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           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                              FILED
                                                                             May 28, 2013

                                        No. 11-20371                         Lyle W. Cayce
                                                                                  Clerk

DAVID HOMOKI, doing business as Global Check Services,

               Plaintiff - Appellee Cross-Appellant
v.

CONVERSION SERVICES, INCORPORATED,

               Defendant - Appellee

ELECTRONIC PAYMENT SYSTEMS, L.L.C.,

               Defendant - Appellant Cross-Appellee


                    Appeals from the United States District Court
                         for the Southern District of Texas


Before KING and HIGGINSON, Circuit Judges, and FOOTE, District Judge.*
FOOTE, District Judge:
      David Homoki d/b/a Global Check Services (“GCS”) and Electronic
Payments Systems (“EPS”) both sell check and debit/credit processing
services to merchants. When Conversion Services, Inc. (“CSI”), a sales agent
for GCS, stopped selling GCS’s products and started selling for EPS, GCS
brought suit against EPS and CSI alleging that EPS tortiously interfered
with GCS’s contract with EPS and conspired to breach CSI’s fiduciary duty to
      *
          District Judge of the Western District of Louisiana, sitting by designation.
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                                 No. 11-20371

GCS. After a jury trial and special verdict, the district court entered
judgment in the amount of $700,000 against EPS and $2.15 million against
CSI. On appeal, EPS challenges the sufficiency of the evidence supporting
the jury’s finding on the interference with contract claim and the trial court’s
decision to allow the conspiracy to breach fiduciary duty claim to go to the
jury. GCS cross-appealed, asserting that the trial court erred in refusing to
enter judgment holding EPS jointly and severally liable for the damages
caused by CSI’s breach of fiduciary duty. We affirm the rulings of the district
court.
I.       Factual and Procedural Background
         This suit involves EPS’s attempt to develop a competing version of a
GCS product. GCS has sold check and debit/credit processing services to
merchants since 1994. EPS sells similar services to merchants. Their dispute
centers on GCS’s “Accounts Receivable Conversion” (“ARC”) service. David
Homoki, the founder of GCS, developed the idea for ARC in 2003 and 2004
and began marketing it in 2005. The ARC service allows customers to pay
merchants for big ticket items with a series of post-dated checks that, in
certain circumstances, will be guaranteed by GCS. Around 2006, EPS became
interested in developing a similar product.
         In order to use the ARC service, the customer and merchant must be
qualified by GCS. GCS decides whether to qualify a customer based on a wide
range of factors, including the price of the item to be purchased, the
customer’s monthly income, the age of the customer’s checking account, the
customer’s check writing history, and the merchant’s history. The customer
writes a check for the amount of down-payment on the item. The down-


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payment check is made payable on the day of the transaction. The customer
also writes a number of post-dated checks that add up to the balance of the
purchase price of the item. Typically, the item must be completely paid for
within ninety days. The checks are run through a device that communicates
to the merchant whether the checks will be guaranteed by GCS. If the checks
are guaranteed, the merchant will receive the entire purchase price of the
item directly from GCS within twenty-four to seventy-two hours.
      GCS does not sell their products to merchants directly, rather they use
agents who market their product. Conversion Services, Inc. (“CSI”) was GCS’s
largest agent. Larry Stuart ran CSI. GCS contended at trial that in 2005 CSI
signed a contract with GCS in which CSI agreed to sell GCS’s services. The
2005 contract did not require CSI to refrain from selling competitors’
products. Because GCS could not produce a copy of the signed 2005 contract,
the existence of the contract was disputed. Mr. Homoki testified that in 2008
CSI signed another contract that was substantially similar to the 2005
contract in all respects except that it included an exclusivity provision
prohibiting CSI from selling competing products. A signed copy of the 2008
contract was not produced by GCS at trial. Whether CSI ever signed the
2008 contract and whether Mr. Stuart was aware of the exclusivity provision
in the contract were contested issues at trial.
      The relationship between GCS and CSI was initially profitable for both
parties, but it soured quickly. CSI signed up a total of 1,257 merchants to the
ARC service—many more than any of GCS’s other agents. During 2007 and
2008, however, Mr. Homoki discovered that CSI had been misrepresenting
the terms of the ARC service to merchants, over-charging for leased


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                               No. 11-20371

equipment, charging merchants for fees that did not actually exist, and
failing to provide on-going support. When Mr. Homoki discovered these
problems, he and his employees called 800 of the 1,257 merchants signed up
by CSI. Each merchant contacted complained about CSI’s misrepresentations,
overcharging, and lack of support. Only 52 of the 1,257 merchants signed up
by CSI ultimately continued to use the ARC service. GCS ceased working
with CSI on July 23, 2009.
     Around this time Mr. Homoki also learned that Mr. Stuart was selling
the EPS90 service. Since 2006, EPS had been developing EPS90, a service
similar to ARC. Mr. Stuart testified that he had been in contact with EPS at
least since 2006, when EPS informed him that they were interested in
developing a program similar to ARC. EPS knew that CSI worked as a selling
agent for GCS and sought to profit from Mr. Stuart’s knowledge of how the
ARC program was sold. Mr. Stuart testified that in October 2008, as EPS was
preparing to bring the EPS90 service to market, he discussed with EPS
employees how the service should function and how it should be marketed.
Both parties anticipated that Mr. Stuart would work as an agent selling the
EPS90 service. Mr. Stuart obtained his first EPS90 contract in November
2008. He testified that in total he moved eight merchants from the ARC
program to EPS90. In January 2009, he stopped selling for GCS. CSI was not
the only GCS agent that EPS attempted to recruit. Another agent of GCS,
Ms. Beranek, testified that EPS tried to persuade her to sell for EPS and to
move merchants from GCS to EPS. There was also testimony that someone
using CSI’s password accessed confidential portions of GCS’s computer
system from computers owned by EPS and obtained confidential information


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related to GCS’s merchants.
      GCS filed suit against CSI asserting breach of contract, breach of
fiduciary duty, fraud, negligent misrepresentation, tortious interference with
plaintiff’s existing contracts, tortious interference with plaintiff’s prospective
business, injury to business reputation, computer fraud and abuse, and civil
conspiracy claims. GCS pled five claims against EPS: tortious interference
with contracts between GCS and GCS’s agents; tortious inference with
contracts   between    GCS    and      merchants;     civil   conspiracy;   business
disparagement; and computer fraud and abuse. Only the following two claims
against EPS were submitted to the jury:
      1)    interference with the CSI/GCS contract;
      2)    civil conspiracy to breach CSI’s fiduciary duty;
      The jury returned the following verdict:
      1)    CSI breached its contract with GCS, causing GCS to suffer $1.15
            million in past lost profits and $1 million in future lost profits;
      2)    CSI’s relationship with GCS was an agent/principal relationship,
            and CSI breached its fiduciary duty to GCS, resulting in $1.15
            million in past lost profits and $1 million in future lost profits;
      3)    EPS conspired with CSI to breach CSI’s fiduciary duty to GCS,
            proximately causing damage to GCS. The jury was not asked to
            find, and did not find, the amount of damages caused by the
            conspiracy;
      4)    CSI committed fraud against GCS, causing damages in the
            amount of $1.15 million in past lost profits and $1 million in
            future lost profits; and


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        5)    EPS intentionally interfered with GCS’s existing contract with
              CSI, causing GCS to suffer $200,000 in past lost profits and
              $500,000 in future lost profits.
The district court entered judgment in the amount of $2.15 million against
CSI and $700,000 against EPS. GCS and EPS lodged timely appeals. CSI has
not appealed and has not filed any briefs in this Court.
II.     Subject Matter Jurisdiction
        While this appeal was pending, the parties attempted to mediate their
dispute. After the mediation, two handwritten documents were drafted and
numerous emails were exchanged regarding the terms of potential
settlement. The parties disputed whether they entered into a valid settlement
agreement. EPS moved to stay this appeal pending the outcome of a separate
suit to enforce the purported settlement agreement. Recognizing our
obligation to ensure that a case or controversy remains in this appeal, in a
separate opinion we denied the motion to stay, enjoined the parties from
prosecuting the separate suit, and remanded to the district court for the
limited purpose of determining whether a valid settlement existed. Homoki v.
Conversion Serv., Inc., No. 11-20371, 488 F.App’x 848 (5th Cir. 2012) (per
curiam) (unpublished). On remand, the district court found that GCS and
EPS had not entered into a binding settlement. Neither party appealed the
district court’s ruling. A live controversy therefore exists, and we have subject
matter jurisdiction.
III.    Sufficiency of the Evidence
        EPS argues that the evidence presented at trial was insufficient to
support the jury’s findings that EPS interfered with the CSI/GCS contract


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and that this interference caused $700,000 in lost profits. EPS raised these
issues in motions for judgment as a matter of law at the close of GCS’s case in
chief, at the close of evidence, and after entry of judgment. We review a
decision not to grant judgment as a matter of law de novo. MGE UPS Sys.,
Inc. v. GE Consumer and Indus., Inc., 622 F.3d 361, 365 (5th Cir. 2010). A
rule 50(a) motion for judgment as a matter of law is properly granted if the
facts and inferences point so strongly and overwhelmingly in favor of the
moving party that reasonable jurors could not have arrived at a contrary
verdict. Poliner v. Texas Health Sys., 537 F.3d 368, 376 (5th Cir. 2008). We
review all the evidence in the record in the light most favorable to the
nonmoving party and draw all reasonable inferences in favor of the
nonmoving party; we do not make credibility determinations or weigh the
evidence. Id.
      A.    Interference with Contract
      We turn first to EPS’s contention that there is insufficient evidence to
support the jury’s finding that EPS had knowledge of the exclusivity clause in
the CSI/GCS contract.
            1.    Applicable Law
      We apply Texas substantive law, as this case falls under our diversity
jurisdiction. Downhole Navigator, L.L.C. v. Nautilus Ins. Co., 686 F.3d 325,
328 (5th Cir. 2012). Texas law requires a party asserting a claim for
interference with a contractual relationship to prove: (1) the existence of a
contract subject to interference; (2) a willful and intentional act of
interference; (3) that the interference was a proximate cause of the plaintiff's
damages; and (4) actual damage or loss. Powell Indus., Inc. v. Allen, 985


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                                 No. 11-20371

S.W.2d 455, 456 (Tex. 1998). Interference with a contract is tortious only if it
is intentional. Southwestern Bell Tel. Co. v. John Carlo Texas, Inc., 843
S.W.2d 470, 472 (Tex. 1992).
      Both parties assume that in order to intentionally interfere with the
CSI/GCS contract, EPS must have had knowledge, or reasonably should have
had knowledge, of the exclusivity provision of the contract. Absent the
exclusivity clause, CSI's decision to cease selling for GCS and to begin selling
for EPS would not have breached GCS's contract. By recruiting CSI, then,
EPS would be persuading CSI to take an action that would not have breached
the contract. There would thus be no intent to interfere with the contract.
ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997)
(“Ordinarily, merely inducing a contract obligor to do what it has a right to do
is not actionable as tortious interference with a contract.”). On the other
hand, the Texas Supreme Court has held that the fact that a party had the
right to terminate an “at will” contract at any time is not a valid defense to an
action for tortious interference with that contract. Sterner v. Marathon Oil
Co., 767 S.W.2d 686, 689 (Tex. 1989). We offer no opinion on whether EPS’s
actions would constitute interference even in the absence of an exclusivity
clause under Sterner, a question that involves a matter of state law that was
not addressed by either party, because both parties frame the sufficiency
issue as whether knowledge of the exclusivity clause was proved. We will
thus proceed on the assumption that when a party to a contract would be free
to take the action the alleged tortfeasor undertook but for a specific provision
of that contract, the intent element turns on whether the alleged torfeasor




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                                        No. 11-20371

had or should have had knowledge of that provision.1 The question is thus
whether sufficient evidence was presented that EPS either knew or
reasonably should have known that the GCS/CSI contract prevented CSI
from selling for anyone else.
              2.      Analysis
       The exclusivity provision of the written, unsigned contract submitted
into evidence by GCS reads as follows:
       While under contract with GCS iso [CSI] is prohibited from
       selling, marketing, or in any way representing any service from
       any other company in competition with any service offered by
       GCS. Exclusivity shall extend to iso [CSI] not providing similar
       services internally, through any subsidiary, or being an owner,
       officer, employee, contractor, or subcontractor of any company
       that provides services that compete with any service offered by
       GCS.2
GCS presented no direct evidence of EPS’s knowledge of this contractual
provision. Mr. Stuart testified that because his contract did not contain an

       1
         Relying on Texas appellate cases, we have previously made the same assumption. See
Amigo Broad., LP v. Spanish Broad. Sys., Inc. 521 F.3d 472, 490 (5th Cir. 2008) (“The
interfering party must have actual knowledge of the contract or business relation in question,
or knowledge of facts and circumstances that would lead a reasonable person to believe in the
existence of the contract or business relationship.”)(internal quotation marks omitted); Exxon
Co. v. Allsup, 808 S.W.2d 648, 656 (Tex. Ct. App. 1991) (“To establish the requisite element of
intent, the plaintiff must show either that the interfering party had actual knowledge of the
existence of the contract and of the plaintiff's interest in it or that the interfering party had
knowledge of such facts and circumstances that would lead a reasonable person to believe in
the existence of the contract and the plaintiff's interest in it.”). While Amigo Broad. does not
use the phrase “plaintiff’s interest in the contract,” both cases analyze the intent element by
examining whether the tortfeasor knew or should have known that the contracts at issue were
exclusive. See also Top Value Enter. v. Carlson Mktg. Group, 703 S.W.2d 806, 810 (Tex. Ct.
App. 1986); Armendariz v. Mora, 553 S.W.2d 400, 406 (Tex. Ct. App. 1977).
       2
        EPS does not appeal the sufficiency of the evidence supporting the implicit finding that
CSI was bound by the 2008 contract. Accordingly, in what follows, we do not question that it
was so bound. As noted above, no signed written contract was entered into evidence.

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exclusivity clause he never told EPS that he was bound by one. Mr. Maley,
EPS's corporate representative, testified that he had no knowledge of any
exclusivity clause. There was testimony that exclusivity clauses are not
typical in this industry.
       For its part, GCS presented testimony that at least one person at CSI
saw the exclusivity clause. Mr. Thomas Milsap, a GCS employee, testified
that Kimberly Allen, a CSI employee, informed him that Mr. Stuart would
not agree to the exclusivity provision. There was also evidence that other GCS
agents knew their contracts contained an exclusivity clause and that EPS
nevertheless tried to persuade them to stop selling for GCS and start selling
for EPS. Ms. Beranek, an agent of GCS, testified that she knew that her
contract with GCS included an exclusivity provision. She also testified that
Mr. Maley, the CEO of EPS, tried to convince her to stop selling for GCS and
start selling for EPS. GCS introduced a letter written by Beranek to an
employee of GCS in which she stated, “[p]lease inform David [Homoki] that
EPS is doing all it can to try and persuade Global Check’s active agents to
leave, even though Global Check is light years ahead of EPS in terms of
dealing with agents and merchants.” There was also substantial evidence
that EPS and Mr. Stuart worked together to develop the EPS90 program and
that EPS ultimately succeeded in persuading Mr. Stuart to switch to EPS.
       GCS argues that a reasonable jury weighing this evidence could find
that in the course of attempting to recruit agents from GCS, EPS reasonably
should have known that GCS’s contracts with its agents contained an
exclusivity provision.3 In response, EPS contends that a finding that EPS
       3
        GCS also relies on Top Value for the principle that an employee’s knowledge of a
contractual provision may be imputed to its employer. 703 S.W.2d at 810. Top Value involved

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                                       No. 11-20371

had actual knowledge of the exclusivity clause would require multiple
unreasonable inferences. EPS also argues that they had no duty to “search
out” the existence of an exclusivity clause.
       While the evidence is not overwhelming, we think that reasonable
jurors could find that these facts and circumstances should have led a
reasonable company in EPS's position to believe in the existence of the
exclusivity clause. It bears emphasizing that our task is not to substitute our
judgment for that of the jury but to merely ensure that a reasonable
interpretation of the evidence supports the verdict. Travelers Cas. and Sur.
Co. of America v. Ernst & Young LLP, 542 F.3d 475, 484-85 (5th Cir. 2008).
The evidence showed that EPS made a sustained effort to persuade GCS's
agents to cease selling for GCS and to sell EPS's competing product instead.
The jury was free to disbelieve Mr. Stuart’s categorical denial of the existence
of the exclusivity clause and Mr. Maley’s testimony that EPS had no
knowledge of the clause and to substitute their own understanding of what
would reasonably be expected under the circumstances. Given EPS’s
aggressive push to recruit GCS’s agents, we do not find such an inference


tortious interference with the exclusivity provision of a contract. The Gold Bond Stamp
Company and the Big 8 stores had exclusive stamp trading license agreements. Attempting to
lure the Big 8 stores away from their exclusive contracts with Gold Bond, Top Value hired a
former employee of the Big 8 stores. This employee, who had knowledge of the exclusive nature
of the license agreements between the Big 8 stores and Gold Bond, negotiated with the Big 8
stores on behalf of Top Value. The court of appeals upheld the jury’s finding that Top Value
knew or reasonably should have known that the license agreements were exclusive because:
1) the terms of the license agreements were ubiquitous in the industry; and 2) the employee
hired by Top Value to negotiate with the Big 8 stores knew the license agreements were
exclusive. A number of distinguishing features limit the persuasive value of Top Value to this
case. In Top Value the terms of the contract were in line with the industry norm while the
evidence here is that exclusivity clauses are the exception rather than the rule. Furthermore,
GCS has pointed to no evidence that CSI had an employee/employer relationship with EPS.

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unreasonable. The intent-to-interfere element of the tortious interference
with contract claim was thus proved with sufficient evidence.4
       B.     Lost Profits
       EPS argues that GCS failed to present sufficiently objective data
supporting the jury’s finding of lost profits caused by EPS. EPS also contends
that the evidence is insufficient to support a causal connection between the
damage award and its actions.
              1.     Applicable Law
       The law governing what damages are recoverable is substantive, and
therefore in a diversity case state law governs what damages are available for
a given claim and the manner in which those damages must be proved.
Coursey v. Broadhurst, 888 F.2d 338, 344 (5th Cir. 1989) (per curiam). The
sufficiency of the evidence supporting a damages award, however, is a matter
of federal procedure. Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d
875, 884 (5th Cir. 2004). We will uphold the trial court’s denial of a motion for
judgment as a matter of law unless there is “no legally sufficient evidentiary
basis for a reasonable jury to find for the party on that issue.” Id. (quoting
Mathis v. Exxon Co., 302 F.2d 448, 453 (5th Cir. 2002)).
       In Texas, tortious interference with contract and breach of contract
typically share the same measure of damages: to place the injured party in
the position he would have been had the contract been performed. American
National Petroleum Co. v. Transcon. Gas Pipe Line Co., 798 S.W.2d 274, 278
(Tex. 1990). Lost profits must be proved by “competent evidence” and with

       4
        Because we find that the exclusivity clause theory is supported by sufficient evidence,
we need not determine whether the jury’s verdict is supported by GCS’s “confidentiality clause”
theory.

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“reasonable certainty.” Texas Instruments v. Teletron Energy Mgmt., 877
S.W.2d 276, 278-79 (Tex. 1994) (citing Sw. Battery Co. v. Owen, 115 S.W.
1097, 1098-99 (Tex. 1938)). While lost profits need not be susceptible to exact
calculation, there must be data from which they can be ascertained with a
reasonable degree of certainty and exactness. Id. Whether the evidence has
shown   a   “reasonable   certainty”   of   lost    profits   is   a   fact-intensive
determination. ERI Consulting Eng’rs Inc. v. Swinnea, 318 S.W.3d 867, 876
(Tex. 2010). “As a minimum, opinions or estimates of lost profits must be
based on objective facts, figures, or data from which the amount of lost profits
can be ascertained. Although supporting documents may affect the weight of
the evidence, it is not necessary to produce in court the documents supporting
the opinions or estimates.” Id. While “[u]ncertainty as to the fact of legal
damages is fatal to recovery... uncertainty as to the amount will not defeat
recovery.” Id. (citing Sw. Battery, 115 S.W.2d at 1099).
            2.    Objective facts, figures, or data
      EPS argues that Mr. Homoki’s testimony regarding his lost profits was
not competent evidence because it lacked support from objective facts, figures,
or data. EPS stopped selling for GCS in December 2008. GCS alleged that it
suffered lost profits in the years 2009 and 2010 and would continue to lose
profits in 2011. Mr. Homoki testified that in 2006 he earned $158,000 in
profits from the ARC service, twenty-seven percent (27%) of which was
attributable to CSI. In 2007, he earned $210,000 in profits from the ARC
program, fifty-two percent (52%) of which was attributable to CSI. In 2008, he
earned $300,000 in profits, fifty-two percent (52%) of which was attributable
from CSI. He did not specify whether this $300,000 figure was the amount of


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                                    No. 11-20371

profits earned solely from the ARC program.
      Mr. Homoki testified that though he projected $750,000 in profits for
2009, he actually only earned $497,000 in profits, sixty-one percent (61%) of
which was attributable to CSI. Once again, he failed to specify whether these
profits were derived solely from sales of ARC services. Mr. Homoki projected
$210,000 in profit for 2010. He testified, however, that based on his
ownership of the business for sixteen years, the typical one-year duration of
merchant contracts, the type of stores to which CSI was selling, and the rate
of increase in the number of merchants buying his services, that he would
have made between $1.1 million and $1.2 million of profits in 2010 if the
actions of CSI and EPS had not caused so many merchants to discontinue use
of the ARC service. These figures were corroborated by his reported income on
the federal tax forms, which were put into evidence.5
          EPS’s claim that no objective facts or figures support Mr. Homoki’s
testimony is inaccurate.      The jury was entitled to rely on Mr. Homoki’s
experience in managing his business for sixteen years in weighing his
testimony as to the amount of lost profits he suffered. ERI Consulting, 318
S.W.3d at 876 (holding that a long-time owner of a company was competent to
testify regarding its profit margin). Extrapolating future profits from past
profits is an accepted method of proving lost profits. Id. at 877 (“Contrasting
revenue from a time period immediately before the period at issue is an
established method of proving revenue for a lost profit damages calculation.”).
Any doubt as to the reliability of this evidence goes to its weight rather than
its competency.
      5
        It is undisputed that at all times material to this case GCS was not a separate
business entity but rather the name under which Mr. Homoki was doing business.

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                                  No. 11-20371

              3.   Causal Relationship between Amount of Damage
                   Award and Defendant EPS’s Actions

        In addition to using competent evidence, GCS was also required to
prove     a   causal   relationship   between    the   amount    of   the   jury’s
award—$200,000 in past lost profits and $500,000 in future lost profits—and
the actions of EPS. EPS contends that GCS did not put forth sufficient
evidence of this causal relationship for two reasons: first, that not all of the
losses caused by CSI are attributable to the actions of EPS; second, that there
is no combination of numbers in the record which supports the $700,000
figure.
        As to its first argument, EPS argues that the evidence showed that the
bulk of GCS’s lost profits were caused by actions of Mr. Stuart that had
nothing to do with EPS’s interference with the CSI/GCS contract. EPS points
to testimony showing Mr. Stuart misrepresented the nature of the ARC
service to merchants, overcharged for equipment sales to merchants, and
failed to provide service to merchants after sale. Of the 1,257 merchants CSI
signed up for GCS, only 52 continued to use the ARC service. Mr. Homoki
testified that each of the approximately 800 merchants he contacted, upon
learning of CSI’s activities, complained about the lack of service and the
misrepresentation of the nature of the service. In response, GCS fails to
highlight any evidence showing that EPS had anything to do with these
actions of CSI. EPS argues that because the number of these merchants who
switched from ARC to EPS90 is so small in comparison to the number of
merchants who complained about Mr. Stuart’s sales tactics, GCS did not
prove with reasonable certainty that EPS caused all of GCS’s lost profits.


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                                       No. 11-20371

       GCS counters EPS’s first argument with its own contention that the
trial court should have entered judgment against EPS in the amount of $2.15
million, the amount of lost profits which the jury found were caused by CSI’s
breach of its contractual and fiduciary obligations to GCS. GCS relies on
American National Petroleum v. Transcontinental Gas Pipe Line for the
principle that the proper measure of damages for interference with contract is
the same as the measure of damages for the breach of the contract itself. 798
S.W.2d 274, 278 (Tex. 1990). Therefore, GCS contends, the proper award
against EPS for tortious interference is $2.15 million for past and future lost
profits.6
       At issue in American National Petroleum was the requirement under
Texas law that a specific jury finding of compensatory damages be made
before punitive damages become available. The Texas Supreme Court held
that defense counsel waived the requirement that the plaintiff obtain a
specific jury finding of tort damages before receiving punitive damages.
Defense counsel represented to the trial court that he did not object to the
omission of a separate tort damages jury interrogatory because the amount of
damages in tort would be the same as the amount in contract, the only breach
at issue being the breach caused by the interference. Finding that the trial
court was entitled to rely on this representation, the Texas Supreme Court
upheld a judgment that included exemplary damages. Id. American National
Petroleum does not hold that the proper amount of damages for interference
with a contract is necessarily the same as the amount of damages caused by

       6
         It is unclear how this argument explains the jury finding of $700,000 rather than $2.15
million. We ignore this difficulty because we find that American National Petroleum does not
hold as GCS claims.

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                                No. 11-20371

any breach of that contract that may have occurred at the same time. Rather,
it stands for the principle that the measure of damages for interference with
contract is generally the appropriate amount of damages for the contractual
breach caused by the interference. The amounts were the same there for the
contractual and tort causes of action because the defendant admitted that the
only contractual breach at issue was caused by the interference. Damages for
tortious interference with contract are necessarily limited to damages
proximately caused by the act of interference and do not extend to any other
breach of the contract that the contracting party happened to commit. See
Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995).
      The question is thus whether the evidence shows with reasonable
certainty that EPS’s interference with the CSI/GCS contract caused GCS to
lose profits in the amount of $700,000. We find that it does. EPS is
responsible for the lost profits caused by CSI ceasing to sell for GCS. EPS is
not responsible for any lost profits caused by customers discontinuing the
ARC service because of CSI's misrepresentations. The amounts of the jury
verdict as to CSI ($2.15 million) and as to EPS ($700,00) differ substantially.
This variance reflects the jury’s judgment that EPS is not responsible for all
of the losses caused by CSI.
      Furthermore, as to EPS’s second contention that there is no
combination of figures in the record from which the jury could have found
that the amount of past and future lost profits attributable to EPS was
$200,000 and $500,000, respectively, we note at the outset that while a jury
must have an evidentiary basis for its findings, the loss need not be
susceptible to exact calculation. U.S. Renal Care, Inc. v. Jaafar, 345 S.W.3d


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                                       No. 11-20371

600, 614 (Tex. Ct. App. 2011) (citing Salinas v. Rafati, 948 S.W.2d 286, 289
(Tex. 1997)); Meaux Surface Protection, Inc. v. Fogleman, 607 F.3d 161, 170
(5th Cir. 2010). Mr. Homoki's testimony regarding projected profits assumes
both that the customers lost by CSI's misrepresentations would not have left
and that CSI would have continued to sell for GCS. To arrive at an amount of
damages that excludes profits lost by CSI's misrepresentations, the jury could
not, and did not, rely on Mr. Homoki’s projected profits. The amount of lost
profits not caused by CSI’s misrepresentations could, however, be fixed with
reasonable certainty if the amount of yearly profit attributable to CSI signing
up new customers could be determined from the record. There is sufficient
evidence to support a finding that CSI contributed approximately half of
GCS’s profits on any given year.7            In 2010, a year in which CSI did not
contribute to any of GCS's profits, GCS earned $210,000 in profits. Thus, one
could conclude that had EPS not caused CSI to stop selling for GCS at the
end of 2008, CSI would have brought in roughly $200,000 a year in profits.
Mr. Homoki testified that CSI brought in no new merchants for 2009 and that
merchants generally stayed on for two years. Thus, one year of past lost
profits (2009) plus two years of future lost profits (2010 and 2011) would yield
$600,000 in lost profits. To account for the steady upward trend in GCS's
profits and CSI's contribution to those profits, the jury could have added an
additional $100,000 to arrive at the $700,000 figure.8 While GCS's

       7
         The average amount of profits attributable to CSI from 2006 until 2009 was forty-six
percent (46%). The portion of profits attributable to CSI increased steadily from twenty-seven
percent (27%) in 2006 to sixty-one percent (61%) in 2009. Total profits grew from $158,000 to
$497,000 during this time period.
       8
       This model assumes that CSI would have been able to obtain the same number of
customers without misrepresenting the ARC service. Any extrapolation of future profits

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                                       No. 11-20371

presentation of its damages evidence was far from ideal, we think that there
is sufficient evidence to support $700,000 in past and future lost profits.
IV.     Notice of the Civil Conspiracy Claim
        EPS challenges the decision of the district court to allow the conspiracy
to breach fiduciary duty claim to go to the jury. EPS claims that since neither
the pleadings nor the proposed pretrial order gave adequate notice of such a
claim, the district court erred in submitting it to the jury.
        A.    Standard of Review and Applicable Law
        EPS properly moved for judgment as a matter of law on this claim at
the end of GCS’s case in chief, at the close of evidence, and by post judgment
motion. A court may instruct the jury on an issue only if the issue has been
properly tried by the parties. Thrift v. Estate of Hubbard, 44 F.3d 348, 355
(5th Cir. 1995). The plaintiff is required to give fair notice in the pleadings of
all claims brought against the defendant. Conley v. Gibson, 355 U.S. 41, 47
(1957). So long as a pleading alleges facts upon which relief can be granted, it
states a claim even if it “fails to categorize correctly the legal theory giving
rise to the claim.” Dussouy v. Gulf Coast Inv. Co., 660 F.2d 594, 604 (5th Cir.
1981). Typically, we look to the pleadings and the pretrial order to determine
whether proper notice of an issue was given before trial. Thrift, 44 F.3d at
355-57 (examining pretrial order and pleadings to determine whether
sufficient notice of a claim of tortious interference with prospective business
relations was given). In this case, however, a pretrial order was submitted by
the attorneys, but not signed by the district court. Thus we do not have the
benefit of the district court’s pronouncement as to the issues to be tried.

requires assumptions, and we are satisfied that sufficient evidence of CSI's selling prowess was
presented to support this assumption.

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                                  No. 11-20371

Instead, we must review the pleadings to determine de novo whether GCS
gave sufficient notice of its claim to permit the claim’s submission to the jury.
      Civil conspiracy is a derivative tort; therefore, liability for a civil
conspiracy depends on participation in an underlying tort. Allstate Ins. Co. v.
Receivable Fin. Co., L.L.C., 501 F.3d 398, 414 (5th Cir. 2007) (citing Tilton v.
Marshall, 925 S.W.2d 672, 681 (Tex. 1996)). In order to adequately plead a
claim for civil conspiracy, a plaintiff must adequately plead the underlying
tort. Meadows v. Hartford Life Ins. Co., 492 F.3d 634, 649 (5th Cir. 2007) (“If
a plaintiff fails to state a separate claim on which the court may grant relief,
then the claim for civil conspiracy necessarily fails.”); see also Amazon Tours
v. Quest Global Angling Adventures, 3:03cv2551-M, 2004 U.S. Dist. LEXIS
12382 at *10-11 (N.D. Tex. June 30, 2004) (holding that catch-all
“incorporation by reference” statement in the civil conspiracy section of a
complaint did not give defendants fair notice that any of the other torts listed
in the complaint were the underlying tort). In Texas, “[t]he elements of a
breach of fiduciary duty claim are: (1) a fiduciary relationship existed
between the plaintiff and defendant; (2) the defendant breached its fiduciary
duty to the plaintiff; and (3) the defendant's breach resulted in injury to the
plaintiff or benefit to the defendant.” Jones v. Blume, 196 S.W.3d 440, 447
(Tex. Ct. App. 2006).
      B.    Analysis
      The portion of GCS’s complaint asserting a claim of civil conspiracy
against EPS reads as follows:
      I. Civil Conspiracy

      136. Paragraphs 7-135 are incorporated by reference.


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                                 No. 11-20371

      137. GCS would show that CSI and EPS have entered into a civil
      conspiracy to injure GCS. More specifically, Defendants have
      combined to accomplish an unlawful purpose, or to accomplish a
      lawful purpose by unlawful means. Defendants had (1) an end to
      be accomplished; (2) there was a meeting of the minds on the end
      or course of action; (3) one or both of Defendants committed one
      or more overt, unlawful acts; and (4) GCS was injured as
      proximate result of those acts.

      138. Defendants unlawfully accessed Global Check’s server to
      obtain Global Check’s merchant contact information and used
      said information to switch various merchants to EPS.

      139. CSI and EPS breached the security of Global Check’s
      computer systems, defined under the Texas Penal Code §33.02.

GCS submitted a proposed pretrial order which included the following
assertion under the “Propositions of Law” heading:
      Breach of a fiduciary duty can be the basis of a conspiracy claim.
      Paschal, 215 S.W.3d at 450; Remenchik, 757 S.W.2d at 841; Kirby
      v. Cruce, 688 S.W.2d 161, 166 (Tex.App.-Dallas 1985, writ ref'd
      n.r.e.).
At trial, GCS withdrew its statutory computer fraud claims (paragraph 139)
and its claim for interference with the contracts between GCS and merchants
other than CSI.
      We find that the proposed pretrial order and the amended complaint
gave EPS sufficient notice that GCS was pursuing a civil conspiracy claim
under a breach of fiduciary duty theory. Because neither party has disputed
that fiduciary duties necessarily follow the creation of an agency relationship,
for the purpose of this analysis we will assume without deciding that this is




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                                       No. 11-20371

an accurate statement of Texas law.9 GCS’s amended complaint alleges that
Mr. Stuart was the agent of GCS. It also alleges that EPS conspired with Mr.
Stuart to obtain GCS’s confidential information and use it to GCS's
detriment. Taken together, these two allegations plausibly state a claim for
conspiracy to breach CSI’s fiduciary duty to GCS. It does not matter that GCS
did not use the words “breach of fiduciary duty” in the section of their
amended complaint alleging conspiracy because GCS alleged facts upon
which relief can be granted on that theory. See Dussouy, 660 F.2d at 604.
While GCS's pleading was perhaps inartful, it adequately stated a claim for
relief and EPS chose not to request clarification. Furthermore, GCS clarified
in the     proposed pretrial order that it was pursuing a civil conspiracy to
breach fiduciary duty claim. It is true that this statement was included in the


       9
         EPS does not argue that there was insufficient evidence to support the jury finding
that a formal agency relationship existed. Neither does EPS contest that a formal agency
relationship necessarily imposes fiduciary duties. We therefore express no opinion concerning
whether under Texas law a principal/agent relationship always entails the creation of fiduciary
duties. Neither do we attempt to define the nature and scope of those fiduciary duties, as these
issues were not properly raised on appeal. EPS does, however, argue that no informal fiduciary
relationship may be implied on the facts of this case, contending that Texas law does not imply
a fiduciary relationship in the business context unless: 1) the fiduciary relationship existed
prior to the business relationship being sued upon; and 2) the fiduciary relationship existed
separate and apart from the business agreement that is the basis of the suit. Crim Truck &
Tractor Co. v. Navistar Int’l Trans., 823 S.W.2d 591, 593-94 (Tex. 1992); Schlumberger Tech.
Co. v. Swanson, 959 S.W.2d 171, 176 (Tex. 1977); Consol. Gas & Equip. Co. of America v.
Thompson, 405 S.W.2d 333, 336-37 (Tex. 1966). These cases, however, make clear that this
two-step analysis is only used when an informal fiduciary relationship rather than a formal
one is alleged. See, e.g., Crim Truck, 823 S.W.2d at 592-94 (distinguishing between formal
fiduciary relationships, such as principal/agent, and informal fiduciary relationships of
“confidentiality and trust”). A relationship of principal/agent is a well-established formal
fiduciary relationship in Texas. ERI Consulting, 318 S.W.3d at 867; Crim Truck, 823 S.W.2d
at 594 (citing Kinzbach Tool Co. v. Corbett-Wallace, 160 S.W.2d 509, 512 (Tex. 1942)). After
being instructed that an agent is one who is authorized by the principal to transact business
or manage affairs on the principal’s behalf, the jury found that CSI was the agent of GCS.
Accordingly, the case law cited by EPS is inapplicable.

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                                 No. 11-20371

“propositions of law” section of the proposed pretrial order rather than the
“statement of the claim” section. Neither the computer fraud nor the
switching merchants theories, however, were included under the civil
conspiracy “propositions of law” section. GCS’s decision to assert only fraud
and breach of fiduciary duty theories in their proposed pretrial order put EPS
on notice that they were pursuing their civil conspiracy claim under a breach
fiduciary duty theory.
       Furthermore, as is discussed in more detail below, the jury was not
asked to fix a dollar amount of damages for this cause of action, but instead
only asked to fix damages for EPS’s intentional interference with the GCS
contract.
V.     Joint and Several Liability for Civil Conspiracy
       The jury verdict form required special findings for the amount of past
and future lost profits caused by CSI’s failure to comply with its fiduciary
duty. It did not ask the jury to find the amount of damages caused by the civil
conspiracy to breach CSI’s fiduciary duty. Neither did it ask the jury to assess
the total amount of damages for which CSI, GCS, or EPS are liable. The jury
found CSI caused $2.15 million in damages by breaching its fiduciary duty to
GCS and that EPS conspired with CSI to breach CSI’s fiduciary duty. GCS
argues that the trial court erred when it refused to hold CSI and EPS jointly
and severally liable for the damages caused by CSI’s breach of fiduciary duty.
GCS raised this issue before the trial court in a motion to amend the
judgment. The court denied the motion without giving reasons.
       A.    Standard of Review and Applicable Law
       A motion to amend judgment under Fed. R. Civ. P. 59(e) “must clearly


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                                 No. 11-20371

establish either manifest error of law or fact or must present newly
discovered evidence and cannot raise issues that could and should have been
made before the judgment issued.” Advocare Int’l LP v. Horizon Lab., Inc.,
524 F.3d 679, 691 (5th Cir. 2008) (internal quotation marks ommitted). This
motion to amend raises an issue of law; we therefore apply de novo review.
Dearmore v. City of Garland, 519 F.3d 517, 520 (5th Cir. 2008). The essential
elements of civil conspiracy claim are: 1) two or more persons; 2) an object to
be accomplished; 3) a meeting of the minds on the object or course of action; 4)
one or more unlawful, overt acts; and 5) damages as the proximate result.
Juhl v. Airington, 936 S.W.2d 640, 644 (Tex. 1996) (citing Massey v. Armco
Steel Co., 652 S.W.2d 932, 934 (Tex. 1983)).
      B.    Analysis
      GCS’s argument is premised on the settled Texas rule that co-
conspirators are jointly and severally liable for all acts done in furtherance of
the unlawful combination. Tompkins v. Cyr, 202 F.3d 770, 783 (5th Cir. 2000);
In Re Enron Co. Sec., Derivative & “ERISA” Litigation, 623 F. Supp. 2d 798,
832 (S.D. Tex. 2009); Operation Rescue-National v. Planned Parenthood, 975
S.W.2d 546, 561 (Tex. 1998); Kirby v. Cruce, 688 S.W.2d 161, 166 (Tex. Ct.
App. 1985); Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex.
1980); Kinzbach Tool Co. v. Corbette-Wallace Co., 160 S.W.2d 509, 514 (1942).
Damages for civil conspiracy are measured by the extent of the injury
resulting from an act done pursuant to the conspiracy’s common purposes,
rather than from any injury caused by the unlawful agreement itself.
Schlumberger Well Surveying Co. v. Nortex Oil & Gas Co., 435 S.W.2d 854,
856 (Tex. 1969). GCS reasons as follows: 1) CSI breached its fiduciary duty in


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                                   No. 11-20371

furtherance of the conspiracy with EPS; 2) the jury found CSI’s breach of
fiduciary duty caused $2.15 million in lost profits; and 3) therefore, EPS is
jointly and severally liable for $2.15 million in lost profits.
      In response, EPS cites a line of Texas state cases that hold that when
the plaintiff does not obtain a jury finding on what damages are caused by the
conspiracy itself, joint and several liability for damages awarded by a jury for
an underlying offense is not mandated unless the evidence conclusively
establishes that the damages are the same for the conspiracy and the
underlying offense. Bunton v. Bentley, 176 S.W.3d 1, 16-17 (Tex. Ct. App.
1999) aff’d without discussion 94 S.W.3d 561 (Tex. 2002); THPD v.
Continental Imports, 260 S.W.3d 593, 605-08 (Tex. Ct. App. 2008) (discussing
and following Bentley); Belz v. Belz, 667 S.W.2d 240, 243 (Tex. Ct. App. 1984).
In THPD, the plaintiff obtained a jury verdict finding one defendant liable for
breach of fiduciary duty, fraud, and theft. Another defendant was found to
have participated in a conspiracy that damaged the plaintiff. No finding of
the amount of damages caused by the conspiracy, however, was made by the
jury. The court of appeals upheld the trial court’s decision not to hold the co-
conspirator jointly and severally liable for the damages found to have been
caused by the first defendant’s breach of fiduciary duty, fraud, and theft. The
court relied on Texas Rule of Civil Procedure 279, which provides that unless
a party submits every element of his claim to the jury, it waives that ground
of recovery unless it is conclusively established by the evidence. Because the
evidence did not conclusively establish that the conspiracy caused the same
amount of damages as the wrongs for which the co-conspirator was found
liable, the court of appeals declined to impose joint and several liability. EPS


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                                No. 11-20371

argues that the same analysis is appropriate here.
      While Texas procedural law governing what questions must be included
on a jury verdict form does not apply in federal court, we find that Federal
Rule of Civil Procedure 49 requires the result suggested by THPD, Belz, and
Bentley. Travelers Ins. Co. v. Truitt, 280 F.2d 784, 789 (5th Cir. 1960). Rule
49(a)(3) provides:
         A party waives the right to a jury trial on any issue of fact
         raised by the pleadings or evidence but not submitted to the
         jury unless, before the jury retires, the party demands its
         submission to the jury. If the party does not demand
         submission, the court may make a finding on the issue. If the
         court makes no finding, it is considered to have made a finding
         consistent with its judgment on the special verdict.

The jury was not asked to return a general verdict with respect to EPS, nor
was it asked to make a special finding regarding the amount of damages
caused by the civil conspiracy. GCS waived the right to a jury trial on that
issue because it failed to demand such a jury finding. We have previously
overlooked the failure to submit a damages interrogatory when the evidence
supporting a jury finding on an interrogatory actually presented is sufficient
to support a finding on the omitted interrogatory. See Ornelas v. Allsup’s
Convenience Stores, Inc., 40 F.3d 384, 1994 WL 652455 at *4 (5th Cir. 1994)
(unpublished) (damages finding for medical expenses caused by tort claim
supported judgment of same amount for claim of contract to pay for medical
expenses); Olney Sav. & Loan Ass’n v. Trinity Banc Sav. Ass’n,885 F.2d 266,
270 (5th Cir. 1989) (failure to submit jury interrogatory regarding defense of
ratification was not error because elements of ratification paralleled elements
of defense of waiver, which was submitted to jury). We are not faced with


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                                        No. 11-20371

such a situation here. There was no evidence that EPS had knowledge of, or
intended to participate in, CSI’s misrepresentations to merchants or its
failure to service merchant ARC contracts. Rather, as is discussed in more
detail above, the evidence showed that a significant portion of GCS’s lost
profits were caused by actions of CSI in which EPS had no part. We cannot
say with any degree of certainty that the amount of damages proximately
caused by the civil conspiracy in which EPS participated is the same amount
caused by CSI's breach of its fiduciary duty. The jury’s verdict regarding the
amount of damages caused by CSI’s breach of fiduciary duty does not,
therefore, mandate entry of judgment in the same amount against EPS.10
VI.          Conclusion
        For the reasons stated above, we AFFIRM the decisions of the district
court and the judgment below.




        10
          EPS argues for the first time on appeal that the economic loss rule bars any recovery
of lost profits for conspiracy to breach fiduciary duty. In light of our decision that GCS waived
its right to a jury trial on the issue of damages caused by the civil conspiracy, we need not
address this argument.

                                               27
