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