damages. See In re Corral-Lerma, 451 S.W.3d 385, 386 (Tex. 2014) (no damages recovery needed); Air Routing Int'l Corp. v. Britannia Airways, Ltd., 150 S.W.3d 682, 686 (Tex. App.-Houston [14th Dist.] 2004, no pet.) (attorney's fees to successful defendant of TTLA claim); Johns v. Ram-Forwarding, Inc., 29 S.W.3d 635, 638 (Tex. App.-Houston [1st Dist.] 2000, no pet.) (prevailing party is one who successfully prosecutes or defends an action). Further, when a plaintiff's claims are dismissed with prejudice, the defendant is the prevailing party. See Arrow Marble, LLC v. Killion, 441 S.W.3d 702, 707-708 (Tex. App.-Houston [1st Dist.] 2014, no pet.).

SOURCE: Chieftain Exploration Co., Inc v. Gastar Exploration Inc., No. 10-15-00037-CV (Tex.App.- Waco, Aug. 30, 2017, pet. filed and docketed under Tex. No.17-1040, case abated 11/9/2018 based on bankruptcy filing) (summary judgment reversed in part and remanded for award of attorney's fees under the TTLA to the prevailing defendant).

Chieftain contends Gastar was not a prevailing party because Gastar did not prove it did not commit theft of the royalties. We have already held that because Chieftain was not entitled to royalties, Gastar was not liable to Chieftain for theft. Summary judgment was granted in favor of Gastar and all of Chieftain's claims, including its claim under the TTLA, were dismissed with prejudice. Therefore, Gastar was entitled to attorney's fees, and the trial court erred in denying Gastar's request for attorney's fees.

Gastar's second issue is sustained. Because of our disposition of Gastar's second issue, we need not discuss Gastar's first issue.

CONCLUSION

Having overruled Chieftain's issues necessary to the appeal but having granted one of Gastar's issue necessary to the appeal, we reverse the trial court's Final Summary Judgment, only to the extent that it does not award attorney's fees to Gastar, and remand this appeal to the trial court for a determination of reasonable and necessary attorney's fees for Gastar's defense of Chieftain's TTLA claim. The trial court's Final Summary Judgment is affirmed in all other respects.

COURT OF APPEALS

TENTH DISTRICT OF TEXAS

August 30, 2017

No. 10-15-00037-CV

CHIEFTAIN EXPLORATION COMPANY, INC.

v.

GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC

From the 369^th District Court

Leon County, Texas

Trial Court No. NOT-13-126

JUDGMENT

        This Court has reviewed the briefs of the parties and the record in this proceeding as relevant to the issues raised.  Because it is the opinion of this Court that there was error, in part, in the Final Summary Judgment of the trial court; it is the judgment of this Court that the Final Summary Judgment signed by the trial court on July 31, 2014, is reversed but only to the extent that attorney’s fees were not awarded to Gastar Exploration Company, Inc., and this appeal is remanded to the trial court for further proceedings only on the issue of attorney’s fees due to Gastar Exploration Company, Inc. for Gastar Exploration Company, Inc.’s defense of the Texas Theft Liability Act claim made by Chieftain Exploration Company, Inc.  To the extent not expressly reversed and remanded, the trial court’s Final Summary Judgment is affirmed. 

        It is further ordered that Gastar Exploration Company, Inc. and Cubic Assets, LLC., is awarded judgment against Chieftain Exploration Company, Inc. for Gastar Exploration Company, Inc.’s and Cubic Assets, LLC.’s appellate court costs that were paid, if any, by Gastar Exploration Company, Inc. and Cubic Assets, LLC.; and all unpaid appellate court costs, if any, are taxed against Chieftain Exploration Company, Inc.

        A copy of this judgment will be certified by the Clerk of this Court and delivered to the trial court clerk for enforcement.

                                                            PER CURIAM

                                                            SHARRI ROESSLER, CLERK                         

                                                            By: ___________________________

                                                            Nita Whitener, Deputy Clerk

CHIEFTAIN EXPLORATION COMPANY, INC., Appellant,
v.
GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC. Appellee.

Court of Appeals of Texas, Tenth District, Waco.

Opinion delivered and filed August 30, 2017.  No. 10-15-00037-CV     

Jess W. Mason, Christopher Grimm, Robert D. O'Conor, for Chieftain Exploration Company, Inc., Appellant.

Matthew Jensen, Barry F. Cannaday, for Cubic Assets, LLC, Appellee.

Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Ltd., Appellee.

Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Texas, LP, Appellee.

Appeal from the 369th District Court, Leon County, Texas, Trial Court No. NOT-13-126.

Affirmed in part; Reversed and remanded in part.

Before Chief Justice Gray, Justice Davis, and Justice Scoggins.

MEMORANDUM OPINION

TOM GRAY, Chief Justice.

Chieftain Exploration Company, Inc. appeals the trial court's summary judgment in favor of Gastar Exploration, Ltd. and Gastar Exploration Texas, L.P. (now Gastar Exploration Inc.) and Cubic Assets, LLC. Gastar also appeals the denial of its request for attorney's fees. Because the trial court did not err in granting Gastar's and Cubic's motions for summary judgment but did err in denying Gastar's request for attorney's fees, the trial court's Final Summary Judgment is reversed and remanded in part and, to the extent not expressly reversed and remanded, is affirmed.

BACKGROUND

The Streater Gas Unit, a pooled unit, was formed in 2010 by Gastar and two other entities (Presco, Inc. and Navasota Resources, Ltd., LLP) which had executed various oil and gas leases included in the Unit. The Unit was comprised of 56 leases, covering 702.3 acres of land. These leases are listed in the Unit Designation. Tract 17, which was comprised of 56 surface acres, was included in the Unit. The Streater Well was drilled on the Unit but not on Tract 17.

Title to the minerals in Tract 17, the 56 acre tract, is divided, with two parties each owning an undivided one-half of the minerals: the McBeth Family Limited Partnership and Lone Oak.^[1] An undivided ¼ nonparticipating royalty interest, now owed by Chieftain, was carved out of Lone Oak's mineral estate.

Before Chieftain acquired its NPRI, two oil and gas leases were executed, each covering the lessor's one-half of the mineral estate in the 56 acre tract: the McBeth Lease, executed by the McBeth Family Limited Partnership, and the Lone Oak Lease, executed by Lone Oak. The Lone Oak Lease covered 3,466 acres, including the 56 acre tract. The McBeth Lease covered 591.3 acres, which also included the 56 acre tract.

CHIEFTAIN'S APPEAL

Chieftain sued Gastar asserting violations of the Natural Resources Code, breach of contract, and violations of the Texas Theft Liability Act and claiming it was owed oil and gas royalties from a well drilled in a pooled unit. As a successor in interest to Gastar's rights in the Streater Unit, Cubic intervened in the suit. Each party filed competing motions for summary judgment. Gastar filed a traditional motion for partial summary judgment asserting Chieftain's claims fail as a matter of law because Chieftain is not owed any royalties. Cubic filed a traditional motion for summary judgment asserting that the terms of a Ratification and the Lone Oak Lease defeat Chieftain's claims as a matter of law. Chieftain also filed a traditional motion for partial summary judgment on its claims. The trial court granted Gastar's and Cubic's motions and denied Chieftain's motion.

Summary Judgment Review

[omitted]

Issues

Asserted by various issues, Chieftain's appeal centers on its desire to be paid what it alleges to be its share of royalties from the Streater Well located in the Streater Unit. We first discuss whether the Lone Oak Lease was pooled in the Streater Unit, which would entitle Chieftain to payment. If the Lease was not pooled, we then will address other reasons for payment asserted by Chieftain

Pooling of the Lease/Land

Oil and gas leases in general, and pooling clauses in particular, are a matter of contract. Samson Expl., LLC v. T.S. Reed Props., Inc., No. 15-0886, 60 Tex. Sup. Ct. J. 1413, 2017 Tex. LEXIS 599, at *13 (June 23, 2017); Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 419, 424 (Tex. 2008). A lessee's authority to pool requires the lessor's consent, which is typically furnished through a pooling provision in the mineral lease. Samson, at *13; Se. Pipe Line Co. v. Tichacek, 997 S.W.2d 166, 170 (Tex. 1999). Pooling is valid only if done "in accordance with the method and purposes specified in the lease." Id. A pooling agreement that does not comply with the terms of the lease is invalid and unenforceable absent the lessor's ratification. See Samson, at *14.

Can prevailing defendants get attorney's fees under the Texas Theft Liability Act (TTLA)?

Unlike other statutes that authorize recovery of attorney's fees as an exception to the American Rule, the Texas Theft Liability Act (TTLA) provides for an award of such fees to the prevailing party, which includes the party that successfully defends a statutory civil theft claim, not just the prevailing plaintiff. No showing of frivolousness is required. Dismissal with prejudice signifies success for fee purposes because it entails preclusive effect and thereby alters the relationship between the parties. 


THEFT LIABILITY ACT AND ATTORNEY FEE RECOVERY

Section 134.005(b) of the TTLA provides that "[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees." TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b). The award of fees to a prevailing party in a TTLA action is mandatory. Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) ("Statutes providing that a party `may recover,' `shall be awarded,' or `is entitled to' attorney fees are not discretionary.").

The TTLA statute does not contain a definition of "prevails" to assist in determining who qualifies as a prevailing party. Courts have looked to the term's "ordinary" meaning to determine its scope for both statutory and contractual claims. See, e.g., Epps v. Fowler, 351 S.W.3d 862, 866 (Tex. 2011) (construing written contract to give meaning to undefined term "prevailed" while noting that phrase "prevailing party" is given its ordinary meaning and has been explicated through statutory interpretation by many courts).

Courts have held that the phrase "prevailing party" in section 134.005(b) of the TTLA includes both a plaintiff successfully prosecuting a theft suit and a defendant successfully defending against one. Peoples v. Genco Fed. Credit Union, No. 10-09-00032-CV, 2010 WL 1797266, at *7 (Tex. App.-Waco May 5, 2010, no pet.) (mem. op.); Brown v. Kleerekoper, No. 01-11-00972-CV, 2013 WL 816393, *5 (Tex. App.-Houston [1st Dist.] March 5, 2013, pet. filed) (mem. op.). A prevailing defendant is entitled to attorney's fees "without any prerequisite that the claim is found to be groundless, frivolous, or brought in bad faith." Air Routing Int'l Corp. (Canada) v. Britannia Airways, Ltd., 150 S.W.3d 682, 686 (Tex. App.-Houston [14th Dist.] 2004, no pet.). Thus, Equicap's status defending against a TTLA claim does not prevent recovery of attorney's fees.

Prevailing on portion of but not entire suit

In Moak v. Huff, No. 04-11-00184-CV, 2012 WL 566140, at *11 (Tex. App.-San Antonio Feb. 15, 2012, no pet.) (mem. op.), the defendant lost on the plaintiff's DTPA claim but successfully defended against the plaintiff's TTLA claim. Id., 2012 WL 566140, at *1. The defendant then sought an award of attorney's fees under the TTLA. Id., 2012 WL 566140, at *9. The plaintiff resisted, arguing that a person does not "prevail in a suit" unless he is the "party in whose favor a judgment is rendered" and is "vindicated by the judgment." Id., 2012 WL 566140, at *10. The plaintiff maintained that the defendant had to prevail on the entire suit to recover attorney's fees under the TTLA. Id.

The court of appeals disagreed, holding that "a person who prevails in a TTLA cause of action is entitled to recover the reasonable fees necessarily incurred prosecuting or defending that cause of action, even if the party is unsuccessful on other claims and counterclaims litigated in the same suit." Id., 2012 WL 566140, at *11; see Brown, 2013 WL 816393, at *5 (holding that defendant who successfully defended theft-of-property claim under TTLA was entitled to attorney's fees even if defendant did not prevail on other causes of action). Thus, Equicap's failure to obtain judgment on its breach-of-contract claim does not affect its recovery of attorney's fees as the prevailing party on the TTLA claim.

A defendant "prevails" if the plaintiff's claim is dismissed with prejudice

A party prevails if he "successfully prosecutes the action or successfully defends against it. . . ." Johns v. Ram-Forwarding, Inc., 29 S.W.3d 635, 637-38 (Tex. App.-Houston [1st Dist.] 2000, no pet.). A defendant who has the claims against him resolved by voluntary dismissal without prejudice generally is not considered a prevailing party or entitled to an award of attorney's fees. Cricket Commc'ns, Inc. v. Trillium Indus., Inc., 235 S.W.3d 298, 311 (Tex. App.-Dallas 2007, no pet.); Travel Music of San Antonio, Inc. v. Douglas, No. 04-00-00757-CV, 2002 WL 1058527, at *3 (Tex. App.-San Antonio May 29, 2002, pet. denied) (mem. op., not designated for publication). This is because a dismissal without prejudice does not materially alter the plaintiff's legal relationship with the defendant; the plaintiff is free to reassert his claims and may prevail against the defendant at a later date. See Epps, 351 S.W.3d at 869.

The legal relationship between a plaintiff and defendant does change, however, when the plaintiff's claims are dismissed with prejudice. Epps, 351 S.W.3d at 866-69. When a plaintiff's claims are dismissed with prejudice, the doctrine of res judicata prohibits the plaintiff from re-asserting his claims against that defendant in a later suit. Epps, 351 S.W.3d at 867; see Mossler v. Shields, 818 S.W.2d 752, 754 (Tex. 1991) (holding that dismissal with prejudice functions as final determination on merits); see also Williams v. TDCJ-Inst. Div., 176 S.W.3d 590, 594 (Tex. App.-Tyler 2005, pet. denied) (holding that dismissal with prejudice has full res judicata and collateral estoppel effect).

Res judicata attaches to a dismissal with prejudice even though the plaintiff's claims have not been fully litigated at trial. See Epps, 351 S.W.3d at 868-69. Res judicata applies because "a dismissal or nonsuit with prejudice is `tantamount to a judgment on the merits,'" and the effect of res judicata in that instance "works a permanent, inalterable change in the parties' legal relationship to the defendant's benefit: the defendant can never again be sued by the plaintiff or its privies for claims arising out of the same subject matter." Id. at 868-69.

The TTLA claim asserted against Equicap was dismissed with prejudice, but the basis for dismissal was specified as want of prosecution: "Accordingly, it is ORDERED and DECREED . . . that all claims by the Estate . . . are DISMISSED with PREJUDICE, for want of prosecution." See TEX. R. CIV. P. 165a (permitting dismissal of plaintiff's claims for want of prosecution).

A dismissal for failure to appear at trial or for want of prosecution should be without prejudice. See Att'y Gen. v. Rideaux, 838 S.W.2d 340, 342 (Tex. App.-Houston [1st Dist.] 1992, no writ) ("[A] trial court's authority to dismiss cases for want of prosecution does not confer upon it the authority to adjudicate and deny the merits of the dismissed claim."). An order dismissing a claim with prejudice when only dismissal without prejudice was appropriate can be challenged through a postjudgment motion. See El Paso Pipe & Supply v. Mountain States Leasing, Inc., 617 S.W.2d 189, 190 (Tex. 1981). While admittedly erroneous, a dismissal with prejudice that should have been without prejudice is not automatically void— it is merely voidable. Id.; Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 863-64 (Tex. 2010) (holding that erroneous order dismissing case with prejudice for want of prosecution "must be attacked directly in order to prevent the order from becoming final. . . ."). A plaintiff must affirmatively challenge the order to avoid it becoming a final judgment. Joachim, 315 S.W.3d at 863-64 (citing El Paso, 617 S.W.2d at 190). If the plaintiff fails to challenge the error, the order of dismissal with prejudice becomes "a final determination on the merits for purposes of res judicata." Id. at 866.

The Estate did not challenge the dismissal of its TTLA claim with prejudice. Accordingly, the dismissal is treated as a final determination on the merits and res judicata applies. Joachim, 315 S.W.3d at 864, 866; El Paso, 617 S.W.2d at 190; see Mossler, 818 S.W.2d at 754; see also Williams, 176 S.W.3d at 594.

Because res judicata applies to the Estate's TTLA claim against Equicap, the parties' legal relationship has changed in a manner that materially benefited Equicap and, as such, permits Equicap to qualify as a prevailing party under the TTLA statute. See Epps, 351 S.W.3d at 868 (stating that "we have no doubt that a defendant who is the beneficiary of a nonsuit with prejudice would be a prevailing party."); cf. Doolin's Harley-Davison, Inc. v. Young, No. 06-05-00101-CV, 2006 WL 27983, at *3 (Tex. App.-Texarkana Jan. 6, 2006, no pet.) (mem. op.) (holding that defendant was not prevailing party because matter was dismissed without prejudice and plaintiff retained right to refile case).

Accordingly, the trial court was required to award to Equicap its attorney's fees related to defending against the TTLA claim. TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b) (providing that prevailing party on TTLA claim "shall be awarded" attorney's fees); Brown, 2013 WL 816393, at *5. We sustain Equicap's first issue and hold that the trial court erred by denying Equicap's timely request for attorney's fees under the TTLA, given that the trial court ordered dismissal with prejudice.

Remand to determine attorney's fees

We have held that Equicap is entitled to an award of attorney's fees on the TTLA claim because it prevailed through dismissal of the Estate's claim with prejudice. When an award of attorney's fees to a prevailing party is mandated by statute, the factfinder can decide to award zero attorney's fees only if the evidence (1) failed to prove (a) that the attorney's services were provided or (b) the value of the services provided; or (2) affirmatively showed that (a) no attorney's services were needed or (b) that any services provided were of no value. Recognition Commc'ns, Inc. v. Am. Auto. Ass'n, Inc., 154 S.W.3d 878, 891 (Tex. App.-Dallas 2005, pet. denied); Citibank (S.D.), N.A. v. Tran, No. 05-11-01423-CV, 2013 WL 3205878, at *6 (Tex. App.-Dallas Aug. 26, 2013, pet. denied) (mem. op.).

If there is any evidence in support of the award of fees, the factfinder does not have discretion to award no fees. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311-14 (Tex. 2006); see also Tran, 2013 WL 3205878, at *7 (holding that prevailing party could not be awarded zero attorney's fees by jury when attorney testified that he provided legal services and his testimony established that services had value); Glenn v. Pack, No. 02-09-00204-CV, 2011 WL 167254, at *7 (Tex. App.-Fort Worth Jan. 13, 2011, no pet.) (mem. op.) (holding that jury could not award zero attorney's fees on breach-of-contract counterclaim when attorney testified to some fee amount).

A prevailing party entitled to attorney's fees is required to "segregate fees between claims for which they are recoverable and claims for which they are not." Chapa, 212 S.W.3d at 311. Failure to segregate, though, does not result in the denial of any fee. Tran, 2013 WL 3205878, at *7 (holding that testimony of aggregate fee was some evidence of segregated fees and, therefore, supported remand); Glenn, 2011 WL 167254, at *7 ("[Party's] failure to segregate fees does not mean that he cannot recover any fees. . . ."). Rather, testimony of the full, unsegregated amount of the fee is treated as "some evidence" of the segregated fee amount, and remand is appropriate to determine the segregated fee amount due. Glenn, 2011 WL 167254, at *7; Wright v. McCusker, No. 04-99-00592-CV, 2000 WL 863099, at *2 (Tex. App.-San Antonio June 28, 2000, no pet.) (mem. op., not designated for publication).

Because the reasonableness of a fee award is a question of fact and Equicap produced some evidence of its fees, we remand for a new trial on attorney's fees.

Conclusion

Having sustained Equicap's first issue, we reverse the trial court's judgment denying attorney's fees and remand for a new trial on attorney's fees.

SOURCE: FIRST COURT OF APPEALS IN HOUSTON - No. 01-12-01133-CV - 7/1/2014

Is misappropriation of trade secrets actionable under the TTLA? [Texas Theft Liability Act]

   

TRADE SECRETS & Texas Theft Liability Act Claim

Is the misappropriation of trade secrets actionable under the TTLA?

  

The Texas Theft Liability Act. See Tex. Civ. Prac. & Rem. Code Ann. §§ 134.001-.005.

The Texas Theft  Liability Act imposes civil liability for, among other actions, “unlawfully appropriating property” as described by Texas Penal Code section 31.05. Id. §§ 134.002(2), 134.003.

Under penal code section 31.05(b), a person commits theft of trade secrets if, without the trade-secret owner's consent, he knowingly: (1) steals a trade secret; (2) copies an article representing a trade secret; or (3) communicates or transmits a trade secret. Tex. Penal Code Ann. § 31.05(b) (West  2011).
 

A person who sustains damages resulting from the unlawful appropriation of property under section 31.05 may recover actual damages, as well as additional damages not to exceed $1,000 and  attorney's fees. Tex. Civ. Prac. & Rem. Code Ann. § 134.005.

SOURCE: DALLAS COURT OF APPEALS – 05-11-00409-CV – 4/11/12

CASE CITE: Twister B.V. v. Newton Research Partners, LP, 364 S.W.3d 428 (Tex. App.-Dallas 2012, no pet.) 

Read more from the opinion …

364 S.W.3d 428 (2012)

TWISTER B.V., Appellant,
v.
NEWTON RESEARCH PARTNERS, LP, Appellee.

No. 05-11-00409-CV.

Court of Appeals of Texas, Dallas.

April 11, 2012.

432*432 Jennifer Heather Davidow, Phillip B. Dye, Jr., Vinson & Elkins, LLP, Houston, Tyler J. Bexley, Vinson & Elkins, LLP, Dallas, for Appellant.

Jim L. Flegle, Carol E. Farquhar, Corey Weinstein, Loewinsohn Flegle Deary, L.L.P., Dallas, for Appellee.

Before Justices O'NEILL, FRANCIS, and MURPHY.

OPINION

Opinion By Justice MURPHY.

Twister B.V. appeals the trial court's order denying its special appearance in a theft of trade secrets suit filed against it by Newton Research Partners, LP. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(7) (West 2008) (interlocutory appeal). We affirm.

BACKGROUND

Both Twister and Newton are involved in the business of natural gas processing. Twister is a Dutch private limited liability company located in the Netherlands town of Rijswijk. Twister was formed in 2001 by Shell International Exploration and Production B.V., a company of the Royal Dutch/Shell Group of Companies and an investment partner to "market innovative gas processing technologies to the global exploration and production market." One of Twister's products is a supersonic separator, which separates hydrocarbon liquids and water from natural gas. Twister's gas-processing technology was developed by Shell International and transferred to Twister at the time of its incorporation. A Shell International employee involved in the development of the technology, Cornelis Antonie "Kees" Tjeenk Willink, became Twister's Chief Executive Officer.

Newton, a Texas limited partnership, owns what it claims are confidential and proprietary trade secrets related to natural gas processing. The alleged trade secrets were developed by Michael Bloom and concerned technology used to separate and remove contaminants from natural gas. For descriptive purposes only, this information is referenced simply as the "trade secrets." Bloom was a limited partner in Newton and manager of Newton's general partner, Newton Research, LLC. Newton obtained ownership of the trade secrets through a series of assignments and agreements.

In 1997, Bloom disclosed the trade secrets to Shell E & P Technology Corporation, a division of Shell Exploration & Production Company, under a promise of confidentiality. According to Newton, Shell Exploration later violated that promise and shared the trade secrets with a Shell affiliate in the Netherlands and others, including Twister. Newton claims Twister then unlawfully used Newton's trade secrets in Twister's gas-separation products and that Twister marketed and sold those products in Texas and elsewhere.

Newton filed suit against Twister and other defendants^[1] in 2007, charging them with, among other things, stealing Newton's 433*433 trade secrets and violating the Texas Theft Liability Act. See TEX. CIV. PRAC. & REM.CODE ANN. §§ 134.002(2), 134.003(a) (West 2011) (providing for civil liability for certain acts proscribed by the penal code, including theft of trade secrets). Newton also charged Shell Exploration with breaking contractual promises of confidentiality and breaching its fiduciary duty to Newton by unlawfully misappropriating Newton's trade secrets.

In response, Twister filed a special appearance with a supporting affidavit from Tjeenk Willink, who at that time was Twister's CEO and Chief Technology Officer. Tjeenk Willink stated in his affidavit that the technology used in Twister's gas-separation products was not derived from Newton's trade secrets; rather, it was based on technology developed by another company. Newton's response to Twister's special appearance included an affidavit from Bloom, as well as other documentary evidence. Bloom stated that after reviewing certain documents related to Twister's technology and products, he concluded the technology he developed and disclosed to Shell Exploration was being used by Twister in its products. Newton's other evidence related to Twister's marketing and product sales in Texas. Twister later filed an amended special appearance with a supplemental affidavit from Tjeenk Willink in which he explained the extent of Twister's marketing and sales projects in Texas.

The trial court heard argument on the special appearance in October 2008. The parties relied on their documents on file and offered no live testimony; thus, the record consists of the affidavits and other documents attached to the special appearance and response. The trial court did not rule on Twister's special appearance at this hearing or at a second special appearance hearing held one year after the first.^[2] Nearly a year and a half later, in March 2011, the trial court orally denied Twister's special appearance at a hearing on a motion to modify a prior discovery order. The trial court subsequently signed its order denying Twister's first amended special appearance on March 30, 2011. The trial court did not specify the basis for its ruling in the order and did not issue fact-findings or legal conclusions.

DISCUSSION

Common-law tort of CONVERSION of property

ELEMENTS OF CONVERSION UNDER TEXAS LAW 

To establish a claim for conversion, a plaintiff must prove the following elements: (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff’s rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property.  Ashdon, Inc. d/b/a Impression Bridal v. Gary Brown & Assocs., Inc., 260 S.W.3d 101, 116 (Tex. App.—Houston [1st Dist.] 2008, no pet.). 

SOURCE: HOUSTON COURT OF APPEALS - 01-10-00416-CV - 9/22/11

RELATED CAUSES OF ACTION: Claim under the Texas Theft Liability Act, civil theft, misappropriation  

Texas Theft Liability Act (TTLA) Civil Claim Based on Definition of Offense in Criminal Code

CIVIL LIABILITY (STATUTORY) PREDICATED ON THEFT OF PERSONAL PROPERTY

Under the Texas Theft Liability Act, an individual, corporation, or other "person" who commits theft is liable for the damages resulting from the theft. Tex. Civ. Prac. & Rem. Code Ann. §§ 134.001-.005. Theft is defined as "unlawfully appropriating property or unlawfully obtaining services" as described by certain sections of the penal code. Id. § 134.002. The section at issue here is section 31.03, which states (a) A person commits an offense if he unlawfully appropriates property with intent to deprive the owner of property. (b) Appropriation of property is unlawful if: (1) it is without the owner's effective consent; (2) the property is stolen and the actor appropriates the property knowing it was stolen by another; or (3) property in the custody of any law enforcement agency was explicitly represented by any law enforcement agent to the actor as being stolen and the actor appropriates the property believing it was stolen by another. Tex. Penal Code Ann. § 31.03 (Vernon Supp. 2009).

SOURCE: 05-08-01521-CV (Dallas Court of Appeals) (2/26/10)

306 S.W.3d 947 (2010)

Hollis Osborne WILCOTS, Appellant,
v.
Arecie Wilcots WIGGINS, Good Street Baptist Church Federal Credit Union, and Linda Shanklin, Appellees.

No. 05-08-01521-CV.

Court of Appeals of Texas, Dallas.

February 26, 2010.

Hollis Osborne Wilcots, Gatesville, TX, pro se.

Stephen L. Baskind, Kleiman Lawrence Baskind Fitzgerald LLP, Dallas, TX, for Appellee.

Before Justices MOSELEY, FITZGERALD, and LANG-MIERS.

OPINION

Opinion By Justice LANG-MIERS.

Hollis Wilcots, acting pro se while incarcerated, sued his sister, Arecie Wiggins, Good Street Baptist Church Federal Credit Union, and its manager, Linda Shanklin, 948*948 for damages under the Texas Theft Liability Act. See TEX. CIV. PRAC. & REM.CODE ANN. § 134.001-.005 (Vernon 2005). The trial court granted summary judgment in favor of the Credit Union and Shanklin and dismissed Wilcots's claims against his sister for want of prosecution. Wilcots appeals. 

We affirm.

BACKGROUND

Wilcots received an inheritance of over $6000, presumably from his mother's estate. Because he was incarcerated, he executed a limited power of attorney in which he gave Wiggins authority to handle certain financial matters on his behalf. Pursuant to Wilcots's instructions, Wiggins opened an account at the Credit Union in Wilcots's name and signed the signature card "Arecie Wiggins P.O.A. for Hollis Osborne Wilcots." She withdrew a portion of the deposit immediately, leaving a balance of approximately $2500.^[1] Over the next month or so, Wiggins withdrew the entire $2500 balance to handle personal matters. When Wilcots learned that his sister had depleted his account, he sued her for theft under the Texas Theft Liability Act. He alleged that the power of attorney only authorized her to open an account in his name and deposit funds into that account, not to withdraw those funds. He also sued the Credit Union and Shanklin under the Texas Theft Liability Act alleging that they knew the power of attorney was limited and that they allowed Wiggins to withdraw the funds anyway. He alleged that Shanklin conspired with Wiggins to commit theft and that the Credit Union, by not intervening, endorsed Shanklin's actions.

The Credit Union and Shanklin jointly moved for summary judgment, which the trial court granted. Wilcots twice moved for default judgment on his claim against his sister.^[2] The appellate record does not contain a ruling on those motions. While the case was pending, Wiggins died. Wilcots wrote the clerk of the district court and advised the clerk pursuant to civil procedure rule 152 that Wiggins had died and asked the clerk to issue a scire facias for the administrator or executor of Wiggins's estate to appear and defend the lawsuit. Although the clerk's response is not in the appellate record, Wilcots purports to quote the letter, which apparently requested "additional paperwork" from him before the scire facias could issue. Wilcots wrote the clerk again and asked about the type of paperwork that was needed. He also inquired again about the status of the motion for default judgment. About three months later, the trial court signed an "Order Requesting Inmate Availability for Telephone Conference." It was directed to the senior warden at the Hughes Unit in Gatesville, Texas and asked that Wilcots be made available to participate in a telephone status conference on a certain date. Three days before the status conference was to occur, the trial court signed another order asking that Wilcots be made available for a telephone status conference on a different date about a week later. There is no reporter's record of a telephone conference in the appellate record. Four days after 949*949 the second scheduled telephone conference, the trial court signed a final judgment dismissing without prejudice Wilcots's claims against Wiggins for want of prosecution.

Wilcots brings two issues on appeal: (1) the trial court erred by granting summary judgment in favor of the Credit Union and Shanklin, and (2) the trial court abused its discretion by refusing to set a hearing or to rule on his motion for default judgment against Wiggins.

SUMMARY JUDGMENT

In his first issue, Wilcots argues that the trial court erred by granting summary judgment in favor of the Credit Union and Shanklin because he raised genuine issues of material fact about whether they were liable for his sister's withdrawal of funds from his account for her personal use. He contends that Shanklin knew Wiggins did not have authority to withdraw the funds, but allowed her to do so anyway, and that the Credit Union endorsed Shanklin's conduct by remaining silent.

Standard of Review

We review a trial court's summary judgment de novo. Tex. Mun. Power Agency v. Pub. Util. Comm'n, 253 S.W.3d 184, 192 (Tex.2007). We will affirm a summary judgment if the record establishes that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See TEX.R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). For a defendant to prevail on a traditional motion for summary judgment, it must either disprove at least one element of each of the plaintiff's claims as a matter of law or conclusively establish all elements of an affirmative defense. Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex.1996) (per curiam); Shaun T. Mian Corp. v. Hewlett-Packard Co., 237 S.W.3d 851, 854-55 (Tex.App.-Dallas 2007, pet. denied). If the movant meets its burden, then and only then must the nonmovant respond and present evidence raising an issue as to the material facts in question. TEX.R. CIV. P. 166a(c); see Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex. 1999); Shaun T. Mian Corp., 237 S.W.3d at 855.

In our review, we examine "the entire record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion." Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex.2006) (per curiam) (quoting City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex.2005)). We will affirm a traditional summary judgment if the evidence submitted in support of the motion and any response shows that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Shaun T. Mian Corp., 237 S.W.3d at 855.

Applicable Law

Under the Texas Theft Liability Act, an individual, corporation, or other "person" who commits theft is liable for the damages resulting from the theft. TEX. CIV. PRAC. & REM.CODE ANN. §§ 134.001-.005. Theft is defined as "unlawfully appropriating property or unlawfully obtaining services" as described by certain sections of the penal code. Id. § 134.002. The section at issue here is section 31.03, which states

(a) A person commits an offense if he unlawfully appropriates property with intent to deprive the owner of property.

(b) Appropriation of property is unlawful if:

(1) it is without the owner's effective consent;

950*950 (2) the property is stolen and the actor appropriates the property knowing it was stolen by another; or

(3) property in the custody of any law enforcement agency was explicitly represented by any law enforcement agent to the actor as being stolen and the actor appropriates the property believing it was stolen by another.

TEX. PENAL CODE ANN. § 31.03 (Vernon Supp.2009).

Discussion

In their joint motion for summary judgment, the Credit Union and Shanklin argued that the power of attorney and signature card authorized Wiggins to withdraw funds from Wilcots's account. They contended that Wiggins was the only person authorized to act on Wilcots's account, and that they were required to honor her requests to withdraw funds. As proof, they offered the power of attorney, depositor agreement, and signature card. Shanklin additionally argued that she was not individually liable to Wilcots because she acted at all times as manager of the Credit Union and there is no credible summary judgment evidence that she conspired with Wiggins to harm Wilcots. In her affidavit to support the summary judgment, she stated that she did not know the purpose for which Wiggins used the funds.

On appeal, Wilcots argues that the limited power of attorney clearly gave his sister only the power to deposit funds and not to withdraw them, and that the power of attorney expired upon the settlement of his mother's estate. He further contends that he raised a fact question about whether Shanklin conspired with Wiggins to allow Wiggins to withdraw funds for her personal use.

The power of attorney provides:

LIMITED POWER OF ATTORNEY

I, Hollis Osborne Wilcots, residing at Hughes Unit ... Hereby appoint Arecie Wilcots Wiggins ... as my attorney-in-fact ("Agent") to exercise the power and discretions described below.

My Agent shall have power and authority to act on my behalf to receive and disperse [sic] the following:

In the matter of closing settlement of the estate of Mae Belle Davis, disbursement of proportioned share of deceased mother's (Charlene Davis Wilcots) estate inheritance in the amount of $6,829.81 shall be disbursed in the following manner:

1. $2,500.00 to be placed in a financial institute savings account for me....

2. $1,500.00 paid to Arecie Wilcots Wiggins as contribution to repair updates to my father's house....

3. $2,829.81 to be sent to my account at the Texas Department of [C]riminal Justice inmate trust fund.

Conduct any business with any banking or financial institution with respect to, disbursement matters of the estate of Mae Belle Davis, limited to making deposits, negotiating or endorsing any checks or other instruments with respect to any such checks, money matters or vouchers payable to me by any person, firm, and/or corporation.

Purform [sic] any act necessary to deposit, negotiate, or transfer any moneytary [sic] funds, notes or draft of the United [S]tates of America, including U.S. Treasury securities.

This Limited Power of Attorney shall become effective immediately and shall continue until the matter of closing settlement of the estate of Mae 951*951 Belle Davis and disbursement of funds received has been completed as aforementioned above. This Limited Power of Attorney may be revoked by me at any time by providing written notice to my agent.

The power of attorney is signed by Wilcots, dated, and notarized.

Although Wilcots argues that Wiggins's "sole duty [under the power of attorney] was to deposit money into the account she started on [his] behalf," the unambiguous language of the power of attorney states otherwise. In the power of attorney, Wilcots gave Wiggins authority to perform "any act necessary to deposit, negotiate, or transfer any moneytary [sic] funds, notes or draft of the United [S]tates of America...." To "negotiate" means "to transfer or assign (as a check, bill of exchange, promissory note) to another by delivery or endorsement or both in return for equivalent value" or "to convert (as a check) into cash or the equivalent value." WEBSTER'S THIRD NEW INT'L DICT. 1514 (1981). In the ordinary sense of the term, to "negotiate" means not only to deposit funds, but also to cash checks. See id.; Assoc. Carriages, Inc. v. Int'l Bank of Commerce, 37 S.W.3d 69, 73 (Tex.App.-San Antonio 2000, pet. denied) (stating bank did not cash checks to corporation because bank could not know if person authorized to negotiate on behalf of business).

In addition, the evidence showed that Wiggins was the only person authorized to sign on the account and that the funds were withdrawn only by her. A bank has a duty to honor its depositor's checks if there are sufficient funds in the account, regardless of the purpose for which the check is given. See TEX. BUS. & COM.CODE ANN. §§ 4.401-.402 (Vernon 2002); Mesquite State Bank v. Prof'l Inv. Corp., 488 S.W.2d 73, 75 (Tex.1972) (bank under duty to disburse funds on deposit in accordance with directions of depositor); White Rock Nat'l Bank of Dallas v. U.S. Fire Ins. Co., 562 S.W.2d 268, 274 (Tex.Civ.App.-Dallas 1978, writ ref'd n.r.e.) (relationship between bank and depositor is one of debtor and creditor and in absence of agreement to contrary, bank under duty to honor depositor's checks).

We conclude that the summary judgment evidence offered by the Credit Union and Shanklin conclusively established that Wiggins was authorized to negotiate funds in Wilcots's account and, as a result, they conclusively established that they were not liable for her withdrawal of those funds.

Wilcots contends that he raised a fact issue about whether Shanklin allowed Wiggins to unlawfully appropriate his funds. He cites a letter from his sister in which she stated that Shanklin "was aware I was withdrawing the funds for urgent needs regarding daddy's care and household needs. She was also aware that I was in a big financial bind, but had discussed with her my intentions and plans to replace the funds." As we have concluded, however, the power of attorney, deposit agreement, and signature card authorized Wiggins to withdraw funds from Wilcots's account, and nothing in the record shows that the Credit Union agreed that it would disburse funds from the account only for specific purposes. See White Rock Nat'l Bank, 562 S.W.2d at 273-74 (although president of bank knew purpose of deposit, no agreement between bank and depositor that bank would pay out money only for that specific purpose). We conclude that Wilcots's summary judgment evidence does not raise a genuine issue of material fact about whether Wiggins unlawfully appropriated funds in the account.

Wilcots also complains about a discrepancy in the records of his account. He contends that the initial deposit and membership fee noted in the Credit Union's 952*952 records are different from the initial deposit and membership fee on the receipt he received.^[3]However, this discrepancy in the records concerning the membership fee does not change our conclusion that the power of attorney authorized Wiggins to withdraw funds from the account.

We conclude that the trial court did not err by granting summary judgment in favor of the Credit Union and Shanklin. We resolve appellant's first issue against him.

MOTION FOR DEFAULT JUDGMENT

In his second issue, Wilcots argues that the trial court erred when it failed to set a hearing on his motion for default judgment and to rule on the motion. Wilcots does not challenge the dismissal for want of prosecution. We conclude that Wilcots did not preserve this issue for our review.

To preserve a complaint for appellate review, a party must make the complaint to the trial court by a timely request, objection, or motion. TEX.R.APP. P. 33.1(a)(1). Preservation also requires one of three things: (1) an express ruling by the trial court, (2) an implicit ruling by the trial court, or (3) a refusal to rule by the trial court, coupled with an objection to that refusal by the complaining party. TEX.R.APP. P. 33.1(a)(2). The appellate record does not contain an express ruling on Wilcots's motion for default judgment, nor does it contain a refusal to rule coupled with an objection by Wilcots to that refusal, if any. Further, Wilcots does not argue that the dismissal constituted an implicit ruling by the trial court. See Unifund CCR Partners v. Smith, No. 05-07-01449-CV, 2009 WL 2712385, at *1-2 (Tex. App.-Dallas Aug. 31, 2009, pet. filed) (mem.op.); AIS Servs., LLC v. Mendez, No. 05-07-01224-CV, 2009 WL 2622391, at *1-2 (Tex.App.-Dallas Aug. 27, 2009, no pet.) (mem.op.). Consequently, we conclude that this issue is not preserved for our review.

We resolve appellant's second issue against him.

CONCLUSION

We affirm the trial court's judgment.

[1] The record indicates that Wiggins disbursed the money she immediately withdrew pursuant to Wilcots's instructions; he does not complain about those funds.

[2] Simultaneously, Wilcots filed a notice of appeal. We questioned whether there was a final judgment in the case and Wilcots responded that there was not. See Wilcots v. Good St. Baptist Church Fed. Credit Union, No. 05-08-00119-CV, 2008 WL 1991702, at *1 (Tex.App.-Dallas May 9, 2008, no pet.) (mem. op.). By memorandum opinion, we dismissed the appeal for want of jurisdiction. Id.

[3] The Credit Union's records show an initial deposit of $6829.81, a membership fee of $5, a share withdrawal on the same day in the amount of $4329, leaving a balance of $2495.81. On the receipt that Wilcots received, it shows a share balance in the amount of $2500 and a $30 membership fee. He argues that this discrepancy "further advance[s] Shanklin's liability." We note, however, that the $6829.81 corresponds to the total of the funds listed in the power of attorney, and that the $4329 withdrawn from the account on the day it was opened corresponds to the disbursements listed in the power of attorney.

Conversion, Civil Theft Claim, and Trespass

ELEMENTS OF CONVERSION, THEFT, TRESPASS CLAIMS UNDER TEXAS LAW Cause of Action for Conversion

The elements of a conversion claim are (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff’s rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. Khorshid, Inc. v. Christian, 257 S.W.3d 748, 758–59 (Tex. App.—Dallas 2008, no pet.).

Statutory Cause of Action under Texas Theft Liability Act (alt. to conversion)

Under the Theft Liability Act, a person who commits theft by unlawfully appropriating property with intent to deprive the owner of property is liable for the resulting damages. Tex. Civ. Prac. & Rem. Code Ann. §§ 134.002(2), 134.003(a) (Vernon 2005); Tex. Penal Code Ann. § 31.03(a) (Vernon Supp. 2009). Appropriation of property is unlawful if it is without the owner’s effective consent. Id. § 31.03(b)(1).

Common-law Trespass Claim

“Trespass to personalty is an injury to, or interference with, possession of the property, unlawfully, with or without the exercise of physical force.” Russell v. Am. Real Estate Corp., 89 S.W.3d 204, 210 (Tex. App.—Corpus Christi 2002, no pet.) (citing Jamison v. Nat’l Loan Investors, L.P., 4 S.W.3d 465, 469 n.2 (Tex. App.—Houston [1st Dist.] 1999, pet. denied)). Destruction of, or injury to, personal property, regardless of negligence, may be a trespass. Id.

SOURCE: Cash Rent-A-Car v. Old American County Mutual Fire Ins. Co. No. 01-09-00021-CV (Tex.App.- Houston [1st Dist.] Jan. 14, 2009)