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Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., Jody W. Olson and Carey Roberts
414 S.W.3d 911
Tex. App.
2013
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Background

  • sentinel Integrity sued Olson and Mistras for breach of a covenant not to compete and tortious interference.
  • the covenant defined a broad Restricted Activities and a wide Restricted Area across multiple states and international locations.
  • the covenant included a reformability provision allowing modification to be reasonable by a court.
  • Olson left Sentinel for Mistras and began working as a turnaround inspector; Sentinel sought damages and fees.
  • at trial, Sentinel conceded the geographic scope was overbroad and asked the court to reform; the jury found no liability against any defendant.
  • after verdict, the trial court reformed the covenant; Sentinel appealed, challenging enforceability, reform, and attorney’s fees;
  • the appellate court ultimately held that Sentinel waived enforceability and that reform could be granted post-judgment; it remanded appellate fees and deleted prejudgment interest.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Enforceability of the covenant Sentinel argued the covenant was enforceable as written. Olson/Mistras argued the covenant was overbroad and unenforceable. Waived enforceability; no ruling on enforceability on the merits.
Duty to reform under 15.51(c) Court should reform but Sentinel did not obtain timely final hearing. Reformation should be allowed where necessary; court complied post-verdict upon request. No reversible error; court properly reformed post-verdict and Sentinel waived related challenge.
Attorney’s fees predicate under 15.51(c) Olson proved Sentinel knew the covenant was overbroad and sought overbroad enforcement. Sentinel argued insufficiency of predicate findings and that fees were not properly incurred. Court properly submitted predicate issues to the jury; findings supported award of fees.
Segregation of fees Fees were properly segregated between recoverable and nonrecoverable work. Segregation was necessary to separate recoverable work from nonrecoverable work. Evidence supported segregation; fees were adequately tied to the covenant dispute.
Pre-judgment interest on fees Pre-judgment interest may be appropriate for fees incurred. Act preempts other remedies; prejudgment interest not appropriate for paid fees. Pre-judgment interest on paid fees removed; act preempts such interest.

Key Cases Cited

  • Cruz v. Andrews Restoration, Inc., 364 S.W.3d 817 (Tex. 2012) (complaint to jury charge waived unless objected)
  • City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (no-evidence and weight-of-evidence standards for factual sufficiency; standard of review)
  • El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012) (lodestar and documentation required for attorney’s fees)
  • Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998) (attorney’s fees as a remedy under statute; standards for review)
  • Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011) (hallmark of enforcement is reasonableness of covenants)
Read the full case

Case Details

Case Name: Sentinel Integrity Solutions, Inc. v. Mistras Group, Inc., Jody W. Olson and Carey Roberts
Court Name: Court of Appeals of Texas
Date Published: Oct 22, 2013
Citation: 414 S.W.3d 911
Docket Number: 01-12-00370-CV
Court Abbreviation: Tex. App.