Preview
FILED
DALLAS COUNTY
5/6/2016 10:52:19 AM
FELICIA PITRE
DISTRICT CLERK
CAUSE NO. DC 13-13499
EVOLV HEALTH, LLC, EVOLV § IN THE DISTRICT COURT
HEALTH INTERNATIONAL, LLC, §
and EVOLVHEALTH MEXICO §
SERVICOS, S. de R.L. de C.V., §
§
Plaintiffs, §
§
v. § 68TH JUDICIAL DISTRICT
§
EPICERA INCORPORATED, §
ECOSWAY USA, INC., GLEN JENSEN, §
JEFFREY N. ALDOUS, MATT STEFFE, §
KEVIN KERANEN, TRAVIS BOTT, §
ROBERTO GONZALEZ, §
EASTON RUTKOWSKI, KYLE §
PALMER and VINCENT TAN §
§
Defendants. § DALLAS COUNTY, TEXAS
DEFENDANT JEFFREY N. ALDOUS’
REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
TO THE HONORABLE JUDGE MARTIN HOFFMAN:
Defendant Jeffrey N. Aldous (“Aldous”) files this Motion for Summary Judgment against
Plaintiffs Evolv Health, LLC (“Evolv Health”) and EvolvHealth Mexico Servicos, S. de R.L. de
C.V. (“Evolv Mexico”) (Evolv Health and Evolv Mexico collectively “Plaintiffs.
I. PLAINTIFFS’ IMPOSSIBLE TASK:
WHAT IS NOT COVERED BY THE MNDNCA?
Plaintiffs fail to respond to the “impossible task of separating and distinguishing alleged
misconduct as “covered” vs. “not covered” by the MNDNCA.” See Aldous Motion at p. 2. And,
Plaintiffs do not dispute or redefine that “Evolv Health intended that all of its confidential and
proprietary information” be covered by the MNDNCA. Instead, Plaintiffs repeat that various
conduct and claims would fall outside the MNDNCA—yet they fail to identify a single trade
secret that is not covered by the MNDNCA, and because all claims relating to trade secrets
covered by the MNDNCA have been dismissed, there is nothing remaining for any other
misappropriation claim, and they should be dismissed. Plaintiffs simply cannot, and have not,
distinguish a trade secret as not covered by the MNDNCA.
II. PLAINTIFFS IMPROPERLY RELY ON CIRCUMSTANTIAL EVIDENCE
Plaintiffs rely heavily on “circumstantial evidence” but their reliance is improper because
their circumstantial evidence does not make the fact more or less probable. When faced with a
lack of direct evidence, Texas Courts may look to circumstantial evidence only where it meets a
specific threshold. Soodeen v. Rychel, 802 S.W.2d 361, 363 (Tex. App. 1990), writ denied (May
1, 1991). In Soodeen, the Court clearly identified the Texas rule: “[t]his Court repeated and
applied the established definition of “circumstantial evidence” in Texas Department of
Corrections v. Jackson, 661 S.W.2d 154 (Tex.App.—Houston [1st Dist.] 1983, writ ref'd n.r.e.),
where we stated:
An ultimate fact may be established by circumstantial evidence, but the circumstances
relied upon must have probative force sufficient to constitute a basis of legal inference. It
is not enough that the facts raise a mere surmise or suspicion of the existence of the fact
or permit a purely speculative conclusion. The circumstances relied on must be of such a
character as to be reasonably satisfactory and convincing, and must not be equally
consistent with the non-existence of the ultimate fact.
Soodeen, 661 S.W.2d at 157 (citations omitted).
Here, Plaintiffs’ circumstantial evidence presents an unsupported theory, but not to the exclusion
of multiple other possible explanations, which precludes this circumstantial evidence from
overcoming summary judgment.
For example, Plaintiffs repeatedly identify a single Defendant as having access to Evolv
Health’s distributor list, and then identify that Defendant as working for Epic Era in the presence
of a former Evolv Health distributor and claim that because this former Evolv Health’s
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 2 of 14
distributor found his way to Epic Era that there can only be one explanation, and that this
circumstantial evidence overcomes summary judgment. But, this scenario leaves open multiple
possibilities that are equally likely, including: (a) that no Evolv Health information was ever
taken, (b) that the Evolv Health distributor was interested in a new business and made a change
on his own, or (c) that someone other than the accused defendant brought the Evolv Health
distributor to Epic Era. Regardless, where any possibility is equally as likely based on the
weakness of the circumstantial evidence, such evidence does not overcome summary judgment.
III. PLAINTIFFS FAIL TO PRESENT DAMAGES EVIDENCE
A. No Lost Profits Evidence
Plaintiffs’ damages evidence fails because “[t]he calculation of lost-profits damages must
be based on net profits, not gross revenue or gross profits” (Hunter Bldgs. & MFG., L.P. v. MBI
Global, L.L.C., 436 S.W.3d 9, 18 (Tex. App.–Houston 2014) see also Texaco, Inc. v. Phan, 137
S.W.3d 763, 771 (Tex. App.–Houston 2004)), and “‘[n]et profits’ is defined as the difference
between a business’s total receipts and all of the expenses incurred in carrying on the business.”
Texaco, 137 S.W.3d at 771.
Plaintiffs claim their damages are “based upon the ultimate loss of its distributor base and
Latin American operations.” Plaintiffs’ Response Memo. at p. 60. But, Plaintiffs fail to identify
the lost distributors and fail to identify a monetary amount connected to the loss of such
distributors. And, Plaintiffs do not contradict Roscoe F. Trey White’s statements that “we’d
struggled in Latin America” (White Depo. at p. 44:23-24) or Susan Roger’s admission that:
“Were there any profits or losses generated through the EvolvHealth Mexico Services company?
A. No.” Susan Rogers Depo. p. 27:12-28:2.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 3 of 14
B. Failed to Allocate Damages to Individual Defendants
Plaintiffs have presented only general damages allegations against all Defendants as a
group, but have failed to ascribe damages to any individual defendant’s conduct. Failing to
separate out damages is fatal. Hunter Bldgs. & MFG., L.P., 436 S.W.3d 9, 21 (Plaintiffs failed
to connect his calculation of lost profits to any defendant’s alleged wrongful act.).
C. Evolv Mexico Has No Damages: No Evidence of Profits, Losses, Expenses, or
Revenue
In response to Defendant’s challenge that Evolv Mexico has no damages, because it was
not an operating business, Plaintiffs state that the overall damages of the Plaintiffs are
consolidated, which include “revenues, expenses, profits, and losses of Evolv’s subsidiaries
running the Latin American operations, including Evolv Mexico.” Plaintiffs’ Response Memo.
at p. 65. However, Plaintiffs fail to provide any evidence to support this allegation that
contradicts the clear testimony of Evolv Health’s former CFO, that Evolv Mexico had not
operations. And without any operations and no measurable damages, Evolv Mexico’s claims
fail.
IV. NO EVIDENCE SECTION
A. COUNT #10: No Evidence to Support Their Claim against Aldous for:
“Misappropriation of Trade Secrets Independent of MNDNCA”.
Element: No breach of confidential relationship outside the MNDNCA by
Aldous and no improper discovery of confidential information by
Aldous
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of whether Aldous allegedly improperly discovered
Plaintiffs’ confidential information independent of the MNDNCA.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 4 of 14
Element: No use of Plaintiffs’ confidential information by Aldous
1. Plaintiffs’ opposition presents no evidence identifying any alleged
use of Plaintiffs’ confidential information by Aldous.
Element: No injury caused by Aldous’ actions independent of the MNDNCA
1. Plaintiffs’ opposition presents no evidence identifying any alleged
injury independent of the MNDNCA caused by Aldous.
2. Plaintiffs fail to present lost profits evidence.
B. COUNT #12: No Evidence to Support Their Claim against Aldous for:
“Common Law Misappropriation”.
Element: No breach of confidential relationship outside the MNDNCA by
Aldous and no improper discovery of confidential information by
Aldous
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of whether Aldous allegedly improperly discovered
Plaintiffs’ confidential information independent of the MNDNCA.
Element: No use of Plaintiffs’ confidential information by Aldous
1. Plaintiffs’ opposition presents no evidence identifying any alleged
use of Plaintiffs’ confidential information by Aldous.
Element: No injury caused by Aldous’ actions independent of the MNDNCA
1. Plaintiffs’ opposition presents no evidence identifying any alleged
injury caused to Plaintiffs independent of the MNDNCA by Aldous.
2. Plaintiffs fail to present lost profits evidence.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 5 of 14
C. COUNT #13: No Evidence to Support Their Claim against Aldous for:
“Violation of Texas Theft Liability Act”.
Element: Aldous did not appropriate, either by copying or stealing, Plaintiffs’
trade secrets
1. Plaintiffs’ opposition presents no evidence identifying alleged
appropriation of Plaintiffs’ trade secrets by Aldous.
Element: No injury caused by Aldous under Texas Theft Liability Act
1. Plaintiffs’ opposition presents no evidence identifying any alleged
injury caused to Plaintiffs under the Texas Theft Liability Act by Aldous.
2. Plaintiffs fail to present lost profits evidence.
D. COUNT #14: No Evidence to Support Their Claim against Aldous for:
“Conversion”.
Element: Aldous did not unlawfully assume and exercise control over Plaintiffs’
confidential information to the exclusion of Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying alleged
unlawful assumption or exercise of control over Plaintiffs’ confidential
information by Aldous.
E. COUNT #16: No Evidence to Support Their Claim against Aldous for:
“Tortious Interference with Existing Contracts”.
Element: Aldous did not know of the existence of any contract between
Plaintiffs and Defendants
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of whether or not Aldous allegedly knew of the
existence of any contract between Plaintiffs and:
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 6 of 14
a. Defendant Steffe
b. Defendant Bott
c. Defendant Keranen
d. Defendant Gonzalez
e. Defendant Rutkoski
f. Defendant Palmer.
Element: Aldous did not willfully and intentionally interfere with any alleged
contract between Plaintiffs and Defendants
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of whether or not Aldous allegedly intentionally
interfered with the alleged contract between Plaintiffs and:
a. Defendant Steffe
b. Defendant Bott
c. Defendant Keranen
d. Defendant Gonzalez
e. Defendant Rutkoski
f. Defendant Palmer.
Element: Aldous was not the proximate cause of any alleged damages caused to
Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying alleged
proximate cause of alleged damages caused to Plaintiffs’ from alleged
interference with Plaintiffs’ contract with:
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 7 of 14
a. Defendant Steffe
b. Defendant Bott
c. Defendant Keranen
d. Defendant Gonzalez
e. Defendant Rutkoski
f. Defendant Palmer.
Element: No injury caused by Aldous by interfering with Plaintiffs’ contracts
1. Plaintiffs’ opposition presents no evidence identifying any alleged
injury caused to Plaintiffs from Aldous’ conduct relating to Plaintiffs’ contracts
with:
a. Defendant Steffe
b. Defendant Bott
c. Defendant Keranen
d. Defendant Gonzalez
e. Defendant Rutkoski
f. Defendant Palmer.
2. Plaintiffs fail to present lost profits evidence.
F. COUNT #17: No Evidence to Support Their Claim against Aldous for: “Civil
Conspiracy”.
Element: Aldous did not enter into an agreement with another Defendant to
commit an unlawful and overt act to harm Plaintiffs
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 8 of 14
existence or non-existence of an alleged agreement between Aldous and another
Defendant to commit an unlawful and overt act to harm Plaintiffs.
Element: Aldous did not have a meeting of the minds with another Defendant to
unlawfully obtain Plaintiffs’ confidential information
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of an alleged meeting of the minds with another
Defendant to unlawfully obtain Plaintiffs’ confidential information.
Element: Aldous did not unlawfully obtain Plaintiffs’ confidential information
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of an alleged unlawful acquisition of Plaintiffs’
confidential information by Aldous.
Element: Plaintiffs did not incur damages as a proximate result of any act by
Aldous
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of an alleged injury caused to Plaintiffs by alleged
actions of Rutkoski.
2. Plaintiffs fail to present lost profits evidence.
G. COUNT #18: No Evidence to Support Their Claim against Aldous for:
“Aiding and Abetting”.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 9 of 14
Element: Aldous did not know that activity by another Defendant was tortious
against Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying any alleged
knowledge by Aldous of tortious against by Defendant(s) against Plaintiffs.
Element: Aldous did not substantially assist in bringing to fruition the
breaching of fiduciary duties or committing of torts against Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying any alleged
action by Aldous to assist in the committing of any tort against Plaintiffs.
Element: Plaintiffs did not incur damages as a result of Aldous’ alleged conduct
1. Plaintiffs’ opposition presents no evidence identifying any alleged
injury caused to Plaintiffs by Aldous’ alleged aiding conduct.
2. Plaintiffs fail to present lost profits evidence.
H. COUNT #19: No Evidence in Support of Business Disparagement Claim
against Aldous.
Element: Aldous did not publish false or disparaging information about
Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying any alleged
publication of false or disparaging information by Aldous.
Element: Aldous did not publish statements with malice
1. Plaintiffs’ opposition presents no evidence identifying the alleged
publication of statements with malice by Aldous.
Element: Plaintiffs did not incur damages because of a statement made by
Aldous
1. Plaintiffs’ opposition presents no evidence identifying any alleged
damages incurred by Plaintiffs caused by any statements made by Aldous.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 10 of 14
2. Plaintiffs’ fail to present evidence of lost profits.
I. COUNT #20: No Evidence in Support of Defamation Claim against Aldous.
Element: Aldous did not publish a defamatory statement of fact.
1. Plaintiffs’ opposition presents no evidence identifying any alleged
publication of a defamatory statement of fact by Aldous.
Element: Aldous did not act with malice or negligence regarding the truth of
any statement.
1. Plaintiffs’ opposition presents no evidence identifying any alleged
publication of statements with malice or negligence regarding the truth of any
statement by Aldous.
Element: Aldous did not publish a statement about Plaintiffs.
1. Plaintiffs’ opposition presents no evidence identifying any alleged
publication of a defamatory statement about Plaintiffs by Aldous.
J. COUNT #21: No Evidence in Support of Claim for Attorney Fees against
Aldous.
Element: Because the underlying claims on which Plaintiffs rely to support
their claim for attorney fees fail, the claim for attorney fees also fails
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of alleged wrongful acts required for the underling
claims to support Plaintiffs claim for attorney fees as to Aldous.
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 11 of 14
K. COUNT #22: No Evidence in Support of Claim for Exemplary Damages
against Aldous.
Element: Aldous did not commit any fraud against Plaintiffs
1. Plaintiffs’ opposition presents no evidence identifying an alleged
fraud against Plaintiffs by Aldous.
Element: Aldous did not act with malice or gross negligence toward Plaintiffs
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of alleged malice or gross negligence toward Plaintiffs
by Aldous.
Element: Aldous did not violate any statute that allows for exemplary damages
1. Plaintiffs’ opposition presents only circumstantial evidence that
may create a suspicion, but this is insufficient to overcome summary judgment
because the circumstantial evidence continues to allow speculation as to the
existence or non-existence of alleged violation of a statute that allows for
exemplary damages by Aldous.
//
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 12 of 14
CONCLUSION AND REQUEST FOR RELIEF
WHEREFORE Defendant Jeffrey N. Aldous requests that the Court grant his motion for
summary judgment and dismiss all of Plaintiffs’ claims against Aldous, as set forth above.
DATED May 6, 2016.
Respectfully submitted,
GRIMMER & ASSOCIATES, PC
/s/ Matthew G. Grimmer
Matthew G. Grimmer
Thanksgiving Point
2975 W. Executive Pkwy, Suite 192
Lehi, Utah 84043
(801) 341-2075 (Telephone)
(801) 341-2076 (Facsimile)
ATTORNEYS FOR DEFENDANTS
EPICERA INCORPORATED,
ECOSWAY USA, INC., GLEN JENSEN,
JEFFREY N. ALDOUS, KYLE
PALMER, EASTON PALMER AND
ROBERTO GONZALEZ
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 13 of 14
CERTIFICATE OF SERVICE
This is to certify that on May 6, 2016, a true and correct copy of the foregoing instrument
was served on all counsel of record via the Texas State Court electronic filing system, including
those below:
Carter Scholer Arnett Hamada Mockler PLLC
J. Robert Arnett II
8150 N. Central Expressway, Suite 500
Dallas, Texas 75206
(214) 550-8188 (Telephone)
(214) 550-8185 (Facsimile)
Friedman & Feiger, L.L.P.
Lawrence J. Friedman
Carter Boisvert
5301 Spring Valley Road, Suite 200
Dallas, Texas 75254
(972) 788-1400 (Telephone)
(972) 788-2667 (Telecopier)
Lewis Brisbois
Michael L. Gaubert
2100 Ross Avenue, Suite 2000
Dallas, Texas 75201
214.722.7102 (Telephone)
214.722.7111 (Telecopier)
Bell Nunnally
Sonja J. McGill
3232 McKinney Ave.
Suite 1400
Dallas, Texas 75204
214-740-1497 (Telephone)
214-740-5797 (Telecopier)
/s/ Matthew G. Grimmer
Matthew G. Grimmer
Defendant Aldous’ Reply Memorandum
In Support of Motion for Summary Judgment Page 14 of 14
Preview
FILED DALLAS COUNTY 5/6/2016 10:52:19 AM FELICIA PITRE DISTRICT CLERK CAUSE NO. DC 13-13499 EVOLV HEALTH, LLC, EVOLV § IN THE DISTRICT COURT HEALTH INTERNATIONAL, LLC, § and EVOLVHEALTH MEXICO § SERVICOS, S. de R.L. de C.V., § § Plaintiffs, § § v. § 68TH JUDICIAL DISTRICT § EPICERA INCORPORATED, § ECOSWAY USA, INC., GLEN JENSEN, § JEFFREY N. ALDOUS, MATT STEFFE, § KEVIN KERANEN, TRAVIS BOTT, § ROBERTO GONZALEZ, § EASTON RUTKOWSKI, KYLE § PALMER and VINCENT TAN § § Defendants. § DALLAS COUNTY, TEXAS DEFENDANT JEFFREY N. ALDOUS’ REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT TO THE HONORABLE JUDGE MARTIN HOFFMAN: Defendant Jeffrey N. Aldous (“Aldous”) files this Motion for Summary Judgment against Plaintiffs Evolv Health, LLC (“Evolv Health”) and EvolvHealth Mexico Servicos, S. de R.L. de C.V. (“Evolv Mexico”) (Evolv Health and Evolv Mexico collectively “Plaintiffs. I. PLAINTIFFS’ IMPOSSIBLE TASK: WHAT IS NOT COVERED BY THE MNDNCA? Plaintiffs fail to respond to the “impossible task of separating and distinguishing alleged misconduct as “covered” vs. “not covered” by the MNDNCA.” See Aldous Motion at p. 2. And, Plaintiffs do not dispute or redefine that “Evolv Health intended that all of its confidential and proprietary information” be covered by the MNDNCA. Instead, Plaintiffs repeat that various conduct and claims would fall outside the MNDNCA—yet they fail to identify a single trade secret that is not covered by the MNDNCA, and because all claims relating to trade secrets covered by the MNDNCA have been dismissed, there is nothing remaining for any other misappropriation claim, and they should be dismissed. Plaintiffs simply cannot, and have not, distinguish a trade secret as not covered by the MNDNCA. II. PLAINTIFFS IMPROPERLY RELY ON CIRCUMSTANTIAL EVIDENCE Plaintiffs rely heavily on “circumstantial evidence” but their reliance is improper because their circumstantial evidence does not make the fact more or less probable. When faced with a lack of direct evidence, Texas Courts may look to circumstantial evidence only where it meets a specific threshold. Soodeen v. Rychel, 802 S.W.2d 361, 363 (Tex. App. 1990), writ denied (May 1, 1991). In Soodeen, the Court clearly identified the Texas rule: “[t]his Court repeated and applied the established definition of “circumstantial evidence” in Texas Department of Corrections v. Jackson, 661 S.W.2d 154 (Tex.App.—Houston [1st Dist.] 1983, writ ref'd n.r.e.), where we stated: An ultimate fact may be established by circumstantial evidence, but the circumstances relied upon must have probative force sufficient to constitute a basis of legal inference. It is not enough that the facts raise a mere surmise or suspicion of the existence of the fact or permit a purely speculative conclusion. The circumstances relied on must be of such a character as to be reasonably satisfactory and convincing, and must not be equally consistent with the non-existence of the ultimate fact. Soodeen, 661 S.W.2d at 157 (citations omitted). Here, Plaintiffs’ circumstantial evidence presents an unsupported theory, but not to the exclusion of multiple other possible explanations, which precludes this circumstantial evidence from overcoming summary judgment. For example, Plaintiffs repeatedly identify a single Defendant as having access to Evolv Health’s distributor list, and then identify that Defendant as working for Epic Era in the presence of a former Evolv Health distributor and claim that because this former Evolv Health’s Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 2 of 14 distributor found his way to Epic Era that there can only be one explanation, and that this circumstantial evidence overcomes summary judgment. But, this scenario leaves open multiple possibilities that are equally likely, including: (a) that no Evolv Health information was ever taken, (b) that the Evolv Health distributor was interested in a new business and made a change on his own, or (c) that someone other than the accused defendant brought the Evolv Health distributor to Epic Era. Regardless, where any possibility is equally as likely based on the weakness of the circumstantial evidence, such evidence does not overcome summary judgment. III. PLAINTIFFS FAIL TO PRESENT DAMAGES EVIDENCE A. No Lost Profits Evidence Plaintiffs’ damages evidence fails because “[t]he calculation of lost-profits damages must be based on net profits, not gross revenue or gross profits” (Hunter Bldgs. & MFG., L.P. v. MBI Global, L.L.C., 436 S.W.3d 9, 18 (Tex. App.–Houston 2014) see also Texaco, Inc. v. Phan, 137 S.W.3d 763, 771 (Tex. App.–Houston 2004)), and “‘[n]et profits’ is defined as the difference between a business’s total receipts and all of the expenses incurred in carrying on the business.” Texaco, 137 S.W.3d at 771. Plaintiffs claim their damages are “based upon the ultimate loss of its distributor base and Latin American operations.” Plaintiffs’ Response Memo. at p. 60. But, Plaintiffs fail to identify the lost distributors and fail to identify a monetary amount connected to the loss of such distributors. And, Plaintiffs do not contradict Roscoe F. Trey White’s statements that “we’d struggled in Latin America” (White Depo. at p. 44:23-24) or Susan Roger’s admission that: “Were there any profits or losses generated through the EvolvHealth Mexico Services company? A. No.” Susan Rogers Depo. p. 27:12-28:2. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 3 of 14 B. Failed to Allocate Damages to Individual Defendants Plaintiffs have presented only general damages allegations against all Defendants as a group, but have failed to ascribe damages to any individual defendant’s conduct. Failing to separate out damages is fatal. Hunter Bldgs. & MFG., L.P., 436 S.W.3d 9, 21 (Plaintiffs failed to connect his calculation of lost profits to any defendant’s alleged wrongful act.). C. Evolv Mexico Has No Damages: No Evidence of Profits, Losses, Expenses, or Revenue In response to Defendant’s challenge that Evolv Mexico has no damages, because it was not an operating business, Plaintiffs state that the overall damages of the Plaintiffs are consolidated, which include “revenues, expenses, profits, and losses of Evolv’s subsidiaries running the Latin American operations, including Evolv Mexico.” Plaintiffs’ Response Memo. at p. 65. However, Plaintiffs fail to provide any evidence to support this allegation that contradicts the clear testimony of Evolv Health’s former CFO, that Evolv Mexico had not operations. And without any operations and no measurable damages, Evolv Mexico’s claims fail. IV. NO EVIDENCE SECTION A. COUNT #10: No Evidence to Support Their Claim against Aldous for: “Misappropriation of Trade Secrets Independent of MNDNCA”. Element: No breach of confidential relationship outside the MNDNCA by Aldous and no improper discovery of confidential information by Aldous 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of whether Aldous allegedly improperly discovered Plaintiffs’ confidential information independent of the MNDNCA. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 4 of 14 Element: No use of Plaintiffs’ confidential information by Aldous 1. Plaintiffs’ opposition presents no evidence identifying any alleged use of Plaintiffs’ confidential information by Aldous. Element: No injury caused by Aldous’ actions independent of the MNDNCA 1. Plaintiffs’ opposition presents no evidence identifying any alleged injury independent of the MNDNCA caused by Aldous. 2. Plaintiffs fail to present lost profits evidence. B. COUNT #12: No Evidence to Support Their Claim against Aldous for: “Common Law Misappropriation”. Element: No breach of confidential relationship outside the MNDNCA by Aldous and no improper discovery of confidential information by Aldous 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of whether Aldous allegedly improperly discovered Plaintiffs’ confidential information independent of the MNDNCA. Element: No use of Plaintiffs’ confidential information by Aldous 1. Plaintiffs’ opposition presents no evidence identifying any alleged use of Plaintiffs’ confidential information by Aldous. Element: No injury caused by Aldous’ actions independent of the MNDNCA 1. Plaintiffs’ opposition presents no evidence identifying any alleged injury caused to Plaintiffs independent of the MNDNCA by Aldous. 2. Plaintiffs fail to present lost profits evidence. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 5 of 14 C. COUNT #13: No Evidence to Support Their Claim against Aldous for: “Violation of Texas Theft Liability Act”. Element: Aldous did not appropriate, either by copying or stealing, Plaintiffs’ trade secrets 1. Plaintiffs’ opposition presents no evidence identifying alleged appropriation of Plaintiffs’ trade secrets by Aldous. Element: No injury caused by Aldous under Texas Theft Liability Act 1. Plaintiffs’ opposition presents no evidence identifying any alleged injury caused to Plaintiffs under the Texas Theft Liability Act by Aldous. 2. Plaintiffs fail to present lost profits evidence. D. COUNT #14: No Evidence to Support Their Claim against Aldous for: “Conversion”. Element: Aldous did not unlawfully assume and exercise control over Plaintiffs’ confidential information to the exclusion of Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying alleged unlawful assumption or exercise of control over Plaintiffs’ confidential information by Aldous. E. COUNT #16: No Evidence to Support Their Claim against Aldous for: “Tortious Interference with Existing Contracts”. Element: Aldous did not know of the existence of any contract between Plaintiffs and Defendants 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of whether or not Aldous allegedly knew of the existence of any contract between Plaintiffs and: Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 6 of 14 a. Defendant Steffe b. Defendant Bott c. Defendant Keranen d. Defendant Gonzalez e. Defendant Rutkoski f. Defendant Palmer. Element: Aldous did not willfully and intentionally interfere with any alleged contract between Plaintiffs and Defendants 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of whether or not Aldous allegedly intentionally interfered with the alleged contract between Plaintiffs and: a. Defendant Steffe b. Defendant Bott c. Defendant Keranen d. Defendant Gonzalez e. Defendant Rutkoski f. Defendant Palmer. Element: Aldous was not the proximate cause of any alleged damages caused to Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying alleged proximate cause of alleged damages caused to Plaintiffs’ from alleged interference with Plaintiffs’ contract with: Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 7 of 14 a. Defendant Steffe b. Defendant Bott c. Defendant Keranen d. Defendant Gonzalez e. Defendant Rutkoski f. Defendant Palmer. Element: No injury caused by Aldous by interfering with Plaintiffs’ contracts 1. Plaintiffs’ opposition presents no evidence identifying any alleged injury caused to Plaintiffs from Aldous’ conduct relating to Plaintiffs’ contracts with: a. Defendant Steffe b. Defendant Bott c. Defendant Keranen d. Defendant Gonzalez e. Defendant Rutkoski f. Defendant Palmer. 2. Plaintiffs fail to present lost profits evidence. F. COUNT #17: No Evidence to Support Their Claim against Aldous for: “Civil Conspiracy”. Element: Aldous did not enter into an agreement with another Defendant to commit an unlawful and overt act to harm Plaintiffs 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 8 of 14 existence or non-existence of an alleged agreement between Aldous and another Defendant to commit an unlawful and overt act to harm Plaintiffs. Element: Aldous did not have a meeting of the minds with another Defendant to unlawfully obtain Plaintiffs’ confidential information 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of an alleged meeting of the minds with another Defendant to unlawfully obtain Plaintiffs’ confidential information. Element: Aldous did not unlawfully obtain Plaintiffs’ confidential information 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of an alleged unlawful acquisition of Plaintiffs’ confidential information by Aldous. Element: Plaintiffs did not incur damages as a proximate result of any act by Aldous 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of an alleged injury caused to Plaintiffs by alleged actions of Rutkoski. 2. Plaintiffs fail to present lost profits evidence. G. COUNT #18: No Evidence to Support Their Claim against Aldous for: “Aiding and Abetting”. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 9 of 14 Element: Aldous did not know that activity by another Defendant was tortious against Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying any alleged knowledge by Aldous of tortious against by Defendant(s) against Plaintiffs. Element: Aldous did not substantially assist in bringing to fruition the breaching of fiduciary duties or committing of torts against Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying any alleged action by Aldous to assist in the committing of any tort against Plaintiffs. Element: Plaintiffs did not incur damages as a result of Aldous’ alleged conduct 1. Plaintiffs’ opposition presents no evidence identifying any alleged injury caused to Plaintiffs by Aldous’ alleged aiding conduct. 2. Plaintiffs fail to present lost profits evidence. H. COUNT #19: No Evidence in Support of Business Disparagement Claim against Aldous. Element: Aldous did not publish false or disparaging information about Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying any alleged publication of false or disparaging information by Aldous. Element: Aldous did not publish statements with malice 1. Plaintiffs’ opposition presents no evidence identifying the alleged publication of statements with malice by Aldous. Element: Plaintiffs did not incur damages because of a statement made by Aldous 1. Plaintiffs’ opposition presents no evidence identifying any alleged damages incurred by Plaintiffs caused by any statements made by Aldous. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 10 of 14 2. Plaintiffs’ fail to present evidence of lost profits. I. COUNT #20: No Evidence in Support of Defamation Claim against Aldous. Element: Aldous did not publish a defamatory statement of fact. 1. Plaintiffs’ opposition presents no evidence identifying any alleged publication of a defamatory statement of fact by Aldous. Element: Aldous did not act with malice or negligence regarding the truth of any statement. 1. Plaintiffs’ opposition presents no evidence identifying any alleged publication of statements with malice or negligence regarding the truth of any statement by Aldous. Element: Aldous did not publish a statement about Plaintiffs. 1. Plaintiffs’ opposition presents no evidence identifying any alleged publication of a defamatory statement about Plaintiffs by Aldous. J. COUNT #21: No Evidence in Support of Claim for Attorney Fees against Aldous. Element: Because the underlying claims on which Plaintiffs rely to support their claim for attorney fees fail, the claim for attorney fees also fails 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of alleged wrongful acts required for the underling claims to support Plaintiffs claim for attorney fees as to Aldous. Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 11 of 14 K. COUNT #22: No Evidence in Support of Claim for Exemplary Damages against Aldous. Element: Aldous did not commit any fraud against Plaintiffs 1. Plaintiffs’ opposition presents no evidence identifying an alleged fraud against Plaintiffs by Aldous. Element: Aldous did not act with malice or gross negligence toward Plaintiffs 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of alleged malice or gross negligence toward Plaintiffs by Aldous. Element: Aldous did not violate any statute that allows for exemplary damages 1. Plaintiffs’ opposition presents only circumstantial evidence that may create a suspicion, but this is insufficient to overcome summary judgment because the circumstantial evidence continues to allow speculation as to the existence or non-existence of alleged violation of a statute that allows for exemplary damages by Aldous. // Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 12 of 14 CONCLUSION AND REQUEST FOR RELIEF WHEREFORE Defendant Jeffrey N. Aldous requests that the Court grant his motion for summary judgment and dismiss all of Plaintiffs’ claims against Aldous, as set forth above. DATED May 6, 2016. Respectfully submitted, GRIMMER & ASSOCIATES, PC /s/ Matthew G. Grimmer Matthew G. Grimmer Thanksgiving Point 2975 W. Executive Pkwy, Suite 192 Lehi, Utah 84043 (801) 341-2075 (Telephone) (801) 341-2076 (Facsimile) ATTORNEYS FOR DEFENDANTS EPICERA INCORPORATED, ECOSWAY USA, INC., GLEN JENSEN, JEFFREY N. ALDOUS, KYLE PALMER, EASTON PALMER AND ROBERTO GONZALEZ Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 13 of 14 CERTIFICATE OF SERVICE This is to certify that on May 6, 2016, a true and correct copy of the foregoing instrument was served on all counsel of record via the Texas State Court electronic filing system, including those below: Carter Scholer Arnett Hamada Mockler PLLC J. Robert Arnett II 8150 N. Central Expressway, Suite 500 Dallas, Texas 75206 (214) 550-8188 (Telephone) (214) 550-8185 (Facsimile) Friedman & Feiger, L.L.P. Lawrence J. Friedman Carter Boisvert 5301 Spring Valley Road, Suite 200 Dallas, Texas 75254 (972) 788-1400 (Telephone) (972) 788-2667 (Telecopier) Lewis Brisbois Michael L. Gaubert 2100 Ross Avenue, Suite 2000 Dallas, Texas 75201 214.722.7102 (Telephone) 214.722.7111 (Telecopier) Bell Nunnally Sonja J. McGill 3232 McKinney Ave. Suite 1400 Dallas, Texas 75204 214-740-1497 (Telephone) 214-740-5797 (Telecopier) /s/ Matthew G. Grimmer Matthew G. Grimmer Defendant Aldous’ Reply Memorandum In Support of Motion for Summary Judgment Page 14 of 14