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62 2023-09-22 LTR Pohl Response to Kassab letter Pohl's letter to Judge Christine Weems replying to Kassab's September 20, 2023 post-hearing letter brief, addressing exemplary damages burden of proof, recoverability of attorneys' fees, conspiracy preemption, and Precision's exoneration Sur-reply letter brief filed September 22, 2023 in the 281st Judicial District Court, Harris County, Cause No. 2018-58419. Addressed to Judge Christine Weems. Filed two days after Kassab's post-hearing letter brief (September 20) and three days after the September 19 hearing on entry of judgment. Pohl notes his Reply was filed one business day after Kassab's Response. Signed by Harris Y. Wells and Jean C. Frizzell of Reynolds Frizzell LLP. JDGMT-1 N/A Phase 5 2023-09-22_LTR_Pohl-Response-to-Kassab-Letter-re-Final-Judgment_FILED.pdf That the Court grant Pohl's Motion, enter judgment in the form attached as Exhibit B to the Motion, and overrule Kassab's objections to entry of judgment 9/22/2023 9:53 PM Marilyn Burgess - District Clerk Harris County Envelope No. 79868932 By: Bonnie Lugo Filed: 9/22/2023 9:53 PM September 22, 2023 Via Electronic Filing Judge Christine Weems r Harris County Civil Courthouse l 201 Caroline, 14th Floor Houston, Texas 77002 c t RE: Michael A. Pohl et al. v. Lance Christopher Kassab et al.; Casutse No. 2018-58419; In the 281st Judicial District Court of Harris County, Texas. D i Reply to Kassab’s Post-Hearing Letter on Pohl’s Motion for Entry of Judgment (the “Motion”) Dear Judge Weems: e In Kassab’s September 20, 2023 letter (the “Leutter”), Kassab suggests that the timing of Pohl’s Reply brief entitles Kassab to further briefing. Pohl filed his Reply one business day after Kassab filed his Response. Because Kassab misstates both the law and facts in the Letter, Pohl files this reply letter. l DMISCUSSION A. The Jury Verdict shows thoe Jury unanimously awarded exemplary damages. Kassab makes two argumencts on the recovery of exemplary damages: he claims (1) it was Pohl’s burden to ensure the Jury fsigned a certificate of unanimity for Question 17, and (2) that various cases Pohl cited are “distinguishable for important reasons.” Letter at 1–2. Each argument fails. First, as the Supreme Cyourt of Texas held in USAA Tex. Lloyds Co. v. Menchaca, “the party who must rely on theo conflicting answer to avoid the effect of answers that establish liability . . . bore the burden to object.” 545 S.W.3d 479, 519 (Tex. 2018) (emphasis added). That is Kassab here. lSecond, any so-called distinguishing facts either are not distinguishing or are immaterial becaucsei the reasoning of those cases, applied to the facts of this case, shows Pohl is entitled to an awfard of exemplary damages. 1. It was Kassab’s burden to object because he seeks to set aside the Jury’s answers. Pohl obtained the necessary findings to support an award of exemplary damages against Kassab through the Jury’s answers to Questions 2, 17, and 19.1 Kassab asks the Court to ignore the Jury’s findings because he contends the certificate of unanimity is incomplete and lacks a signature for Question 17. See Letter at 2. Binding precedent from the Texas Supreme Court 1 See Jury Verdict at 7–8, 24, & 26, attached as Ex. A to the Motion. September 22, 2023 Page 2 shows Kassab had the burden to object before the Jury was dismissed to avoid the effect of the Jury’s answers to Questions 2, 17, and 19. Kassab’s failure to object waived this issue. In USAA Tex. Lloyds Co. v. Menchaca, the Texas Supreme Court discussed how Texas Rule of Civil Procedure 295 “provides the procedure for resolving incomplete and nonresponsive jury verdicts as well as those containing conflicting answers.” 545 S.W.3d at r519. The Court stated that a party must object before the jury is dismissed and clarified that “thle party who must rely on the conflicting answer to avoid the effect of answers that establish liability . . . bore the burden to object.” Id. (emphasis added). In this case, it does notc matter whether Kassab frames the issue as a problem of incompleteness or conflict within thet Jury Verdict. The rule is the same; Rule 295 and Menchaca govern the question of whose buriden it was to object. Because the Texas Supreme Court clarified these rules in 2018, post-Menchaca caselaw is instructive. A recent case cites Menchaca on the precise issue ebefore this Court—which party has the burden to object when the jury does not sign a certificate of unanimity for an exemplary damages question. See Bruce v. Oscar Renda Contracting, 657 S.W.3d 453, 463 (Tex. App.—El Paso 2022, pet. filed). In Bruce, the court cited Menchaca and found that the defendant—the party who opposed giving effect to the jury’s answers finding exemplary damages—had the burden to object to the lack of a certificate of unanimity “bielfore the jury was discharged.” Id. The same is true here. As a matter of law, the Jury’s answers to Questions 2, 17, and 19 are sufficient to award exemplary damages.2 See id; see also Menchaca, 545 S.W.3d at 519. Kassab had the burden to object before the Jury was discharged too avoid the effect of those answers based on any contention that the Jury Verdict is incomplete ore has a conflict. 2. Kassab’s discussion off caselaw demonstrates that exemplary damages are proper. Kassab does not address the caselaw demonstrating the Court “must,” when possible, “reasonably construe the [jpury’s] findings in a way that harmonizes them.” Menchaca, 545 S.W.3d at 509; see Bender v. SC. Pac. Transp. Co., 600 S.W.2d 257, 260 (Tex. 1980). The only way to harmonize the Jury Verdict is to give effect to the Jury’s affirmative finding of exemplary damages. Because Kassab has no response to this, he claims that three other cases cited by Pohl are “distinguishable ifor important reasons” and one case that Kassab cites, which was decided before Menchaca, iso the “most analogous.” See Letter at 1–2. Kassab’s claims are not accurate. Kassab’s attempt to distinguish Stover v. ADM Milling Co., No. 05-17-00778-CV, 2018 WL 6818561 (Tex. App.—Dallas Dec. 28, 2018, pet. denied) is so ineffective it is worth highlighting. In Stover, the jury had to unanimously answer three sets of questions to support an award of exemplary damages: (a) “jury question nos. 5 and 6,” which found liability for fraud and statutory fraud; (b) jury question nos. 15 and 16, which found clear and convincing evidence and 2 See Jury Verdict at 7–8, 24, & 26, attached as Ex. A to the Motion. September 22, 2023 Page 3 malice; and (c) jury question no. 17, which found the amount of exemplary damages. See Stover, 2018 WL 6818561, at *12. The court upheld the jury’s award of exemplary damages even though the jury did not sign a certificate of unanimity for jury questions nos. 5 and 6. Id. Kassab contends Stover is distinguishable because the Jury, in this case, did not sign a certificate of unanimity for Question 17 (clear and convincing evidence of malicer), and the jury in Stover certified that its answers were unanimous in response to the equivalent qluestions—question nos. 15 and 16 (on clear and convincing evidence and malice). See Letter at 1. But this “distinguishing” fact is a distinction without a difference and is not helpfucl for Kassab. In Stover, the jury needed to unanimously answer three sets of questions—sets “at,” “b,” and “c”—to support an award of exemplary damages. But the jury did not sign a certificaite of unanimity for questions 5 and 6 (question set “a”). Id. The court nevertheless found that exemplary damages were proper because the jury certified it was unanimous on questions 15 ands 16, and those questions “instructed the jury to answer those questions” only if the jury was unanimous for at least one of the questions in question set “a.” Id. This result—that not all predicrate answers to a finding of exemplary damages require a certificate of unanimity—is fatal toB Kassab’s argument. Here, the question is whether the jury’s answers to three questions—Questions 2, 17, and 19—were unanimous. Like Stover, the Jury ceri ltified it was unanimous for two out of the three relevant questions.3 Also similar to Stover, th a e Jury signed a certificate of unanimity for Question 19, which was predicated on the Jury unanimously answering the question the Jury did not separately certify unanimity for—Quesotio f n 17.4 It does not matter that there is no certificate of unanimity for Question 17 (malice) reather than Question 2 (liability). The point is that, if a jury answers an exemplary damages question predicated on a unanimous answer to a prior exemplary damages question (whether the fprior question be a threshold liability question or a malice question), then, absent other evidence, the prior question is considered to have been unanimously answered even absent a unpanimity certificate. The reasoning of Stover illustrates that the Jury’s findings are sufficient because the “jury is presumed to have followed the trial court’s instructions” to answer “Yes” to Question 17 only if it was unanimous. See Stover, 2018 WL 6818561, at *12. Kassab’s catitempt to distinguish two other cases Pohl cited does little to help his position. Kassab argues thfat Bruce v. Oscar Renda Contracting, 657 S.W.3d 453 (Tex. App.—El Paso 2022, pet. filed) is distinguishable because “there was no Additional Certificate in which the jury was instructedU to certify whether certain jury questions were unanimous.” Letter at 1. That is misleading at best. There was a certificate of unanimity, but it could not be used because the questions were misnumbered. See Bruce, 657 S.W.3d at 457. Regardless, the fact that exemplary damages were awarded despite there not being a certificate of unanimity supports Pohl’s position here. Bruce demonstrates that a signed certificate of unanimity is not necessary for an award 3 See Jury Verdict at 32–33, attached as Ex. A to the Motion. 4 See id. at 26, 32–33. September 22, 2023 Page 4 of exemplary damages. The Jury’s answers in this case, which were conditioned on unanimity, are also sufficient to support the award of exemplary damages. Thus, it was not Pohl’s burden to object to any purported lack of signature on the certificate of unanimity. As the party seeking to avoid the Jury’s findings, it was Kassab’s burden to object. See Menchaca, 545 S.W.3d at 519. Kassab’s discussion of Bryan v. Papalia, 542 S.W.3d 676, 692–93 (Tex.r App.—Houston [14th Dist.] 2017, rev. granted, judgm’t vacated w.r.m.) also misses the point. lPohl cited this case because it illustrates what Kassab should have done if he believed that the Jury was not unanimous concerning Question 17. In Bryan, the jury failed to sign a certificate ofc unanimity for questions 1 and 2, which needed to be unanimous for an award of exemplary datmages. See 542 S.W.3d at 692. However, the jury was instructed to answer “yes” to question i2 only if it was unanimous to both questions 1 and 2. See id. Contrary to Kassab’s suggestion otherwise, the Bryan trial court briefing showed the defendant—the party opposing asn award of exemplary damages— requested the jury be polled to ensure it was unanimous.5 Here, Kassab should have done the same thing. As the party desiring to avoid the effect orf answers that establish liability, under Menchaca, Kassab needed to object or request a pollinBg of the jury in order to dispute that the Jury followed the Court’s instructions to only answer “Ynes” to Question 17 if the Jury was unanimous. Kassab claims the “case most analogousi l to the present case is the “no petition” case of Redwine v. Peckinpaugh, 535 S.W.3d 44 (Tex. App.—Tyler 2017, no pet.).” Letter at 2. In his Reply, Pohl explains how Redwine is different for multiple reasons. However, if Kassab’s “most analogous” case is Redwine, no on-poinot cases support Kassab’s position. Setting aside the fact that the Tyler Court of Appeals opinieon in Redwine predates the Texas Supreme Court’s opinion in Menchaca, Redwine is facially not on point because the court polled the jury in Redwine and confirmed the jury was not unafnimous. Redwine, 535 S.W.3d at 47. Kassab chose not to poll the jury here. Because of the Court’s instructions, the Jury’s answers to Questions 17 and 19 are evidence that the Jury was punanimous. Menchaca, 545 S.W.3d at 519; Bruce, 657 S.W.3d at 463. B. Pohl’s attorneys’ fees from prior litigation are recoverable as damages. First, under the plain text of TUTSA, Pohl is entitled to recover “actual loss caused by misappropriationi.” Tex. Civ. Prac. & Rem. Code § 134A.004(a). The jury found that Pohl’s “actual loss”o included damages measured by the attorneys’ fees in other cases that Kassab’s misappropriation caused Pohl to incur. This “actual loss” is recoverable. Second, and regardless of the plain language of TUTSA, Kassab’s argument on the tort- of-another doctrine is worth briefly addressing. As a threshold issue, published precedent allows the Court to apply this doctrine. See Dixon Fin. Services, Ltd. v. Chang, 325 S.W.3d 668, 678 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Kassab does not argue Pohl fails to satisfy 5 See Richard BRYAN et al, Plaintiffs, v. AMERICAN GENERAL LIFE INSURANCE, CO., et al, Defendants., 2015 WL 4184907 (Tex. Dist.) (stating the jury was polled “at the request” of the defendant’s counsel). September 22, 2023 Page 5 the elements listed in Dixon,6 and instead, Kassab contends the doctrine does not apply because Pohl “does not have clean hands.” See Letter at 3. This argument fails for at least two reasons. First, there is no clean hands requirement. Second, the Jury did not find Pohl had unclean hands. 1. There is no clean hands requirement for applying the “tort of another theory.” Kassab is wrong that the “tort of another theory” includes a clean hands requirement. See Letter at 3. While the Texas Supreme Court has not yet resolved the split among the courts of appeals on the applicability of this doctrine, its discussion of the tort-of-anotther doctrine indicates that it does not have a clean hands requirement. See Akin, Gump, Straruss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106 (Tex. 2009). Precedent, like Dixon, and cases from other courts that have applied this doctrine, also do not include any requirement that a party must have clean hands or be “wholly innocent” to recover fees sas damages. See, e.g., Dixon, 325 S.W.3d at 678; Massey v. Columbus State Bank, 35 S.W.3de 697, 701 (Tex. App.—Houston [1st Dist.] 2000, pet. denied); Lesikar v. Rappeport, 33 S.W.3d 282, 306 (Tex. App.—Texarkana 2000, pet. denied); Standard Fire Ins. Co. v. Stephenson, 963 S.W.2d 81, 90 (Tex. App.—Beaumont 1997, no pet.); Symetra Life Ins. Co. v. Rapid Settlements, Ltd., 775 F.3d 242, 251 (5th Cir. 2014). Because there is no clean hands or whollly innocent party requirement for the tort-of- another doctrine, the Court should ignore thisa argument by Kassab. 2. There is no Jury finding that Pohl has unclean hands. The Jury did not find that Poehl had unclean hands. Thus, nothing would change even if the Court agreed with Kassab that thce equitable nature of the doctrine makes the defense of unclean hands relevant. See Letter at 3. fRegardless of whether the Jury found wrongful conduct by Pohl in connection with his trade secrets claim—which Pohl disputes it did—the unclean hands defense would still not apply because there is no finding that any wrongful conduct of Pohl injured Kassab. To establish anC unclean hands defense, Kassab “must show an injury to himself arising from the conduct.” Slee Wood v. Wiggins, 650 S.W.3d 533, 556 (Tex. App.—Houston [1st Dist.] 2021, pet. denied).i “‘The clean hands maxim should not be applied when the defendants have not been seriously fhiarmed and the wrong complained of can be corrected without applying the doctrine.’” Id. (citation omitted). In Question 3, the Jury found unspecified “wrongful conduct” by Pohl cUontributed to an unspecified “injury.”7 Nothing connects that conduct to Kassab, much less any injury to Kassab. Absolutely nothing demonstrates that Kassab was injured by any “wrongful conduct” by Pohl. Thus, the defense of unclean hands does not and cannot apply. 6 See Dixon, 325 S.W.3d at 678 (“Equitable principles allow the recovery of attorney’s fees as actual damages when a party was required to prosecute or defend a prior legal action as a consequence of a wrongful act of the defendant.”). 7 See Jury Verdict at 9, attached as Ex. A to the Motion. September 22, 2023 Page 6 C. Conspiracy is not preempted. Kassab contends that proportionate responsibility applies to TUTSA claims, yet he then argues that conspiracy is preempted and cannot apply. Despite having the opportunity, Kassab does not explain why conspiracy is preempted, yet proportionate responsibility still survives. See generally Letter. His failure to do so is telling. r Rather than address Pohl’s argument, Kassab falsely claims that “Pohl asserts that no Texas case law supports the proposition that conspiracy is preempted by TUTSA.”t See Letter at 4. That is not what Pohl said. Pohl’s Reply stated “Kassab also has no Texasr caselaw finding there can no longer be a conspiracy to misappropriate trade secrets to support his TUTSA preemption argument.” Kassab’s letter all but confirms that what Pohl said is true by failing to cite any such case. The Court should apply Texas law that permits joints and several liability when there is a conspiracy to misappropriate trade secrets. See, e.g., Whitleock v. CSI Risk Mgmt., LLC, No. 05- 19-01297-CV, 2021 WL 1712215, at *13 (Tex. App.—Dallas Apr. 30, 2021, pet. denied), reh’g denied (June 7, 2021) (finding conspiracy was supported by a misappropriation of trade secrets). D. Kassab’s liability is not predicatend on the Jury finding that Precision misappropriated Pohl’s trade secretls. Kassab contends that Pohl cannot “lMegally recover against Kassab after the jury concluded that Precision, and those associated with Precision, did not misappropriate anything.” Letter at 4. Kassab’s theory is he cannot engage in misappropriation if the person who gave him the trade secrets did not also engage in misappropriation. This argument fails for multiple reasons, including that the “factual” premisei of the argument is simply false. First, Kassab’s argument is premised on his claim that Precision “provided Pohl’s alleged information to Kassab.” Letter at 4. But the Jury never found that Kassab received Pohl’s trade secrets from Precision. Ionstead, the evidence at trial demonstrated that Favre (not Precision) sold Pohl’s trade secrets to Kassab. The Jury did find that Favre misappropriated Pohl’s trade secrets.8 The fact that Kassaba obtained the trade secrets from Favre is fatal to Kassab’s argument. Further, the fact that the jucry found that Favre misappropriated Pohl’s trade secrets underscores the falsity of Kassab’s rfepresentation to the Court that “those associated with Precision did not misapproprniate anything.” Letter at 4. Second, Kassab’s argument also requires the Court to believe that the Jury not finding misappropriation by Precision necessarily means that “Precision either owed no duty to Pohl or it breached no duty to Pohl when it provided Pohl’s alleged information to Kassab.” Letter at 4. This is not true. The Jury could have answered “No” misappropriation for Precision for other reasons. Pohl had no reason to present the Jury with evidence of Precision improperly disclosing 8 See Jury Verdict at 7–8. September 22, 2023 Page 7 or using Pohl’s trade secrets because such evidence was not relevant to Pohl’s case. Kassab, not Pohl, designated Precision as a responsible third party and requested that Precision be listed in the Jury Charge. It was incumbent on Kassab to put forward evidence on this issue. Further, if it were relevant, Kassab should have presented evidence and requested an affirmative Jury finding to establish that Precision did not breach any duty to Pohl when it allegedly disclosedk or used Pohl’s trade secrets. While Pohl disputes that this finding would have defeated Pohl’s terade secrets claim, it does not matter if it would have, because Kassab did not secure such a findCing.9 CONCLUSION c Pohl respectfully requests that the Court grant Pohl’s Motion, enter judgment in the form attached as Exhibit B to the Motion, and overrule Kassab’s objections to entry of judgment. Sincerely, s REYNOLDS FrRIZZELL LLP By: Harris Y. Wells yJean C. Frizzell iState Bar No. 07484650 Harris Y. Wells State Bar No. 24106563 o1100 Louisiana St., Suite 3500 e Houston, Texas 77002 Tel. 713.485.7200 O Fax 713.485.7250  jfrizzell@reynoldsfrizzell.com p hwells@reynoldsfrizzell.com On behalf of Plaintiffs Michael Pohl and a Law Office of Michael A. Pohl 9 See generally id. Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Suni Blue on behalf of Harris Wells Bar No. 24106563 sblue@reynoldsfrizzell.com r Envelope ID: 79868932 Filing Code Description: No Fee Documents Filing Description: Pohl's Letter in Response to Kassab's Postt-Hearing Letter i Status as of 9/25/2023 8:44 AM CST s Case Contacts  Name BarNumber Email g TimestampSubmitted Status Jean C.Frizzell jfrizzell@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Jean C.Frizzell jfrizzell@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Harris Wells hwells@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Kevin Dubose 6150500 kdubose@aadjtlaw.com 9/22/2023 9:53:52 PM SENT Marisa Barrera Cruz Hurd 24041157 mhurd@adjtlaw.com 9/22/2023 9:53:52 PM SENT Lance Kassab lance@kassab.law 9/22/2023 9:53:52 PM SENT David Kassab cdavid@kassab.law 9/22/2023 9:53:52 PM SENT Nicholas Pierce fnicholas@kassab.law 9/22/2023 9:53:52 PM SENT Lance Kassab  eserve@kassab.law 9/22/2023 9:53:52 PM SENT Thallia Malespin tmalespin@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Misty Davis C mdavis@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Harris Wells a hwells@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Andrea Mendez andrea@kassab.law 9/22/2023 9:53:52 PM SENT Murray JFogler o mfogler@foglerbrar.com 9/22/2023 9:53:52 PM SENT Murray FoglerU mfogler@fbfog.com 9/22/2023 9:53:52 PM SENT D Kassab david@kassab.law 9/22/2023 9:53:52 PM SENT Murray J. Fogler 7207300 mfogler@foglerbrar.com 9/22/2023 9:53:52 PM SENT L Kassab lance@kassab.law 9/22/2023 9:53:52 PM SENT Kelly Skelton reception@kassab.law 9/22/2023 9:53:52 PM SENT Murray J. Fogler 7207300 mfogler@foglerbrar.com 9/22/2023 9:53:52 PM SENT Harris Wells hwells@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT Harris Wells hwells@reynoldsfrizzell.com 9/22/2023 9:53:52 PM SENT

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