18-08-83181-a · a. adm's structure and business operations. 24. plaintiff adm is a...

CAUSE NO.---------

M. ROBERTS MEDIA LLC, TEXAS COMMUNITY MEDIA, LLC, VICTORIA ADVOCATE § PUBLISHING COMPANY, and AFFECT DIGITAL § MEDIA, LLC, §

Plaintiffs,

V.

JASON HOLMES, DAN EASTON, AMANDA BOWLBY, TAMMIE GILDON, PAIGE LEOPOLD, VICTORIA HOLMES, JOSHUA TESCH, NANCY BENNETT, SHANNON ELISOR, THOMAS HIBBARD, JENNIFER LOVE, ROBERT ROYER, and THRIVEFUEL, LLC,

Defendants.

§ § § § § § § § § § § § §

IN THE DISTRICT COURT

__ JUDICIAL DISTRICT

VICTORIA COUNTY, TEXAS

PLAINTIFFS' ORIGINAL VERIFIED PETITION AND APPLICATIONS FOR TEMPORARY RESTRAINING ORDER, AND

TEMPORARY AND PERMANENT INJUNCTIONS

COMES NOW Plaintiffs M. Roberts Media, LLC ("MRM"), Texas Community Media, LLC ("TCM"),

Victoria Advocate Publishing Company, ("VAPCO"), and Affect Digital Media, LLC ("ADM"(collectively,

MRM, TCM, VAPCO and ADM are referred to as "Plaintiffs"), by and through their attorneys, and files this

Original Verified Petition and Application for Temporary Restraining Order and Temporary and Permanent

Injunctions against Defendants Jason Holmes, Dan Easton, Amanda Bowlby, Tammie Gildon, Paige

Leopold, Victoria Holmes, Joshua Tesch, Nancy Bennett, Shannon Elisor, Thomas Hibbard, Jennifer Love,

Robert Royer, (collectively, the "Defendant Employees") and ThriveFuel, LLC ("ThriveFuel") (together,

the Defendant Employees and ThriveFuel are collectively referred to as "Defendants"), and in support

thereof would respectfully show the Court as follows:

1 PLAINTIFF'S ORIGINAL VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY AND PERMANENT PRELIMINARY INJUNCTIONS

18-08-83181-A

Filed 8/24/2018 3:16 PMCathy StuartDistrict Clerk

Victoria County, TexasBy: Bobbi Ellinger

I. INTRODUCTION

This case is brought to rectify the equivalent of an 'inside-job' bank robbery by ADM's former

officers and employees. Regrettably, the heist is over. Now, Defendants must be stopped from profiting off

the Plaintiffs' stolen goods.

The Defendant Employees worked for ADM, a digital and traditional marketing firm. Some of them,

including Homes, Easton, and Love were high-level officers. On August 20, 2018, the Defendant

Employees resigned in unison from ADM via brief, identical letters to the company. By itself, this is

perfectly legal-however the full story is far more sinister. In the months preceding their resignation, the

Defendant Employees engaged in ·a scheme to create their own digital and traditional marketing business

ThriveFuel-using ADM's own confidential information, trade secrets, property, goodwill, and employees as

the fledgling business's core foundation.

For months, the Defendant Employees attempted to keep this plan a secret by feigning interest in

purchasing ADM outright. But those 'negotiations' proved to be a sham. Indeed, as the adage goes, why

buy what you can steal? Rather than purchase ADM, the Defendant Employees chose to syphon off the

company's confidential and proprietary information, goodwill and other assets to begin their own venture.

This stolen material includes, but is not limited to, ADM's current and prospective customer and client lists,

product and service plans, pricing, methodologies, and software programs.

This is not a case brought out of unwarranted fear of honest competition. Indeed, crucial portions

of the Defendants Employees' unlawful conduct have already been documented. For example, only days

before the mass resignation, Defendant Love accidentally forwarded an e-mail containing ADM's "top"

sales accounts to one of Plaintiffs representatives, as well as other named Defendants. The twofold

purpose of the e-mail was clear: (i) document their soon-to-be former employer's top customers, and (ii)

2 PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY ANO PERMANENT PRELIMINARY INJUNCTIONS

immediately contact those customers to begin work on moving them to the Defendants Employees' new

venture. If this sounds hyperbolic, the e-mail speaks for itself:

From: Jennifer Love <jlow(@affectdl,:ltal.com>

Sent: Friday, August 17, 201810:19 AM

To: Shannon Richardson; Paige Leopold; Robert Royer

Subject: List of .iccount~

All

here is the spreadsheet of accounts. The ones I listed and gave you are within the top 40 accounts so these are top priority, but all other are important as well. The accounts under top 40 will need to be contacted as well and addressed. Robert and I will be working with Jason on explanations and how to handle current contracts.

Be working on your list and plan for next week. We wil be reviewing this on Monday so be prepared to walk through your week with me on appointments you were able to set or how you plan on contacting everyone and going down the list.

Thank you,

Jennifer Love Vice President of Sales ~tfcct019JtalModla.com

Unfortunately, the 'robbery' portion of this story is over. The Defendant Employees-having looted

ADM of its people and trade secrets-are now operating their competing venture, ThriveFuel. Further still,

based on the contents of their company's website, they are doing so without a care in the world:

I FORMER ADM TEAM LAUNCHES THRIVEFUEU

.• $1111 fl .11~

,I:'.-.

Aug 22, 2018

Employee$ or 1he former Af1ect Dlglwl Media came toqelller Monday and launched Tnr,veFuel, 3 ne1·, full

::r,r11ce JdV(!nlsln9 agency ,pcclahw1<J 1n digital m:irkellng ~nd prorno1ion.

This forma!lon Jmmedi.:itely positions ThriveFu;,J ,;,i the premier dlQlt;,I m arketing furn and Mverl1"-,IOQ agency

,n th0 r<Jgfon :ind lrecz 11 from resrrlc11om: .:ii;~oclated wl!h the nel'r-,paper lnoustry. As one o f che l3rgost

odverm,ing ,,gcnc,es 111 the Crossroads. T11rlvcFuel 11as in-house spec1allsl!l unique 10 all areas of cllgltal

rnarketin!).

3 PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY AND PERMANENT PRELIMINARY INJUNCTIONS

This cannot continue. All Defendants must be immediately stopped from profiting off of ADM's

information, goodwill, and trade secrets. Each passing day that Defendants are allowed to operate using

ADM's proprietary materials against it constitutes irreparable harm done.

II. DISCOVERY CONTROL PLAN

1. Plaintiffs intend to conduct discovery pursuant to "Level 2" as set forth in Rule 190 of the

Texas Rules of Civil Procedure except as may be modified by any subsequent Motion by Plaintiffs for

Expedited Discovery. Plaintiffs reserve the right to request to conduct discovery pursuant to "Level 3" as set

forth in Rule 190 of the Texas Rules of Civil Procedure.

Ill. PARTIES, JURISDICTION AND VENUE

2. Plaintiff ADM is a Texas Limited Liability Company with its principal place of business at

4611 E. Airline Rd. Ste. 200, Victoria, Texas 77904, and is authorized to do business in the State of Texas.

3. Plaintiff M. Roberts Media, LLC is a Texas Limited Liability Company with its principal

place of business at 320 E. Methvin St., Longview, TX 75601.

4. Plaintiff Texas Community Media, LLC is a Texas Limited Liability Company with its

principal place of business at 320 E. Methvin St., Longview, TX 75601.

5. Plaintiff Victoria Advocate Publishing Company is a Texas Company with its principal place

of business at 311 East Constitution St., Victoria, Texas 77901 .

6. Defendant Love is a natural person who, upon information and belief, resides and may be

served with process at her home at 415 Pura Vida, Inez, Texas.

7. Defendant Royer is a natural person who, upon information and belief, resides and may be

served with process at his home at 3607 Redwood, Victoria, TX 77901.

8. Defendant Ellisor is a natural person who, upon information and belief, resides and may be

served with process at her home at 1701 Bonham, Victoria, Texas 77901 .

4 PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY RESTRAINING ORDER ANO TEMPORARY AND PERMANENT PRELIMINARY INJUNCTIONS

9. Defendant Leopold is a natural person who, upon information and belief, resides and may

be served with process at her home at 103 Hessler Drive, Hallettsville, Texas 77964.

10. Defendant Bennett is a natural person who, upon information and belief, resides and may

be served with process at her home at 1704 E. Virginia, Victoria, Texas 77901.

11. Defendant Holmes is a natural person who, upon information and belief, resides and may

be served with process at his home in Victoria County, Texas.

12. Defendant Tesch is a natural person who, upon information and belief, resides and may be

served with process at his home at 1853 FM 1686, Victoria, Texas 77905.

13. Defendant Hibbard is a natural person who, upon information and belief, resides and may

be served with process at his home at 802 Linwood Drive, Apt. A, Victoria, Texas 77901.

14. Defendant Gilldon is a natural person who, upon information and belief, resides and may

be served with process at her home 116 Gentle Breeze, Victoria, Texas 77905.

15. Defendant Bowlby is a natural person who, upon information and belief, resides and may

be served with process at her home at 1601 John Stockbauer Drive, Apt. 2104, Victoria, Texas 77901 .

16. Defendant Holmes is a natural person who, upon information and belief, resides and may

be served with process at her home in Victoria County, Texas.

17. Defendant Easton is a natural person who, upon information and belief, resides and may

be served with process at his home 608 West Goddwin ,Victoria, Texas 77901.

18. Defendant ThriveFuel, LLC is Texas Limited Liability Company whose principal place of

business is 5606 N. Navarro St. Ste 200, Victoria, Texas 77904, and, additionally, may be served with

process via its Registered Agent, located at 701 Brazos Street, Ste. 720 Austin, Texas 78701.

19. Venue is proper in Victoria County pursuant to Texas Civil Practice and Remedies Code

§§ 15.002(a)(1)-(2) and 65.023 because (i) a substantial part of the events giving rise to the claim occurred


in Victoria County and (ii) Defendants reside, and are thus domiciled, in Victoria County at the time the

cause of action accrued.

20. Injunctive relief is sought pursuant to Rules 680-693 of the Texas Rules of Civil Procedure

and Section 65.011 of the Code and this action seeks to protect, by way of injunctive relief, customer

relationships and confidential business information and trade secret information having a value far in

excess of the minimum jurisdictional limits of the Court, exclusive of interest and costs.

21. The amount in controversy exceeds the minimum jurisdictional limits of this Court.

22. By reason of the foregoing, the Court has jurisdiction and venue over this action.

IV. CLAIM FOR RELIEF

23. At this time, Plaintiffs seek monetary relief of over $1,000,000 as well as non-monetary

relief described herein and attorneys' fees.

V.FACTUALBACKGROUND

A. ADM's Structure and Business Operations.

24. Plaintiff ADM is a nationally-recognized, full-service advertising agency that provides

marketing services via traditional media, digital media, and all forms in between. As a full-service

marketing firm, ADM's provides everything from TV advertising, internet campaigns, video, traditional

billboards, web-design, and applications designed to expand each client's business. Primarily, ADM's

clients are retail and professional firms looking to expand their customer base. Additionally, a number of

ADM clients are generated through its direct relationship with the newspaper, the Victoria Advocate.

25. ADM is structurally interrelated to the other named-Plaintiffs. Specifically, ADM is a wholly-

owned subsidiary of VAPCO. MRM is a management company that is owned in equal parts by VAPCO

and TCM. Before January 1, 2018, ADM was named 'Advocate Digital Media.'


26. As part of its operations, ADM necessarily creates and maintains numerous items that

constitute the company's proprietary information and trade secrets under Texas law. These include, but

are not limited to; (i) products and service plans, (ii) sales and marketing plans, (iii) price lists,

methodologies, and profit margins, (iv) forward-looking business plans and development strategies, (v)

current and prospective product and service offerings, and (vi) certain computer software programs and

database technologies and systems.

B. Defendants Were Officers and Employees of ADM.

27. Defendants were all former ADM employees and, notably, several of them were high-level

officers. Specifically:

(a) Holmes was ADM's President and General Manager;

(b) Easton was ADM's CEO; and

(c) Love was ADM's Vice President of Sales.

28. In addition, Hibbard and Tesch were key technical employees responsible for development

and maintenance of company technology. The remaining Defendant Employees worked in various

positions with the company under the general supervision of Holmes and Easton.

C. ADM's Critical Software Programs and Applications.

29. In the course and scope of their employment for ADM, each of the Defendant Employees

had substantial and continuous access to ADM's confidential proprietary information and trade secrets.

Indeed, the Defendant Employees could not have performed their various job duties without the access to

and use of this proprietary material.

30. For example, ADM internally developed and uses a web-based software application called

"AgencyQue." AgencyQue has been in use by ADM for years and is used by the company to house client

information, business contacts, key names of individuals, and advertising campaigns developed for the


company's clients. Additionally, AgencyQue is used to monitor the status of individual client advertising

campaigns. The program is hosted on ADM's cloud server which is restricted to company employees

behind password protection. In addition to AgencyQue, ADM has internally developed software programs

called JewelBox (a jewelry store inventory platform), AXL (a content management system), and Trend (an

online market research polling system). Each of these constitutes assets of ADM.

31. In addition to the above-mentioned software programs, ADM uses other third-party

software applications for the sole and explicit use of the company and its employees. These include:

1) Google-based company e-mail accounts;

2) Adobe Creative Cloud;

3) Logic Pro X;

4) Hubspot.

C. Holmes and Easton Propose a Buy Out of ADM and Then Go Silent.

32. In November 2017, Defendants Holmes and Easton came to ADM's Board of Directors

with a proposition. Specifically, they asked to be allowed to purchase all-or at least 51% ownership-of

ADM and separate the company from its parent/affiliate entities.1 Easton and Holmes stated that if the

Board refused, they would leave the company outright.

33. ADM's Board was surprised by the proposal, but took the proposition in good faith and

began efforts to move forward with the sale. Specifically-because ADM was so intertwined with the other

named-Plaintiff entities-the Board worked to begin separating assets for an eventual transfer of ADM to

Holmes and Easton. This manifested itself in two key ways. First, ADM (then named "Advocate Digital

Media") was re-named Affect Digital Media as of January 1, 2018. The purposes of this name change was

1 As noted above, at the time of this proposal, ADM was called Advocate Digital Media.


to separate the new company from its then (and still-current) affiliate VAPCO. Second, going along with

the name change, ADM employees stopped using the internal Microsoft exchange e-mail system.

34. As part of these efforts, ADM's Board began drafting a separation agreement for Easton

and Holmes that would, necessarily, be required as part of any purchase and asset transfer. In so doing,

the Board thoroughly researched a fair purchase price to offer Holmes and Easton for control of the

company. Notably, the third-party appraiser used was hired by Defendant Easton. Perhaps tellingly, when

presented with the proposed separation agreement, Holmes and Easton balked at signing any such

document and requested more time to negotiate the purchase price.

35. As of July 2018, negotiations had not progressed and the Board was becoming frustrated

with the process, which had dragged on for nearly a year. Accordingly, at its July 2018 meeting, ADM's

Board gave Holmes and Easton a three-week deadline to purchase the company for fair value. Easton and

Holmes then went radio-silent.

D. ADM First Learns of Defendants' Scheme Via an Inadvertent, 'Smoking Gun' Email.

36. On August 17, 2018-three days before the Defendant Employees resigned-the

Plaintiffs were 'accidentally' made aware of a sinister plot to rob the company blind of its customers and

proprietary assets. Specifically, at 10:19 a.m., Defendant Love, ADM's Vice President of Sales, e-mailed

Defendants Leopold, Elison, and Royer. The purpose of her e-mail was as clear as it was nefarious. It was

a reminder, directing her co-conspirators to review ADM's "top 40" customer accounts and contact them for

the purpose of 'encouraging' them to end their business relationships with ADM and move to the Defendant

Employees' soon-to-be-operating company.

37. The importance of surreptitiously taking ADM's customers to the Defendant Employees

cannot be understated. Indeed, Defendant Love stated that these accounts "are top priority" and that the

customers "will need to be contacted ... and addressed." Further, Love noted that she, Royer, and Holmes


would be explaining to all the conspirators "how to handle current contracts," i.e., how to disrupt and/or

destroy ADM's contractual relationships with its top customers so that those customers would take their

business to the Defendant Employees' company. Below is the e-mail in full:

From:'Jennifer Love. <Jlove@~ffectd,1\it·~l.90111>

Sent: Friday, Augu~t 17, 201810:19 AM

To: ShMnon RlchMd~on; Paige Leopold; Robert Royer

Subject: List of Jccounts

All

here is the spreadsheet of accounts. The ones I listed and gave you are within the top 40 accoun ts so these are top priority, but all other are important as well. The accounts under top 40 will need to be contacted as well and addressed. Robert and I will be working with Jason on explanations and how to handle current contracts.

Be working on your list and plan for next week. We wil be reviewing this on Monday so be prepared to walk through your week with me on appointments you were able to set or how you plan on contacting everyone and going down the list.

Thank you,

Jennifer Love Vice President of Sales Affoct~lg lt.11Mcdla.com

2

38. Thankfully for ADM, when sending the e-mail, Defendant Love used an incorrect e-mail

address for Royer, and the message was delivered to Darla Walker, Advertising Director for MRM. Three

days later, all Defendant Employees would leave ADM.

E. The Defendant Employees Uniformly Resign To Begin Their Competing Venture.

39. On the afternoon of Monday, August 20-three days after Defendant Love sent her

customer theft e-mail-all Defendant Employees tendered identical form resignations. Specifically, each

employee e-mailed Jennifer Bilbrey, HR officer, a stock form letter announcing they were leaving the

company effective immediately. Below is an example from Defendant Bennett's letter, which is

substantively identical to all others:

2 A true and correct copy of this e-mail is attached as Exhibit 1 to the Petition.


- -NANCY BENNETT

Doi• f /m/..J.{)/ r Jom lor B/loroy M. Robert, Modlo m E. Mo!hvtn st. Longview, TX 75601

Dear Jonnltor~

Efroc llvo Avgusl 20. 2018 l havv rt1>!Qnod my ~Hon w11h Arrac1 O~lct Modla. LLC. o

dtsrogordod entity o f VAPCO. tnc. ond otnllo1• or M. Robllfts Mddla.

AJ hai boon !no policy of 1htt corporation for K>MO tin, ,. now, ploaso IO(IN(lrd o c hlK:k

l qyldctlno lho lo:,or ot.

• Rom<>nlng Pro t>aonco

• Or 80 hour.; (two wooksJ PTO to lho oddro" (,rod obovo.

3

40. This exodus gutted ADM, leaving the company with only two employees, effectively

shuttering ADM.

F. ADM Learns The Defendant Employees Have Stolen Company Trade Secrets.

41 . If it had not already been made clear by the Love e-mail, immediately after the Defendant

Employees' departure, ADM understood this was no mere exit. Rather, it was a full-scale heist.

Specifically, upon their departure, the Defendant Employees took and, on information and belief, are

actively continuing to use, ADM's proprietary software system AgencyQue, as well as ADM's personal

property in the form of various business-critical software applications.

42. In the days after the Defendant Employees' resignation, ADM accessed AgencyQue via

Kelly Benson's credentials. Ms. Benson is one of the two-remaining company employees and her

AgencyQue access codes remained active. Upon logging in, ADM was shocked to discover that its web

based AgencyQue software had been migrated to the website of the Defendant Employees' new company,

3 True and correct copies of the Defendant Employees' resignation letters are attached as Exhibit 2 to the Petition.


ThriveFuel. The below screenshot, taken by ADM in the days following the Defendant Employees'

resignation, makes this undeniably clear:

•.. ~:' ----····-- --

--··---· -···- _____ , ·-··--·--·

4

43. It gets worse. Along with the active use of AgencyQue, the Defendant Employees have

failed to return a variety of the company's access codes to various software programs and applications that

are necessary for continued operations and client service. These 'Digital Keys' include, but are not limited

to:

1) Passwords to ADM Google Mail accounts;

2) ADM client domain names;

3) Access credentials for software applications used by ADMS;

4) Payroll and business software login information; and

5) Back-end login information for client websites managed by ADM.

44. When ADM asked for its own materials back, the Defendant Employees, in so many

words, told ADM to 'pound sand.' Stated another way, the Defendant Employees-not satisfied with having

robbed Plaintiffs' house blind-refuse to return the keys to the house.

4 A true and correct copy of the screenshot taken demonstrating this image is attached as Exhibit 3 to the Petition.

5 E.g., supra at ,r 30.


G. Defendants Are Actively Undermining ADM's Contractual Relations.

45. Perhaps unsurprisingly, with ADM's employees, trade secrets, and Digital Keys in tow, the

Defendants apparently found it easy to set up shop. Specifically, within a day of resigning, Defendants new

company, ThriveFuel, had a fully functioning website that made it clear to all comers that ADM was 'out'

and ThriveFuel was 'in':

FORMER ADM TEAM LAUNCHES THRIVEFUEU

1,· 1i

Aug 22, 2018

Employees of the torm.:r Affoct Olg,rnl ME:Cf1a came too1ether Monday and launched Tt1rlveFueJ. a new full

scr;ic0 advem~ing agency spccl2l12in9 in dl91t::il markm1ng and promotion.

Tl11s form~t1on lmm~d1~tely positions Th;JvoFucl as the premier dlgi1al mr,r~ellng f1m1 and advertising ag~ncy

In the region and frees It from resmcrlom: associated wit h the newspaper Industry. As i."lnE' of the largest

advertl$ln<J agenc,er. In tile Cro~sroads. ThnveFuel has ln,house speclnllst& unique 10 all Jreas of digital

markc1ln9.

6

46. Indeed, rather than shy away from their ADM roots, Defendants practically advertised

them. But this conduct was not confined to mere digital puffery. ADM has learned that Defendants have

been actively contacting current ADM clients and customers-with existing ADM contracts-for the

explicit purpose of disrupting (i.e., ending) those business relationships. Specifically, the ThriveFuel

webpage contains a "FAQ" section, which makes clear that, according to Defendants, ADM's customers

are now ThriveFuel's customers:

Any services our team performs tor you beginning August 21st will be bil led to you by Thrive Fuel according to

our team's usual and customary procedures, with which everyone is accustomed. Just make sure you reach

6 http://www. thrivefuel .com/2018/08/22/former-adm-tea m-forms-thrivefuel/

7 http://www. thrivefuel. com/2018/08/22/frequently-asked-q uestions/


7

47. As if that weren't enough, Defendants are actively preventing ADM from servicing its

current customers. Specifically, on August 23, 2018, ADM was contacted by a large client who had just

received a call from ThriveFuel. ADM has an existing business relationship with the client, hosting and

servicing its website. According to the client, ThriveFuel stated that if the client did not dump ADM and sign

a new contract with ThriveFuel, the client's website could go down "in the next couple of days." To make

matters worse, Defendants have stolen, and refuse to return to ADM, the very back-end website access

codes that ADM requires to ensure the client's website continues to operate smoothly. This is not fair

competition. It is, more accurately, the type of 'protection' services offered by Hollywood-movie mobsters.

H. Defendants Force ADM to Litigate to Protect Its Rights.

48. Despite all of this misconduct, Plaintiffs did not immediately rush to the courthouse.

Rather, on August 21, 2018, Plaintiffs sent cease and desist letters to each named Defendant in a good

faith attempt to engage in resolution-based dialogue. These efforts were unsuccessful.

I. ADM Continues To Suffer Irreparable Harm.

49. With each passing day, Plaintiffs suffer continued harm in the form of lost customers, lost

revenues, and loss of goodwill from current and/or prospective customers. Additionally, Defendants are

currently and actively using Plaintiffs' confidential information, trade secrets, and personal property as a

launching pad for their new business. This course of conduct must be stopped now. Defendants cannot

continue to form and grow their company on a foundation of wrongdoing and at the direct expense of ADM.

VI. CAUSES OF ACTION

Count I - Trade Secret Misappropriation (TUTSA): All Defendants

50. Plaintiffs reallege and incorporate by reference the preceding paragraphs of this Petition

as if fully set forth herein.


51. As more fully described above, Plaintiffs developed and own trade secrets including ,but

not limited to, information stored in the AgencyQue web-based software. Plaintiffs made a reasonable

effort to protect information stored in the AgencyQue software by, among other things, keeping AgencyQue

stored on a restricted cloud-based server whereby access was limited to employees. The software code

comprising AgencyQue and the information stored in AgencyQue is not generally known to the public or

readily ascertainable. On information and belief, Defendants have also misappropriated ADM's other

internally-developed software platforms, including Jewelbox, AXL, and Trend.

52. Defendants misappropriated Plaintiffs' trade secrets and confidential information by

disclosing and/or using those secrets and that information without Plaintiffs' consent. Additionally,

Defendants procured Plaintiffs' trade secret(s) and confidential information via improper means. As

described in more detail above, the Defendant Employees-having left their employment with ADM-have

wrongfully accessed and continue to use Plaintiffs' AgencyQue software as part of their current venture,

Defendant ThriveFuel.

53. Stating further, Plaintiffs' developed and maintained additional trade secrets and

confidential information including, but not limited to, customer lists. As described above, as part of their

scheme to jointly exit ADM's employment, Defendants shared amongst each other and, on information and

belief, took with them, an ADM customer list-which constitutes a protectable trade secret under Texas

law.

54. Defendants' misappropriation of Plaintiffs' trade secrets and confidential information

caused actual injury to the Plaintiffs by, among other things, devaluing the trade secrets-at-issue, unjustly

enriching themselves, and resulting in lost profits to Plaintiffs.


55. Additionally, because Defendants' actions in misappropriating Plaintiffs' trade secrets and

confidential information were willful and malicious, Plaintiffs are entitled to exemplary damages. Tex. Civ.

Prac. & Rem. Code§ 134A.004(b).

56. Plaintiffs are also entitled to their reasonable and necessary attorneys' fees in prosecuting

this action. Tex. Civ. Prac. & Rem. Code §134A.005.

herein.

Count 11- Violation of Texas Harmful Access by Computer Act: All Defendants (Tex. Pen. Code§ 33.02 et seq.)

57. Plaintiffs hereby allege and incorporate the preceding paragraphs as if fully set forth

58. The Defendant Employees knowingly and willfully accessed ADM's computers and/or

computer systems to obtain information for use at ThriveFuel. As discussed in more detail above, the

Defendant Employees continued to access and use ADM's AgentQue web-based software system for their

own benefit after resigning their employment at ADM. Additionally, as officers, agents, and employees of

ThriveFuel, Defendants continue to access AgentQue for their own benefit. Additionally, as discussed

above, the Employee Defendants downloaded and transferred information and data belonging to ADM

without ADM's consent, including, but not limited to, ADM's customer list. On information and belief,

Defendants have also engaged in the same conduct with respect to ADM's other software programs:

Jewelbox, AXL, and Trend.

59. Plaintiffs have been damaged as a direct and proximate result of the access of its

computers by the Defendants, including from the loss of current and future transactions.

60. Plaintiffs are therefore entitled to actual damages, as well as costs of court and reasonable

and necessary attorneys' fees. Tex. Civ. Prac. & Rem. Code§ 143.002.

Count Ill - Theft Liability Act (Tex. Pen. Code§ 31.03): Defendant Employees




62. As more fully described above, Plaintiffs owned and had possessory right to a variety of

software programs that constitute Plaintiffs' personal property. These software programs included: (i)

Adobe, (ii) JewelBox, (iii) AXL, (iv) Trend, (v) Marketplace, and (vi) AgentQue. Additionally, Plaintiffs

owned and had possessory right to a variety of Digital Keys-i.e. , access codes to this software as well as

various web-based applications that were developed for Plaintiffs' explicit use in servicing its clients.

63. As more fully described above, the Defendant Employees wrongfully appropriated

Plaintiffs' personal property in violation of Texas Penal Code Section 31.03.

64. The Defendant Employees' unlawful appropriation was made with the intent to deprive

Plaintiffs of the above-described property.

65. Defendant Employees' wrongful conduct has caused Plaintiffs' injury, including, but not

limited to, the loss of the use of the converted property and loss of profits from use of the property.

66. Upon proof of actual damages, Plaintiffs are entitled to additional statutory damages of

$1,000 from the Defendant Employees under Tex. Civ. Prac. & Rem. Code§ 134.005(a)(1).

67. Additionally, because the Defendant Employees acted with malice, Plaintiffs are entitled to

exemplary damages.

68. Plaintiffs are also entitled to the recovery of costs and their reasonable and necessary

attorneys' fees. Tex. Civ. Prac. & Rem. Code.§ 134.0S(b).

Count IV - Conversion: Defendant Employees




70. As more fully described above, Plaintiffs owned and had possessory right to a variety of

software programs that constitute Plaintiffs' personal property. These software programs included: (i)

Adobe, (ii) Jewe1Box, (iii) AXL, (iv) Trend, and (v) Marketplace. Additionally, Plaintiffs owned and had

possessory right to a variety of Digital Keys-i.e., access codes to this software, as well as various web

based applications that were developed for Plaintiffs' explicit use in servicing its clients.

71. As more fully described above, the Defendant Employees have wrongfully exercised

dominion and/or control over the above-described property by unlawfully using it in their new venture,

ThriveFuel. Plaintiffs have requested that the Defendant Employees cease all use of the above property

and return any and all software and/or access codes. The Defendants have refused. Defendant

Employees' acts constitute a clear repudiation of Plaintiffs' rights in the property.

72. The above-described conduct of the Defendant Employees has damaged Plaintiff,

including, but not limited to, the loss of use of the converted property and loss of profits from the converted

property. Plaintiff also seeks immediate return of the above property.

Count V - Tortious Interference With Existing and Prospective Contracts: All Defendants

73. Plaintiffs hereby allege and incorporate the preceding paragraphs of this Petition as if fully

set forth herein.

74. Plaintiff ADM has valid and existing contracts for services various clients.

75. Defendants knew or had reason to know of ADM's contracts because the Defendant

Employees were former ADM employees who, themselves, performed services related to the contract for

ADM.

76. Defendants willfully and intentionally interfered with at least one contract by-as more fully

described above-failing to return back-end access codes belonging to ADM that would allow ADM to

continue to service that client's website under the terms of the services contract. Additionally , Defendants


willfully and intentionally interfered with the contract by contacting the client and threatening them with

'deactivation' of their website if they did not enter into a contract with ThriveFuel for marketing services

currently provided by ADM. In addition, or in the _alternative, Defendants' actions constitute intentional

interference with ADM's performance of its contract.

77. Defendants' interference proximately caused injury to Plaintiffs by preventing and/or

interfering with ADM's continued ability to service the client effectively under the terms of the contract.

Additionally, Defendants' conduct harmed ADM's goodwill.

78. In addition, on information and belief, Defendants have willfully and intentionally interfered

with various other contracts which ADM has with persons and business entities, by engaging in the same

and/or similar conduct described herein. Such conduct has proximately caused ADM to lose existing and

future business, as well as its goodwill-which has caused it incalculable damage in the past and in the

future.

79. Plaintiffs are entitled to exemplary damages because Defendants' actions were

undertaken knowingly, intentionally, and with wanton, malicious, and callous disregard of ADM's rights.

Tex. Civ. Prac. & Rem. Code§ 41.003(a).

Count VI - Conspiracy: Defendant Employees

80. Plaintiffs hereby allege .and incorporate the preceding paragraphs as if fully set forth

herein.

81 . As more fully described above, the Defendant Employees, in combination and concert with

each other, conspired and agreed to engage in numerous actions, the object of which was to accomplish

an unlawful purpose: (i) to misappropriate Plaintiffs' trade secrets, (ii) to convert Plaintiffs' personal property

and goodwill and to use those assets as their own, and (iii) to interfere with and otherwise illegally damage

Plaintiffs' existing and future contractual relations and goodwill.


82. As more fully described above, the Defendant Employees acted with the intent to harm

Plaintiffs.

83. As more fully described above, the Defendant Employees committed numerous unlawful

acts in furtherance of accomplishing their conspiracy.

84. The Defendant Employees' conspiracy proximately caused injury to Plaintiffs, insofar as

their unlawful agreement did, in fact, lead Defendant Employees to misappropriate Plaintiffs' trade secrets,

convert Plaintiffs' personal property and goodwill, and interfere with Plaintiffs' contractual relations and

goodwill.

Count VII - Breach of Fiduciary Duty: Defendant Employees


herein.

86. As ADM officers and employees with access to and control over ADM confidential

information, the Defendant Employees owed fiduciary duties to ADM. These duties included, but were not

limited to, the duty to act in good faith, the duty of fair dealing, and the duty of full disclosure. More

particularly, the Defendant Employees owed a duty of loyalty not to transmit ADM's confidential information

to other parties for personal gain. The Defendant Employees-in particular but not limited to ADM's former

officers Holmes, Love, and Easton-also owed ADM a fiduciary duty not to compete with ADM while they

were employed by ADM.

87. Before departing ADM, the Defendant Employees transmitted ADM's trade secrets and

confidential information, including, but not limited to, customer and client lists as well as, on information and

belief, various software applications and access codes to same, in connection with their departure. The

Defendant Employees also plotted and planned their departure from ADM to maximize the business they

could take from ADM to ThriveFuel. Further, Holmes, Easton, and Love breached their duties to ADM as


officers of the company by soliciting the departure of other ADM employees while still employed with ADM.

Finally, on information and belief, the Defendant Employees contacted ADM customers before they

departed from ADM and advised they were leaving ADM to start up ThriveFuel, and solicited existing and

future business.

88. By engaging in these actions and those referenced in more detail above, the Defendant

Employees breached their fiduciary duties to ADM.

89. The Defendant Employees profited from their breach by, at minimum, generating revenues

for ThriveFuel by way of the above-described breaches, and by continuing to receive a salary and benefits

from ADM while they were effectively working-at least in part-for ThriveFuel.

90. Additionally, as a proximate cause of the Defendant Employees' breaches, ADM suffered

damages in the form of loss of business, lost profits, harm to its goodwill, and potential exposure to liability

based on the Defendant Employees' removal of access to certain software systems and website tools that

would allow ADM to service its customers under currently-existing contracts.

91. Plaintiffs are, therefore, entitled to actual damages plus a disgorgement of all benefits and

profits derived by the Defendant Employees from their breaches of fiduciary duty to ADM.

92. The Defendant Employees' conduct was committed intentionally, knowingly, and with

wanton, malicious, and callous disregard of ADM's legitimate rights, entitling ADM to an award of

exemplary damages.

herein.

Count VIII-Application for Temporary Restraining Order and Temporary and Permanent Injunctions: All Defendants



94. Plaintiffs seek a temporary restraining order, as well as temporary and permanent

injunctive relief, under Texas Rules of Civil Procedure 680-681.

95. As demonstrated by this Petition and well as the accompanying Verification, Plaintiffs have

a probable right of recovery in this action. In addition, Plaintiff ADM is suffering, and will continue to suffer,

immediate and irreparable harm to its business as a result of Defendants' unlawful conduct because they

have used and are using ADM's confidential and proprietary information and trade secrets, as well as

ADM's personal property, to gain an unfair advantage in the marketplace with existing and future business

of ADM. Further, the total damages caused by Defendants' unlawful conduct is not readily quantifiable or

measurable and will likely be unrecoverable if Defendants are permitted to continue their unlawful conduct

before a hearing on this matter.

96. The threatened damage to ADM occasioned by Defendants unlawful conduct outweighs

any potential damages to Defendants of temporary injunctive relief. Defendants have engaged in

numerous unlawful activities that stand in direct violation that have given them a distinct commercial

advantage to ADM's detriment. Defendants' legitimate business activities will not be affected by the entry

of a temporary restraining order or temporary injunction because, quite simply, Defendants have no

legitimate business activities. Indeed, Defendant ThriveFuel was founded only days ago and-as

demonstrated throughout this Verified Petition-is founded on the proprietary confidential information,

custo'mers, and personal property of ADM. And to the extent that Defendants do wish to pursue legitimate

business activities on behalf of ThriveFuel, the terms of the proposed temporary restraining order and

temporary injunction demand no more than Defendants cease their unlawful activities and act within the

confines of state law.

97. The requested injunctive relief is not adverse to the public interest. The public has an

interest in a competitive marketplace that is fostered by innovation and business development that is fairly


obtained. Further, the public has an interest in individuals living up to and abiding by the rights and

obligations set forth in longstanding Texas business law, as well as upholding their various fiduciary duties.

Further, as demonstrated herein, Defendants are in possession of Plaintiffs' confidential information and

trade secrets and, upon information and belief, are actively using it-as well as Plaintiffs' unlawfully

converted personal property-to unfairly compete with ADM by utilizing this material in furtherance of

ThriveFuel, a direct competitor. Consequently, Defendants have engaged in anti-competitive behavior to

Plaintiffs' and, consequently, the public's detriment.

98. Plaintiffs are prepared to post a bond in the amount the Court considers appropriate.

99. Plaintiffs request that the Court grant it a temporary restraining order and, thereafter, a

temporary injunction pending a trial on the merits to prevent Defendants, and any and all persons acting in

concert or participation with them or acting on their behalf or at their direction from:

(i) Working, advising, or otherwise providing any benefit to any individual or business entity which currently has an open contract for services with ADM or to whom ADM is otherwise providing services, or to whom ADM has provided any services in the previous twenty-four (24) months;

(ii) Soliciting, contacting, or communicating, directly or indirectly, with any customer or prospective customer, who or which any of the Defendant Employees solicited, contacted, communicated with, or was assigned to at any time during their employment or association with ADM, or who was a customer or prospective customer of ADM in the previous twenty-four (24) months;

(iii) Using, disclosing, selling, leasing, or otherwise transferring ADM's confidential information or trade secrets for Defendants' own benefit, or for any other purpose or in any other way that harms Plaintiffs or diminishes the value of Plaintiffs' trade secrets and other confidential and proprietary information;

(iv) Using, accessing, disclosing, or transferring any information, knowledge, software, or data of or belonging to ADM that Defendants received, developed, or had access to by virtue of the Defendant Employees' employment or association with Plaintiffs and/or ADM and that constitute ADM's trade secrets and other confidential and proprietary information, business strategies and plans, customer lists, or any other compilations of information which are owned by Plaintiffs and/or ADM and which are regularly used in the operation of ADM's business to give it an opportunity to obtain an advantage over competitors who do not know or use it;

(v) Using, accessing, or otherwise deriving any benefit or service from any software program or application, e-mail client, webmail service, web-based application, digital application, subscription


application, subscription service, and/or hardware device that is the property of ADM and/or Plaintiffs that the Defendant Employees used, accessed, or otherwise derived any benefit or service from by way of their employment with ADM;

(vi) Destroying, concealing, or disposing of any documents, paper or electronic files, or other materials obtained from or belonging to ADM and/or Plaintiffs or otherwise containing or referring to ADM and/or Plaintiffs' trade secrets or other confidential or proprietary information or information thereof residing, in transit or storage in Defendants' computers, hard drives, networks, or servers;

(vii) Altering, deleting, removing or writing over in any respect any documents, computer files (including, but not limited to, emails, text messages, hard drives, flash drives, disc drives, zip drives), data, electronic information, drafts or other things relating in any way to ADM and/or Plaintiffs, including information regarding ADM and/or Plaintiffs' clients, property, or business information, until such time as those materials may be turned over in discovery or until further order of the Court; and

(viii) Removing any evidence from the jurisdiction of this Court.

Relief Requested As To All Counts

WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray that this Court enter judgment for them

and against the Defendant Steve Belcher as follows:

(a) Issue a temporary restraining order and an order to show cause why the temporary restraining order should not be a temporary injunction pending a trial on the merits of this case;

(b) Enter a temporary and permanent injunction against Defendants, enjoining them from working, advising, or otherwise providing any benefit to any individual or business entity to which ADM is currently providing services or to whom ADM has provided any services in the previous twenty-four (24) months;

(c) Enter a temporary and permanent injunction against them, enjoining them from soliciting, contacting, or communicating, directly or indirectly, with any customer or prospective customer, who or which they solicited, contacted, communicated with, or were assigned at any time during their employment or association with ADM, for the purpose of offering, marketing, or selling any product or service, or the equivalent of any product or service, developed, produced, distributed, marketed, or sold by ADM;

(d) Enter a temporary and permanent injunction enjoining them from using, divulging, selling, licensing, transferring, or relying upon Plaintiffs' trade secrets or confidential information and other compilations of information that they may have created or used and that are based in whole or in part on Plaintiffs' confidential information or trade secrets;


(e) Order them to provide to Plaintiffs the originals and all copies of any and all of Plaintiffs' software programs, documents, information, passwords, login credentials, access codes, hardware devices, and whether on paper or in computer memory, file, or external storage media;

(D Enter a judgment against Defendants on each count of this Petition respectively asserted against him;

(g) Award Plaintiffs actual, consequential, exemplary, and punitive damages;

(h) Award Plaintiffs attorneys' fees necessary for prosecuting this action;

(i) Award Plaintiffs pre- and post-judgment interest at the highest rate allowable by law;

0) Award Plaintiffs its costs of court; and

(k) Grant Plaintiffs all such further and additional relief to which it may be entitled.


Dated: August 24, 2018 RESPECTFULLY SUBMITTED,

By: Isl Stephen E. Fox Stephen E. Fox Texas Bar No. 07337260 [email protected] Jonathan E. Clark Texas Bar No. 24069515 [email protected]

SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 220 Ross Avenue, Suite 2400 Dallas, Texas 75201 Telephone: 469.391.7400 Facsimile: 469.391 .7401

By: Isl John Griffin, Jr. John Griffin, Jr. Texas Bar No. 08460300

MAREK, GRIFFIN & KNAUPP 203 N. Liberty Street Victoria, Texas 77901 Telephone: 361.573.5500 Facsimile: 361.573.5040

Attorneys for PLAINTIFFS


CERTIFICATE OF SERVICE

I certify that I am causing a true and correct copy of the foregoing to be sent by electronic mail delivery to counsel for Defendants

Isl Stephen E. Fox Stephen E. Fox


18-08-83181-a · a. adm's structure and business operations. 24. plaintiff adm is a...

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