Computek Computer & Office Supplies, Inc. v. Walton

Citations: 156 S.W.3d 217; 2005 Tex. App. LEXIS 1179; 2005 WL 352036Docket: 05-03-00889-CV

Court: Court of Appeals of Texas; February 15, 2005; Texas; State Appellate Court

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Daron Walton, operating as OEM Supplies, sued Computek Computer Office Supplies, Inc. and its owner, Michael Williams, alleging that Williams misappropriated trade secrets from his previous employment with OEM to establish a competing business. The trial court ruled in favor of OEM, awarding actual damages of $113,000, exemplary damages of $100,000, and issuing a permanent injunction against Computek. Computek contested the injunction's lack of specificity and the joint and several nature of the exemplary damages award. The appellate court partially reversed and modified the permanent injunction and remanded the exemplary damages issue for further proceedings, but upheld the trial court's judgment on other claims. The background involved Williams and Walton working at ABBA, with Walton starting OEM after leaving ABBA. Williams, hired by Walton, took confidential client information from OEM, including data from the TeleMagic program, to launch Computek, leading to the lawsuit. The trial court also imposed temporary restraints on Williams' actions regarding OEM clients and confidential information prior to the trial's conclusion.

The trial court issued a "Judgment of the Trial on the Merits," ruling in favor of OEM regarding misappropriation of trade secrets and awarding OEM $113,000 in actual damages, $100,000 in exemplary damages (offset by $1,500), while favoring Computek on other claims. A permanent injunction was also granted. Computek's motion to clarify or modify the injunction and for a new trial was overruled by operation of law, leading to an appeal.

Computek argues the permanent injunction is unclear, lacking specificity on which OEM clients it cannot contact, and is overly broad, restricting lawful activities. It seeks modification or reversal of the injunction, referencing relevant case law. The standard of review for injunctions allows for trial court discretion, with appeals assessing whether there was a clear abuse of discretion. An injunction should provide clear, detailed instructions on restrained actions without ambiguity, as per Texas procedural rules. 

The permanent injunction's first two paragraphs prohibit Computek from engaging with any OEM client not listed in Attachment A or any new account established during an employee's tenure at OEM. However, the specific clients Computek is barred from contacting are not explicitly identified, raising concerns about the injunction's clarity and potential overreach.

Computek is prohibited from advising OEM clients, specifically those existing as of October 16, 2002, and new accounts established during Williams' tenure at OEM, from terminating their business relationships with OEM. However, the injunction does not specify which clients are included, leading Computek to assert that it lacks clarity regarding which contacts are considered OEM clients. OEM contends that the injunction clearly restricts Computek from contacting those OEM clients as of the effective date. Both parties agree that the injunction fails to identify specific OEM clients, complicating Computek's ability to comply without potentially violating the injunction by inadvertently contacting OEM clients.

Additionally, Computek is restrained from using or disclosing non-ABBA information and files taken from OEM, yet the injunction does not explicitly list the prohibited information. Computek argues that this lack of specificity renders the injunction vague and overly broad, particularly concerning lawful activities. In particular, paragraph seven's prohibition against removing or destroying any files, including unrelated documents, is viewed as excessively restrictive. The injunction must be clear and detailed, as mandated by Texas Rule of Civil Procedure 683, which emphasizes the necessity for specificity in terms and actions to be restrained. This requirement underlines the insufficiency of implicit references or external knowledge in enforcing compliance.

Computek asserts its legal right to dispose of routine records, including deleting unused computer files and discarding old sales lead documents. The court notes that an injunction affecting Computek's ability to manage its internal records is overly broad, as it lacks specificity and includes activities that are legally permissible for Computek, such as record deletion unrelated to OEM. Consequently, the trial court abused its discretion in issuing a permanent injunction that restricts these activities.

In the matter of exemplary damages, Computek contends that the award against both Williams and the corporation is improper under section 41.006 of the civil practice and remedies code, which mandates that exemplary damages must be specific to each defendant with no joint and several liability. This statute, applicable since 2002 for intentional torts, is interpreted based on its plain language, confirming that each defendant is only liable for the specific amount awarded against them. OEM argues for joint and several liability based on precedents involving closely related defendants, but the court emphasizes adherence to the unambiguous statutory language requiring individual liability assessments for each defendant.

Cases that accrued prior to the implementation of the statutory rule for specific allocation in intentional torts were not subject to this new requirement. Instead, these cases adhered to the common law rule mandating the specific allocation of exemplary damages, which included an exception for closely related defendants. The court concluded that the trial court mistakenly awarded joint and several exemplary damages, leading to a favorable resolution for Computek on this issue. Consequently, the court reversed specific paragraphs of the permanent injunction, remanding them for further proceedings, and modified another paragraph regarding the removal or destruction of files related to OEM. Additionally, the court reversed the trial court's joint and several award of exemplary damages, remanding the matter to determine whether exemplary damages should be awarded to any specific defendant, in accordance with TEX. CIV. PRAC. REM. CODE ANN. 41.006. The court affirmed all other aspects of the permanent injunction and the trial judgment. The permanent injunction included various restrictions on the defendants concerning soliciting OEM clients and handling confidential information. Attachment A referenced a client list brought to OEM from ABBA by one of the defendants.