David Homoki v. Conversion Services, Inc.
2013 U.S. App. LEXIS 10715
| 5th Cir. | 2013Background
- GCS and EPS compete in check/ARC processing; CSI was GCS’s sales agent for ARC.
- ARC involved post-dated checks guaranteed by GCS; EPS sought a similar product (EPS90).
- CSI allegedly misrepresented ARC terms, overcharged, and provided poor support, prompting Homoki to end CSI’s relationship.
- EPS recruited CSI and other GCS agents to switch to EPS; there was alleged exploitation of confidential information.
- A jury found CSI breached contracts/fiduciary duties; EPS conspired with CSI to breach CSI’s fiduciary duty; damages awarded to GCS; appeal challenges sufficiency of evidence and notice of conspiracy claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Knowledge of exclusivity clause | GCS argues EPS knew or should have known of exclusivity | EPS argues no evidence of knowledge; exclusivity not typical | Sufficient evidence supports knowledge/should have known of exclusivity clause |
| Damages proof and causation | GCS contends damages tied to EPS/CSI conduct | EPS argues damages overstated and partly caused by CSI misrepresentations | Damages proven with reasonable certainty; EPS liable for losses caused by CSI ceasing to sell for GCS |
| Notice of civil conspiracy claim | GCS’s pleadings/pretrial order gave sufficient notice of conspiracy to breach fiduciary duty | EPS contends lack of proper notice | Notice adequate; conspiracy claim properly tried to jury |
| Joint/separate liability for civil conspiracy | GCS seeks joint/separate liability for CSI and EPS | Texas rule requires explicit causation evidence for joint liability | Rule 49(a) demand not met; cannot impose joint/separate liability for conspiracy damages; damages limited to underlying tort unless proven otherwise |
Key Cases Cited
- Powell Indus., Inc. v. Allen, 985 S.W.2d 455 (Tex. 1998) (elements of tortious interference and required damages proof)
- Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex. 1989) (at-will contract interference not a defense to tortious interference)
- Travellers Cas. & Sur. Co. v. Ernst & Young LLP, 542 F.3d 475 (5th Cir. 2008) (review of damages evidence in interference cases; standard of review)
- Top Value Enterprises v. Carlson Mktg. Group, 703 S.W.2d 806 (Tex. Ct. App. 1986) (knowledge of exclusive contracts imputable to employer; employer knowledge matters)
- American National Petroleum Co. v. Transcontinental Gas Pipe Line Co., 798 S.W.2d 274 (Tex. 1990) (damages measure for interference with contract equal to contract breach; caveat on scope of damages)