PAS, INC. v. Engel
2011 Tex. App. LEXIS 4851
Tex. App.2011Background
- PAS, Inc. sued Engel, April Engel, and Caputech, alleging breach of contract, breach of fiduciary duty, fraud, civil conspiracy, and related claims in Texas court.
- The 2006 Employment Agreement included a two-year non-compete and trade-secret/confidentiality provisions, naming Matrikon as a competitor and preserving at-will employment.
- Engel negotiated a later 2008 Agreement narrowing the non-compete; he resigned a few days after it was executed and Caputech was formed to resell Matrikon products.
- Caputech entered into an exclusive reseller agreement with Matrikon, forming a competing entity to PAS in certain PAS-defined fields.
- PAS amended its pleadings to include claims for breach of the 2006 and 2008 agreements, intentional interference, theft of trade secrets, fraud, civil conspiracy, and breach of fiduciary duty; summary judgment was granted below.
- The trial court granted summary judgment on multiple claims, including assuming at-will employment foreclosed fraud theories related to Engel’s continued employment; PAS appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of fiduciary duty not in motion | PAS argues fiduciary duty claim was properly before court despite not being in motion. | Engel/April/Caputech contend fiduciary duty claim was not raised in motion and cannot be ruled on. | Reversed; fiduciary-duty claim not addressed in motion thus improper to grant summary judgment. |
| Fraud based on remaining employment | PAS relied on Engel's promise to remain with PAS to its detriment. | Engel’s at-will status bars justifiable reliance on continued-employment promises. | At-will employment bars this fraud claim; PAS cannot sustain it. |
| Fraud by non-disclosure (Caputech/Matrikon) | Engel, as a fiduciary, owed a duty to disclose forming Caputech and plans to work with Matrikon. | No general duty to disclose competing plans; non-disclosure claims premised on fiduciary status. | Question of fiduciary status and duty to disclose; reversal on this non-disclosure fraud claim for Caputech/Matrikon. |
| Operative contract between 2006 and 2008 | 2006 Agreement controls; 2008 was obtained by fraud and thus unenforceable. | 2008 superseded 2006 and is enforceable; at-will status precludes certain claims. | Breach of the 2006 Agreement remains viable; 2008 Agreement breach judgment improper; remand for operative contract determination. |
| Civil conspiracy | Caputech and April participated in a conspiracy to harm PAS. | No meeting of minds or actionable conspiratorial acts evidenced. | Summary judgment proper; civil conspiracy claim over Caputech/April affirmed. |
Key Cases Cited
- Jacobs v. Satterwhite, 65 S.W.3d 653 (Tex. 2001) (motion for summary judgment grounds must be expressly raised)
- Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (final judgment finality and grounds on appeal)
- Wilson v. Davis, 305 S.W.3d 57 (Tex.App.-Houston [1st Dist.] 2009) (no-evidence grounds require explicit articulation)
- Mendoza v. Fiesta Mart, 276 S.W.3d 653 (Tex.App.-Houston [14th Dist.] 2008) (summary judgment standard applied with favorable view to nonmovant)
- Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929 (Tex.App.-Houston [14th Dist.] 1994) (promissory estoppel and at-will employment issues)