Barry Brooks, Heston C. King, Stefen Douglas Brooks, Johanna Barton, and Jesse Rodriguez Benavides v. Excellence Mortgage, Ltd. LADTD-1, LLC Grothues Financial, Ltd. Grothues Brothers Management I, LLC And Georgetown Mortgage, L.L.C.
2015 Tex. App. LEXIS 12455
| Tex. App. | 2015Background
- Appellants were loan officers for Excellence Mortgage in 2010; Excellence began restructuring in September 2010 and coordinated with Georgetown Mortgage, forming MG Mortgage.
- Around late September 2010 Excellence’s loan officers received Georgetown training and were asked to sign applications for Georgetown; the Brooks appellants declined and left Excellence effective October 1, 2010 (Barton was terminated by Sept. 28).
- When they left, about 91 “pipeline” residential loan files were pending; some customers signed written requests to transfer their files and some appellants notified customers of their move to Premier Nationwide Lending.
- Excellence sued and obtained a TRO enjoining appellants and Premier from using Excellence’s confidential information; Premier settled and returned files; appellants counterclaimed for breach of contract, antitrust, and interference with prospective business relations (among other claims).
- The trial court granted Excellence’s (Appellees’) traditional summary judgment on appellants’ breach-of-contract (for loans funding after Oct. 1, 2010), antitrust, and tortious-interference claims; those claims were severed and appealed.
- The court of appeals reversed: it held Appellees failed to conclusively disprove essential elements of the breach, antitrust, and interference claims and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Excellence owed commissions on pipeline loans funding after Oct. 1, 2010 | Brooks appellants: their employment was involuntarily terminated (Excellence ceased operations earlier), so voluntary-termination provisions do not bar commissions | Excellence: appellants voluntarily resigned (or were paid through 9/30) and the Compensation Plan limits commissions after voluntary resignation | Reversed summary judgment: genuine fact issue whether terminations were involuntary and whether Plan’s voluntary-termination rules apply; Appellees failed to conclusively disprove breach element |
| Barton’s entitlement to post-termination commissions | Barton: she was not shown to have been terminated for cause and Plan is silent on employer-initiated terminations for convenience | Excellence: Barton was terminated Sept. 28 and, if for cause, is not entitled to further commissions | Reversed summary judgment: Appellees did not conclusively prove termination-for-cause; fact issue remains |
| Antitrust (Texas Free Enterprise & Antitrust Act §15.05) — whether Appellees engaged in an unreasonable practice with adverse market effect | Appellants: Excellence/Georgetown coordinated to transfer files without customer authorization, misled customers, prevented transfers and competition — adverse effect on local construction-to-permanent market | Appellees: nondisclosure/confidentiality agreements are not unlawful non-competes; actions protected as enforcing confidential-information rights | Reversed summary judgment: affidavits raise fact issues on unreasonable practice, market definition/role, and demonstrable economic effect; Appellees didn’t conclusively disprove elements |
| Tortious interference with prospective business relations — whether conduct was independently tortious or unlawful | Appellants: Appellees made false statements, sent threatening letters, and filed a groundless injunction that prevented customers from transferring files — alleged fraud underlying interference | Appellees: use of legal process to protect rights is not tortious; injunction suit was lawful | Reversed summary judgment: Appellees failed to conclusively disprove the underlying tort (fraud) alleged in pleadings; fact issues remain |
Key Cases Cited
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Texas 2000) (reviewing competing summary judgment motions)
- Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (final-judgment and severance principles)
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (summary judgment standard—resolve doubts for nonmovant)
- Elliott–Williams Co. v. Diaz, 9 S.W.3d 801 (Tex. 1999) (movant must conclusively disprove an essential element)
- Doe v. Boys Clubs of Greater Dall., Inc., 907 S.W.2d 472 (Tex. 1995) (summary judgment burden discussion)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (consider evidence in light most favorable to nonmovant)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (evidentiary review on summary judgment)
- Rhȏne-Poulenc, Inc. v. Steel, 997 S.W.2d 217 (Tex. 1999) (indulge reasonable inference for nonmovant)
- Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754 (Tex. 2007) (per curiam; summary judgment review principles)
- Casso v. Brand, 776 S.W.2d 551 (Tex. 1989) (affidavit sufficiency on summary judgment)
- Trico Techs. Corp. v. Montiel, 949 S.W.2d 308 (Tex. 1997) (affidavit sufficiency)
- Marlin v. Robertson, 307 S.W.3d 418 (Tex. App.—San Antonio 2009) (antitrust elements—unreasonable practice and adverse effect on competition)
- Cont’l T. V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977) (rule of reason analysis)
- Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909 (Tex. 2013) (elements of tortious interference)
- Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711 (Tex. 2001) (fraud as an independently tortious act supporting interference claim)