Complaint,Petition: 2000 INDUSTRIES GROUP, INC. vs. HARLAN DEBOERet al

On August 02, 2019 a Complaint,Petition was filed involving a dispute between 2000 Industries Group, Inc., and Deboer, Harlan, Doboer Services Group, Llc, for OTHER CONTRACT in the District Court of Dallas County.

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FILED
DALLAS COUNTY
8/2/2019 4:43 PM
FELICIA PITRE
DISTRICT CLERK

2 CITS ESERVE
Danitra Wilkerson
CAUSE NO. DC-1 9-1 1045

2000 INDUSTRIES GROUP, INC., IN THE 134thJUDICIAL
a Texas corporation,
Plaintifﬁ

V.
v. WWWWWWWWWWW
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DISTRICT COURT OF

HARLAN DEBOER, an Individual, and
DEBOER SERVICES GROUP, LLC,
a Texas limited liability company,
Defendants. DALLAS COUNTY, TEXAS

PLAINTIFF’S ORIGINAL PETITION

COMES NOW, 2000 Industries Group, Inc., a Texas corporation and ﬁles this Original

Petition against Defendants Harlan DeBoer, an Individual and DeBoer Services Group, LLC, a

Texas limited liability company, and in support thereof, would show the Court the following:

DISCOVERY CONTROL PLAN
1. Discovery is intended to be conducted under Level 3 pursuant t0 Rule 190.4 of the Texas

OfCivil Procedure.
Rules ofCivil

II.

PARTIES & SERVICE OF PROCESS
2. Plaintiff 2000 Industries Group, Inc. (“2000 Industries” or the “Company”) is a Texas

corporation formed in 2010, with its principal place 0f
of business at 1313 W. College Avenue,

Carrollton, Dallas County, Texas 75006.

3. Defendant Harlan DeBoer (“M”) is an individual residing in the State 0f
of Texas.

DeBoer may be served through his last known counsel of record the Cox Law Firm at 1300

PLAINTIFF’S ORIGINAL PETITION Page 1 of 21
0f
Norwood Drive, Suite 100, Bedford, Texas 76022 0r at his residence at 911 Oak Street Wylie,

Texas 75098.

4. Defendant DeBoer Services Group, LLC (“D_SG”), is a Texas limited liability company

formed on April 24, 2018, with its principal place 0f business at 10503 Forest Ln Suite #154,

Dallas, Texas 75243. DSG may be served through its last known attorney 0f record the COX Law

Firm at 1300 Norwood Drive, Suite 100, Bedford, Texas 76022 or by and through its registered

agent Hayden Slack at 4021 Benbrook Highway, Fort Worth, Texas 761 16. For the purposes 0f

this Petition, “Defendants” means DeBoer and DSG.

III.

RULE 47 DISCLOSURE
5. This is an action by Plaintiff against Defendants for breach of contract, breach of ﬁduciary

duty, promissory fraud, theft and/or misappropriation 0f trade secrets, declaratory, and, if

necessary, injunctive relief concerning the misappropriation by Defendants of Plaintiff” s principal

intangible assets: intellectual property in the form of customer lists (including contact

information), internal pricing, vendor relationships, and the manufacturing of proprietary products

(Plaintiff s “Intellectual Property”).

6. The subject matter in controversy and the damages sought are Within the jurisdictional

limits of this Court. Plaintiff seek monetary relief over $200,000 but not more than $1,000,000,

and non-monetary relief.

IV.
JURISDICTION & VENUE
7. This Court has jurisdiction over the subject matter and the persons and entities named

herein because all Defendants subjected themselves to the State of Texas by residing or doing

PLAINTIFF’S ORIGINAL PETITION Page 2 of 21
business in Texas and by purposefully contracting with a Texas entity. The amount in controversy

is Within the jurisdictional limits 0f this Court.

8. Venue in Dallas County, Texas is appropriate pursuant to TeX. CiV. Prac. & Rem. Code §§
15.002(a)(1) because this action involves tortious, harmful, and damaging conduct which is a

substantial part 0f the events 0r omissions giving rise to Plaintiff s claims Which were committed

in Dallas County.

V.
FACTS SUPPORTING CLAIMS FOR RELIEF

A. Factual Background

9. 2000 Industries, Inc. is a Carrollton, Texas—based manufacturer and distributor 0f

foundation repair products. These products include (without limitation) concrete and steel blocks,

brackets, pipe, and certiﬁed helical pier products, and lifting and leveling tools and supports.

Founded by J.D. and Kathy Grommesh, Plaintiff s success lies in the Grommesh’s and their staff” s

knowledge and experience in the foundation supply industry. Texas is a large and growing market,

and Plaintiff has a considerable number of contacts, including both customers and

suppliers/vendors, in the foundation repair industry. Customer service, reputation, and its industry

knowledge are some 0f the keys to Plaintiff’s success.

10. Defendant Harlan DeBoer is a former employee of Plaintiff and brother—in—law of Kathy

Grommesh. DeBoer began his employment with Plaintiff on March 4, 201 1. Prior to his

employment With Plaintiff, DeBoer had only worked in the restaurant industry; DeBoer had n0

professional experience in the construction industry generally, foundation repair, or the

manufacturing 0r distribution of foundation repair supplies.

11. DeBoer’s familial, social, and/or personal relationship, as well as his employment position,

put him in a unique position 0f trust and reliance by Plaintiff. Additionally, upon information and

PLAINTIFF’S ORIGINAL PETITION Page 3 of 21
belief, DeBoer has held himself out t0 others as either the President or a Vice President ofPlaintiff.

These circumstances create both a formal and informal ﬁduciary duty by DeBoer in favor 0f

Plaintiff.

12. During his six-year employment with Plaintiff, DeBoer was provided more and more

responsibility. In April of 2014, DeBoer was tasked With rolling out a new employee handbook

(effective March 1, 2016), certain acknowledgements of conﬁdential and proprietary information

(and specialized training), and employment agreements containing restrictive covenants for

certain employees. DeBoer was responsible for securing signatures 0n these documents for the

respective employees Who were to execute them. DeBoer was also required to execute certain

documentation as part of their continuing employment, but apparently refused to do so.

13. Among others, DeBoer was t0 execute the following documents:

a. Employment and Conﬁdentiality Agreement effective April 18, 2016 (unsigned);1

b. Deduction Authorization dated April 18, 2016 (unsigned);2

c. Employee Handbook Acknowledgment and Receipt dated April 18, 2016

(signed);3 and

d. Acknowledgment 0f Receipt 0f Conﬁdential Information dated April 18, 2016

(signed).4

14. DeBoer did not execute the Employment and Conﬁdentiality Agreement or the Deduction

Authorization. Upon information and belief, this non-execution was an intentional attempt t0

1
The Employment and Conﬁdentiality Agreement effective April 18, 2016 (the “Employment Agreement”) is
attached hereto and incorporated by reference as Exhibit A.
2
The Deduction Authorization dated April 18, 2016 is attached hereto and incorporated by reference as Exhibit B.
3
The Employee Handbook Acknowledgment and Receipt dated April 18, 2016 is attached hereto and incorporated by
reference as Exhibit C.
4
The Acknowledgment 0f Receipt of Conﬁdential Information dated April 18, 2016 is attached hereto and
incorporated by reference as Exhibit D.

PLAINTIFF’S ORIGINAL PETITION Page 4 of 21
circumvent the non-solicitation and conﬁdentiality restrictions of the Employment and

Conﬁdentiality Agreement.

15. DeBoer did, however, execute the Employee Handbook Acknowledgment and Receipt and

the Acknowledgment 0f Receipt 0f Conﬁdential Information.

16. DeBoer also acknowledged receipt of Plaintiff’s Conﬁdential Information. His

acknowledgement included the following statement:

As set forth in the Employment Agreement between 2000 Industries Group, Inc.

(the “Employer”) and Harlan DeBoer (the “Employee”) and consistent With the
Employer’s policies and procedures, Employee hereby acknowledges receipt 0f
access to Employer’s business and ﬁnancial records and other materials and
information from Employer containing certain portions ofEmployer’s Conﬁdential
information as deﬁned in the Employment Agreement between Employer and
Employee effective as 0f 18 day 0f April 2016, and that Employee has been
provided training on Employer’s systems.

17. This Acknowledgement was an exhibit t0 the Employment Agreement, and speciﬁcally

references the document as being effective. Additionally, the Acknowledgement contains

references t0 DeBoer’s receipt of access to and information concerning Conﬁdential Information,

and t0 specialized training on Plaintiff s systems.

18. The Employment Agreement further provides, in pertinent part:

9. Intellectual Property. Employee acknowledges that all patents, copyrights,
trademarks, trade secrets, know-how, and other proprietary property of Employer
(the "Intellectual Property") is the property of Employer and Employee has no
rights t0 such property, despite Employee's employment relationship With
Employer.

a. Assignment of Inventions. During the course of Employee's employment
with Employer, Employee will promptly disclose t0 Employer all inventions,

discoveries, improvements, developments, and innovations (the "Inventions")
whether patentable or not, conceived in whole or in part by Employee during
business hours 0r thereafter, which (a) result from any work performed on behalf
of Employer or (b) result from the use 0f Employer's intellectual or other property,

time, material, employees, 0r consultants. Employee agrees t0 assign and hereby

PLAINTIFF’S ORIGINAL PETITION Page 5 of 21
assigns to Employer, its successors and assigns, all right, title, and interest t0 any
such Inventions, including the right t0 sue for past infringement, and will execute,
acknowledge, and deliver such documents as are necessary to obtain patents in any
country and to assist, at Employer's expense, in the defense and prosecution of any
such patents during the term 0f Employee's business relationship with Employer or
thereafter.

***

c. Electronic Files. Employee acknowledges and agrees that any electronic
by Employee relating to
ﬁles created the business of Employer during Employee's

employment with Employer belongs to and is owned by Employer, even if such
ﬁles are created 0n Employee's own personal computer, smart phone, camera, 0r
PDA. As used herein, "Electronic File" is deﬁned t0 include emails, image ﬁles,

electronic documents such as Word ﬁles and other computer media, contact
information in electronic format, software, and the like. T0 the extent not already

assigned by this Section 9 0fthis Agreement, Employee hereby assigns t0 Employer
all 0f Employee's rights in the Electronic Files, including copyrights.

10. Conﬁdential Information. Employer promises that it will provide Employee
with access t0 certain of its conﬁdential data and trade secrets, Which may include
but is not limited to Employer's proprietary information technology products,
processes and techniques, specially designed equipment, software and tools
including uses thereof; conﬁdential information of Employer's customers; client
information such as ordering habits, billing rates, buying preferences, and short-
term and long-term needs; company sales reports and analyses, marketing plans,
research and development plans, pricing strategies and business methods; ﬁnancial
information that is not publicly available; specially negotiated terms With vendors;
contractor relationships; evaluations of other employees and prospects as W611 as

employee compensation; hiring needs and practices; and other conﬁdential
information (collectively, "Conﬁdential Information"), Which Employee agrees is

Employer's conﬁdential information and trade secrets, and Which Employee agrees
is necessary t0 be able t0 perform his 0r her job duties. Employee Will acknowledge
the initial receipt 0f such Conﬁdential Information
by signing the
Acknowledgement of Receipt of Conﬁdential Information, Which is attached hereto
as APPENDIX B. Employee acknowledges that such information is commercially
valuable to Employer, and is safeguarded by Employer as Employer's trade secrets.

11. Training. Employer will provide Employee With initial and on-going
specialized training, Which Employee agrees is necessary t0 be able t0 perform his
0r her job duties. Areas 0f training may include receiving specialized training 0n

PLAINTIFF’S ORIGINAL PETITION Page 6 of 21
Employer's software, ﬁnancial systems and recordkeeping, business methods,
internal systems, and use 0f Employer's proprietary equipment and tools (the
"Specialized Training"). During training, Employee Will have access t0 Employer's
Conﬁdential Information.

12. Employee's Acknowledgment. Employee understands and acknowledges that
Employer has expended substantial sums of money for product development,

advertising, public relations work, establishing good Will, and otherwise t0 develop
Employer's proprietary products and systems and that Employer will provide
Employee with training in Employer's methods of operation. In consideration 0fthe
valuable beneﬁts Employee will receive from Employer, including the Specialized
Training and access t0 the Conﬁdential Information, and as a condition 0f
Employee's employment 0r continued employment, Employee agrees as follows:

a. Non-Disclosure Agreement. Employee Will not, at any time during
his or her employment by Employer disclose, furnish, 0r make accessible t0

any person, ﬁrm, corporation, 0r other entity, any 0f Employer's
Conﬁdential Information. Employee agrees that all Conﬁdential
Information, and all physical embodiments thereof, are conﬁdential t0 and
will be and remain the sole and exclusive property 0f Employer, including
Conﬁdential Information that Employee developed pursuant to his or her
employment. Employee agrees that during his 0r her employment, all

Conﬁdential Information will be used only for Employer's business.
Employee Will not at any time after his 0r her employment With Employer
is terminated, for any reason, use, disclose, furnish, or make accessible t0

any person, ﬁrm, corporation, 0r other entity, any of Employer's
Conﬁdential Information. Further, Employee agrees not to accept a position
With another employer where it would be likely or inevitable that Employee
would make use of Employer's Conﬁdential Information, even if the

information is accessible to Employee only from memory, in Employee's
job function With the subsequent employer.

b. Non-Solicitation Agreement. Employee Will not, for a period 0f one

(1) year after termination 0f Employee's employment with Employer (the
"Restricted Period"), directly or indirectly:

i. induce any client for Whom Employee has had
responsibility, With whom Employee has had any contact, 0r a client
Whose identity Employee learned through employment With
Employer ("Employer Clients") t0 patronize any competitor 0f

PLAINTIFF’S ORIGINAL PETITION Page 7 of 21
Employer in the business 0f serving foundation repair companies,
and providing services related thereto;

ii. canvass, solicit, accept, or service any business from any

Employer Clients or potential client candidates 0f Employer for

Whom Employee has had responsibility, With Whom Employee has
had any contact, 0r a candidate Whose identity Employee learned
through employment With Employer ("Employer Candidates");

iii. request or advise any Employer Client or Employer
Candidate t0 Withdraw, curtail, 0r cancel their business with
Employer (Employer Clients and Employer Candidates include all

persons and organizations for whom any of the Applicable Ofﬁces
performs 0r has performed services in the course 0f its business
Within the 12 months preceding Employee's termination 0f
employment, regardless 0f Whether 0r not such clients 0r candidates

were previously customers 0f Employee 0r 0f others); 0r

iv. solicit, recruit, induce, advise, or encourage or attempt t0
solicit, recruit, induce, advise, 0r encourage any employee (either
full—time or temporary) 0f any of the Applicable Ofﬁces to leave the

employ of Employer 0r to work for or be employed by any company
that competes with Employer in the business 0f foundation repair
supplies, and providing services related thereto.

***

16. Wrongful Use 0f Employer's Name. After termination 0f Employee's
employment with Employer, Employee will not indicate on any stationery, business
card or advertising, solicitation, or other business materials that he or she is or was
formerly an employee of Employer or any division or subsidiary 0f Employer,
except in the bona ﬁde submission of resumes and the ﬁlling out of applications in
the course 0f seeking employment.

19. The Employment Agreement also contains standard severance, injunctive relief, and n0-

waiver clauses.

20. During his employment, DeBoer embezzled funds from Plaintiff, writing himself checks

in the amount 0fthousands of dollars. DeBoer eventually repaid those monies that were uncovered

as stolen, but it is unknown how much additional monies were embezzled.

PLAINTIFF’S ORIGINAL PETITION Page 8 of21
21. DeBoer’s performance declined in 2017, as demonstrated by his evaluations.5 DeBoer

received a subpar employment review on June 26, 2017. He refused t0 execute this performance

review.

22. DeBoer abruptly resigned, with n0 prior indication and Without providing the customary

tWO-Weeks’ notice, Via e-mail 0n August 31, 2017, effective immediately.6

23. In late 2017, almost immediately after his resignation, it became clear that DeBoer had

7
accepted employment with a former client and began providing services for that client.

Additionally, it became clear that DeBoer had begun using and disclosing Plaintiff” s Conﬁdential

Information to assist that client. Courts have permitted equitable tolling during breach.8

24. This subsequent, competitive employment was in direct Violation to the Employment

Agreement in multiple ways. First, it was in Violation of the restrictive covenants contained in

Paragraph 12(b). Second, it was in Violation of Paragraph 10 (restrictions 0n possession and use

0f Conﬁdential Information).

25. Subsequently, Plaintiff learned that DeBoer formed his own ﬁrm, Defendant, DeBoer

Services Group, LLC ("DSG”), in April of 2018. DeBoer Services Group is a distributor of

foundation repair supplies. Upon information and belief, DeBoer has retained certain Conﬁdential

Information, gained from the access provided by Plaintiff, his job experience, and the Specialized

Training, and contributed same to Defendant DSG.

5
See employment evaluations 0f H. Deboer, most recently dated June 26, 2017, attached hereto and incorporated by
reference as Exhibit E.
6
See e-mail from H. Deboer t0 JD Grommesh and Kathy Grommesh dated August 31, 2017, attached hereto and
incorporated by reference as Exhibit F.
7
The client’s name is being omitted for conﬁdentiality purposes.
8
“Under Texas law, covenants not compete can be equitably extended if the Violations of the covenant were
t0
‘continuous and persistent.”’ WeberAircraft, LLC. v. Krishnamurthy, 2013 WL
5288846, at *3 (E.D. Tex. Sept. 13,
2013) (citing Farmer v. Holley, 237 S.W.3d 758, 761 (TeX.App.-Waco 2007, review denied)).

PLAINTIFF’S ORIGINAL PETITION Page 9 of 21
26. DSG now competes directly with Plaintiff, using the Conﬁdential Information provided

by DeBoer, in Violation of DeBoer’s obligations not t0 use Plaintiff’s Conﬁdential Information

and DeBoer’s restrictions against soliciting business of Plaintiff’s.

27. DeBoer, through DSG, competes with and causes damage t0 Plaintiff by misappropriating

Plaintiff” s Conﬁdential Information by, inter alia:

a. Utilizing Plaintiff” s vendors/suppliers, including his knowledge ofthe pricing these

suppliers provide material to Plaintiff;

b. Utilizing Plaintiff’s business model, the combination, amount, and scope 0f

product and service offerings;

c. Utilizing Plaintiff” s pricing (and internal, break—even pricing) to underbid Plaintiff;

d. Utilizing Plaintiff” s customer list t0 patronize and market t0 Plaintiff” s customers;

e. Soliciting for hire Plaintiff” s employees; and

f. Utilizing Plaintiff’s name and DeBoer’s (both ﬁctitious and actual) former title in

his communications.

28. DeBoer, through DSG, has caused Plaintiff to lose normal business previously done With

customers, including (without limitation) G.L. Hunt, a Foundation & Concrete Repair Company.
The amount lost exceeds $100,000 and is growing consistently.

29. Plaintiff has sent several written demands presenting its claim as t0 the ownership 0f its

Conﬁdential Information and its damages to Defendants, through counsel. A11 have been met With

swift derision.

30. To be clear in Plaintiff” s allegations — n0 “miscommunications” are involved in the causes

of action against DeBoer, individually and by actions taken through DSG. Defendants took

decisive action, using knowledge 0f Plaintiff s Conﬁdential Information solely attributable t0 his

PLAINTIFF’S ORIGINAL PETITION Page 10 of 21
employment by Plaintiff, t0 take, use, and otherwise misappropriate proprietary and protected

trade secrets, conﬁdential information, and intellectual property belonging t0 Plaintiff. DSG, at

the very least, knew and beneﬁtted from same.

VI.
CAUSES OF ACTION

Count One: Trade Secret Misappropriation Under the Texas Uniform Trade Secret Act —
Plaintiff Against All Defendants

3 1. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

32. Plaintiff owns certain conﬁdential, proprietary, protected, and trade secret information

including (without limitation) Plaintiff” s Conﬁdential Information and other trade secrets and IP

rights, and any derivatives therefrom, which give it a competitive advantage and Which constitute

trade secrets protected by Texas law.

33. The trade secrets are valuable and required a large amount of time and joint effort 0n the

part of Plaintiff t0 develop.

34. Plaintiff has taken reasonable measures to keep the conﬁdential, proprietary, and trade

secret information substantially secret by inter alia (a) disclosing it only to those individuals and

employees who needed the information t0 perform their duties and services t0 Plaintiff; (b)

publishing an employee handbook requiring that all information be kept conﬁdential and that all

works and intellectual property created during employment be contributed to Plaintiff; (c) making

certain key individuals sign a written employment and conﬁdentiality agreement, in which they

agreed that the information would at all times be kept conﬁdential and acknowledging that the

information 0r work product created by them exclusively belongs to, is owned by, and/or is 0r has

been assigned t0 Plaintiff ;
and (d) the information derives independent economic value from not

being generally known t0, and not being easily ascertainable through proper means by Plaintiff s

PLAINTIFF’S ORIGINAL PETITION Page 11 of 21
competitors and/or customers in the industry, and others, who could obtain, and in some cases

have obtained, economic beneﬁt from use of the information.

35. Plaintiff’s conﬁdential, proprietary, and trade secret information (including, without

limitation, Plaintiff’s Conﬁdential Information) is not available for others t0 use through any

legitimate purpose Without Plaintiff” s consent.

36. Because ofhis trusted position as Plaintiff” s Manager of Product Development and familiar

relationship with one of the two principals 0f Plaintiff, DeBoer had a trusted, ﬁduciary relationship

with Plaintiff. As a former director-level employee, DeBoer actually had (and acknowledged he

had) access t0 all of Plaintiff’s Conﬁdential Information and all other proprietary systems and

information.

37. In Violation 0f the Texas Uniform Trade Secrets Act, Chapter 134A 0f the Texas Civil

Practice and Remedies Code, Defendants have misappropriated the trade secrets embodied in

Plaintiff’s conﬁdential, proprietary, and trade secret information by knowingly using and

misappropriating conﬁdential, proprietary and trade secret information belonging t0 Plaintiff in

breach 0f their respective agreements, conﬁdential relationships and ﬁduciary duties, by using it

for their own beneﬁt, by acquiring such information through improper means With others involved

in the conspiracy and, upon information and belief, by disclosing such information t0 their current

employer 0r potential competitors in the industry.

38. Defendants also fraudulently mispresented and promised that (a) any and all intellectual

property 0f Plaintiff including but not limited t0 all developments, documentation, 0r other

materials or creative works, and all work product shall be deemed a “Work Made for Hire” owned

by Plaintiff under the United States Copyright Act; and (b) all title in such work was transferred

and conveyed t0 Plaintiff. Defendant, as 0f and including the date ofhis resignation, did not intend

PLAINTIFF’S ORIGINAL PETITION Page 12 of 21
to honor those promises and made false representations concerning his job obligations (i.e. not

signing the agreements he was tasked With collecting signatures for), so that Plaintiff would be

unaware of his intention.

39. Defendants and others involved in the conspiracy to defraud have wrongfully

misappropriated and used Plaintiff’ s conﬁdential, proprietary, and trade secret information

Without Plaintiff’s authorization, have exercised dominion and over such information and have

refused and have continued t0 refuse t0 return such information to Plaintiff” s detriment and t0 the

unjust enrichment 0f themselves, and other potential co-conspirators.

40. Defendants’ misappropriation 0f Plaintiff’s Conﬁdential Information has been and

continues to be willful and malicious. Defendants knew that Plaintiff’s conﬁdential, proprietary

and trade secret information including (Without limitation) Plaintiff’s Conﬁdential Information,

and all derivatives therefrom, rightfully belonged to Plaintiff. Nevertheless, Defendants

misappropriated it for their own material gain.

41. As a direct and proximate result of Defendants’ actions, Plaintiff has suffered damages.

These damages include, without limitation, the loss 0f business and proﬁts to Plaintiff and loss 0f

continued business relations.

42. As a direct and proximate result 0f Defendants’ misappropriation of Plaintiff’s

Conﬁdential Information, Plaintiff has already suffered, and will continue t0 suffer substantial,

immediate, and irreparable harm for which there is n0 adequate remedy at law, including (Without

limitation) loss 0f goodwill; harm t0 reputation; and other injury and damages for Which there is

no adequate remedy at law, all 0f which may necessitate the imposition of injunctive relief against

Defendants, including (Without limitation) temporarily and permanently enjoining Defendants

from using, disseminating, 0r publishing Plaintiff’ s Conﬁdential Information.

PLAINTIFF’S ORIGINAL PETITION Page 13 of 21
43. Plaintiff will continue t0 suffer such injury until the misappropriation are preliminarily

and permanently enjoined.

44. As a direct and proximate result of Defendants’ misappropriation of Plaintiff’s

Conﬁdential Information, Plaintiff already has suffered and will continue t0 suffer additional

damages Which continue to accrue in the form 0f attorneys’ fees and costs related to this litigation

and lost business, lost proﬁts, royalties, and other direct and consequential damages in an amount

to be proven at trial.

Count Two: Breach 0f Contract— Plaintiff against Defendant DeBoer

45. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

46. The Employment Agreement is a valid and existing contract between Plaintiff and

Defendant DeBoer. Course 0f dealing, substantial performance, and equitable estoppel require a

ﬁnding that the Employment Agreement is valid and existing. Additionally, Defendant

acknowledged receipt 0f the conﬁdential information and specialized training, both of Which are

independent consideration for the restrictions on the use of Plaintiff’s Conﬁdential Information

and the restrictions against solicitation 0f Plaintiff s actual and potential clients and employees.

47. Defendant DeBoer breached the Employment Agreement by, inter alia, wrongfully taking,

using, and/or misappropriating Plaintiff s Conﬁdential Information for his own use, both on behalf

0f one 0r more former employers and by contributing, and then using and/or misappropriating

same t0 DSG.

48. Defendant has waived and is estopped from asserting any claim, defense, 0r argument that

the Employment Agreement is not a valid, binding, and enforceable contract based on the doctrine

0f partial and/or substantial performance.

PLAINTIFF’S ORIGINAL PETITION Page 14 of 21
49. Plaintiff has fully performed their obligations t0 perform all 0f the terms 0f the

Employment Agreement, including by, inter alia, providing DeBoer access t0 the Conﬁdential

Information, providing him Conﬁdential Information, and providing the training.

50. As a direct and proximate cause 0f Defendants’ actions, Plaintiff has suffered economic

losses, including lost proﬁts, loss of reputation, and incurring attorneys’ fees, costs, and expenses.

Count Three: Breach 0f Fiduciary Duty — Plaintiff Against Defendant DeBoer

5 1. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

52. Defendant was a manager 0r director-level employee With responsibility t0 oversee all

products of Plaintiff prior to his resignation. Defendant has also held himself out as a President or

Vice President 0f Plaintiff. Defendant also had a familial relationship With the principals 0f

Plaintiff.

53. The elements 0f a claim for breach of ﬁduciary duty are: (1) there is a ﬁduciary relationship

between the plaintiff and defendant; (2) the defendant breached his ﬁduciary duty to the plaintiff;

and (3) the defendant’s breach proximately caused injury to the plaintiff or beneﬁt to the

defendant. Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.- Dallas 2006, pet. denied). A ﬁduciary
relationship may be formal or informal. Fiduciary duties arise as a matter 0f law in certain formal

relationships, including attomey-client, partnership and trustee relationships. Meyer v. Cathay,

167 S.W.3d 327, 331 (Tex. 2005). An informal ﬁduciary relationship may arise Where one person

trusts in and relies upon another, Whether the relationship is a moral, social, domestic, or purely

personal one. Meyer at 33 1. T0 impose an informal ﬁduciary relationship in a business transaction,

a special relationship 0f trust and conﬁdence must exist prior t0, and separate from, the parties’

agreement. Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171, 177 (TeX. 1997).

PLAINTIFF’S ORIGINAL PETITION Page 15 of 21
54. Defendant, in his employment capacity, created or had a special relationship 0f trust and

reliance by Plaintiff. As such, Defendant owed ﬁduciary duties t0 Plaintiff. As an ofﬁcer,

employee, and/or agent acting for Plaintiff, DeBoer owed a ﬁduciary duty and is obligated to act

in Plaintiff’s best interest, ahead of himself. Plaintiff was entitled t0 rely on this relationship 0f

trust. Defendant was also obligated t0 not divulge any of Plaintiff s conﬁdential, proprietary and

trade secret information secured by Virtue of their ﬁduciary 0r conﬁdential relationship.

55. Defendant DeBoer breached his ﬁduciary duties to Plaintiff by, amongst other things: (1)

breaching his duty 0f loyalty; (2) breaching his duty 0f candor; (3) breaching his duty t0 refrain

from self—dealing; (4) breaching his duty to act With integrity 0f the strictest kind; (5) breaching

his duty of full disclosure; (6) breaching his duty to account for company property; (8) breaching

his duty t0 refrain from improper competition With Plaintiff; (9) usurping Plaintiff’s corporate

opportunities; and (10) misappropriating Plaintiff’ s Conﬁdential Information, all of which led to,

inter alia, purposeful devaluing 0f shareholder investment.

56. Plaintiff has been injured to the extent that DeBoer retains any conﬁdential, proprietary 0r

trade secret information including, inter alia, Plaintiffs Conﬁdential Information and any

derivatives therefrom, t0 Which DeBoer is not entitled. DeBoer is not entitled t0 retain any beneﬁts

acquired from his breach 0f ﬁduciary duty, including Plaintiff’s customer lists, pricing models,

business mix 0f products 0r services, vendor/supplier list, and/or know-how for fabricating

additional products. DeBoer’s actions were at all times intentional With the goal t0 gain an

unwarranted beneﬁt of sole ownership rights over the source code belonging to Plaintiff. The

intent behind DeBoer’s actions can be demonstrated by his embezzlement and unwillingness t0

execute his employment review and subsequent resignation Without prior notice.

PLAINTIFF’S ORIGINAL PETITION Page 16 of 21
57. As a direct and proximate result 0f Defendants’ actions, Plaintiff has sustained economic

damages as set forth herein. Plaintiff s claims entitle Plaintiff t0 exemplary damages under TeX.

CiV. Prac. & Rem. Code § 41.003(a). Moreover, Defendants acted with malice and displayed a

speciﬁc intent t0 cause substantial injury t0 Plaintiff.

58. Plaintiff seeks a constructive trust/equitable lien over its Conﬁdential Information, any

derivatives therefrom and full forfeiture of same, and forfeiture of the proﬁt earned by Defendants

during the course 0f this breach 0f ﬁduciary duty.

Count Four: Unfair Competition — Plaintiff Against All Defendants

59. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

60. DeBoer used his employment with Plaintiffto gain access t0 and misappropriate Plaintiff’ s

Conﬁdential Information for the purpose 0f seeking additional employment and creating a

competing business, With the intent of offering competing products and/or services.

61. Defendant gained accessed t0 and used Plaintiff” s Conﬁdential Information With the

knowledge it exclusively belonged to and is owned by Plaintiff and with the intent to use such

protected information for their own economic beneﬁt.

62. Defendants’ access to and misappropriation of Plaintiff’s Conﬁdential Information has

given and Will continue to give Defendants an economic advantage in the marketplace, and

therefore, constitutes unfair competition. This unfair competition has caused Plaintiff t0 suffer

economic damages as set forth herein, and to incur attorney’s fees and costs.

Count Five: Tortious Interference With Existing Contract — Plaintiff Against All
Defendants

63. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

PLAINTIFF’S ORIGINAL PETITION Page 17 of 21
64. Defendants willfully and intentionally interfered with existing customer relationships 0f

Plaintiffby, inter alia, utilizing Plaintiff” s customer lists, product and service mix, supplier/vendor

pricing, and product pricing to sell to known and existing customers of Plaintiff.

65. Plaintiff has sustained extensive damage by Defendants’ tortious interference with

Plaintiff’ s customers, in the form 0f economic damages as set forth herein.

Count Six: Unjust Enrichment— Plaintiff Against All Defendants

66. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

67. A11 0f Plaintiff s proprietary, trade secret, and Conﬁdential Information (acknowledged as

such by Defendant) belongs exclusively to Plaintiff.

68. Defendants have had the beneﬁt 0f taking, using, and misappropriating Plaintiff” s

Conﬁdential Information and have been unjustly enriched by same. Plaintiff seeks the

disgorgement of all amounts by which Defendants have been unjustly enriched in the form of

revenues, proﬁts, and the expectation 0f future value 0f same, wages earned by other employers,

and/or any other types of compensation.

Count Seven: Request for Declaratory Relief — Plaintiff Against All Defendants

69. Plaintiffre-alleges and incorporates by reference each and every allegation set forth above.

70. An actual controversy exists between Plaintiff and Defendants regarding the above

allegations. Pursuant t0 Chapter 37.001 et seq., Plaintiff seeks a declaration 0f the rights, status,

and other legal relations between and among Plaintiff and Defendants setting forth the rights of

the parties under the employment relationship and eliminating uncertainty regarding the parties

under the employment relationship and eliminating uncertainty regarding the parties’ duties and

obligations With respect t0 Plaintiff” s Conﬁdential Information.

PLAINTIFF’S ORIGINAL PETITION Page 18 of 21
71. A11 parties who have an interest in the Court’s declaration have been made parties t0 this

suit. Pursuant t0 the Declaratory Judgment Act, Section 37.001, er seq. 0f the Texas Civil Practice

and Remedies Code, Plaintiff requests that this Court enter the following declarations:

A. The Employment Agreement was a valid, existing, and enforceable contract

between Plaintiff and DeBoer;

B. DeBoer was an employee of Plaintiff under the restrictions contained in the

Employment Agreement;

C. A11 0f

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TILLERY, DALE Track Judge’s New Case

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August 02, 2019

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Complaint,Petition: 2000 INDUSTRIES GROUP, INC. vs. HARLAN DEBOERet al

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