In re Hernandez

1

IN RE SYLVIA HERNANDEZ

No. 13-21-00244-CV

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

March 3, 2022

On Petition for Writ of Mandamus.

Before Chief Justice Contreras and Justices Benavides and Silva Memorandum Opinion by Justice Silva ^[1]

MEMORANDUM OPINION

CLARISSA SILVA JUSTICE

In this original proceeding, relator Sylvia Hernandez seeks to set aside an order allowing her presuit deposition to be taken under Texas Rule of Civil Procedure 202. See Tex.R.Civ.P. 202.^[2] Sylvia is the former employee of a constellation of health care companies including Legacy Home Health Agency, Inc. (Legacy) Restorative Health Services, LLC d/b/a Coastal Home Health Care (Coastal), and Legacy Home Care Services, Inc. d/b/a All Seasons Home Care (All Seasons), ^[3] which are generally owned by Ambrose Hernandez. Sylvia terminated her employment with the companies and began working for American Medical ^[4] a competing health care company. Legacy and All Seasons sued American Medical and others^[5] in Bexar County for, inter alia, breach of contract regarding nondisclosure agreements and noncompete agreements, breach of fiduciary duty, misappropriation of trade secrets and confidential information, and tortious interference.

In a separate proceeding filed in Nueces County, Hernandez, Legacy, Coastal, and All Seasons filed a Rule 202 petition seeking to depose Sylvia regarding similar issues.^[6] The trial court granted the petition and ordered that Hernandez and Coastal could conduct a presuit deposition of Sylvia. Sylvia now challenges that ruling by petition for writ of mandamus. We conditionally grant the petition for writ of mandamus.

I. Background

On May 27, 2021, Hernandez, Legacy, Coastal, and All Seasons (collectively, petitioners) filed a verified Rule 202 petition seeking Sylvia's presuit deposition. ^[7] According to their petition, Hernandez owns Legacy, All Seasons, and A.C.L.S., Inc., the owner of Coastal. Legacy, All Seasons, and Coastal are home health care providers that employ "thousands" of attendants to assist the elderly and disabled who qualify for Medicaid. The petition stated that "[t]he home health industry is a competitive industry," and that the three companies had

invested substantial time, effort, and financial resources into developing certain formulas, patterns, compilations, programs, devices, methods[, ] and techniques of the business operation, marketing plans, client and patient information, referral and payor sources, employee lists, wages, supplier lists, business relationships[, ] and other information that [have] helped [Legacy, All Seasons, and Coastal] maintain a competitive edge in the regional market (hereinafter collectively referred to as "Confidential Information" and "Trade Secrets").

The petition recounted that the companies' employees were required to sign nondisclosure and noncompete agreements to further the companies' operations. According to the petition, Sylvia signed "several" of these agreements when she contracted with Legacy, All Seasons, "and/or" Coastal to perform various tasks. The companies shared with her "confidential, trade secret, and proprietary information," and Sylvia gained "extensive" knowledge regarding the companies' confidential information.

According to the petition, Sylvia terminated her employment with the companies and began working for one of their competitors in violation of the noncompete agreements she signed. The petition provided that, "upon information and belief," Sylvia, among others, "participated in soliciting other employees of [the companies] to leave their employment for employment with the competitor." The petitioners stated that they believed that "these former employees divulged information to third parties which was false[, ] misleading[, ] and/or [c]onfidential," and "[s]uch actions have led to adverse business interruptions in business operations" for All Seasons and Coastal. The petition further stated:

Based on the timing, proximity, and repeat nature of these events, [petitioners] suspect that [Sylvia] violated and continues to violate [her] respective contractual obligations. [The petitioners] also have reason to believe [that she] shared information with third parties which ultimately led to adverse action to be taken by such third parties against [All Seasons and/or Coastal].

The petitioners stated that they sought "to discover such information so as to determine the extent of economic damages caused by these actions." The petition provided that,

although [the petitioners believe] based on what [they know] thus far that there may well be a suit in the offing, [they were bringing] this petition solely under Rule 202.1(b) "to investigate a potential claim or suit" before actually filing one in order to gain a better understanding of the damage caused [by Sylvia].

The petitioners alleged that their "interest in this matter is to determine [their] legal rights with respect to the above-described communications." The petitioners stated that "the substance of the testimony [they] would elicit from [Sylvia] would, at a minimum, include whether and to what extent [she] violated [her] contractual and legal duties to [the petitioners]." The petition further stated, in relevant part, that:

20. For the reasons set forth above, [petitioners aver] that the likely benefit of allowing [petitioners] to take the requested deposition to investigate a potential claim outweighs the burden or expense of the procedure. While [petitioners] could conceivably file a lawsuit based on what [petitioners know] at this time, [petitioners believe] a superior method would be [to] take the deposition of [Sylvia] first to investigate [petitioners'] claims and in the process narrow down and/or identify the existence of any alternative/additional claims and/or defendants among (or perhaps even outside of) [Sylvia] listed above and determining what claims should be asserted against any such potential additional defendant(s).

21. In addition, this Petition would put [Sylvia] as well as all of the associated persons/entities on whose behalf [she] act(s) on notice of the fact that claims are being investigated such that it/they know to retain relevant documents that may have otherwise been purposefully or accidentally destroyed. Should [petitioners] learn that witnesses or persons acting in concert or privity with [Sylvia are] in possession of data or documents that contain [petitioners'] confidential information, [petitioners] could seek the orderly return of such data and/or documents.

The petition was signed separately by counsel representing Hernandez and counsel representing Legacy, All Seasons, and Coastal. The petitioners supported their request with a declaration^[8] provided by Hernandez verifying that the statements in the petition were within his personal knowledge and were true and correct. Hernandez's declaration referenced and attached the following agreements that Sylvia signed in the course of her employment with the petitioners: (1) a 2016 "[Nondisclosure] Agreement" with Legacy, (2) a separate 2016 "[Nondisclosure] Agreement" with Legacy, and (3) a 2016 "Covenant Not to Compete and Arbitration Agreement" with Legacy.

On June 23, 2021, Sylvia filed a verified "Plea to Abate" which was premised on the "dominant jurisdiction of a pending intertwined lawsuit" in Bexar County. Sylvia asserted that the "two suits involve common issues of fact and law, similar parties, and the same or similar written discovery, depositions, and evidence at trial." Sylvia asserted that "[b]oth cases involve alleged violations of [nondisclosure] and [noncompete] agreements allegedly signed by former Legacy employees who later went to work for American Medical, and potential resulting damages." Sylvia stated that counsel for Legacy and All Seasons had already taken her six-hour deposition in the Bexar County case, and that the petitioners "seek to evade the jurisdiction and discovery limits" of the Bexar County case by filing the Rule 202 petition in Nueces County. Sylvia further pointed out that "[b]oth lawsuits involve the same nucleus of operative facts, similar parties, and the same or similar causes of action."

Sylvia argued that Legacy and All Seasons were two of the plaintiffs in the Bexar County suit; that Hernandez owned Legacy, Coastal, and All Seasons and was a fact witness who verified all the petitions in the Bexar County suit; and that Coastal was a "managed company" through which Legacy and All Seasons had asserted claims in Bexar County. Sylvia asserted that the petitioners were "parties, potential parties, or have been identified . . . as witnesses with relevant knowledge" in the Bexar County suit. Sylvia further alleged that the same attorneys represented Legacy, All Seasons, and Hernandez in the Bexar County suit as in the Rule 202 proceedings. Sylvia supported her request for abatement with various pleadings and filings from the Bexar County litigation.

At the hearing, the petitioners filed numerous exhibits in support of their request for relief, including a June 23, 2021 declaration by Hernandez made in support of the petitioners' request to depose Sylvia. Hernandez's June 23, 2021 declaration provided, in relevant part:

5. Legacy, All Seasons and I (Ambrose Hernandez) were involved in a legal proceeding with a managed care organization ("MCO"), Superior HealthPlan, Inc. ("Superior") arising from Superior's wrongful and illegal [retaliatory] conduct against companies I own and against me personally. In 2013, Superior, overnight and without notice, terminated its agreements with companies I owned, Legacy Home Health Agency, Inc. ("Legacy") Legacy Home Care Services, Inc. d/b/a All Seasons; Legacy Adult Day Care

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