Daugherty v. Highland Capital Mgmt., L.P.

05-14-01215-CV
August 22, 2016
State Court
Texas
Court of Appeals of Texas (Dallas)

Background:
Patrick Daugherty was a partner and senior executive at Highland Capital Management, L.P. ("Highland") until he left to start a competing business. Highland sued Daugherty for theft of trade secrets and for breach of his employment contract. At trial, Highland presented evidence showing that Daugherty forwarded Highland documents to his personal email address, kept printouts of other emails, and kept 40,000 documents on his laptop that included portfolio and pricing information, as well as documents regarding Highland's internal management and operations.

At trial, the court found that that while Daugherty had breached his contracts with Highland, Highland's damages from the breaches of contract were $0. The jury found that the information that Daugherty took did not constitute trade secrets but did constitute "Confidential Information" as that term was defined in Daugherty's employment agreement with Highland. However, the jury awarded Highland $2.8 million in attorney's fees. The trial court upheld the findings and issued a permanent injunction against Daugherty, preventing him from further retaining or disclosing Highland's confidential information.

Daugherty appealed, challenging the judgment's award of $2.8 million in attorney's fees to Highland. He argued that Highland failed to please or tender a jury question for contractual attorney's fees, and was thus not entitled to attorney's fees by statute because the jury found zero damages on Highland's claim for breach of contract. Texas Civil Practices and Remedies Code Section 38.001(8) states that awarding attorney's fees for breach of contract should only occur when there is a finding of damages. The Dallas Court of Appeals rejected Daugherty's arguments and affirmed the jury verdict and trial court injunction.

Highland Capital Mgmt., L.P.
Daugherty
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