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order_id	date	title	court	filename	full_text
11	2019-06-21	2019-06-21 RPL Kassab-Reply-Brief-TCPA FILED	appellate	2019-06-21_RPL_Kassab-Reply-Brief-TCPA_FILED.pdf	KASSAB v. POHL 01-18-01143-CV COURT OF APPEALS OF TEXAS, FIRST DISTRICT, HOUSTON June 21, 2019 Reporter 2019 TX APP. CT. BRIEFS LEXIS 10958 * LANCE CHRISTOPHER KASSAB AND LANCE CHRISTOPHER KASSAB, PC D/B/A THE KASSAB LAWFIRM, ET AL., Appellants V. MICHAEL POHL AND LAWOFFICE OFMICHAEL A. POHL, PLLC, Appellees Type: Brief Prior History: On Appeal from the 189th Judicial District Court of Harris County, Texas. Trial Court Cause No. 2018-58419. Counsel ALEXANDER DUBOSE & JEFFERSON LLP, Kevin Dubose, Texas State Bar No. 06150500, Houston, Texas, THE KASSAB LAW FIRM, Lance Christopher Kassab, Texas State Bar No. 00794070, David Eric Kassab, Texas State Bar No. 24071351, Houston, Texas. Title REPLY BRIEF OF THE KASSAB APPELLANTS Text [1] REPLY TO FACTUAL BACKGROUND Pohl 1 contends that: (1) Kassab 2 has "fail[ed] to inform the Court that the 'facts' [he] recite[s] are not facts but are instead repudiated assertions" by a witness named Magdalena Santana ("Santana"); and (2) Kassab's reference to grievance proceedings is "in total disregard of the State Bar's admonition that grievances are 'strictly confidential.'" Br. Appellees at 11. Both contentions are without merit and require a brief response. Pohl argues that Santana's affidavit was "reputed" and "withdrawn" by her and is "not reliable." Id. at p. 3. Pohl cites to a second affidavit by Santana in which she claims she was "offered compensation to sign" the initial affidavit. Id. at p. 10. Ironically, Pohl himself paid Santana more than $ 50,000 to sign a statement for him agreeing not to charge him with any wrongdoing or report him to the State Bar of Texas. 1CR254-260. Regardless, Santana's second affidavit does not state that the testimony in her first affidavit is untrue, only that it is unreliable. 1CR277. 1 Appellees Michael Pohl and Law Office of Michael A. Pohl, PLLC. 2 Appellants Lance Christopher Kassab and Lance Christopher Kassab, PC d/b/a The Kassab Law Firm. Page 2 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 1 Moreover, Santana did not withdraw her deposition testimony, see 1CR277, which is cited at length in Kassab's brief to establish that the "client liaison" services Pohl says he hired Precision 3 to conduct were nothing but a thinly veiled cover-up for barratry. 1CR249-252. Santana's deposition confirms many of the things she stated in her first affidavit, and reveals why she refused to state that her first affidavit is untrue. 1CR248-264 The Texas Disciplinary Rules of Procedure regarding the confidentiality of grievance proceedings provide that only the " members and staff of the Office of Chief Disciplinary Counsel, Board of Disciplinary Appeals, Committees, and Commission shall maintain as confidential all Disciplinary Proceedings and associated record..." TEX. R. DISC. P. 2.16 (emphasis added). The rule does not prohibit complainants from disclosing [2] the facts or subject matter of the grievances. See id. In fact, a previous, broader version of this rule was amended in 2009 to limit this restriction to members and staff. See id. at Cmt. (noting that the rule was amended to exclude: "Disciplinary Proceedings are strictly confidential and not subject to disclosure, except by court order or as otherwise provided in this Rule 2.16."). Pohl has been less than candid with the Court, not Kassab. ARGUMENT IN REPLY A. Kassab carried his burden to show the TCPA applied. Pohl contends that Kassab failed to sustain his evidentiary burden to show that the TCPA 4 applied to Pohl's claims against him. Br. Appellees at 18. But, as recognized by Pohl, his own pleadings may constitute the "best and all-sufficient evidence of the nature of the action." Id. at 17 (quoting Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017)). For each cause of action, Kassab cited Pohl's own pleadings, often bolstered by additional uncontested evidence, to demonstrate that each cause is subject to the TCPA because it is based on, related to, or in response to a protected right. Br. Kassab Appellants at 17-23. Kassab also cited cases from this Court and other courts of appeals to support to his argument that the TCPA applies. See id. Pohl makes no effort to distinguish these cases, nor does he cite any contrary authority. See generally Br. Appellee at 20-22. Instead, Pohl simply argues [3] that his claims are "not facially subject to a TCPA challenge." Id. at 17. In contrast to Pohl's lack of authority, Kassab satisfied his burden. See Hersh, 526 S.W.3d at 467 ("When it is clear from the plaintiff's pleadings that the action is covered by the [TCPA], the defendant need show no more."). Pohl argues that Kassab failed to demonstrate that Pohl's claims were retaliatory. Br. Appellees at18, 20-22. Pohl also argues that Kassab waived his complaint on appeal because he "failed to argue in the trial court that the claims fall within the TCPA even though they are not retaliatory..." Id. at 21-22. Both arguments fail. 3 Appellant Precision Marketing Group, LLC. 4 Texas Citizens Participation Act, Chapter 27 of the Texas Civil Practice & Remedies Code. Page 3 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 3 First, "[r]etaliation is not a requirement the statute imposes." Arey v. Shipman Agency, Inc., No. 10-18-00100-CV, 2019 Tex. App. LEXIS 3513, at 5 n.1 (Tex. App. - Waco, May 1, 2019, no pet.) (rejecting non-movant's argument that movant "did not prove retaliation" because it "constitutes an improper effort to narrow the scope of the TCPA by reading language into the statute that is not there"); see also Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018) (injecting requirement that the TCPA only applies to constitutionally guaranteed activities is disloyal to the statute's text).The statute only requires a demonstration that the action is based on, relates to, or is in response to a party's exercise of a protected right. See TEX. CIV. PRAC. & REM. CODE § 27.003(a). Therefore, Pohl's argument that Kassab was required to prove retaliation in order to establish that Pohl's claims fall within the TCPA is without merit. [4] See Arey, 2019 Tex. App. LEXIS 3513, at 5 n.1 Second, even if retaliation were a required element, it was not waived. Kassab argued multiple times in the trial court that Pohl's lawsuit was in retaliation of Kassab's exercise of protected rights. See 1CR89 ("In direct retaliation to the Barratry Lawsuits and the grievance proceedings, Pohl filed this litigation alleging that Kassab and others stole his property and are using it to bring lawsuits and grievances against him."); 1CR93 ("Pohl has filed this retaliatory lawsuit against Kassab for conversion and theft of trade secrets"); 1CR95 ("This is a retaliatory lawsuit designed to chill the rights of Kassab and his clients and silence them from speaking out against Pohl and other lawyers in legal malpractice cases."); Id. ("This is the very type of retaliatory lawsuit the TCPA was intended to protect against."); 3CR124 ("Because of these actions in representing clients against Pohl and the grievances filed against Pohl, Pohl has filed a retaliatory lawsuit against the Kassab alleging conversion and theft of trade secrets."). Finally, though not required, retaliation was proved. Kassab established through uncontested evidence that he associated with Favre, [5] 5 Precision and Nicholson 6 to expose Pohl's illegal and unethical barratry. 1CR109-110. Kassab filed barratry lawsuits and grievances against Pohl communicating matters of public concern. 1CR110, 379-576, 578-638. In response to these protected activities, Pohl sued Kassab alleging Kassab and others "entered into a combination" to misappropriate his trade secrets and convert the marketing lists and attorney-client contracts that Precision obtained. 2CR899. Pohl alleged Favre and Precision, with Nicholson's assistance, converted this property and provided it to Kassab in order to convince Pohl's former clients "to bring cases against Pohl for alleged barratry and other claims." 2CR898. Given the timing of the lawsuit and the evidence presented by Kassab, the trial court correctly recognized that Pohl's suit was "retaliatory on its face." 1RR16. B. The commercial speech exception does not apply. Pohl argues that the commercial speech exception applies because all four elements of the Castleman 7 test are satisfied. Element (1) is not [6] in dispute, so only elements (2), (3) and (4) will be addressed. 5 Appellant Scott Favre and Scott M. Favre Public Adjuster, LLC. 6 Appellant Tina Nicholson and Baker Nicholson, LLP. 7 Castleman v. Internet Money Ltd., 546 S.W.3d 684 (Tex. 2018). Page 4 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 6 Element (2) requires that the defendant made the statement or engaged in the conduct on which the claim is based in the defendant's capacity as a seller or lessor of those goods or services. Castleman, 546 S.W.3d at 688. Pohl argues this element is satisfied because his TUTSA 8 claim alleges Kassab misappropriated trade secrets through "disclosure or use" of them "in violation of the statute." Br. Appellees at 24. But the commercial speech exemption is not triggered by conduct concerning the sale of any services. Instead, "the sale or lease of goods or services must refer to the defendant's sale or lease of goods or services." Castleman, 546 S.W.3d at 688-89 (emphasis in original). Because the solicitation and filing of suit occurred after the alleged theft and conversion, Pohl's claims do not arise out of any commercial transaction involving Kassab's usual business or sale of his services. See id. Element (3) requires that the statement or conduct at issue arise out of a commercial transaction involving the kind of goods or services the defendant provides. Castleman, [7] 546 S.W.3d at 688. Pohl argues this element is satisfied because Kassab's "advertisements and solicitations of Pohl's clients and prospective clients arose out of a commercial transaction - Kassab and Nicholson's coordinated effort to obtain clients to sue Pohl for profit - involving the kind of services that Kassab and Nicholson provide." Br. Appellees at 25. But Pohl is not suing Kassab for sending out advertisements or solicitations; he is suing Kassab for alleged conversion and theft of trade secrets. 2CR900-901. Therefore, the complained of conduct occurred before (and did not "arise out of") any commercial transaction involving the kind of services that Kassab provides. See Dickens v. Jason C. Webster, P.C., No. 05-17-00423-CV, 2018 Tex. App. LEXIS 10893, at 17 (Tex. App. - Dallas, Dec. 31, 2018, no pet. h.) (commercial speech exception did not apply to claim alleging attorney tortuously interfered with contingency fee agreement because claim did "not concern or arise out of [the lawyer's] services."). Element (4) requires that the intended audience of the statement or conduct be actual or potential customers of the defendant for the kind of goods or services the defendant provides. Castleman, 546 S.W.3d at 688. Pohl argues that this element is satisfied because "the [8] intended audience of Kassab's advertisements and solicitations were potential clients of Kassab and Nicholson to sue Pohl and, therefore, were indisputably potential clients of Kassab and Nicholson for the kind of services that Kassab and Nicholson provide - suing lawyers." Br. Appellees at 25. But the "audience" of the alleged conduct was Favre and Precision, who Pohl alleges Kassab purchased his confidential information and trade secrets from. 2CR869. The exemption does not apply, and a seller of goods or services may avail himself of the TCPA, "when he speaks of other goods or services in the marketplace." Castleman, 546 S.W.3d at 689 (emphasis added). Kassab is not in the business of purchasing marketing lists, and Favre and Precision are not Kassab's usual clients, nor are they seeking legal services from Kassab. Therefore, the commercial speech exception is inapplicable. See Schimmel v. McGregor, 438 S.W.3d 847, 858 (Tex. App.-Houston [1st Dist.] 2014, pet. denied) (statements and conduct by lawyer directed to third parties did not fall within commercial speech exception because the third parties, who were the "ultimate intended audience for his statements" were not lawyer's potential customers). 8 Texas Uniform Trade Secrets Act. Page 5 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 8 Pohl cites three cases for his proposition [9] that his claims against Kassab fall within the commercial speech exception. Br. Appellees at 25-26. Two of these cases were cited by Pohl in the trial court and already have been distinguished by Kassab. See Br. Kassab Appellants at 27-30 (distinguishing Miller Weisbrod, L.L.P. v. Llamas-Soforo, 511 S.W.3d 181 (Tex. App. - El Paso 2014, no pet.) and NCDR, L.L.C. v. Mauze & Bagby, PLLC, 745 F.3d 742 (5th Cir. 2014)). Pohl fails to rebut Kassab's arguments distinguishing those case. Pohl cites an additional case for the proposition that Kassab's actions were allegedly "primarily to advance [his] commercial interests in obtaining new clients." Br. Appellees at 26 (citing N. Cypress Med. Ctr. Operating Co. Grp., LLC v. Norvil, No. 01-18-00582-CV, 2019 Tex. App. LEXIS 4447 (Tex. App. -Houston [1st Dist.] May 30, 2019, no pet. h.) (mem. op.)). Pohl's reliance on Norvil is misplaced. In Norvil, the plaintiff was injured in a slip-and-fall and transported to a hospital for care. Id. at 1-2. The hospital treated the plaintiff, who had no insurance, in exchange for an agreement to pay all medical costs and an assignment of any proceeds she received from any settlement. Id. at 2. When a dispute arose over a lien filed by the hospital in the litigation, the plaintiff filed a declaratory judgment action seeking determination of the limits of the lien. Id. at 3-4. The hospital filed a TCPA motion to dismiss the declaratory judgment action, arguing it was based on its right to file a lien and therefore its right to petition. Id. at 4-5. The trial court denied the motion and the hospital appealed. Id. at 5. In affirming the denial in the context of the commercial speech exception, this Court concluded that the hospital "was primarily engaged in the business of selling goods or services for [10] the treatment of sick and injured people." Id. at 11. This Court rejected the hospital's contention that the intended audience of the hospital lien was not an actual or potential buyer or customer, stating a "lien against the patient's tort recovery is a claim against the patient" and the plaintiff "is a member of the hospital lien's intended audience." Id. at 12. The Court also rejected the hospital's contention that the lien was filed for purposes other than for securing sales of services, stating: "[the hospital] was primarily engaged in the business of providing healthcare services for which it expected to be paid, and it filed the lien in its capacity as seller of goods and services related to healthcare." Id. at 12-13. This case is distinguishable from Norvil. Here, Pohl is not suing Kassab for the solicitation of his former clients and subsequent filing of lawsuits; Pohl is suing Kassab for alleged theft of property and trade secrets that he contends occurred prior to this solicitation. 2CR890. In other words, while the claims in Norvil arose out of a commercial transaction involving the kind of services the hospital provides (healthcare services to the plaintiff), Pohl's claims against Kassab arose before the commercial transactions involving the kind of legal services Kassab provides (accumulation of clients to file barratry suits against Pohl). See Castleman, 546 S.W.3d at 688 (commercial exception only applies if "the statement or conduct at issue arose out of a commercial transaction involving the kind of goods or services the defendant provides") (emphasis added). Accordingly, unlike in Norvil where the conduct arose from communications to the plaintiff "who was a member of the intended audience of the lien," Norvil, 2019 Tex. App. LEXIS 4447, at 13, the conduct in this case is alleged to have arisen from Kassab's communications and Page 6 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 10 purported transactions [11] with Favre, Precision and Nicholson, who are not intended audiences of Kassab's legal services. 2CR897-898. Because Pohl failed to meet his burden to show that the commercial speech exception applied to his claims against Kassab, the claims should have been dismissed C. Pohl did not establish a prima facie case against Kassab by clear and specific evidence. Because Pohl's claims against Kassab fell within the purview of the TCPA, Pohl was required to establish each essential element of the claims in question "by clear and specific evidence." TEX. CIV. PRAC. & REM. CODE § 27.005(c). A prima facie case "is the minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true." In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015). The TCPA limits the type of evidence from which a prima facie case may be made to evidence that is "clear and specific": "clear" meaning "unambiguous," "sure or free from doubt;" "specific" meaning "'explicit' or "referring to a particular named thing.'" Id. "Collectively, these elements require that a party provide enough detail to show the factual basis for its claim, and thus effectively abrogate the utility of mere notice pleading as 'evidence' [12] to that end." Cavin v. Abbott, 545 S.W.3d 47, 72 (Tex. App.-Austin 2017, pet. denied). Even if the trial court considered Pohl's pleadings as "evidence," these pleadings were mere notice pleadings that failed to establish a prima facie case against Kassab by clear and specific evidence. 1. The conversion claim fails. Pohl cites paragraph 20 of his Amended Petition to support the elements of his conversion claim. Br. Appellees at 30. However, this paragraph does not even mention Kassab. 2CR895. Instead, it merely recites, in conclusory fashion, property that Pohl claims was his, including attorney-client fee agreements, communications with clients, and unidentified "compilations" and "proprietary marketing information." Id. Pohl's conclusory reference to property he claims was his, without any factual details establishing ownership or damages or Kassab's conversion, is insufficient to satisfy the minimum requirements of the TCPA. See In re Lipsky, 460 S.W.3d at 593 (explaining that "general averments" are insufficient); Grant v. Pivot Tech. Sols., Inc., 556 S.W.3d 865, 883 (Tex. App.-Austin 2018, pet. filed) (prima facie case not established when plaintiff did "not describe any factual basis for determining the value of the allegedly taken property or for calculating the loss of [13] its use."). Pohl also failed to allege, let alone provide prima facie evidence to demonstrate that he demanded that Kassab return the allegedly stolen property. Pohl argues: "[t]o the extent, if any, that Texas law requires demand for the return of the materials as an element of the tort of conversion, Pohl provided proof that such a demand was made." Br. Appellees at 31. First, Pohl was required to present prima facie evidence that he made a demand that the property be returned. See Tex. Civ. Prac. & Rem. Code § 27.005(c). Texas law is clear that demand is a necessary element of conversion. See Stroud Prod., L.L.C. v. Hosford, 405 S.W.3d 794, 811 (Tex. App.-Houston [1st Dist.] 2013, pet. denied) ("The elements of a conversion claim are ... the plaintiff demanded return of the property" and "the defendant refused to return the property."). Page 7 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 13 Second, Pohl did not allege or prove that he demanded return of the purportedly stolen property from Kassab. 2CR890-903. Pohl's defective declaration did not even say that he requested that Kassab return the purportedly stolen property. 2CR905-907. The only "proof" that Pohl says he provided to the trial court is a letter to Nicholson, as an attorney for Precision, not Kassab. 2CR1035-36. Moreover, this [14] "proof" is attached as Exhibit 6 to the affidavit of Billy Shepherd, to which Kassab asserted objections that should have been sustained. Br. Kassab Appellants at 31-39. Pohl cannot cite evidence to which Kassab objected, while at the same time arguing the "objections are not relevant to the issues on appeal." Br. Appellees at 35. Pohl made no effort to respond to these objections, either in the trial court or on appeal, and the objections should have been sustained. Without an allegation or evidence of demand, Pohl's conversion claim against Kassab fails as a matter of law, and should have been dismissed. See Automek, Inc. v. Orandy, 105 S.W.3d 60, 63 (Tex. App.-Houston [1st Dist.] 2003, no pet.) (affirming summary judgment on conversion claim when there was no proof in the record that plaintiff demanded return of the property). 2. The theft of trade secrets claim fails. "The elements of misappropriation of trade secrets are (1) ownership of a trade secret; (2) misappropriation of the trade secret; and (3) an injury, if the plaintiff is seeking damages." Morgan v. Clements Fluids S. Tex., Ltd., No. 12-18 00055-CV, 2018 Tex. App. LEXIS 9061, at 3 (Tex. App.-Tyler Nov. 5, 2018, no pet.) (citing TEX. CIV. PRAC. & REM. CODE §§ 134A.002(1), (3), (6), 134A.004(a)). Even if Pohl's pleadings are considered evidence, [15] Pohl failed to make a prima facie case for each of these elements. First, Pohl did not establish ownership of any trade secret. The party claiming trade secret status bears the burden of proof of establishing that something is a trade secret. Stewart & Stevenson Servs. v. Serv-Tech, Inc., 879 S.W.2d 89, 99 (Tex. App. - Houston [14th Dist.] 1994, writ denied). To meet this burden, Pohl was required to provide details concerning (1) the extent to which the information is known by those involved inside or outside his business, (2) the extent of the measures taken by Pohl to guard the secrecy of the information, (3) the value of the information, (4) the amount of effort or money expended by Pohl in developing the information, or (5) the ease or difficulty with which the information could be properly acquired or duplicated by others. See In re Bass, 113 S.W.3d 735, 739 (Tex. 2003). Pohl's Amended Petition fails to meet this burden, and merely makes the conclusory allegation that the purportedly stolen information constitutes "trade secrets." 2CR895, 899. "General averments . . . without more, do not satisfy the minimum requirements of the TCPA." Lipsky, 460 S.W.3d at 592. Pohl's conclusory claim to ownership of "trade secrets" is "not probative and accordingly will not suffice [16] to establish a prima facie case." See Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 355 (Tex. App.-Houston [1st Dist.] 2013, pet. denied). A recent Texas case demonstrates what Pohl could have done to satisfy his burden. See Morgan v. Clements Fluids S. Tex., Ltd., No. 12-18-00055-CV, 2018 Tex. App. LEXIS 9061 (Tex. App.-Tyler Nov. 5, 2018, no pet.). There, an employer sued former employees for misappropriation of trade secrets relating to a salt system used in oil wells. Id. at 1-2. The employees filed motions to dismiss under the TCPA, which were denied. Id. The employer Page 8 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 16 relied on an affidavit from its vice president discussing details of the salt system, the company's protocols for maintaining the secrecy of its salt systems, and why the system was valuable to competitors. Id. at 13-15. Based on this detailed affidavit, the court of appeals concluded the employer established by clear and specific evidence that it owned a trade secret. Id. at 15. In contrast, Pohl submitted no evidence or allegation similar to the proof in Morgan to establish the factors necessary to determine whether the information allegedly misappropriated was a trade secret. 2CR890-903, 905-907. Pohl argues that he provided "substantial evidence" supporting this element through the Favre affidavit. Br. Appellees at 33-34 ("Favre himself averred to [the information's] confidentiality and value, stating that they are one of his 'most valuable assets' that would lose all value if they became 'public knowledge.'") However, that affidavit was Exhibit 7 to Shepherd's affidavit, to which Kassab made a valid objection that should have been sustained. Br. Kassab Appellants at 31-39. But even if this affidavit is considered, Favre is merely discussing "marketing lists" and not [17] any of the information identified by Pohl in his pleadings. 2CR1049 ("Precision has always protected and treated its marketing lists as confidential and proprietary."). The fact that Favre believed Precision's marketing lists were trade secrets and valuable to Precision does not prove that Pohl's purportedly stolen information was a trade secret and valuable to Pohl. Moreover, Pohl failed to establish that Kassab "knew or had reason to know" that the purported trade secrets were acquired by improper means. See TEX. CIV. PRAC. & REM. CODE § 134A.002(3). Pohl does not even allege that Kassab knew the information was acquired by improper means; only that Kassab "knowingly purchased" information. 2CR898. Pohl merely alleges in conclusory fashion that Kassab "willfully and maliciously misappropriated Pohl's trade secrets by using them without the express or implied consent of Pohl." 2CR901. This may prove that Pohl did not consent to Kassab using the lists, but does not prove that Kassab knew the lists had been misappropriated. Again, Pohl's conclusory allegations are insufficient to establish a prima facie case of knowledge. See Better Bus. Bureau of Metro. Hous., 441 S.W.3d at [18] 355. Recognizing no prima facie case was established by his pleadings, Pohl directs the Court to an agreement between Kassab and Favre to allegedly "purchase the trade secrets" which obligated Kassab "to indemnify Favre from claims that Pohl might bring." Br. Appellees at 34. Pohl argues that "this detail makes clear that at the time of the agreement everyone understood that Pohl might assert a claim because Favre did not own the materials." Id. However, this document is nothing more than an agreement for Favre, a licensed insurance adjuster experienced in the BP litigation, to serve as an expert and evaluate and consult with Kassab on hundreds of barratry cases to determine whether the solicited clients had legitimate underlying claims against BP. 2CR909. In exchange, Kassab agreed to pay Favre a $ 100 fee for receiving and setting up a file at his office, plus any hourly fees he incurred, to be credited against a nonrefundable retainer. Id. Favre certified in this agreement that he was not aware of anything that prohibited him from disclosing client information. 2CR911. Favre also claimed ownership over the marketing lists and materials Precision acquired while soliciting [19] clients for Pohl. 1CR641. Based on Favre's certification and claim of ownership over the materials, Kassab agreed to indemnify Favre for any costs he incurred defending claims relating to disclosure of client Page 9 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 19 information, because there could not be any legitimate claims. 2CR911. This agreement does not establish that Kassab knew the information was stolen; it establishes the opposite. In the absence of any allegation or evidence from Pohl establishing Kassab's knowledge, and the presence of Kassab's uncontroverted evidence that the information he obtained belonged to Precision, 1CR110, Pohl failed to make a prima facie case of the knowledge element of his theft of trade secrets claim. Finally, Pohl presented no evidence of damages, which is a required element of a theft of trade secrets claim. See TEX. CIV. PRAC. & REM. CODE § 134A.004(a). Pohl makes no allegation of an alleged injury as a result of the purported theft of trade secrets. 2CR890-903. Pohl alleges only that he "suffered damages as a proximate result of Defendants' conduct" but offers no explanation or proof of what these damages are. 2CR891. Pohl's theft of trade secret claim against Kassab does not mention damages [20] at all. 2CR900-901. Likewise, in his conclusory declaration, Pohl states that he has "incurred damages as a result of the conversion of my property" but fails to detail what those damages are. 2CR906. Pohl merely declares that he has suffered the "loss of the value of [his] confidential materials and unjust enrichment to Kassab ... as a result of [the] wrongful misappropriation." 2CR907. Regarding TCPA damages, the Texas Supreme Court has made clear that "general averments of direct economic losses and lost profits, without more, [do not] satisfy the minimum requirements of the TCPA. " Lipsky, 460 S.W.3d at 593. The statements in Pohl's pleadings and declaration are self-serving and conclusory; they are "completely devoid of details to support his factual inference or show the factual basis for his claims." See David Martin Camp & Bargains for Millionaires LLC v. Patterson, No. 03-16-00733-CV, 2017 Tex. App. LEXIS 7258, 2017 WL 3378904, at 23 (Tex. App.-Austin Aug. 3, 2017, no pet.) (mem. op.). Although Pohl claims to have been damaged, he does not clearly and specifically demonstrate what damages he suffered; therefore, he has failed to present a prima facie case of damages. See Lipsky, 460 S.W.3d at 593 (affidavit stating that plaintiff suffered "direct pecuniary and economic losses [21] and costs, lost profits, loss of its reputation, and loss of goodwill in the communities in which it operates . . . in excess of three million dollars" was "devoid of any specific facts illustrating how defendant's alleged remarks caused such losses"); Bedford v. Spassoff, 520 S.W.3d 901, 904-905 (Tex. 2017) (concluding that neither petition nor affidavit identified any actual damages). 9 3. The conspiracy claim fails. 9 See also McDonald Oilfield Operations, LLC v. 3B Insp., LLC, No. 01-18-00118-CV, 2018 Tex. App. LEXIS 10036, at 38-39 (Tex. App. - Houston (1st. Dist.) Dec. 6, 2018, no pet. h.) (plaintiff's "general statement" that it suffered "unspecified 'delay damages' and 'damage to its reputation,'" was "insufficient to establish damages" under the TCPA); Barker v. Hurst, No. 01 17- 00838-CV, 2018 Tex. App. LEXIS 4555, at 24 (Tex. App.-Houston [1st Dist.] June 21, 2018, no pet.) (mem. op.) (statement in affidavit that conduct "has or will cast and place him, and his family, into disputes, situations, and ridicule for which he had no control or responsibility" and has "injured his reputation and exposed him to contempt in the community and had called into question his honesty, integrity, virtue, and reputation" was insufficient to make prima facie case of damages) (internal quotations omitted); Better Bus. Bureau of Metro. Hous., 441 S.W.3d at 361 (prima facie case not established in tortious interference [22] claim when plaintiff "did not clearly and specifically demonstrate what injuries or damages it suffered as a result of the interference"). Page 10 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 22 Conspiracy is a derivative tort. See Trammel Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex. 1997). Because Pohl did not establish a prima facie cause on his conversion or theft of trade secrets claim, which are the underlying torts for which he sought to hold Kassab liable, Pohl similarly failed to establish a prima facie case on his civil conspiracy claim. See Mem'l Hermann Health Sys. v. Khalil, No. 01-16-00512-CV, 2017 Tex. App. LEXIS 7474, at 38 (Tex. App.-Houston [1st Dist.] Aug. 8, 2017, pet. denied) (mem. op. on reh'g). Regardless, Pohl has failed to establish a prima facie case for each element of his conspiracy claim against Kassab. A conspiracy claim requires (1) a combination of two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful or overt acts; and (5) damages as a proximate result. First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 222 (Tex. 2017). Pohl attempted to establish these elements through a single paragraph in his Amended Petition, which alleged: Acting in combination with the agreed object of misappropriating Pohl's trade secrets and [23] converting Pohl's property, each of the Defendants committed overt acts toward the unlawful misappropriation of Pohl's trade secrets, which were unlawful and which proximately caused damages to Pohl. 2CR901. This conclusory allegation is insufficient because Pohl provides no details concerning the alleged agreement amongst Appellants, the object they sought to accomplish, the specific overt acts they committed in furtherance of the conspiracy, or how any of these alleged acts caused him damages. See Dobrott v. Jevin, Inc., No. 05-17-01472-CV, 2018 Tex. App. LEXIS 9840, at 1 (Tex. App.-Dallas Nov. 30, 2018, no pet.) (mem. op.). Moreover, "merely proving a joint intent to engage in the conduct that resulted in the injury is not sufficient to establish a cause of action for civil conspiracy." Juhl v. Airington, 936 S.W.2d 640, 644 (Tex. 1996) (internal quotations omitted). "Instead, civil conspiracy requires specific intent to agree to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means." Id. Pohl provides no details about Kassab's alleged "specific intent" to agree to accomplish an unlawful purpose. 2CR901. In fact, Pohl's pleadings do not even mention Kassab's intent, only the intent of Nicholson and Favre. See 2CR985 ("Favre, with Nicholson or with Nicholson's active [24] and knowing and intentional assistance, then secretly sold Pohl's stolen confidential information and property to Kassab and Montague."); 2CR896 ("Thus, Nicholson's active, knowing and intentional assistance included brokering the illegal sale of Pohl's information and property as well as actually providing such information and property to Kassab."); 2CR900 ("Nicholson's active and knowing and intentional assistance as described above"). Pohl's conclusory, global allegations against Kassab are insufficient to make a prima facie showing of conspiracy. See MVS Int'l Corp. v. Int'l Advertising Solutions, LLC, 545 S.W.3d 180, 197 (Tex. App.-El Paso 2017, no pet.) (affidavit discussing circumstantial evidence was insufficient to support conspiracy claim because it was not "clear and specific" and did not "develop with any specificity a time line of events that would allow a fact finder to draw an inference of the agreement he alleges."). D. Kassab conclusively established his affirmative defenses. 1. Pohl's claims are barred by limitations. Page 11 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 24 Pohl argues his claims are not barred by limitations because they began to accrue when the "Favre-Kassab Agreement" was executed on November 10, 2016, and he brought this suit within two years [25] of that date. Br. Appellees at 36. But Pohl acknowledges that this agreement is not the basis of his suit. See id. Rather, "the basis of this suit is the conversion and misappropriation of the trade secrets through both theft and sale and their use." Id. This alleged conversion and misappropriation occurred more than three years before Pohl filed this lawsuit, and Pohl knew that it had allegedly occurred but neglected to timely file suit. Pohl's contention that limitations did not begin to accrue until Favre allegedly sold the purported trade secrets to Kassab is without merit. A misappropriation of trade secrets claim has a three-year statute of limitations. TEX. CIV. PRAC. & REM. CODE § 16.010(a). The claim continues over time as a single cause of action and the limitations period begins running without regard to whether the misappropriation is a single or continuing act. Id. at § 16.010(b). Moreover, disclosure or sale of the trade secret is unnecessary for a misappropriation claim to accrue because "any misappropriation of trade secrets, followed by an exercise of control and domination, is considered a commercial use" sufficient for limitations to begin to accrue. [26] Garth v. Staktek Corp., 876 S.W.2d 545, 548 (Tex. App. -Austin 1994, writ dism'd w.o.j.). Therefore, the claim begins to accrue when the plaintiff knew or should have known of the unlawful misappropriation of the trade secret, regardless of any subsequent disclosure or sale. See Tavana v. GTE Sw., No. 05-97-00664-CV, 1999 Tex. App. LEXIS 5365, at 11 (Tex. App. - Dallas, July 21, 1999, pet. denied) (unpublished). The statute of limitations for conversion is two years. TEX. CIV. PRAC. & REM. CODE § 16.003(a). "In cases of conversion, the statute of limitations generally begins to run at the time of the unlawful taking." Burns v. Rochon, 190 S.W.3d 263, 271 (Tex. App.-Houston [1st Dist.] 2006, no pet.). The discovery rule can apply to conversion claims, see id., but the party relying on the discovery rule must specifically plead it. See TEX. R. CIV. P. 94. Pohl did not plead the discovery rule. 1CR4-14; 2CR890-903. Therefore, the defense is waived. See Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1988) (where the party relying on the discovery rule fails to plead it, the defense is waived). Pohl testified that the computers containing the purported trade secrets and client files were stolen from his office. 1CR671, P 28. Pohl also testified that he closed the office containing these computers in February of 2014. 1CR673. Therefore, the conversion claim accrued no later than this date, and Pohl should have known by this [27] date that the computers containing the purported trade secrets had been misappropriated (taken). Yet, Pohl waited until August 28, 2018, more than four years later, to file this lawsuit. 1CR4. Accordingly, all claims are barred by limitations, including the conspiracy claim. See Mayes v. Stewart, 316 S.W.3d 715, 719 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (statute of limitations for civil conspiracy also is two years). Even if Pohl had not waived the right to assert the discovery rule, the rule only defers accrual until "demand and refusal, or discovery of facts supporting the cause of action, whichever occurs first." Burns, 190 S.W.3d at 271. Pohl alleges that he demanded the allegedly stolen property be returned, Br. Appellees at 31, and that demand (made to Nicholson, and not Kassab) was made on February 23, 2016. 2CR1035-36. Thus, it is undeniable that Pohl knew by this date his Page 12 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 27 materials had been wrongfully retained. See id. ("given these circumstances, it is our position that the documents are stolen property."). Yet, Pohl did not file suit until August 28, 2018, more than two years later. 1CR4. The conversion claim is therefore barred by limitations. 2. Pohl's claims are barred by judicial immunity. Pohl argues that his [28] claims against Kassab are not barred by judicial immunity because his "suit asserts claims for actions taken before Kassab had a single client, much less a client in litigation." Br. Appellees at 37. But for judicial immunity to apply, the conduct need only "bear some relationship" to the litigation. See Daystar Residential, Inc. v. Collmer, 176 S.W.3d 24, 29 (Tex. App.-Houston [1st Dist.] 2004, pet. denied). The privilege protects conduct carried out "in contemplation of and preliminary to judicial proceedings." Watson v. Kaminski, 51 S.W.3d 825, 827 (Tex. App. - Houston [1st Dist.] 2001, no pet.) (emphasis added). The conduct need only "relate to pending or proposed litigation and must further the attorney's representation." Id. (emphasis added). Therefore, Pohl's contention that judicial immunity does not apply to Kassab's pre-litigation conduct is without merit. See Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 485 (Tex. 2015) (attorney was immune from conduct that occurred after litigation had ended because it was related to the representation). 3. Pohl's claims are barred by res judicata. Pohl argues that res judicata was not established because the "conduct at issue in the prior lawsuit predates the wrongful conduct in the underlying litigation." Br. Appellees at 39. But Pohl's own pleadings and testimony demonstrate the [29] opposite. Pohl testified that Precision had "disclosed confidential and proprietary information to third parties without authorization" and this is what led to him bringing the prior suit. 1CR665-666. Therefore, Pohl sued Kassab's alleged co-conspirators (Precision and its owners) for conversion, alleging they stole his property. 3SCR18. Pohl alleged that Precision and its owners committed misconduct by "providing Pohl's proprietary information and materials to unauthorized third persons and/or co- conspirators and converting Pohl's property, including original client contracts and client personal and claim information, to their own use." 3SCR194. Pohl even demanded return of the allegedly stolen property, including the purportedly confidential client files and trade secrets in the prior Mississippi litigation. 2CR1026-27. Yet, Pohl voluntarily settled his claims against Kassab's co-conspirators before April 21, 2017, without suing Kassab. 1CR353-354. Pohl also contends that Kassab failed to meet his burden to establish "a sufficiently close relationship" with the defendants in the prior lawsuit for res judicata to attach. Br. Appellees at 39. But again, Pohl's own allegations and [30] testimony support Kassab's defense. In the prior suit, Pohl claimed in correspondence that Nicholson, Favre and Precision had wrongfully obtained his confidential information and trade secrets, including his attorney-client contracts, and were going to sell the information "to attorneys who would use the contracts as the basis for lawsuits against Pohl ..." 2CR1026. Pohl alleged that Precision and its owners improperly provided "Pohl's proprietary information and materials to unauthorized third persons and/or co- conspirators" and converted his "original client contracts and client personal and claim information" to use as their own. 3SCR194 (emphasis added). In this lawsuit, Pohl has identified Kassab as one of the "co-conspirators" who allegedly purchased and received the allegedly Page 13 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 30 stolen information. 2CR895-896. Accordingly, by Pohl's own admissions, Kassab had a "sufficiently close" relationship with the defendants in the prior suit for res judicata to apply. E. Pohl does not dispute that Kassab is entitled to an award of reasonable attorney's fees and sanctions against Pohl if the trial court erred by failing to grant the motion. Pohl does not respond to the attorney fee [31] and sanctions argument, except to state that "Defendants are not entitled to an award of attorneys' fees because their motions were properly overruled." 10 Br. Appellees at 39. But because the trial court erroneously denied Kassab's motion to dismiss, it also abused its discretion when it declined to award Kassab mandatory costs, and reasonable attorney's fees and expenses incurred in defending against the claim, and sanctions, as required by the TCPA. See Schimmel v. McGregor, 438 S.W.3d 847, 863 (Tex. App.-Houston [1st Dist.] 2014, pet. denied). Pohl does not attempt to controvert the amount of attorney's fees requested by Kassab. Br. Appellees at 39-40. Therefore, an attorney fee award of $ 81,750 is reasonable, and should be awarded to Kassab along with an appropriate monetary sanction against Pohl to deter Pohl from bringing similar actions in the future. See Urquhart v. Calkins, No. 01-17-00256-CV, 2018 Tex. App. LEXIS 5145, at 11-12 (Tex. App.- Houston [1st Dist.] July 10, 2018, no pet. h.) (mem. op.). CONCLUSION & PRAYER For all these reasons, Kassab requests the relief described on page 61-62 of Brief of Appellant. Respectfully submitted, ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP /s/ Kevin Dubose Kevin Dubose [32] State Bar No. 06150500 kdubose@adjtlaw.com 1844 Harvard Street Houston, Texas 77008 Telephone: (713) 523-2358 Facsimile: (713) 523-4553 THE KASSAB LAW FIRM Lance Christopher Kassab State Bar No. 00794070 lance@kassab.law David Eric Kassab 10 Pohl does argue that an award of attorney's fees to Nicholson and Favre would be improper, but for reasons not applicable to Kassab. Page 14 of 14 2019 TX APP. CT. BRIEFS LEXIS 10958, 32 State Bar No. 24071351 david@kassab.law 1214 Elgin Street Houston, Texas 77004 Telephone: (713) 522-7400 Facsimile: (713) 522-7410 Attorneys for the Kassab Appellants CERTIFICATE OF COMPLIANCE Based on a word count run in Microsoft Word, this brief contains 6,731 words (excluding the items exempted under Texas Rule of Appellate Procedure 9.4(i)(1). /s/ David Eric Kassab David Eric Kassab CERTIFICATE OF SERVICE I certify that on June 21, 2019, I electronically filed this brief with the Clerk of the Court using the eFile.TXCourts.gov electronic filing system which will send notification of such filing to all counsel of record. /s/ David Eric Kassab David Eric Kassab End of Document