CourtListener 10671416•Nicholas Kreines, David P. Ryan, Liberty Mineral Partners LLC, Nak Resources INC., and CGR Oil and Gas, LLC v. ES3 Minerals, LLC
Nicholas Kreines, David P. Ryan, Liberty Mineral Partners LLC, Nak Resources INC., and CGR Oil and Gas, LLC v. ES3 Minerals, LLC
CourtListener 10671416Txctapp15Sep 9, 2025
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ACCEPTED
15-25-00027-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
9/2/2025 7:34 PM
NO. 15-25-00027-CV CHRISTOPHER A. PRINE
CLERK
IN THE COURT OF APPEALS RECEIVED IN
15th COURT OF APPEALS
FOR THE FIFTEENTH JUDICIAL DISTRICTAUSTIN, TEXAS
AT AUSTIN, TEXAS 9/2/2025 7:34:36 PM
CHRISTOPHER A. PRINE
Clerk
NICHOLAS KREINES, DAVID P. RYAN, LIBERTY MINERAL
PARTNERS LLC, NAK RESOURCES INC.,
AND CGR OIL AND GAS, LLC,
Appellants,
September 9, 2025
v.
ES3 MINERALS, LLC,
Appellee.
On Appeal from the 459th Judicial Court,
Travis County, Texas
Cause No. D-1-GN-24-006854
AMENDED BRIEF FOR APPELLANTS
JAMES F. PARKER
State Bar No. 24027591
GABRIELLE C. SMITH
State Bar No. 24093172
SYDNEY P. SADLER
State Bar No. 24117905
LLOYD GOSSELINK
ROCHELLE &TOWNSEND, P.C.
816 Congress Ave., Suite 1900
Austin, Texas 78701
(512) 322-5800
(512) 472-0532 (fax)
ATTORNEYS FOR APPELLANTS
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellants: Attorneys for Appellants:
Nicholas Kreines, David P. Ryan, James F. Parker
Liberty Mineral Partners LLC, Gabrielle C. Smith
NAK Resources Inc., and CGR Sydney P. Sadler
Oil & Gas, LLC Lloyd Gosselink Rochelle
& Townsend, P.C.
816 Congress Avenue, Suite 1900
Austin, Texas 78701
Telephone: (512) 322-5800
Facsimile: (512) 472-0532
Appellee: Attorneys for Appellee:
ES3 Minerals, LLC Michael D. Marin
Tori B. Bell
Boulette Golden & Marin L.L.P.
2700 Via Fortuna, Suite 250
Austin, TX 78746
Telephone: (512) 732-8900
Facsimile: (512) 551-9602
2
TABLE OF CONTENTS
Page_Toc195621438
INDEX OF AUTHORITIES....................................................................... 7
STATEMENT OF THE CASE ................................................................. 11
INTRODUCTION .................................................................................... 13
STATEMENT REGARDING ORAL ARGUMENT ................................. 15
ISSUES PRESENTED FOR REVIEW .................................................... 16
STATEMENT OF JURISDICTION AND STANDARD OF REVIEW .... 19
A. Jurisdiction............................................................................ 19
B. Standard of Review. .............................................................. 19
STATEMENT OF FACTS ....................................................................... 21
A. ES3 is a mineral-interest broker. ......................................... 21
B. ES3 hires Ryan to convince mineral-interest
owners to sell to ES3. ............................................................ 23
C. ES3 taps Ryan’s sales knowledge and experience
to develop its software platform. .......................................... 23
D. Ryan leaves ES3 in 2021 and is subsequently
rehired. .................................................................................. 24
E. ES3 hired Kreines to lead its efforts to sell the
mineral interests that Ryan acquired. ................................. 24
F. ES3 requires its employees to sign non-
competition agreements. ....................................................... 25
G. ES3 terminates Ryan for refusing to steal a
consultant’s intellectual property. ........................................ 26
H. Ryan starts LMP to act as a mineral broker and
secures its first AMI deal. ..................................................... 26
I. LMP hires an independent software designer to
develop its own CRM platform to facilitate its
business model. ..................................................................... 27
J. LMP sells its first mineral interest outside an
AMI. ....................................................................................... 28
3
K. Kreines leaves ES3 in January 2024 to once more
work as an independent landman. ....................................... 28
L. ES3 and LMP have not competed with one
another. ................................................................................. 28
M. The Travis County District Court issues the
Temporary Injunction, which the Business Court
modifies. ................................................................................ 30
SUMMARY OF THE ARGUMENT ......................................................... 32
ARGUMENT & AUTHORITIES ............................................................. 36
A. The Temporary Injunction does not meet the
requirements of Rules 683 or 684. ........................................ 36
1. The Temporary Injunction does not set out
the reasons why ES3’s harm is irreparable as
required by Rule 683. ................................................... 37
2. The Temporary Injunction does not meet the
specificity requirement of Rule 683. ............................ 42
a. The Temporary Injunction does not
define specific persons with whom
Appellants cannot do business. .......................... 43
Appellants do not know with
whom they cannot transact
business from a simple reading of
the Temporary Injunction.......................... 44
Appellants cannot conduct their
own investigation to ensure
compliance with the Temporary
Injunction because its limitations
are confidential. ......................................... 46
b. By barring Appellants from doing
business with unknown companies, the
Temporary Injunction violates Rule
683. ...................................................................... 47
4
3. The bond required by the Temporary
Injunction is inadequate and contrary to the
evidence. ....................................................................... 51
a. The trial court set a nominal bond that
was unsupported by the evidence. ...................... 52
b. The bond should have been set on the
basis of lost revenue, but even a lost-
profit standard would have resulted in
a significantly higher bond amount. ................... 53
c. The nominal bond set by the trial court
essentially eliminated the bond
requirement altogether. ...................................... 54
B. The evidence does not support the issuance of a
temporary injunction. ........................................................... 55
1. There is no imminent and irreparable harm
to ES3 ........................................................................... 56
a. ES3’s injury was not “immediate.” ..................... 57
b. ES3 has not endured an injury
requiring injunctive relief. .................................. 58
c. ES3’s alleged damage to its
relationship with buyers is speculative.
............................................................................. 60
2. The trial court improperly granted the
Temporary Injunction because there is no
probable right of relief on ES3’s claims. ...................... 61
a. This industry relies on the most basic
principles of economics and marketing.
............................................................................. 62
b. ES3 identifies no trade secret that has
been taken. .......................................................... 63
Though there is overlap due to
the nature of the industry, the
two companies employ different
business practices. ..................................... 64
5
There are material differences in
the pricing formula stemming
from the differences in business
practices. .................................................... 66
The two companies’ software
platforms are different. .............................. 67
The identities of ES3’s buyers are
not secret. ................................................... 70
c. The evidence doesn’t support ES3’s
allegation that Ryan and Kreines have
breached an enforceable covenant not
to compete. .......................................................... 72
David Ryan has not breached the
covenant not to compete. ........................... 72
The covenants are not supported
by consideration. ........................................ 73
The restrictions in the covenants
not to compete are unreasonable. .............. 75
A) The temporal restriction is
unreasonable. ...................................... 75
B) The geographic restriction is
unreasonable. ...................................... 76
C) Industry-wide restriction is
invalid as a matter of Texas law......... 76
3. The Temporary Injunction does not contain a
geographic restriction, thereby barring
Appellants from engaging in lawful activity. .............. 77
CONCLUSION AND PRAYER ............................................................... 79
CERTIFICATE OF SERVICE................................................................. 81
CERTIFICATE OF COMPLIANCE ........................................................ 82
INDEX OF APPENDICES ...................................................................... 83
6
INDEX OF AUTHORITIES
Cases Page(s)
Amend v. Watson,
333 S.W.3d 625 (Tex. App.—Dallas 2009, no pet.) ............................ 20
Archon Design v. Naim,
No. 03-23-00226-CV, 2023 Tex. App. LEXIS 6740
(Tex. App.—Austin Aug. 30, 2023, no pet.) ........................................ 56
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ................................................ 17, 19, 20, 56
Citation 2002 Inv. Llc, & Endeavor Energy Res., L.P. v.
Occidental Permian,
662 S.W.3d 550 (Tex. App.—El Paso 2022) ........................................ 73
Clark v. Hastings Equity Partners, LLC,
651 S.W.3d 359
(Tex. App.—Houston [1st Dist.] 2022, no pet.) .......................... passim
Computek Computer & Office Supplies, Inc. v. Walton,
156 S.W.3d 217 (Tex. App.—Dallas 2005, no pet.) ................ 47, 48, 50
DeSantis v. Wackenhut Corp.,
793 S.W.2d 670 (Tex. 1990) .............................................. 17, 51, 52, 53
Ex parte Chambers,
898 S.W.2d 257 (Tex. 1995) ................................................................ 42
Ex parte Hodges,
625 S.W.2d 304 (Tex. 1981) ................................................................ 43
Ex parte Jackman,
663 S.W.2d 520 (Tex. App.—Dallas 1983, no writ) ............................ 42
Franklin Savings Association v. Reese,
756 S.W.2d 14 (Tex. App.-Austin 1988, no writ) ................................ 52
7
Home Asset, Inc. v. MPT of Victory Lakes Fcer,
No. 01-22-00441-CV, 2023 Tex. App. LEXIS 2890
(Tex. App.—Houston [1st Dist.] May 2, 2023, no pet.) ................ 37, 40
Huynh v. Blanchard,
694 S.W.3d 648 (Tex. 2024) ................................................................ 57
Indep. Capital Mgmt., L.L.C. v. Collins,
261 S.W.3d 792 (Tex. App.—Dallas 2008, no pet.) ............................ 20
In re Krueger,
No. 03-12-00838-CV, 2013 Tex. App. LEXIS 5984
(Tex. App.—Austin May 16, 2013, no pet.) ............................ 48, 49, 50
In re Luther,
620 S.W.3d 715 (Tex. 2021) .................................................... 43, 49, 50
IPSecure, Inc. v. Carrales,
No. 04-16-00005-CV, 2016 Tex. App. LEXIS 6288
(Tex. App.—San Antonio June 15, 2016, no pet.) .................. 16, 34, 37
Kotz v. Imperial Capital Bank,
319 S.W.3d 54 (Tex. App.—San Antonio 2010, no pet.) ..................... 39
Lagos v. Plano Econ. Dev. Bd.,
378 S.W.3d 647 (Tex. App.—Dallas 2012, no pet.) ............................ 18
Marsh USA Inc. v. Cook,
354 S.W.3d 764 (Tex. 2011) .................................................... 72, 74, 77
Parker v. Schlumberger Tech. Corp.,
475 S.W.3d 914
(Tex. App.—Houston [1st Dist.] 2015, no pet.) .................................. 79
Paul v. Roy F. & JoAnn Cole Mitte Found.,
No. 03-21-00502-CV, 2023 Tex. App. LEXIS 772
(Tex. App.—Austin Feb. 8, 2023, pet. denied).................................... 45
Peat Marwick Main & Co. v. Haas,
818 S.W.2d 381 (Tex. 1991) .......................................................... 76, 77
8
Qwest Commc’ns Corp. v. AT&T Corp.,
24 S.W.3d 334 (Tex. 2000). ........................................................... 36, 52
Stewart & Stevenson Servs. v. Serv-Tech, Inc.,
879 S.W.2d 89
(Tex. App.—Houston [14th Dist.] 1994, writ denied) ........................ 74
Tarr v. Lantana Sw. Homeowners’ Ass’n,
No. 03-14-00714-CV, 2016 Tex. App. LEXIS 13372
(Tex. App.—Austin Dec. 16, 2016, no pet.) ........................................ 45
Taylor Hous. Auth. v. Shorts,
549 S.W.3d 865 (Tex. App.—Austin 2018, no pet.) ............................ 20
Tex. Dep’t of Pub. Safety v. Salazar,
304 S.W.3d 896 (Tex. App.—Austin 2009, no pet.) ............................ 56
Totus Grp., LLC v. Pruitt Family Living Tr.,
No. 05-23-01222-CV, 2025 Tex. App. LEXIS 907
(Tex. App.—Dallas Feb. 14, 2025, no pet. h.) ..................................... 20
Van Huis v. Marine Ventures, Ltd.,
672 S.W.3d 22 (Tex. 2023) ............................................................ 54, 55
Whinstone US Inc. v. Rhodium 30MW, LLC,
691 S.W.3d 47 (Tex. App.—Austin 2024, no pet.) ........................ 42, 45
Whitlow v. Polley,
670 S.W.2d 318 (Tex. App.—Tyler 1984, no writ) .............................. 54
Statutes
Tex. Bus. & Com. Code § 15.50 ................................................... 74, 78, 83
Tex. Gov’t Code § 25A.004(b) .................................................................. 55
Tex. Gov’t Code § 25A.006................................................................. 31, 83
9
Other Authorities
Rule 683 ........................................................................................... passim
Rule 684 ........................................................................................... passim
10
STATEMENT OF THE CASE
Nature of the This is a trade-secrets, breach-of-fiduciary-duty, breach-
Case: of-contract and fraudulent-transfer case brought by
mineral-interest broker ES3 Minerals, LLC (“ES3”)
against former ES3 employees David P. Ryan (“Ryan”)
and Nicholas Kreines (“Kreines”) and the mineral-
interest companies established by them. ES3 alleges
that Ryan and Kreines stole ES3’s trade secrets,
proprietary software, and other confidential
information, used that information to solicit ES3’s
buyers and employees and in doing so breached the
covenants to not compete entered into by Ryan and
Kreines as a condition of their employment with ES3.
ES3 sought to enjoin Ryan, Kreines, and their mineral-
interest company Liberty Mineral Partners LLC
(“LMP”) from entering or negotiating any transaction
with ES3’s buyers, from encouraging ES3’s buyers to
discontinue or limit their relationships with ES3, and
from soliciting ES3’s employees for employment or
encouraging them to terminate their relationships with
ES3.
Trial Court: District Court for the 455th Judicial District,
Travis County, Texas, Judge Laurie Eiserloh presiding.
Removed to the Texas Business Court for the Third
District at Austin on December 23, 2024 (2d. Suppl.
CR 1−9.)
Course of ES3 filed its Verified Original Petition and Application
Proceedings: for Injunctive Relief on September 18, 2024
(CR 5−108.). The temporary injunction hearing was
held on October 29–30, 2024.
After removal, Appellants filed a Motion to Dissolve the
Temporary Injunction, which the Business Court heard
on February 27, 2025.
11
Disposition in The trial court granted the temporary injunction on
Trial Court: November 26, 2024, but did not serve the parties or file
the Temporary Injunction Order until December 19,
2024 (CR 869−870.)
On February 27, 2025, the Business Court heard
Appellants’ Motion to Dissolve the Temporary
Injunction along with Appellee’s Motion to Modify the
Temporary Injunction. (2d. Suppl. CR 10−189,
190−209.) The Business Court issued its Order
Modifying Temporary Injunction on April 7, 2025.
(2d. Suppl. CR 307−33.)
The Court granted Appellants’ Motion for Appellate
Review under Rule 29.6 on April 11, 2025, and agreed
to review the April 7, 2025 Modified Temporary
Injunction issued by the Business Court alongside the
original Temporary Injunction issued in
November 2024.
12
INTRODUCTION
Along with a hundred others, ES3 and LMP are mineral-interest
brokers in West Texas. The business is simple; the broker buys mineral
interests from current owners and then resells them to buyers who plan to
repackage them for sale as securitized instruments or develop for extraction.
Ryan and Kreines are former ES3 employees. Ryan worked to acquire
mineral interests; Kreines worked on the divestiture side. Both signed
covenants not to compete.
When ES3 terminated Ryan in August 2023, he started LMP. In
January 2024, Kreines left ES3 to join Ryan. Over the next nine months,
LMP operated successfully without competing with ES3 to acquire any
mineral interest.
Because of that lack of competition, ES3 did not learn of LMP’s
existence until September 2024. When it did, it sued to enforce the
covenants not to compete. It also alleged theft of confidential information
and trade secrets and a breach of Kreines’s fiduciary duty. The trial court
issued a Temporary Injunction in November 2024.
Recognizing that LMP was not competing with ES3 to buy mineral
interests, the Temporary Injunction does not limit Appellants’ acquisition of
13
mineral interests. The Temporary Injunction only restricts Appellants from
selling mineral interests to entities that have done business with ES3.
Each mineral interest is different. LMP doesn’t compete with ES3 to
sell a mineral interest that it owns and ES3 does not. So, if the Temporary
Injunction’s restriction seems nonsensical, that’s because it is. And the
district court was unable to set forth the reasons why a temporary injunction
should be issued, notwithstanding the requirements of Rule 683.
After Appellants removed the case to the Texas Business Court, that
court modified the Temporary Injunction’s restrictions, which are still
insufficiently specific to meet the requirements of Rule 683. The
modification also doesn’t state the reasons for the Temporary Injunction.
Two courts have now looked at this injunction. Neither could set forth
the reasons for its issuance. That’s because the evidentiary record does not
support the issuance of an injunction. ES3 identified no imminent harm
from LMP’s sales of mineral interests that ES3 doesn’t own. To the extent
ES3 has a harm, it has an adequate remedy at law. Neither the district
court nor the Business Court could explain why the Temporary Injunction
should be issued because it shouldn’t have been, and this Court should
reverse that decision.
14
STATEMENT REGARDING ORAL ARGUMENT
The temporary injunction issued by the trial court does not meet the
requirements of Texas Rule of Civil Procedure 683, in ways that limits the
trial court’s ability to enforce its own order. That noncompliance with Rule
683 derives largely from the fact that the evidence adduced at the
temporary-injunction hearing did not support the issuance of an injunction
in the first place.
After the district court issued the Temporary Injunction, Appellants
removed the case to the Texas Business Court, which modified the
Injunction. The Business Court’s modification carries over most of the same
fatally defective language. Any further attempt to modify the Temporary
Injunction to meet the requirements of Rule 683 would be equally fruitless
inasmuch as the Injunction is not supported by the record evidence.
To elucidate the difficulty the Business Court will have in enforcing
the Temporary Injunction resulting from its lack of specificity, and to
explain the lack of evidentiary basis for the Injunction, Appellants
respectfully ask the Court to set this appeal for oral argument.
15
ISSUES PRESENTED FOR REVIEW
1. Rule 683 requires an order granting a temporary injunction “be
specific in terms” and “describe in reasonable detail . . . the act or acts
sought to be restrained.” Tex. R. Civ. P. 683. The Temporary Injunction in
this case, however, does not definitively identify the persons or entities with
whom Appellants are enjoined from transacting business. Instead, to
determine whether a potential business partner is off-limits, Appellants
need to investigate whether it is a “contact and or decision maker who is/was
associated with” a confidential list of off-limits people/entities.
Issue Presented: Whether a temporary injunction that requires
Appellants investigate third parties’ employment
records to ensure compliance meets the specificity
requirements of Rule 683.
2. Rule 683 also requires that “every order granting an
injunction . . . shall set forth the reasons for its issuance.” “And, when
setting forth the reasons for granting a temporary injunction, the trial court
must set forth specific reasons, not merely make conclusory statements.”
IPSecure, Inc. v. Carrales, No. 04-16-00005-CV, 2016 Tex. App. LEXIS 6288,
at *56 (Tex. App.—San Antonio June 15, 2016, no pet.). The Temporary
Injunction in this case, however, recites without further explanation “[a]ny
16
suit for money damages would not be an adequate remedy at law to protect
Plaintiff’s rights.” (CR 997–98, ¶ 17.)
Issue Presented: Whether a mere recital of the temporary-injunction
elements sufficiently sets forth the reasons for the
injunction’s issuance as required by Rule 683.
3. Rule 684 requires an order granting a temporary injunction to
fix a bond in an amount sufficient to compensate the defendant in the event
the injunction is ultimately dissolved. See Tex. R. Civ. P. 684; DeSantis v.
Wackenhut Corp., 793 S.W.2d 670, 686 (Tex. 1990). In this case, in which
ES3 acknowledges that the amount in dispute is more than $5 Million and
the evidence showed an injunction would immediately impair contracts
worth $3.6 Million, the trial court set a nominal bond of $25,000.
Issue Presented: Whether a nominal bond provides security as
required by Rule 684.
4. A party seeking a temporary injunction must show that it will
suffer an imminent and irreparable harm if the injunction is not granted.
See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The only
evidence of any harm to ES3 from Appellants’ actions was in the “vibes”
ES3’s president claims to have gotten from his customers.
Issue Presented: Whether a change in the “vibes” in the marketplace
is sufficient to demonstrate an imminent and
irreparable harm.
17
5. An injunction should not be so broad as to enjoin a defendant
from lawful activities. Lagos v. Plano Econ. Dev. Bd., 378 S.W.3d 647, 650
(Tex. App.—Dallas 2012, no pet.). The Temporary Injunction, however,
exceeds the restrictions in the covenant not to compete by extending the
restrictions beyond Texas and past two years after an employee’s
termination.
Issue Presented: Whether a temporary injunction granted on a
covenant not to compete may restrain conduct that
does not violate the covenant’s restrictions.
18
STATEMENT OF JURISDICTION AND STANDARD OF REVIEW
A. Jurisdiction.
The Court has jurisdiction under Texas Civil Practice and Remedies
Code Section 51.014(a)(4), which provides that a party may appeal from an
interlocutory order of a district court that grants a temporary injunction.
Prior to transfer, the Eighth Court of Appeals granted an extension of time
for Appellants to file their notice of appeal, and Appellants timely perfected
their appeal on December 20, 2024.
This case was originally appealed to the Third Court of Appeals at
Austin, Texas, which has jurisdiction over cases brought from Travis
County, Texas. The case was then transferred to the Eighth Court of
Appeals at El Paso, Texas for docket equalization purposes pursuant to
Texas Government Code Section 73.001. After the underlying lawsuit was
removed to the Business Court, this appeal was transferred to this Court
under Texas Rule of Appellate Procedure 27a(c).
B. Standard of Review.
The purpose of a temporary injunction is to preserve the status quo of
the litigation’s subject matter pending a trial on the merits. Butnaru, 84
S.W.3d at 204. A temporary injunction is an extraordinary remedy and will
not issue as a matter of right. Id. To obtain a temporary injunction, the
19
applicant must plead and prove that it (1) has a cause of action against the
opposing parties; (2) has a probable right on final trial to the relief sought,
and (3) faces probable, imminent, and irreparable injury in the interim. Id.;
Taylor Hous. Auth. v. Shorts, 549 S.W.3d 865, 877–78 (Tex. App.—Austin
2018, no pet.).
The decision to grant or deny a temporary injunction is reviewed for
abuse of discretion. Butnaru, 84 S.W.3d at 211. The reviewing court views
“the evidence in the light most favorable to the trial court’s order, indulging
every reasonable inference in its favor.” Amend v. Watson, 333 S.W.3d 625,
627 (Tex. App.—Dallas 2009, no pet.).
However, “[t]he requirements of Rule 683 are mandatory and must be
strictly followed.” Totus Grp., LLC v. Pruitt Family Living Tr., No. 05-23-
01222-CV, 2025 Tex. App. LEXIS 907, at *12 (Tex. App.—Dallas Feb. 14,
2025, no pet. h.). Accordingly, “[a] trial court abuses its discretion by issuing
a temporary injunction order that does not comply with the requirements of
Rule 683.” Indep. Capital Mgmt., L.L.C. v. Collins, 261 S.W.3d 792, 795
(Tex. App.—Dallas 2008, no pet.).
20
STATEMENT OF FACTS
A. ES3 is a mineral-interest broker.
ES3 is a mineral-interest broker/aggregator. (CR 376.) That is to say
that ES3 buys mineral interests from owners and resells them to buyers
who may repackage them for sale as securitized instruments or develop for
extraction themselves. (CR 381; III RR 8:7–22.) The closing of the two
transactions—from mineral-interest owner to broker and from broker to end
buyer—are typically closed at the same time so that the broker does not
need to put its own capital at risk. (III RR 13:15–25.)
The basics of mineral-interest brokerage are simple. The identity of
mineral-interest owners can be ascertained from public records.
(III RR 26:25–27:11.) The broker then cold-calls the mineral-interest owner
to solicit a sale. (III RR 27:12–23, 56:1–5.) It’s straight sales—prior industry
knowledge is neither needed nor even particularly desirable. (CR 386−87;
II RR 46:19–47:1, 50:9–15.) Instead, it is a strong sales background and
capability that is essential to success in the acquisition of mineral interests.
(CR 386−87; III RR 21:12–22:6.)
Once the broker buys a mineral interest, it resells the mineral interest
to private end-buyers and to publicly traded end-buyers. (III RR 19:18–
21
20:23.) The identities of these end-buyers is no secret; it is reflected in the
real-property records of each county. (III RR 22:23–24:7.)
But more importantly, the buyers do not want their identities to be
secret. The buyers are in the business of buying mineral interests, and they
accordingly want the world of mineral sellers and brokers to know that they
are open for business and willing to buy mineral interests. (III RR 24:8–20.)
Accordingly, the mineral-interest buyers actively advertise themselves to
brokers through industry publications, conferences, and networking.
(III RR 24:12–17; 88:21–89:10.)
ES3 is one of approximately 100 broker/aggregators buying and
selling mineral interests in Texas. (III RR 22:12–22.) It has a roughly
proportionate share of the market in mineral interests as reflected in the
public records of the acquisitions by two end-buyers: Hatch Resources and
Mesa Resources. Since ES3’s inception, ES3 has sold five mineral interests
to Hatch. (III RR 86:23–87:13.) Over that same period, Hatch has acquired
295 mineral interests from other broker/aggregators during that time.
(III RR 86:23–87:13.) Over the same period, Mesa has acquired
approximately 200 mineral interests, only five of which were purchased
from ES3. (III RR 87:14–88:6.)
22
B. ES3 hires Ryan to convince mineral-interest owners to sell to
ES3.
ES3 hired Ryan initially as a “Producer” based on Ryan’s two decades
of sales experience. (III RR 54:22–55:6, 55:22–25.) Owing to Ryan’s success
in that position, ES3 promoted him to Vice President of Acquisitions.
(II RR 54:22–55:6.) Ryan led ES3’s efforts to convince mineral-interest
owners to sell to ES3 in his role as Vice President of Acquisitions.
(II RR 55:3–19.) Ryan’s efforts to acquire mineral interests on behalf of ES3
were limited exclusively to the Permian Basin. (III RR 59:13–18.)
C. ES3 taps Ryan’s sales knowledge and experience to develop
its software platform.
In the course of his work for ES3, Ryan took a central role in
developing ES3’s software platform, which it calls “Rainmaker.”
(III RR 56:23–58:2.) When Ryan started at ES3, ES3 simply used
spreadsheets to organize its sales leads. Its sales staff had to manually look
up telephone numbers and other contact information to contact potential
sellers. (III RR 57:14–17.)
Ryan changed that.
Ryan explained how customer-relationship-management (“CRM”)
platforms provide the type of functionality needed to facilitate sales.
(III RR 56:23–57:7.) Using his sales experience in other industries, Ryan
23
explained how much data could be captured and the value of using that data
in sales. (III RR 57:17–24.) ES3 took Ryan’s suggestions to heart and
incorporated his ideas into the development of Rainmaker. (III RR 57:25–
58:2.)
D. Ryan leaves ES3 in 2021 and is subsequently rehired.
In 2021, Ryan resigned his employment with ES3, explaining that he
was tired of the minerals-brokerage business and wanted to go into the
semiconductor industry. (II RR 57:14–25.) Ryan departed on good terms,
with ES3 “leav[ing] the door open” to rehiring him. (II RR 57:23–25.) A
month later, ES3 did exactly that—it rehired Ryan to his previous position.
(II RR 58:1–15.) Ryan did not sign a new noncompetition agreement when
he was rehired.
E. ES3 hired Kreines to lead its efforts to sell the mineral
interests that Ryan acquired.
ES3 recruited Kreines in 2019 to lead its Business Development
Department. (CR 392.) Kreines has been a landman in Texas since 2010,
and used his existing contacts to market the mineral interests that Ryan
and his team acquired for ES3 to sell to end-buyers. (III RR 84:25–85:20.)
Over the course of his career as a landman, Kreines has developed a
large body of industry contacts. (III RR 78:13–25.) As ES3’s founder and
24
president, Trey Stanton, explained it, Kreines was “an extrovert” who “was
not afraid to go into a group of people and introduce” Stanton. (II RR 78:12–
79:15.) Stanton quickly realized that it “would be nice to have [Kreines] by
my side and kind of, you know, fostering and building continued
relationships on the—on behalf of ES3.” (II RR 79:12–15.)
Kreines used those contacts to develop ES3’s business. From his first
North American Prospect Expo (“NAPE”) conference with Stanton, Kreines
connected Stanton to his network. (III RR 85:18–20.)
F. ES3 requires its employees to sign non-competition
agreements.
At the outset of Ryan’s and Kreines’s employment, ES3 required them
to sign a noncompetition agreement. (CR 382, 418−29.) ES3 did not require
Ryan and Kreines to sign the noncompetition agreement owing to their
positions in the company; ES3 requires all of its employees to sign the same
agreement irrespective of their title or job duties. (CR 382 at ¶ 26.)
Kreines expressed reluctance to sign the noncompetition agreement.
He had just moved his family to Austin to join ES3, and did not want to be
unreasonably restrained from working as a landman in the future.
(III RR 86:2–14.) Stanton assured him that the covenant not to compete
wouldn’t prevent him from getting a job after he left ES3. (III RR 86:1–10.)
25
Expressing the same conclusion, ES3’s general counsel told Kreines that he
thought the covenant not to compete was “garbage and not enforceable.”
(III RR 86:11–14.)
G. ES3 terminates Ryan for refusing to steal a consultant’s
intellectual property.
In August 2023, ES3 hired a third-party consultant, Topaz
Consulting, to develop training materials for its sales personnel.
(II RR 59:17–60:8.) ES3 undertook to transcribe Topaz’s training materials
“and make it basically our own.” (II RR 60:1–61:5.)
When Stanton explained his intention to copy all of Topaz’s training
materials and rewrite it as ES3’s own without Topaz’s consent, Ryan
refused. (III RR 60:19–61:12.) A few days later, ES3 fired Ryan.
(III RR 62:7–10.)
H. Ryan starts LMP to act as a mineral broker and secures its
first AMI deal.
After his termination, Ryan started LMP and began trying to acquire
mineral rights. (III RR 63:3–20.) To do so, Ryan scoured county tax records
to identify mineral interests that may be for sale. (III RR 63:6–16.)
At the same time, word of Ryan’s departure circulated around the
industry. One industry player—Mesa Resources—reached out to Ryan over
LinkedIn and negotiated an “area of mutual interest” (“AMI”) deal with him
26
whereby LMP would act as a broker for Mesa’s acquisition of mineral
interests. (III RR 63:6–20, 64:6–25.) While LMP was eager to enter into an
AMI agreement, ES3 eschews such arrangements. (III RR 64:12–15.)
I. LMP hires an independent software designer to develop its
own CRM platform to facilitate its business model.
Having its first AMI agreement in place, LMP hired a software
designer to develop a platform to support its AMI deals in December 2023.
(III RR 53:10–20, 69:6–25, 70:4–8.) LMP provided a basic outline of what it
wanted and the designer developed a platform to manage LMP’s brokerage
business. (III RR 70:9–24.) While LMP’s software platform is tailored to its
AMI-centric business, such CRM platforms are common in the industry.
(III RR 30:10–31:20.)
The differences in the companies’ software systems also derives from
their different philosophies when it comes to pricing. ES3 prices its mineral
interests for sale to buyers based on a multiple-of-cash-flow analysis.
(III RR 15:9–16:16.) ES3’s multiple-of-cash-flow analysis is a basic
valuation model that is common in the industry. (III RR 16:6–16.) In
contrast, LMP bases its pricing mainly off its agreements with its AMI
counterparties. (III RR 66:10–18.)
27
ES3 acknowledges that LMP’s software does not share the same code
as ES3’s software. (II RR 100:13–23.) And because LMP’s business is
different, the interfaces are different. (II RR 100:13–23.)
J. LMP sells its first mineral interest outside an AMI.
In late 2023, Mesa for the first time refused to buy a mineral interest
that LMP had purchased. (III RR 72:22–73:7.) At Kreines’s suggestion,
LMP contacted Hatch Resources to gauge its willingness to acquire the
mineral interest. (III RR 73:8–10.) After a negotiation between LMP and
Hatch, Hatch purchased the mineral interest from LMP. (III RR 72:22–
73:7.)
K. Kreines leaves ES3 in January 2024 to once more work as an
independent landman.
In January 2024, Kreines resigned his employment to resume working
as an independent landman through his company, NAK Resources.
(II RR 73:23–75:6; III RR 83:24−84:6.) As an independent landman, Kreines
has worked with LMP since shortly after his resignation from ES3.
(III RR 84:1–9.)
L. ES3 and LMP have not competed with one another.
As discussed above, the mineral-brokerage business involves two
separate, though related, transactions: the acquisition of the mineral
28
interest from its owner and the resale of that interest to an end-buyer. On
neither side has LMP competed with ES3.
On the acquisition side, LMP and ES3 have never competed against
one another to acquire a mineral interest. (III RR 65:16–21.) As noted
above, the acquisition of mineral interests involves nothing more than a
series of cold calls and sheer luck. (III RR 27:12–23.) So it’s perhaps not
surprising that LMP and ES3 would not be cold-calling the same mineral-
interest owners.
Acquiring mineral interests, however, is critical to the broker’s
business. Without mineral interests, the broker has nothing to resell.
When it does obtain a mineral interest, ES3 turns around and
immediately resells the mineral interest to an end-buyer and
simultaneously closes the two transactions. (II RR 51:11–23.) Hence, ES3
does not sit on an inventory of mineral interests—it resells the mineral
interests it acquires as soon as it gets a deed in hand. (II RR 50:9–51:7.)
If ES3 is not selling as many mineral interests today as it did two
years ago, there’s only one possible reason for that: it doesn’t have as many
mineral interests to sell. But that’s not LMP’s fault. No mineral-interest
seller has ever rejected ES3’s offer in favor of one from LMP. (III RR 65:16–
29
21.) And LMP has never encouraged a buyer not to do business with ES3.
(IV RR at Defs.’ Ex. 21, 111:10–112:14.)
In fact, ES3 itself has no idea why it is not selling as many mineral
interests today as it did two years ago. As to his relationship with end-
buyers, Stanton could only observe that “the vibe has changed.”
(II RR 80:19–82:13.) But Stanton could not link that vibe-shift to anything
LMP has done, and he concedes that no buyer has indicated that they’re not
responding to ES3 because of work they’re doing with LMP. (II RR 82:10–
13.) When specifically asked by ES3’s counsel “Can you tell the Court what
customers you have lost over this year,” Stanton answered “They haven’t
specified that they’re not going to do business with me.” (II RR 46:3–13.)
M. The Travis County District Court issues the Temporary
Injunction, which the Business Court modifies.
Alleging breach of Ryan’s and Kreines’s covenants not to compete and
a variety of other business torts, ES3 filed suit against Appellants on
September 18, 2024. ES3’s Original Petition sought a temporary
restraining order and temporary injunction, among other relief. After the
district court denied its application for temporary restraining order, ES3 set
its application for temporary injunction for October 29, 2024.
30
After a hearing, the district court granted the temporary injunction on
November 26, though the parties were not notified of the order until
December 19. Appellants noticed their appeal the following day.
Appellants subsequently removed this case to the Business Court on
December 23—i.e., within thirty (30) days after the issuance of an order
granting a temporary injunction—consistent with the provisions of Texas
Rule of Civil Procedure 355 and Texas Government Code
Section 25A.006(f)(2). The Business Court heard Appellants’ Motion to
Dissolve the Temporary Injunction for failure to meet the requirements of
Rules 683 and 684 on February 27, 2025. On April 7, 2025, the Business
Court issued its Order Modifying the Temporary Injunction. (2d. Suppl.
CR 307−33.)
31
SUMMARY OF THE ARGUMENT
The Temporary Injunction does not meet the specificity or reasoning
requirements of Rule 683. It is therefore void, and the order issuing the
injunction should be reversed.
Rule 683 requires that any order granting an injunction “describe in
reasonable detail . . . the act or acts sought to be restrained.” Tex. R. Civ. P.
683. Rooted in the Constitution’s due-process guarantee, the specificity
requirement means that an injunction must be clear, specific, and
unambiguous. “Restrained parties should be able to pick up a temporary
injunction order, read it, understand it, and not have to guess about what
they are prohibited from doing upon threat of contempt.” Clark v. Hastings
Equity Partners, LLC, 651 S.W.3d 359, 372 (Tex. App.—Houston [1st Dist.]
2022, no pet.).
The Temporary Injunction in this case does not meet that standard.
It bars Defendants from “negotiating or entering into any transaction with
any of Plaintiff’s Buyers.” (CR 998.) So far so good. But who are “Plaintiff’s
Buyers?”
That’s where things become murky.
32
The Temporary Injunction provides a list of more than a hundred
corporate buyers and more than a hundred “individual contacts” employed
by those entities. (CR 1000–03.) But “Plaintiff’s Buyers” is not limited to
that list. It also includes “any contact and/or decision maker who is/was
associated with” any of the listed entities.” (2d. Suppl. CR 343.)
So to comply with the Temporary Injunction, Appellants cannot just
pick up the order, read it, understand it, and not do business with a list of
people. They have to guess about whether every business partner:
• “was/is associated with” any of the listed entities, and
• is or was a “contact” or a “decision maker” during that association
with one of the listed entities.
Adding to the guesswork, the list itself is designated as “confidential” under
the trial court’s Confidentiality and Protective Order, so Appellants can’t
ask a potential business partner whether it has ever been a “contact and/or
decision maker” with the listed off-limits buyers. Because Appellants have
to guess about whether they’re allowed to do a deal with a company, the
Temporary Injunction does not meet Rule 683’s specificity requirement.
Nor does the Temporary Injunction meet the Rule’s “reasoning”
requirement. Rule 683 requires that an order granting a temporary
injunction “set forth the reasons” why the court deems it proper to issue the
33
writ. Tex. R. Civ. P. 683. The Rule requires specifics, not mere conclusions.
IPSecure, Inc. v. Carrales, No. 04-16-00005-CV, 2016 Tex. App. LEXIS 6288,
at *56 (Tex. App.—San Antonio June 15, 2016, no pet.).
But conclusory statements are all the Temporary Injunction offers. It
characterizes the means by which harm will occur but does not explain the
reasons why irreparable injury will result without an injunction. It does not
explain why ES3’s losses would be difficult to measure (or even state that
they would be difficult to measure). Instead, the Temporary Injunction
simply states that “[a]ny suit for money damages would not be an adequate
remedy at law to protect Plaintiff’s rights.” Such a conclusory statement
does not meet Rule 683’s requirement.
The trial court presumably could not explain the need for an
injunction because there was none. The undisputed evidence before the trial
court was that ES3’s injury—insofar as it has one—is neither imminent nor
irreparable. ES3 has an adequate remedy at law. It is the same remedy
ES3 had for the thirteen months between the time LMP began operating
and when ES3 filed suit.
Moreover, the trial court’s explanation for the injunction is lacking
because the Temporary Injunction prohibits Defendants from engaging in
34
lawful conduct. The covenant not to compete is limited to Texas; the
Temporary Injunction contains no geographic restriction. The covenant not
to compete restricts Ryan’s activities for 24 months after the end of his
employment; the Temporary Injunction applies for more than four years
after Ryan’s 2021 termination.
In issuing a temporary injunction that was so contrary to the evidence,
the trial court abused its discretion. That abuse was multiplied when it
required only a nominal bond, contrary to the requirements of Rule 684.
Accordingly, the Court should reverse the decision of the district court to
issue the Temporary Injunction and remand the case to the Business Court
for further proceedings.
35
ARGUMENT & AUTHORITIES
The Rules governing the issuance of temporary injunctions are
mandatory and must be strictly followed. A temporary injunction that does
not meet the requirements of Rules 683 and 684 is “void and must be
dissolved.” Conlin v. Darrell Haun & Solarcraft, Inc., 419 S.W.3d 682, 687
(Tex. App.—Houston [1st Dist.] 2013, no pet.); accord Qwest Commc’ns
Corp. v. AT&T Corp., 24 S.W.3d 334, 337 (Tex. 2000).
The trial court abused its discretion when it issued a temporary
injunction that (1) did not meet the requirements of Rules 683 and 684 and
(2) was so contrary to the evidence that it ended up restraining Defendants
from engaging in lawful activities. The trial court’s order issuing the
Temporary Injunction should therefore be reversed.
A. The Temporary Injunction does not meet the requirements of
Rules 683 or 684.
The Temporary Injunction neither describes in reasonable detail the
acts to be restrained nor sets forth the reasons supporting the undefined
restrictions imposed. Finally, the Temporary Injunction does not set an
adequate bond as security as required by Rule 684. Accordingly, the
Temporary Injunction is fatally defective, and the trial court’s issuance of
that defective order should be reversed.
36
1. The Temporary Injunction does not set out the reasons
why ES3’s harm is irreparable as required by Rule 683.
The Temporary Injunction’s restrictions are not supported by the
findings made by the enjoining court. Rule 683 requires that an order
granting a temporary injunction “set forth the reasons” why the court deems
it proper to issue the writ. Tex. R. Civ. P. 683. “[I]n other words, the order
must explain the reasons why the court believes the applicant’s probable
right will be endangered if the writ does not issue.” IPSecure, Inc., 2016
Tex. App. LEXIS, at *56 (citing Tuma v. Kerr Co., 336 S.W.3d 277, 279 (Tex.
App.—San Antonio 2010, no pet.). “And, when setting forth the reasons for
granting a temporary injunction, the trial court must set forth specific
reasons, not merely make conclusory statements.” Id.
A statement is conclusory if it does not articulate the factual basis on
which it rests, effectively insisting that the reader accept the writer’s say-so
without explanation.” Home Asset, Inc. v. MPT of Victory Lakes Fcer,
No. 01-22-00441-CV, 2023 Tex. App. LEXIS 2890, at *5 (Tex. App.—
Houston [1st Dist.] May 2, 2023, no pet.) (citing Arkoma Basin Expl. Co. v.
FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 389 (Tex. 2008)). Hence, a
temporary-injunction order must articulate reasons why irreparable harm
will occur, not merely assert that irreparable harm will occur. See Clark v.
37
Hastings Equity Partners, 651 S.W.3d 359, 373–74 (Tex. App.—Houston
[1st Dist.] 2022, no pet.).
Yet a conclusory statement about the supposed irreparable harm is all
the Injunction contains:
(2d. Suppl. CR 339.) According to the Injunction, “unless Appellants are
enjoined,” ES3 will lose “exclusive use of its Trade Secrets,” “deals with
specific buyers,” “gross profits,” and employees. (CR 997, ¶ 16.) But why?
Cf., Clark, 651 S.W.3d at 373–74. The Temporary Injunction offers only the
38
most conclusory statement that Ryan and Kreines have “diluted Plaintiff’s
goodwill.” But how?
Without answering the “why” and “how,” the Temporary Injunction’s
Paragraph 16 closely mirrors the conclusory findings in Clark. The
injunction in that covenant-not-to-compete case found “[t]he Respondents
have violated certain covenants contained in the said Securities Purchase
Agreement and will, if not restrained, likely engage in conduct that will
cause Petitioners to suffer immediate and irreparable injury, loss or
damage; and . . . the threatened damage to Petitioners is impossible to
accurately and fully assess.” Clark, 651 S.W.3d at 374. With no explanation
as to why the purported injury would be “immediate and irreparable,” the
First Court of Appeals concluded that the statement was conclusory and did
not meet the requirements of Rule 683. See id.
Likewise, in Kotz v. Imperial Capital Bank, the San Antonio Court of
Appeals concluded that a temporary injunction reciting that the applicants
“will suffer irreparable injury in their possession and use of the Subject
Property in the event that the requested injunctive relief is not granted” did
not meet the requirements of Rule 683. 319 S.W.3d 54, 56–57 (Tex. App.—
San Antonio 2010, no pet.). To comply with Rule 683, an injunction must
39
“set forth any underlying facts to support its finding” that an irreparable
injury will occur without the issuance of an injunction. Id. “At most, this
language characterizes by what means harm will occur unless Kotz is
enjoined from taking possession and use of the subject property—but does
not state or explain the reasons why irreparable injury will result absent an
injunction.” Id.
The Injunction here similarly “characterizes by what means harm will
occur unless” Appellants are restrained “but does not state or explain the
reasons why irreparable injury will result absent an injunction.” Cf., id. “In
general, harm is irreparable when the harmed party has no adequate
remedy at law.” Home Asset, Inc., 2023 Tex. App. LEXIS 2890, at *7 (citing
Kennedy v. Gulf Coast Cancer & Diagnostic Ctr., 326 S.W.3d 352, 360 (Tex.
App.—Houston [1st Dist.] 2010, no pet.). “So, for example, harm is
irreparable if the harm cannot be adequately compensated in damages or if
the damages cannot be measured by any certain pecuniary standard.” Id.
The Temporary Injunction does not state or explain any reasons why
those injuries cannot be remedied at law. As in Home Asset, the Temporary
Injunction “does not even explain why [ES3’s] losses would be difficult to
measure under the circumstances of this case.” Compare 2023 Tex. App.
40
LEXIS 2890, at *7, with CR 997 at ¶¶ 16–17. Instead, the Temporary
Injunction simply states in conclusory fashion that “[a]ny suit for money
damages would not be an adequate remedy at law to protect Plaintiff’s
rights.” (CR 997–98 at ¶ 17.)
The Temporary Injunction concludes that ES3 will suffer “the loss of
exclusive use of its Trade Secrets, the loss of deals with specific buyers, a
decrease in gross profits, and a loss of employees, which is likely to continue
unless Appellants are enjoined” because Appellants “have diluted Plaintiff’s
goodwill with Plaintiff’s Buyers and will continue to do so.” (CR 864 at ¶ 16.)
But why can those injuries not be remedied at law? The Temporary
Injunction here is silent. And why will this Injunction prevent those losses
when it does nothing to restrict Appellants from acquiring mineral
interests—i.e., the thing that the buyers want to buy? The Injunction offers
no answers; it provides only the conclusion of imminent and irreparable
injury.
As set forth by consistent Texas precedent, the Temporary
Injunction’s findings of imminent and irreparable harm are conclusory and
thus violate Rule 683. Accordingly, the Court should reverse the trial court’s
order issuing the Injunction.
41
2. The Temporary Injunction does not meet the specificity
requirement of Rule 683.
Perhaps arising from the fact that the Injunction can’t explain the
reasons for its issuance, it also can’t identify exactly with whom Appellants
can’t transact business. But Rule 683 requires a temporary injunction to
“describe in reasonable detail . . . the act or acts sought to be restrained.”
Tex. R. Civ. P. 683. A specific description “describes the enjoined acts
without requiring inferences or conclusions about which persons might well
differ and without leaving anything for further hearing.” Whinstone US Inc.
v. Rhodium 30MW, LLC, 691 S.W.3d 47, 50–51 (Tex. App.—Austin 2024, no
pet.) (cleaned up).
Because an injunction is enforced with the threat of criminal
contempt, the specificity requirement of Rule 683 is rooted in the
Constitution’s due-process guarantee. Ex parte Jackman, 663 S.W.2d 520,
523 (Tex. App.—Dallas 1983, no writ). Hence, an injunction must “set forth
the terms of compliance in clear, specific and unambiguous terms so that
the person charged with obeying the decree will readily know exactly what
duties and obligations are imposed upon him.” Ex parte Chambers, 898
S.W.2d 257, 260 (Tex. 1995). “Restrained parties should be able to pick up
a temporary injunction order, read it, understand it, and not have to guess
42
about what they are prohibited from doing upon threat of contempt.” Clark,
651 S.W.3d at 372.
As the Texas Supreme Court has stated:
Where the court seeks to punish either by fine, arrest, or
imprisonment for the disobedience of an order or command, such
order or command must carry with it no uncertainty, and must
not be susceptible of different meanings or constructions, but
must be in the form of a command, and, when tested by itself,
must speak definitely to the meaning and purpose of the court
in ordering.
Ex parte Hodges, 625 S.W.2d 304, 306 (Tex. 1981). “In other words, to be
enforceable by contempt, the order must clearly, specifically, and
unambiguously state the conduct required for compliance.” In re Luther,
620 S.W.3d 715, 722 (Tex. 2021).
Given these requirements, the Temporary Injunction fails in
important and determinative ways. Listing the people with whom
Appellants cannot do business would provide certainty. But the Injunction
doesn’t do that. It instead creates an uncertain list that deprives Appellants
of notice of what they can and can’t do.
a. The Temporary Injunction does not define specific
persons with whom Appellants cannot do business.
The Temporary Injunction’s list of customers with whom Appellants
cannot transact business lacks specificity. The list of entities and persons
43
whom are off-limits is specific. But the Temporary Injunction then contains
an additional catch-all:
(2d. Suppl. CR 343.) This additional term deprives the Temporary
Injunction of the specificity required by Rule 683.
Appellants do not know with whom they cannot
transact business from a simple reading of the
Temporary Injunction.
Appellants have no way of knowing whether an individual was a
“contact and/or decision maker” who “was associated” with the listed
entities. The Temporary Injunction fail to define who a “decision maker”
would be.
But even without knowing who would be a “decision maker,” the
Temporary Injunction would, if read broadly, include each and every person
who has been associated with the listed entities without a time constraint.
Appellants have no way of knowing the identity of every person who is or
has ever been a “contact” or “decision maker” at every one of the 100+
companies listed in the Temporary Injunction. The Temporary Injunction
therefore fails to notify Appellants what they’re enjoined from doing.
44
Not only does the Temporary Injunction fail to notify Appellants what
they’re restrained from doing, it doesn’t provide the trial court with enough
information to enforce it. Rule 683’s specificity requirement enables the
trial court to “determine whether the injunction has been violated.” Paul v.
Roy F. & JoAnn Cole Mitte Found., No. 03-21-00502-CV, 2023 Tex. App.
LEXIS 772 at *5 (Tex. App.—Austin Feb. 8, 2023, pet. denied). But without
the necessary specificity, enforcement is impossible without additional
evidence and inferences.
To enforce the Temporary Injunction, the Court would have to have
an additional hearing to take evidence on a potential buyer’s past
employment, the capacity in which the buyer was employed, and the buyer’s
job duties during that previous employment. That necessity renders the
Temporary Injunction invalid. See Whinstone US Inc. v. Rhodium 30MW,
LLC, 691 S.W.3d 47, 52 (Tex. App.—Austin 2024, no pet.); accord Tarr v.
Lantana Sw. Homeowners’ Ass’n, No. 03-14-00714-CV, 2016 Tex. App.
LEXIS 13372, at *11 (Tex. App.—Austin Dec. 16, 2016, no pet.) (dissolving
injunction in which the determination of “whether certain acts constitute[d]
a breach of the Declaration of Covenants would [have] require[d] inferences
45
and conclusions about which persons might disagree and would [have]
require[d] further hearing.”).
Appellants cannot conduct their own
investigation to ensure compliance with the
Temporary Injunction because its limitations
are confidential.
Not only can Appellants not identify the scope of the Temporary
Injunction today, they can’t ascertain what it will be tomorrow. That’s
because the scope of the Temporary Injunction changes every time an
employee of one of the “Plaintiff’s Buyers” changes jobs. Aside from the
entities listed, the Temporary Injunction prevents Appellants from
transacting business with any entity that may employ a “contact” or
“decision maker” of one of “Plaintiff’s Buyers” in the future.
Under the Injunction, if a “contact” or “decision maker” has moved jobs
to Company X, which has never done business with ES3, then Company X
is added to the list of people with whom Appellants cannot transact
business. But how would Appellants know? Appellants could do a deal with
Company X wholly ignorant of the “contact’s” new employment.
To be safe, Appellants would have to ask each new potential business
partner whether it currently employs any “contact and/or decision maker”
associated with the entities listed in the Injunction. Doing so, however,
46
would violate the confidentiality designation placed on the list of off-limits
entities.
Such a Catch-22 is exactly the type of non-specificity that caused the
Dallas Court of Appeals to invalidate the temporary injunction in Computek
Computer & Office Supplies, Inc. v. Walton. See 156 S.W.3d 217, 222 (Tex.
App.—Dallas 2005, no pet.) (“Because these OEM clients are not specifically
named, we agree with Computek that it must ask every non-ABBA contact
it makes whether it was an OEM client during the relevant times, and that
question may be construed as ‘canvassing’ or ‘soliciting,’ and thus a violation
of the permanent injunction.”). Moreover, requiring Appellants to conduct
their own fact-finding to determine exactly what actions they’re restrained
from doing renders the Temporary Injunction void under Rule 683 even if
they could do that investigation without violating the trial court’s protective
order. See id.
b. By barring Appellants from doing business with
unknown companies, the Temporary Injunction
violates Rule 683.
The scope of the Temporary Injunction, which prevents Appellants
from doing business with certain mystery companies that can only be
identified after further fact-finding, has been consistently held to violate
47
Rule 683. Specifically, and in the context of enforcing a noncompete clause,
the Dallas Court of Appeals has concluded that Rule 683 requires an
injunction enjoining a party from doing business with clients to specifically
identify those clients. Computek Computer & Office Supplies, Inc., 156
S.W.3d at 223.
In Computek, the court held that an order enjoining a former employee
and his new employer from doing business with a non-exclusive list of clients
would require the Appellants to ask any potential client if it had ever done
business with the plaintiff. See id. at 221–23 (striking down injunction that
enjoined Computek from doing business “with any OEM client not listed on
Attachment A or that was a new account set up while Williams worked for
OEM.”). Apart from being insufficiently specific, that inquiry itself could be
seen as soliciting and thus a violation of the injunction. See id. at 221–22.
Therefore, the injunction lacked specificity under Rule 683 and was
unenforceable. Id. at 223.
Similarly, in In re Krueger, the Austin Court of Appeals rejected an
injunction that barred a company executive from “contacting any of Cru
Energy, Inc.’s investors or potential investors, or any other persons doing
business with or potentially a participant in the business of Cru Energy,
48
Inc.” No. 03-12-00838-CV, 2013 Tex. App. LEXIS 5984, at *24 (Tex. App.—
Austin May 16, 2013, no pet.). The court concluded that the prohibition
failed to inform the executive “of who he is enjoined from contacting, and it
requires him to infer the identity of those individuals based on his then-
existing knowledge of the company’s operations.” Id. The Temporary
Injunction suffers from the same infirmity as it requires Appellants to infer
the identity of companies with which they cannot transact business.
Likewise, in In re Luther, the trial court enjoined a hair stylist from
“conducting in-person services at the salon ‘in violation of State of Texas,
Dallas County, and City of Dallas emergency regulations related to the
COVID-19 pandemic.’” 620 S.W.3d 715, 722 (Tex. 2021). That injunction,
however, lacked specificity in two ways: (1) it did not “describe with
specificity which ‘in-person services’ were restrained,” and (2) it did not
specify “any particular state, county, or city regulation” that Luther “is being
commanded to stop violating.” Id. at 722–23.
Accordingly, “Luther could not know without analyzing a multitude of
regulations—state, county, and city emergency orders referenced in the
temporary restraining order, plus the federal guidelines they referenced—
49
what conduct was prohibited at any given time the temporary restraining
order was in effect.” Id. at 723. Such lack of specificity violated Rule 683.
The Temporary Injunction in this case requires a similar investigation
by Appellants to determine what conduct is prohibited at any given time.
Each time they do a deal, Appellants need to ask the party on the other side
of the table for a complete list of its employees. Appellants then presumably
need to ask each employee whether he or she has ever been a contact or
decision maker associated with any of the listed entities. Absent such a
detailed investigation, Appellants risk unwittingly negotiating or entering
into a transaction with a “Plaintiff’s Buyer” as that term is ambiguously
defined in the Injunction.
The Injunction thus follows the same formula found to be deficient in
Luther, Krueger, and Computek. Appellants do not know with whom they
can’t do business without analyzing the employment history of each
employee of every potential business partner. And the trial court cannot
enforce the Injunction without an evidentiary fact-finding. The Injunction
therefore violates Rule 683 and the Court should reverse the trial court’s
decision to issue it.
50
3. The bond required by the Temporary Injunction is
inadequate and contrary to the evidence.
Texas Rule of Civil Procedure 684 requires that orders granting
temporary injunctions must set a bond. Tex. R. Civ. P. 684. Texas law
requires a bond to obtain a temporary injunction because the applicant does
not have to prove its entire case at the temporary-injunction hearing. See
DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 686 (Tex. 1990).
“An injunction plaintiff need not establish the correctness of his claim
to obtain temporary relief, but must show only a likelihood of success of the
merits. Correspondingly, an injunction defendant has a lesser burden to
establish his right to recover on an injunction bond than would be required
in an ordinary action for malicious prosecution.” Id. The bond should
therefore adequately compensate the enjoined party for the damages caused
by the issuance of the injunction in the event it is dissolved. See id. at 685–
86.
The bond set in the Temporary Injunction does not accomplish that
purpose. It is instead a nominal bond that does not meet the requirement
established by Rule 684 to set a security. Because the bond fixed does not
provide adequate security to Appellants, the order issuing the Injunction
51
should be reversed. See Tex. R. Civ. P. 684; Qwest Commc’ns Corp. v. AT&T
Corp., 24 S.W.3d 334, 337 (Tex. 2000).
a. The trial court set a nominal bond that was
unsupported by the evidence.
A bond must be set at an amount that will adequately protect the
enjoined party’s interests. DeSantis, 793 S.W.2d 685. For example, in
Franklin Savings Association v. Reese, the Austin Court of Appeals reversed
and remanded an injunction preventing the foreclosure of a home when the
bond was set at $10,000. 756 S.W.2d 14, 16 (Tex. App.—Austin 1988, no
writ). The court identified that the property at issue was valued at between
$25 million and $50 million and the interest accruing on the debt would
exceed $2 million over the life of the injunction. Id. As such, the court found
that the bond of $10,000 was inadequate to protect the enjoined party. Id.
The evidence before the trial court showed that LMP would be unable
to close five deals that were under contract. The inability to close those deals
alone would result in a loss of approximately $3,595,415.00 in gross revenue.
(CR 766–67.)
The testimony at the temporary injunction hearing echoed this
evidence. (II RR 71:17−21.) Aside from the contracts of which an injunction
could cause a breach, an injunction would impair LMP’s ability to do
52
business. With realized profits of $6.7 Million on gross revenue of $20.2
Million in the first ten months of 2024 (III RR 52:9–16, 71:22−25), the
damage to Appellants resulting from a ten-month temporary injunction is
far greater than $25,000.
b. The bond should have been set on the basis of lost
revenue, but even a lost-profit standard would
have resulted in a significantly higher bond
amount.
To adequately protect LMP in the event that the injunction is later
dissolved, the bond should have reflected the lost gross revenue that LMP
is experiencing as a result of the Injunction. “The purpose of the bond is to
protect the defendant from the harm he may sustain as a result of
temporary relief granted upon the reduced showing required of the
injunction plaintiff, pending full consideration of all issues.” DeSantis, 793
S.W.2d at 685–86. In this case, the harm sustained is by not being able to
sell mineral interests LMP has acquired.
LMP still has to pay the original sellers for those mineral interests; it
still has to make payroll. It still has to keep the lights on (metaphorically
and literally). Lost profits do not protect Appellants from the harm they
have sustained from the void Injunction.
53
But even if the proper measure of the bond were restricted to lost
profits, that number would be vastly greater than $25,000. In the first ten
months of LMP’s operation, LMP realized profits of $6.7 Million on gross
revenues of $20.2 Million. (III RR 52:9–16, 71:22−25.) In the context of such
profits and revenues, a nominal bond of $25,000 is insufficient, and the trial
court’s order issuing the Injunction with an inadequate bond should be
reversed.
c. The nominal bond set by the trial court essentially
eliminated the bond requirement altogether.
Against the amount in dispute and the likely losses caused by the
Injunction, a bond of $25,000 is nominal. Such a bond should be avoided.
As Justice Young stated in his dissent in Van Huis v. Marine Ventures, Ltd.,
a nominal bond “could be tantamount to dispensing the bond requirement
altogether.” 672 S.W.3d 22, 26 (Tex. 2023) (Young, J., dissenting).
That is the situation here. While the amount of the bond is within the
trial court’s discretion, the failure to require a bond renders an injunction
void. See Whitlow v. Polley, 670 S.W.2d 318, 319 (Tex. App.—Tyler 1984, no
writ). In a case in which (1) the undisputed evidence demonstrated that the
issuance of an injunction imperiled pending contracts worth $3,595,415.00,
(2) LMP realized profits of $6.7 Million over the preceding 10-month period,
54
and (3) ES3 affirmatively acknowledged the amount in controversy exceeds
$5 million when it did not challenge the removal of the case to the Business
Court, see Tex. Gov’t Code § 25A.004(b), a $25,000 bond is “tantamount to
dispensing with the bond requirement altogether.” Van Huis, 672 S.W.3d
at 26. It is, in effect, no bond at all.
In setting a nominal bond that effectively dispensed with the Rule 684
bond requirement, the trial court abused its discretion. The Temporary
Injunction is therefore void, and the order issuing it should be reversed.
B. The evidence does not support the issuance of a temporary
injunction.1
The trial court could not state its reasons for issuing the Temporary
Injunction as required by Rule 683 because the evidence did not support it.
Instead, even taken in the light most favorable to ES3, the evidence
demonstrates that ES3 faces no probable, imminent, and irreparable injury
for which the extraordinary remedy of a temporary injunction is necessary.
1 ES3 attempted to offer and admit into evidence a number of exhibits en masse
at the end of the hearing without a sponsor or foundation. As Judge Eiserloh stated
at the conclusion of the hearing, the reason she normally doesn’t admit exhibits
“without being sponsored by a witness” is because she then “doesn’t have anything to
connect them to.” (III RR at 95:2–5.) Judge Eiserloh further explained, and as is
evident by this record and the Temporary Injunction issued, “that’s kind of a bit of an
issue.” (III RR at 95:6.)
55
“Establishing probable, imminent, and irreparable injury requires
proof of an actual threatened injury, as opposed to a speculative or purely
conjectural one.” Tex. Dep’t of Pub. Safety v. Salazar, 304 S.W.3d 896, 908
(Tex. App.—Austin 2009, no pet.). “[T]o support injunctive relief, the
commission of the act must be more than speculative and the injury that
flows from the act must be more than conjectural.“ Archon Design v. Naim,
No. 03-23-00226-CV, 2023 Tex. App. LEXIS 6740, at *13 (Tex. App.—Austin
Aug. 30, 2023, no pet.).
An injury is irreparable if damages cannot be measured or would not
adequately compensate the injured party. Butnaru v. Ford Motor Co., 84
S.W.3d 198, 204 (Tex. 2002). Breach-of-contract claims generally don’t meet
this standard. Archon Design, 2023 Tex. App. LEXIS 6740, at *13. The
evidence in this case confirms that ES3’s alleged injuries are not such as to
extract its case from that general rule.
1. There is no imminent and irreparable harm to ES3
ES3 failed to show that Appellants have caused it immediate and
irreparable harm. ES3 has not lost a single buyer or a single deal.
(III RR 65:16–21.) ES3 did not identify any present or future harm.
56
In reality, ES3 feels harmed by Defendants’ success in business.
Speculation, much less jealousy, is not a basis for enjoining a party. Huynh
v. Blanchard, 694 S.W.3d 648, 679 (Tex. 2024) (“An injunction will not lie to
prevent an alleged threatened act, the commission of which is speculative
and the injury from which is purely conjectural.”).
a. ES3’s injury was not “immediate.”
ES3 sought to enjoin Defendants in late September 2024 after LMP
had been in operation for over a year. (CR 393 at ¶ 50.) For a year, the
alleged competition from LMP was so non-injurious that ES3 was unaware
that LMP even existed. (CR 398, ¶ 68.)
ES3 has not identified how Appellants’ actions have caused it injury
beyond speculation. Huynh, 694 S.W.3d at 679. No buyer has refused to do
business with ES3 due to competition with LMP. (II RR 46:3−6.).
Defendants have never diverted or discouraged any buyer from buying
minerals from ES3. (IV RR at Defs.’ Ex. 21, at 111:18−112:14.) And LMP
has never competed against ES3 to acquire a mineral interest from a selling
owner. (IV RR at Defs.’ Ex. 21 at 85:19−23 (sealed).)
57
b. ES3 has not endured an injury requiring
injunctive relief.
ES3 does simultaneous closings, or what is commonly known as
arbitrage, for the mineral interests it acquires. (III RR 13:15−21.) ES3 buys
a mineral interest from an owner, ES3 immediately turns it around to sell
that mineral interest to a buyer.
ES3 presented no evidence that LMP has ever competed with it on the
acquisition side because ES3 and LMP had never pursued the same mineral
interest held by a mineral owner. (III RR 65:16−21.) Such evidence would
be easy to produce as ES3’s software program keeps a record of ES3’s
correspondence with potential mineral sellers. (III RR 57:13−25, 58:1−2.)
ES3 has not and cannot point to a single acquisition that LMP procured that
ES3 also attempted to procure.
ES3 instead complains that Appellants were interfering with ES3’s
relationships with buyers and repeatedly defines the market of buyers as
“ES3 Buyers.” (CR 1214, 1329.) This description is misleading.
(III RR 26:14−20.)
ES3 paints the mineral-interest industry to be one in which each
buyer loyally purchases mineral interests from only one broker. But buyers
in the minerals industry are not loyal to a single broker; they purchase from
58
whomever has valuable mineral interests. (III RR 22:23–24:20.) Buyers are
like used-car dealerships, such as Carvana or CarMax. A used-car
dealership does not buy used cars from a single person—it buys from anyone
that has a used car that the dealership believes will be a worthwhile asset.
The used-car dealership may resell the car, break it down for parts, or
simply hold on to it while deciding what to do next. Buyers in the minerals
market similarly purchase mineral interests from brokers and either
repackage them for sale as securitized instruments or develop them for
extraction themselves. Buyers in the minerals market are ready to buy any
mineral interest that they believe will be a valuable asset from any broker
or seller. (III RR 25:24−25; 26:1−6.)
If ES3 procures valuable assets, there is a willing and ready market
ready to buy those assets. Alternatively, if ES3 has been injured (it has not),
it would be from LMP successfully procuring mineral interests out from
under ES3 such that ES3 did not have any inventory to sell to any buyers.
(III RR 22:7−11; 26:21−24.) But that is not the case. ES3 drafted and
submitted a temporary injunction to the trial court that enjoins the
divestiture side of dealing rather than the acquisition side.
Why?
59
Because ES3 cannot identify any competition or harm on the
acquisition side. And with no harm on the acquisition side, it cannot have
an injury on the sales side given the nature and dynamics of the industry.
c. ES3’s alleged damage to its relationship with
buyers is speculative.
To further address any alleged damage on the buyers’ side of ES3’s
transactions, there is no evidence that any buyers are refusing to work with
ES3, just Stanton’s testimony that the “vibe” is different. (II RR 46:3−10.)
Stanton does not state that ES3 has done no deals with Tailwater or
Mesa, but rather “very little.” (II RR 46:6−7.) No buyer has refused to work
with ES3. It is unclear, merely speculative, as to why ES3 has not closed
more deals with a handful of buyers. It very well may be that ES3 has not
procured mineral interests that buyers find to be valuable. (III RR 22:7−11.)
Yet, ES3’s failure to complete deals is not evidence that Appellants have
diminished ES3’s goodwill in the minerals market.
Trey Stanton notably could not identify any damage to ES3 during his
deposition or testimony at the Temporary Injunction hearing tied to
Appellants’ actions. His inability to identify damages does not mean ES3
has an irreparable injury, it means ES3 does not have any injury. Without
60
damages, much less immediate and irreparable damages, the trial court
abused its discretion by issuing the injunction against Appellants.
2. The trial court improperly granted the Temporary
Injunction because there is no probable right of relief on
ES3’s claims.
This suit isn’t about ES3’s difficulties—it’s about LMP’s success. It’s
not about protection, but punishment.
Trey Stanton thinks that he has captured lightning in a bottle with
ES3. But as laid out by Steven Hatcher, Appellants’ industry expert, the
business of buying and selling mineral interests “is simple, it’s not easy.”
(See III RR at 36:3.) The mineral-brokerage industry is based on the use of
public records and valuation formulas that are general industry knowledge.
The only real barrier to entry is a healthy work ethic.
In its Third Amended Petition, ES3 pleads violation of the Texas
Uniform Trade Secrets Act, violation of the Texas Theft Liability Act, breach
of contract, breach of fiduciary duty by Nicholas Kreines, tortious
interference by LMP, and civil conspiracy by all of the Appellants. ES3’s
claims center on alleged violation of a non-compete by Ryan and Kreines
and alleged misappropriation of trade secrets. But in an industry that relies
on fundamental sales principles, in which buyers advertise, and in which
61
key customer data is reflected in the public tax rolls and the Texas Railroad
Commission website, these allegations are unsupported. And consequently
the temporary injunction record does not reflect a likely chance of success
on the merits.
a. This industry relies on the most basic principles of
economics and marketing.
While adjacent to the oil-and-gas industry, the business of brokering
mineral interests is a simple and separate matter of real-estate
transactions, or even more simply, pure sales. You acquire mineral
interests and then you sell them. Trey Stanton in fact hired David Ryan
because of his strong background in sales. That’s consistent with the model
of this industry. As ES3 pleaded, there was no need for prior industry
knowledge. (CR 386−87; II RR 46:19–47:1, 50:9–15.)
Companies that buy mineral interests from brokers like ES3 actively
market themselves to brokers. They contact brokers through direct
communications on LinkedIn and other platforms, participation in industry
conferences, and regularly conducted social events. (IV RR at Defs.’ Ex 21,
79:3–81:1, Defs.’ Ex. 22, 116:6–122:21.) They offer brokers gifts as part of
their marketing efforts. (CR 396 at ¶ 60.)
62
In fact, buyers are so active in marketing themselves that LMP has
never had to solicit them. Every mineral interest LMP has sold has been
bought by a company that contacted LMP first. (III RR 78:24–25.) Again,
it’s a simple sales model; it makes sense that buyers buy. The temporary-
injunction record is devoid of any controverting evidence on this point.
b. ES3 identifies no trade secret that has been taken.
A finding of misappropriation of trade secrets requires trade secrets to
misappropriate. In this case, ES3 paints with a broad brush and covers
everything fundamental to the business of buying and selling mineral
interests as proprietary and confidential in an effort to support its claim that
the only way Appellants could work and succeed in this industry is through
misconduct.
The list and explanation of what is a “trade secret” has evolved over
the life of the underlying litigation to include the software platform,
simultaneous acquisition and divestiture transactions, creating siloed
departments, customer information, and pricing methodology. (Compare
CR 5–31 with CR 376–410.) However, not only are these not confidential
and proprietary matters, there are material differences in the way that LMP
and ES3 operate that defeat ES3’s claims.
63
Though the trial court made a conclusory finding that trade secrets
were misappropriated, the Temporary Injunction fails to identify the what
and the how.
Though there is overlap due to the nature of the
industry, the two companies employ different
business practices.
Included in the original petition and in the Agreements signed by
Ryan and Kreines are reference to “simultaneous closings.” (CR 396 at ¶ 61,
CR 419.) However, Trey Stanton and ES3 did not invent the concept of
simultaneous closings. Steven Hatcher, Appellants’ industry expert
testified that simultaneous closing is commonplace in the industry and that
he himself uses it. (III RR 13:15–14:1.) And as Ryan testified, the
simultaneous closing method is not even unique to this industry, as he used
the simultaneous closing, or arbitrage, model when he was working in the
semiconductor industry. (III RR 58:18–59:4.)
Stanton prides himself on silos within ES3, whereby he could bring in
people with no industry knowledge. (II RR 46:16–47:1.) He walled these
groups off from one another, restricting information between them. (II RR
47:6–8.) Though he now says that it was to prevent someone from
64
replicating what he built, what he portrayed to ES3 employees was about
efficiency—not confidentiality. (II RR 47:9–12.)
But while having internal silos is not unique to ES3, it is unique as
between ES3 and LMP. ES3 segregates its employees into different
departments; LMP actively encourages collaboration between teams. Even
if siloing could be considered a trade secret, there is no evidence in the record
that Ryan, Kreines, or LMP took advantage of that in their dealings after
ES3. (III RR 19:10–17.) And as Ryan himself was an industry outsider who
was siloed while at ES3, his ability to start LMP lends support that this is
an industry with low barriers to entry and has a public facing nature.
Stanton’s claims are undermined by the perceived threat this lawsuit
evidences.
Silos are not the only difference between ES3’s and LMP’s operations.
LMP has actively sought AMI agreements with end buyers; ES3 eschews
such arrangements, and never agreed to an AMI in Texas while Kreines or
Ryan was working for ES3. (See III RR 65:12–15.) There is no evidence in
the record about why ES3 does not do AMIs or whether this material way
of going after and developing business could be attributable to the
differences in ES3’s profits. There is no development in the record of the
65
vague allegation that business methods were misappropriated, and thus
nothing to support a finding of misappropriation of trade secrets.
The only business methods identified by ES3 are (1) not trade secrets,
and (2) not used by LMP. Thus, it is unlikely that ES3 would or even could
succeed on the merits
There are material differences in the pricing
formula stemming from the differences in
business practices.
ES3 also cites its pricing method as a trade secret (without specifying
how or why). (CR 399 at ¶ 72.) LMP prices its deals based on an entirely
different model from ES3. ES3’s model prices its mineral interests for sale
to buyers based on a cash-flow analysis ES3 assigned a moniker to.
(III RR 15:9–16:16.) As Steven Hatcher noted, however, this supposedly
confidential pricing method is “effectively a derivative of a multiple of cash-
flow analysis.” (III RR 15:22–16:5.) This purported trade secret is “as basic
as it gets.” (III RR 16:11–16.) Thus, ES3’s multiple-of-cash-flow analysis is
a basic valuation model that is common in the industry. (III RR 16:6–16.)
In contrast, LMP bases its pricing mainly off its agreements with its
AMI counterparties. (III RR 66:10–18.) And as explained above, ES3 does
66
not engage in many (if any) AMI deals, so the pricing methodology would
necessarily deviate.
The two companies’ software platforms are
different.
ES3 also alleged that LMP’s software was plagiarized from ES3’s
software. (CR 399 at ¶ 72.) There is no allegation that Ryan or Kreines
stole the code—in fact the uncontroverted testimony is that they never had
access. Further, neither Ryan nor Kreines are software engineers or
developers. (IV RR at Defs.’ Ex. 21 at 17:19–18:4.) They lacked the
opportunity and capability to support such a claim.
Instead, ES3 tried to claim “functional plagiarism”—the two platforms
performed some of the same functions. ES3 explained that its software as
“aggregat[ing] information and manipulat[ing] information from select
public sources, non-public sources, and proprietary sources.” (CR 378 at
¶ 7.) But there’s nothing unique about that concept. As ES3’s CEO
acknowledged, other data-aggregating customer relationship management
platforms can be bought off the shelf. (IV RR at Defs.’ Ex. 21, 45:2–48:8.)
LMP’s independent development of software that does what multiple other
well-known software platforms do is not actionable.
67
And as Plaintiff’s software expert, Dr. Mark Gianturco, acknowledged,
the two software platforms look very different. Gianturco focused on
functionality, but he readily acknowledged that he has no background in
this industry and thus doesn’t know what functionality is common to all
platforms used in the industry. (II RR 106:3–16.) The record before the trial
court made clear that to the extent there is overlap in functionality, the
incorporation and display of industry data (tax rolls, Railroad Commission
information, etc.) is information that all mineral interest brokers use.
(III RR 26:21–29:22.)
The fact that the software platforms have some overlap is no evidence
of plagiarism. As explained in the deposition testimony of Dr. Jeff Miller
admitted into the record at the temporary-injunction hearing, many
software platforms have similar functionality. But just because Google Docs
does word processing doesn’t mean that it is plagiarized from Microsoft
Word. (IV RR at Defs.’ Ex. 23 at Vol. 1, 18:7–19:21.) A review of the
platforms reveals functionality unique to LMP’s platform. (IV RR at Defs.’
Ex. 23 at Vol. 1, 60:17–19.)
68
For example, LMP’s platform is optimized working with an AMI. As
David Ryan described, LMP’s software allows it to run reports that ES3’s
software cannot. (III RR 69:3–25.)
Moreso than function, however, Gianturco’s opinion that LMP’s
software is derivative of ES3’s software came from his surmise that LMP’s
software could not have been built in two months if it didn’t have a head
start. The first and only time Gianturco reviewed LMP’s software was in
October 2024. (II RR 106:17–107:2.) Since it was initially developed, the
software has undergone constant and significant revisions. (IV RR at Defs.’
Ex. 23 at Vol. 1, 37:2–17.)
Gianturco is right—LMP’s software wasn’t built in two months; it was
built over the 12 months between when it was started and when he reviewed
it. (IV RR at Defs.’ Ex. 20, 54:10–13.) To put that into context, Stanton
testified that it took him only six months to develop ES3’s software. (IV RR
at Defs.’ Ex. 21, 43:8–20.)
While the trial court correctly excluded the software from its findings
in the Temporary Injunction, the evidence presented on the software
platform speaks to the larger theme here: ES3 can see no way anyone could
69
compete in this space without copying ES3. The evidence, however, does
not support that supposition.
The identities of ES3’s buyers are not secret.
The buyers of mineral interests from ES3 don’t belong to ES3—they’re
companies that buy from any broker willing to sell mineral interests. (IV RR
at Defs.’ Ex. 22 at 116:6−122:21.) Not only are they readily identifiable from
a review of county deed records, mineral-interest buyers make sure that
nobody has to go to that effort to find them. (IV RR at Defs.’ Ex. 22 at
121:25−124:19.)
Nicholas Kreines already had a well-established network prior to his
tenure at ES3. As Stanton testified, when they reconnected at NAPE
Kreines introduced Stanton to Kreines’s preexisting network. (II RR 79:6–
12, 16–19.) Stanton brought Kreines to keep “fostering and building
continued relationships.” (II RR 79:12–15.)
The buyers in the mineral brokerage space buy from any broker with
mineral interests to sell—whether it be from LMP, ES3, or any one of the
hundred other brokers in the market (with which both Hatch and Mesa have
done hundreds of deals). Hatcher made clear that no end buyer buys
exclusively from a single broker. Buyers advertise their desire to buy
70
mineral interests to the wide world in industry publications. They advertise
the price at which they buy to anyone with a mineral interest to sell.
These buyers weren’t exclusive to ES3. They weren’t exclusive to
LMP. As Stanton testified, the same companies he complains LMP was
working with do business with others. (II RR 80:11–15.) He doesn’t know
the number of deals, only that the buyers acquire interests from multiple
sources. (II RR 80:16–18.) There are in fact numerous companies that
compete with ES3 for mineral interests (IV RR at Defs.’ Ex. 21 at 54:23–
55:20.) But ES3 doesn’t know what business method those companies use
or how it is different from ES3’s. (IV RR at Defs.’ Ex. 21 at 115:4–19.) And
ES3 acknowledges that those companies are not relying on a business
method stolen from ES3. (IV RR at Defs.’ Ex. 21 at 54:23–56:3.)
Setting aside ES3’s telling lack of interest in exploring how other
competitors might be affecting his business, if the buyer and contact
information was confidential, how would those other individuals and
entities do business with the same buyers? The clear answer—and the
answer that is in the record—is that the buyers seek out deals. They are
the ones doing the courting.
71
c. The evidence doesn’t support ES3’s allegation that
Ryan and Kreines have breached an enforceable
covenant not to compete.
Nor does the evidence support the issuance of a temporary injunction
on the basis of the covenant not to compete. “The hallmark of enforcement
is whether or not the covenant is reasonable.” Marsh USA Inc. v. Cook, 354
S.W.3d 764, 777 (Tex. 2011). Ryan is not breaching his covenant not to
compete—its restrictions expired. Moreover, Ryan’s and Kreines’s
covenants not to compete are unenforceable under Texas law, and cannot
form the basis for an injunction.
David Ryan has not breached the covenant not to
compete.
As both Ryan and Stanton testified, Ryan resigned from ES3 in 2021.
(II RR 57:14–18; III RR 42:8–10.) Though he later rejoined ES3, he did not
sign a new contract. (II RR 17:6–10.) The two-year restriction on Ryan thus
lapsed in 2023.
There is no tolling language in the agreement between Ryan and ES3.
The agreement expressly states that “Accordingly, Employee agrees that,
during employee’s employment with ES3 and for twenty-four (24) months
thereafter, regardless of the reason for or manner of termination, Employee
will not, directly or indirectly” compete with ES3, accept employment or
72
have an ownership interest in a competing business, solicit customers, or
discourage customers from doing business with ES3. (CR 420–21.) The
relevant language is clear. See Citation 2002 Inv. Llc, & Endeavor Energy
Res., L.P. v. Occidental Permian, 662 S.W.3d 550, 554–55 (Tex. App.—El
Paso 2022), aff’d, 689 S.W.3d 899 (Tex. 2024) (contracts should be enforced
based on what is expressed within the “four corners” of the agreement and
“[a]mbiguity does not arise merely because parties assert differing
interpretations.”). The trigger for the two-year restriction was the ending of
Ryan’s employment “regardless of the reason for or manner of termination.”
Ryan complied with that restriction. After his employment at ES3
ended in 2021, he did not compete with ES3. Instead, he went back to work
in the semiconductor industry. He then returned to ES3—the opposite of
competition. But he did not enter into a new agreement restricting his
activities after his second stint of employment ended. The Temporary
Injunction enforcing a covenant not to compete with which Ryan fully
complied therefore runs contrary to the totality of the record evidence.
The covenants are not supported by
consideration.
A covenant not to compete is enforceable only “if it is ancillary to or
part of an otherwise enforceable agreement at the time the agreement is
73
made.” Tex. Bus. & Com. Code § 15.50(a). Under this statutory
requirement, there must be a nexus between the consideration provided to
the employee and the restrictions imposed. See Marsh USA Inc., 354 S.W.3d
at 775–76. “Consideration for a noncompete that is reasonably related to an
interest worthy of protection, such as trade secrets, confidential information
or goodwill, satisfies the statutory nexus.” See id.
In conclusory (and implausible) fashion, ES3 asserts that everything
it does is confidential. (IV RR at Defs.’ Ex. 21, 110:6–16.) But the reality is
that virtually everything ES3 does is the general practice that everyone else
in the hundreds-of-players industry follows. ES3 didn’t give Kreines and
Ryan any confidential information; it gave them (at most) general industry
knowledge. But general industry knowledge is not a trade secret. See
Stewart & Stevenson Servs. v. Serv-Tech, Inc., 879 S.W.2d 89, 95 (Tex.
App.—Houston [14th Dist.] 1994, writ denied).
Moreover, as Stanton testified, ES3 silos its employees specifically to
ensure that they do not have access to its trade secrets. (II RR 47:6–16.)
Ryan and Kreines did not have access to ES3’s software; only to a small
portion of it. (Id.) And to the extent that any of ES3’s business methods or
74
practices are trade secrets, the siloing of Ryan and Kreines prevented them
from having knowledge of them.
Because ES3 did not provide consideration that was reasonably
related to any business interest worthy of protection, it is not enforceable
under the Act.
The restrictions in the covenants not to compete
are unreasonable.
With no actual trade secrets, ES3 relies on an unenforceable covenant
not to compete to try and destroy LMP and the livelihoods of Ryan and
Kreines.
A) The temporal restriction is unreasonable.
In this case, the two-year restriction is unreasonable when (1)
Hatcher’s testimony is that an outsider could come into the industry and
start competing in a few months and (2) Stanton testified that he recruits
from outside the industry because sales experience is more important than
any industry knowledge. (II RR 46:14–47:1; CR 386–87 at ¶ 34.) No
evidence was presented at the hearing or is in the record to support the
length of the restriction.
75
B) The geographic restriction is unreasonable.
A geographic restriction for the entire state of Texas is unreasonable.
As Ryan testified, his work with ES3 was limited to the Permian Basin.
(III RR 59:13–18.) There was no evidence presented by ES3 as to why Texas
was a reasonable geographic restriction.
C) Industry-wide restriction is invalid as a
matter of Texas law.
ES3’s definition of a competing business contains an industry-wide
restriction. An industry-wide restriction, however, is unreasonable as a
matter of law. Peat Marwick Main & Co. v. Haas, 818 S.W.2d 381, 386–88
(Tex. 1991).
ES3 alleges Appellants violated the agreement by being in the same
business space—not competing over a specific deal. David Ryan testified
that LMP and ES3 have never bid against one another on any acquisition
deal. And Trey Stanton agreed. (IV RR at Defs.’ Ex. 20 at 85:19–23.) But
ES3 offered no evidence that it had ever sought to buy any of the mineral
interests that LMP has acquired.
In this case, the absence of evidence is evidence of absence as to
competition. And a restriction as broad as the one in the non-competes is
not enforceable.
76
The Covenants Not to Compete Act, Tex. Bus. & Com. Code § 15.51, et
seq., sets out the framework and requirements for crafting valid and
enforceable non-compete agreements. The statute’s “core inquiry is whether
the covenant contains limitations as to time, geographical area, and scope
of activity to be restrained that are reasonable and do not impose a greater
restraint than is necessary to protect the goodwill or other business interest
of the promissee.” Marsh US, Inc., 354 S.W.3d at 777.
Again, the statewide geographic restriction is unreasonable when
Ryan and Stanton testified that they only did deals in the Permian Basin.
And the industry-wide restriction is unreasonable as a matter of law. Peat
Marwick Main & Co., 818 S.W.2d at 386–88.
3. The Temporary Injunction does not contain a geographic
restriction, thereby barring Appellants from engaging in
lawful activity.
Not only did the trial court enforce an overbroad covenant not to
compete; it went beyond the overbroad restrictions in the covenant not to
compete and erased any geographic restriction. The enabling statutory
authority for the non-compete states that:
Notwithstanding Section 15.05 of this code, and subject to any
applicable provision of Subsection (b), a covenant not to compete
is enforceable if it is ancillary to or part of an otherwise
enforceable agreement at the time the agreement is made to the
77
extent that it contains limitations as to time,
geographical area, and scope of activity to be restrained that
are reasonable and do not impose a greater restraint than
is necessary to protect the goodwill or other business
interest of the promisee.
Tex. Bus. & Com. Code § 15.50 (emphasis added).
The covenants not to compete included a geographic scope limiting its
restrictions to the State of Texas:
(CR 421 (emphasis added).) The relevant language in the documents signed
by Ryan and Kreines is identical. (See also CR 427.)
The Temporary Injunction contains no geographic restriction. (See
CR 871–77.) Challenge to the enforceability of the Agreements
notwithstanding, the non-competition language in the Agreements that was
signed by the parties restricts prohibited conduct within Texas. By failing
to include any geographic imitation, the trial court put in restrictions to
which the parties did not agree.
78
Texas courts have rejected temporary injunctions that fail to adhere
to the requirements for a valid non-compete agreement. In Parker v.
Schlumberger Tech. Corp., the non-compete agreements that were executed
by the parties were to last for one year. 475 S.W.3d 914, 928 (Tex. App.—
Houston [1st Dist.] 2015, no pet.) The temporary injunction issued by the
trial court, however, extended to the time of trial—significantly outlasting
the one-year period contained in the contracts themselves. Id. at 921.
Accordingly, the First Court of Appeals held the injunction to be invalid
because it barred competition that would be legal and not prohibited by the
noncompetition agreement. See id.
The lack of geographic restriction in this Temporary Injunction is
exactly like the lack of temporal restriction in the Parker case. An essential
term is missing, invalidating the Temporary Injunction.
CONCLUSION AND PRAYER
The evidence introduced at the temporary-injunction hearing
therefore did not support the restrictions contained in the Temporary
Injunction. Indeed, because there was no evidence of an imminent or
irreparable harm, the trial court erred in issuing any temporary injunction
at all.
79
The lack of evidence to support a temporary injunction prevented the
trial court from explaining the reasons for its issuance. But such an
explanation is required by Rule 683. So are specific restrictions that
Appellants can understand and abide by, but the Temporary Injunction
omits those, too.
For these reasons, Appellants therefore respectfully ask the Court to
reverse the order of the district court and render judgment dissolving the
Temporary Injunction.
Respectfully submitted,
LLOYD GOSSELINK
ROCHELLE & TOWNSEND, P.C.
816 Congress Avenue, Suite 1900
Austin, Texas 78701
(512) 322-5800 Phone
(512) 472-0532 Facsimile
By: /s/ James F. Parker
JAMES F. PARKER
State Bar No. 24027591
jparker@lglawfirm.com
GABRIELLE C. SMITH
State Bar No. 24093172
gsmith@lglawfirm.com
SYDNEY P. SADLER
State Bar No. 24117905
ssadler@lglawfirm.com
ATTORNEYS FOR APPELLANT
80
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
document has been sent to the following counsel of record, in accordance
with the Texas Rules of Appellate Procedure, via the Court’s electronic
case filing system and electronic transmission on this 2nd day of
September, 2025:
Michael D. Marin
mmarin@boulettegolden.com
Tori B. Bell
tori@boulettegolden.com
BOULETTE GOLDEN & MARIN L.L.P.
2700 Via Fortuna, Suite 250
Austin, TX 78746
ATTORNEYS FOR APPELLEE
/s/James F. Parker
JAMES F. PARKER
81
CERTIFICATE OF COMPLIANCE
I, James F. Parker, attorney for Appellants, certify that this
document was generated by a computer using Microsoft Word 365, which
indicates that the word count of this document is 11,745 per Tex. R. App.
P. 9.4(i).
/s/James F. Parker
JAMES F. PARKER
82
INDEX OF APPENDICES
Tab A November 26, 2024 Temporary Injunction (CR 860−66)
Tab B April 7, 2025 Order Modifying Temporary Injunction
(2d. Suppl. CR 307−33)
Tab C April 7, 2025 Temporary Injunction (2d. Suppl.
CR 334−46)
Tab D Confidentiality, Non-Competition and Non-Solicitation
Agreement of David P. Ryan (CR 419−23)
Tab E Confidentiality, Non-Competition and Non-Solicitation
Agreement of Nick Kreines (CR 425−29)
Tab F Tex. Bus. & Com. Code § 15.50
Tab G Tex. Gov’t Code § 25A.004
Tab H Tex. Gov’t Code § 25A.006
Tab I Tex. R. Civ. P. 355
Tab J Tex. R. Civ. P. 683
Tab K Tex. R. Civ. P. 684
83
TAB A
12/18/2024 01:43:31 PM
Velva L. Price
District Clerk
Travis County
D-1-GN-24-006854
CAUSE NO. D-1-GN-24-006854
IN THE DISTRICT COURT
Gr Lr Lr? Sr? Or
ES3 MINERALS, LLC,
Plaintiff,
v.
459 JUDICIAL DISTRICT OF
LN
NICHOLAS KREINES, DAVID P.
RYAN, LIBERTY MINERAL
PARTNERS LLC, NAK RESOURCES
INC, CGR OIL AND GAS, LLC,
Lr LP?
Defendants. TRAVIS COUNTY, TEXAS
LE
TEMPORARY INJUNCTION
On October 29-30th, 2024, the Court heard Plaintiff ES3 Minerals, LLC's ("Plaintiff' or
"ES3") Application for Temporary Injunction, and took it under advisement. The Court also asked
the Parties to provide a ten-page closing brief, which they did. The Parties also each filed briefs in
support of their respective positions.
The Court, after examining the pleadings and documents, the arguments of counsel, the
evidence presented, and all other matters properly before the Court, finds:
I. VALID CAUSES OF ACTION
1. Plaintiff has asserted valid causes of action.
I. PROBABLE RIGHT TO RELIEF
2. Plaintiff has shown a probable right to relief against Defendants Nicholas Kreines
("Kreines"), David P. Ryan ("Ryan"), and Liberty Mineral Partners LLC ("LMP").
A. DEFENDANT KREINES
3. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Kreines for (1) violations of trade secret
misappropriation under the Texas Uniform Trade Secrets Act (""TUTSA"), (2) breaches of
860
fiduciary duty, and (3) breaches of contract (confidentiality, non-solicitation-of-buyers, non-
solicitation-of-employees, and non-competition provisions).
4. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines kept and continues to use and disclose materials and information that are Plaintiff's trade
secrets to land deals for Defendant LMP, including deals with Plaintiff's Buyers; that Defendant
Kreines facilitated a deal for Defendant LMP with an existing Plaintiff Buyer while still employed
with Plaintiff; and that Defendant Kreines solicited and will continue to solicit Plaintiff's Buyers
and employees for Defendant LMP's benefit.
B. DEFENDANT RYAN
5. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Ryan for breaches of contract (non-solicitation-of-
buyers, non-solicitation-of-employees, and non-competition provisions). Plaintiff has also
sufficiently shown for this temporary injunction that the relevant provisions of Defendant Ryan's
contract did not change after his brief absence from the company.
6. The Court finds that Plaintiff will probably succeed in showing that Defendant
Ryan has made and will continue to make deals with Plaintiff's Buyers.
C. DEFENDANT LMP
7. The Court finds that Plaintiff will probably succeed in showing that Defendant
LMP tortiously interfered with Plaintiff's agreements with Defendants Kreines and Ryan
(including their noncompetition and non-solicitation provisions) and will continue to do so.
D. TRADE SECRETS MISAPPROPRIATED
8. The Court finds that Plaintiff will probably succeed on its claim that Plaintiffs
Buyer information, including buyer lists, pricing information, contact information for key-decision
makers, the specific asset preferences of those buyers, and the details of the mineral interest
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 2 of 7
861
purchases of those buyers are Plaintiff's trade secrets ("Trade Secrets"). The Court further finds
that Plaintiff will probably succeed on its claim that Plaintiff has taken reasonable measures under
the circumstances to keep this information secret, and this information derives independent
economic value, actual or potential, from not being generally known to, and not being readily
ascertainable through proper means by, other people who can obtain economic value from the
disclosure or use of the information. The Court further finds that Plaintiff will probably succeed
on its claim that Kreines misappropriated Plaintiff's Trade Secrets for his own benefit and the
benefit of LMP and will continue to do so.
E. BREACH OF CONTRACT AND INTERFERENCE
9. The Court finds that Plaintiff will probably succeed on its claim that, as a condition
of employment with Plaintiff, Defendants Kreines and Ryan entered into Confidentiality, Non-
Competition and Non-Solicitation Agreements with identical terms ("Kreines Agreement" and
"Ryan Agreement" respectively, and together, "Agreements.
10. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines has breached the Agreement's confidentiality provisions by taking, using, and disclosing
Plaintiff's Confidential Information for his own benefit and for the benefit of Defendant LMP.
11. In Paragraph 4 of their respective Agreements, Kreines and Ryan agreed to the
following restrictions during employment with ES3 and for twenty-four (24) months thereafter:
Non-Competition; Non-Solicitation of Customers and Prospective Customers.
Employee acknowledges that in the course of fulfilling Employee's responsibilities
to ES3, Employee will be a representative of the company to, and in some instances
may be ES3's primary contact with, existing customers as of the Termination date
and prospective customers with whom ES3 has contacted within the 24-month
period preceding the Termination date (collectively, "Customers and Prospective
Customers"). Employee agrees that the goodwill and relationships developed with
ES3's Customers and Prospective Customers is a special, valuable and unique asset
ofES3 and should be used for the exclusive benefit of ES3. Accordingly, Employee
agrees that, during Employee's employment with ES3 and for twenty-four (24)
months thereafter, regardless of the reason for or manner of termination, Employee
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 3 of 7
862
will not, directly or indirectly, except in connection with Employee's employment
with ES3: ...
(c) induce, solicit or take away (or attempt to induce, solicit, or take away) any
Customer or Prospective Customer of ES3 and/or encourage any Customer or
Prospective Customer to discontinue or limit its relationship with ES3; ... or
(e) divert or discourage any Customer or Prospective Customer from entering
into a business relationship with and/or obtaining products or services from ES3.
12. The Court finds that Plaintiff will probably succeed on its claim that: (a) Defendants
Kreines and Ryan have breached the Agreements' Non-Competition and Non-Solicitation
Provisions by using for their own benefit Plaintiff's' goodwill and that they have diluted Plaintiff's
goodwill with Plaintiff's Buyers; (b) Defendants Kreines and Ryan have induced, solicited and
taken away (and attempted to induce, solicit, or take away) Plaintiff's Buyers and have encouraged
Plaintiff's Buyers to discontinue or limit their relationship with ES3; (c) Defendants Kreines and
Ryan have diverted or discouraged Plaintiff's Buyers from entering into a business relationship
with and/or obtaining products or services from ES3; and (d) Defendant LMP was aware of
Defendant Kreines and Ryan's contractual obligations to Plaintiff and intentionally interfered.
13. The Court finds that Plaintiff's list of Plaintiff's Buyers attached to this order
(which is marked CONFIDENTIAL) are ES3 customers for whom Kreines was a representative
to and did business with on behalf of ES3 during the 24-month period preceding Kreines's
termination date of January 31, 2024, and specifically includes the entities on the list as well as
any subsidiaries, funds or other entities, formed by the listed entities for the purposes of executing
a transaction as well as entities the individual contacts on the list are currently working for, and
thus are within the definition of Customers and Prospective Customers under the Agreements
("Plaintiff's Buyers").
14. In Paragraph 5 of their respective Agreements, Kreines and Ryan agreed to "that,
during Employee's employment with ES3 and for twenty-four (24) months thereafter, regardless
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 4 of 7
863
of the reason for or manner of termination, Employee will not, on behalf of Employee or any other
person or entity except ES3, directly or indirectly hire, solicit, induce or encourage (or attempt to
hire, solicit, induce or encourage) any employee or officer of ES3 to terminate his/her relationship
with ES3, without the prior written consent of ES3." The Court finds that Plaintiff will probably
succeed on its claim that Defendants Kreines and Ryan violated their Agreements by soliciting
Plaintiff's employees, including Curtis Menchaca, inducing them to terminate their employment
with Plaintiff and work for LMP.
15. The Court finds that Plaintiff will probably succeed on its claim that the
Agreements are valid, and the post-employment restrictions recited above were ancillary to or a
part of an otherwise enforceable agreement at the time the Agreements were made; ES3 performed
under the Agreements; and Defendants Kreines and Ryan violated the Agreements and continue
to do so.
III, PROBABLE, IMMINENT, AND IRREPARABLE HARM
16. The Court finds that Plaintiff has shown there would be a probable imminent, and
irreparable injury from the actions it seeks to enjoin. Plaintiff has shown the loss of exclusive use
of its Trade Secrets, a loss of deals with specific buyers, a decrease in gross profits, and a loss of
employees, which is likely to continue unless Defendants are enjoined. Defendants Ryan and
Kreines were closely associated with Plaintiff's goodwill, and by their actions they have diluted
Plaintiff's goodwill with Plaintiff's Buyers and will continue to do so. Plaintiff's probable,
imminent, and irreparable injuries include:
a) Defendant Kreines's misappropriation of trade secrets.
b) Plaintiffs loss of goodwill and customers.
c) Defendants Kreines's and Ryan's breaches of their noncompetition agreements.
17. Any suit for money damages would not be an adequate remedy of law to protect
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 5 of 7
864
Plaintiff's rights.
IT IS, THEREFORE, ORDERED that, until the time of final trial on the merits:
1. DEFENDANT KREINES, and any person acting in concert or participation with him
who receives actual notice of this Order, is commanded forthwith through January 31, 2026, to
cease and desist, and otherwise refrain from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff's Buyers (as defined
above);
b) Encouraging Plaintiff's Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff's employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff.
2. DEFENDANT RYAN, and any person acting in concert or participation with him who
receives actual notice of this Order, is commanded forthwith through August 23, 2025, to cease
and desist, and otherwise refrain, from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff's Buyers (as defined
above);
b) Encouraging Plaintiff's Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff's employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff.
3. DEFENDANT LMP, and any person acting in concert or participation with LMP who
receives actual notice of this Order, is commanded forthwith to cease and desist, and otherwise
refrain, from tortiously interfering with Kreines and Ryan's agreements with Plaintiff not to:
a) Entering or negotiating any transaction with any of Plaintiff's Buyers (as defined
above). This expires no later than twenty-four months after Defendants Kreines's and
Ryan's terminations of employment with Plaintiff;
b) Encouraging Plaintiff's Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff. This expires no later than twenty-four months after
Defendants Kreines's and Ryan's terminations of employment with Plaintiff; and
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 6 of 7
865
c) Soliciting any of Plaintiff's employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff. This expires no later than twenty-four
months after Defendants Kreines's and Ryan's terminations of employment with
Plaintiff.
IT IS FURTHER ORDERED that trial be set before the Court on August 18 , 2025, at
9:00 a.m.
The Clerk of the above-entitled Court shall forthwith, on the filing by Plaintiff of the bond
hereinafter required, and on approving the same according to the law, issue a temporary restraining
order in conformity with the law and the terms of this Order.
This Order shall expire at such time as this Court enters j udgment in this cause.
This Order shall not be effective unless and until Plaintiff executes and files with the Clerk
a bond, in conformity with the law, in the amount of twenty-five thousand dollars and 00/100
Dollars ($25,000.00).
SIGNED this 26th day of November 2024, at 4:50 o'clock p.m.
THE HONORABLE JUDGE EISERLOH
455th District Court
12/30/2024 03:21:08
[PROPOSED] TEMPORARY INJUNCTION ORDER Page 7 of 7
866
TAB B
The Business Court of Texas,
Third Division
ES3 MINERALS, LLC, §
Plaintiff/Counter-Defendant, §
§
v.
§
NICHOLAS KREINES, DAVID P. §
RYAN, LIBERTY MINERAL § Cause No. 24-BC03B-0005
PARTNERS LLC, NAK RESOURCES, §
INC., AND CGR OIL AND GAS, LLC, §
Defendants/Counter-Plaintiffs. §
§
═══════════════════════════════════════
ORDER MODIFYING TEMPORARY INJUNCTION
═══════════════════════════════════════
Before the Court are two motions addressing the Temporary Injunction entered by
Judge Eiserloh on November 26, 2024, 1) Defendants’ Motion to Dissolve and 2)
Plaintiff’s Opposed Motion to Modify Temporary Injunction, Subject to Response to
Motion to Dissolve. As detailed below, the Court partially grants Plaintiff’s motion to
modify and modifies paragraph 13 and the corresponding “Ordered” section of the
Temporary Injunction, enters a Modified Temporary Injunction Order as reflected in the
attached Exhibit A, and denies all other relief requested.
2d. Suppl. CR 307
BACKGROUND
This lawsuit was filed in Travis County District Court on September 18, 2024. ES3
Minerals, LLC (“ES3”) moved for a temporary injunction that was heard on October 29,
2024 and October 30, 2024 by Judge Eiserloh. On November 26, 2024, the trial court
entered a temporary injunction against Defendants Nicholas Kreines (“Kreines”), David
Ryan (“Ryan”), and Liberty Mineral Partners LLC (“LMP”). In its seven-page injunction,
the trial court found that ES3 had asserted valid causes of action, shown a probable right
to recover on multiple claims, and had shown there would be a probable, imminent, and
irreparable injury from the actions ES3 sought to enjoin. The trial court enjoined Kreines,
Ryan and LMP from: 1) “Entering or negotiating any transaction with any of Plaintiff’s
Buyers”; 2) “Encouraging Plaintiff’s Buyers to discontinue or limit their relationships with
Plaintiff”; and 3) Soliciting any of Plaintiff’s employees or officers for employment or
encouraging them to terminate their relationships with Plaintiff.” 1 To identify the
prohibited transactions the order included the following definitional paragraph:
13. The Court finds that Plaintiff’s list of Plaintiff’s Buyers attached to this
order (which is marked CONFIDENTIAL) are ES3 customers for whom
Kreines was a representative to and did business with on behalf of ES3 during
the 24-month period preceding Kreines’s termination date of January 31,
2024, and specifically incudes the entities on the list as well as any
subsidiaries, funds or other entities, formed by the listed entities for the
purposes of executing a transaction as well as entities the individual contacts
on the list are currently working for, and thus are within the definition of
Customers and Prospective Customers under the Agreements. 2
1
Temporary Inj. 6, Dec. 18, 2024.
2
Id. ¶ 13, Dec. 18, 2024 (emphasis added).
2d. Suppl. CR 308
Attached to the order was a list, deemed confidential by the trial court, of over 90
specific “ES3 Trusted Buyers” and approximately 200 associated contacts with whom the
Defendants were enjoined from negotiating a transaction.
After the temporary injunction was issued, Defendants removed this action to the
Texas Business Court on December 23, 2024. Defendants then filed Defendants' Motion
to Dissolve Temporary Injunction, ES3 filed their response, and Defendants filed a reply in
support. Plaintiffs then filed Plaintiff’s Opposed Motion to Modify Temporary Injunction,
Subject to Response to Motion to Dissolve and Defendants filed their response. Both
motions were heard on February 27, 2025.
In their motion, Defendants argue the temporary injunction is deficient in the
following ways: 1) it does not meet the specificity requirement of Rule 683 since it fails to
identify the specific customers with whom the Defendants are prohibited from transacting
business; 2) the temporary injunction does not set forth the reasons for its issuance in
violation of Rule 683; and 3) the bond amount set for the temporary injunction is
insufficient.
In its response, ES3 argues the injunction is sufficiently specific, that Defendants’
motion is an attempt to relitigate issues previously decided by the trial court, and the
injunction sufficiently sets forth the reasons for its issuance. In their motion to modify,
while not conceding the validity of Defendants’ motion, ES3 suggests modifications to the
temporary injunction aimed at addressing Defendants’ specificity contentions.
2d. Suppl. CR 309
ANALYSIS
To analyze the alleged deficiencies in the temporary injunction order, the Court
reviews relevant case law and the text of Texas Rules of Civil Procedure 683 and 684.
Legal Standard
The purpose of a motion to dissolve is to provide a means to show that changed
circumstances or changes in the law require the modification or dissolution of the
injunction; it is not to give an unsuccessful party an opportunity to relitigate the propriety
of the original grant.” 3 A respondent cannot use a motion to dissolve or a motion to modify
to relitigate the basis for the injunction when the basis has not changed. 4 Decrees of
injunction may be reviewed, opened, vacated or modified by the trial court upon a showing
of changed circumstances. 5 The determination of the question of whether to dissolve a
temporary injunction is a matter lying within the discretion of the trial court. 6 The trial
court has no duty, upon the filing of a motion to dissolve, to reconsider the propriety of the
granting of a temporary injunction, at least where the motion does not allege fundamental
error, and also where the motion is not based upon evidence of changed conditions but is
3
Tober v. Turner of Texas, Inc., 668 S.W.2d 831, 836 (Tex. App.—Austin 1984, no writ) ); see also,
e.g., Gruss v. Gallagher, 680 S.W.3d 642, 660 (Tex. App.—Houston [14th Dist.] 2023, no pet.);
Chase Manhattan Bank v. Bowles, 52 S.W.3d 871, 879 (Tex. App.—Waco 2001, no pet.); Murphy
v. McDaniel, 20 S.W.3d 873, 877 (Tex. App.—Dallas 2000, no pet.).
4
Chase Manhattan Bank, 52 S.W.3rd at 879.
5
See Id. quoting (Smith v. O'Neill, 813 S.W.2d 501, 502 (Tex. 1991)).
6
Tober, 668 S.W.2d at 834.
2d. Suppl. CR 310
rather based upon evidence which was before the court at the prior hearing on the motion
to grant the temporary injunction. 7
Rule 683 and 684
Texas Rule of Civil Procedure 683 governs orders granting injunctions and
restraining orders and requires the order to set forth the reasons for its issuance, be specific
in its terms, and describe in reasonable detail the act or acts sought to be restrained. 8 The
requirements of Rule 683 “are mandatory, and an order granting a temporary injunction
that does not meet them is subject to being declared void and dissolved.” 9 A trial court's
failure to comply with an express requirement of Rule 683 is fundamental error; 10 it renders
the injunctive order void, rather than merely voidable. 11
“An injunction must be definite, clear, and concise, leaving the person enjoined in
no doubt about his duties, and should not call on him for interpretations, inferences, or
conclusions.” 12
7
Id. at 835.
8
TEX. R. CIV. P. 683.
9
Qwest Communs. Corp. v. AT&T Corp., 24 S.W.3d 334, 337 (Tex. 2000) (per curiam).
10
See Henke v. Peoples State Bank, 6 S.W.3d 717, 721 (Tex. App. —Corpus Christi 1999, pet. dism'd
w.o.j.), abrogation recognized by Tex. Wrecker Serv. v. Resendez, No. 13-16-00515-CV, 2017 WL
711642, at *5 (Tex. App.—Corpus Christi–Edinburg Feb. 23, 2017, no pet.); Glennie v. Petty, 591
S.W.2d 951, 952 (Tex. App.—Tyler 1979, no pet.); United Farm Workers, AFL-CIO v. H.E. Butt
Grocery Co., 590 S.W.2d 600, 606 (Tex. App.—Corpus Christi 1979, no writ) (holding that trial
court’s entry of overbroad injunction was not fundamental error and modifying rather than
reversing order).
See, e.g., In re Luther, 620 S.W.3d 715, 721 (Tex. 2021) (orig. proceeding) (per curiam); Grounds
11
v. First GroundRock Royalties, LLC, 629 S.W.3d 674, 678 (Tex. App.—San Antonio 2021, no pet.);
In re Chaumette, 456 S.W.3d 299, 307 (Tex. App.—Houston [1st Dist.] 2014, no pet.); In re
Corcoran, 343 S.W.3d 268, 269 (Tex. App.—Houston [14th Dist.] 2011, no pet.).
12
Vaughn v. Drennon, 202 S.W.3d 308, 316 (Tex. App.—Tyler 2006, no pet.).
2d. Suppl. CR 311
Additionally, Texas Rule of Civil Procedure 684 requires a court granting any
temporary restraining order to set a bond, executed by the applicant, and filed with the
clerk. 13 The determination of the adequacy of the bond set by the trial court is to be made
on a case-by-case basis considering the record before the reviewing court. 14 The amount of
a bond is within the trial court's sound discretion and will not be disturbed on appeal absent
an abuse of that discretion. 15 The failure to require a bond in a sufficient amount does not
render an injunction void. 16
Application
The Court considers each of the Defendants’ contentions concerning the alleged
deficiencies in the temporary injunction order beginning with their allegations that the
injunction does not sufficiently specify who the parties are prohibited from transacting
business.
i. Specificity of Prohibited Acts
Defendants’ specificity arguments focus on portions of paragraph 13 that apply the
injunction to, not only the individually listed and named “Plaintiffs Buyer’s,” but
provisions that expand the definition of “Plaintiffs Buyer’s” to include:
13
TEX. R. CIV. P. 684.
14
IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191, 203 (Tex. App.—Fort Worth 2005, no
pet.).
15
Id.
16
El Paso Dev. Co. v. Berryman, 729 S.W.2d 883, 888 (Tex.App.—Corpus Christi 1987, no writ).
2d. Suppl. CR 312
any subsidiaries, funds or other entities, formed by the listed entities for the
purposes of executing a transaction as well as entities the individual contacts
on the list are currently working for, and thus are within the definition of
Customers and Prospective Customers under the Agreements. 17
Defendants argue this language does not meet the specificity requirement of Rule
683 for multiple reasons. They assert they have no way of knowing the corporate structure
of entities to whom they cannot sell mineral interests. To enforce the temporary injunction,
they claim, the Court would be forced to conduct an additional hearing to consider evidence
about the buyer’s corporate structure, the purpose for which a corporate structure was
organized, and the buyer’s roster of employees. Defendants also argue other courts have
rejected non-specific provisions included in similar orders. Defendants primarily cite three
cases in support of their arguments: In re Luther, Computek Computer & Office Supplies,
Inc. v. Walton and In re Krueger.
ES3 contends the temporary injunction issued by the trial court is sufficiently
specific. It argues it is common in the mineral industry for buyers to form transaction
specific entities and that Kreines, as the principal relationship manager to ES3’s Buyers for
several years, knows exactly which buyers are off-limits to him and Defendants. ES3 notes
the temporary injunction attaches a specific list of ES3’s Buyers and includes an
explanation of the entities and individuals that are off-limits. Finally, ES3 argues the
language concerning subsidiaries, funds, or other entities, and the language restricting
Defendants from doing business with individuals on the list, regardless of where they work,
is necessary to prevent circumvention of the injunction.
17
Temporary Inj. ¶ 13, Dec. 18, 2024.
2d. Suppl. CR 313
The Court first reviews Defendants’ cited cases: Luther, Computek, and Krueger.
In Luther, a Dallas salon owner sought relief from a contempt judgment issued
against her for violating a temporary restraining order that prohibited her from operating
in-person services during the COVID-19 pandemic. 18 Luther argued that the order was void
since it did not specify the exact conduct prohibited. 19 The Texas Supreme Court agreed,
ruling that temporary restraining order issued by the trial court, failed to clearly outline
which specific regulations Luther violated or which services at the salon were restrained. 20
The Court reasoned, “Luther could not know without analyzing a multitude of
regulations—state, county, and city emergency orders referenced in the temporary
restraining order, plus the federal guidelines they referenced—what conduct was
prohibited at any given time the temporary restraining order was in effect.” 21
More persuasive is Computek. 22 There, OEM, an office supply company, sued
Computek and its owner, a former OEM employee, alleging theft of OEM’s trade secrets. 23
After the trial court issued a permanent injunction, Computek appealed, asserting the
injunction was improperly broad and lacked specificity since it failed to clearly identify
which OEM clients Computek could not contact. 24 The Dallas Court of Appeals agreed,
18
In re Luther, 620 S.W.3d at 718.
19
Id.
20
Id. at 723.
21
Id.
22
Computek Comput. & Off. Supplies, Inc. v. Walton, 156 S.W.3d 217 (Tex. App.—Dallas 2005, no
pet.).
23
Id. at 219–20.
24
Id. at 221–22.
2d. Suppl. CR 314
noting that the injunction needed to specifically name the clients and define the
information that could not be used or disclosed and that the lack of specificity could not be
cured by any knowledge Computek might have outside the permanent injunction. 25
In re Krueger involved an executive barred from “contacting any of Cru Energy,
Inc.’s investors or potential investors, or any other persons doing business with or
potentially a participant in the business of Cru Energy, Inc.” 26 The district court found
Krueger violated that provision by sending emails to vendors of Cru Energy. 27 On review,
the Austin Court of Appeals found the injunction was not sufficiently specific since it failed
to describe in reasonable detail the individuals or organizations that Krueger was
prohibited from contacting. 28 Notably, the injunction failed to name or otherwise identify
those who are considered “investors or potential investors” of Cru Energy, and those who
are “persons doing business with or potentially a participant in the business of” Cru
Energy. 29 The Court rejected Cru’s argument that Krueger was in a position to know who
the investors and persons were doing business with Cru energy because an injunction must
be as “definite, clear and precise as possible . . . without calling on [the enjoined party] for
25
Id. at 222–23 (“Thus, the injunction itself must provide the specific information as to the off-
limits clients, without inferences or conclusions, or, in this case, implied references to other records
Computek might have.”).
26
No. 03-12-00838-CV, 2013 WL 2157765, at *1 (Tex. App.—Austin May 16, 2013, orig.
proceeding).
27
Id. at *2.
28
Id. at *8.
29
Id.
2d. Suppl. CR 315
inferences or conclusions about which persons might well differ and without leaving
anything for further hearing.” 30
The Court finds Computek and Kruger persuasive and analogous to paragraph 13 of
the order issued by the trial court. Here, the injunction specifically names the ES3 Buyers
that are off-limits to Defendants and attaches a list of those entities and individuals. These
provisions are definite, specific and clear and the Court declines Defendants’ suggestion to
modify those provisions.
However, the second prohibition contained in paragraph 13 of the temporary order
is less specific. It includes, in addition to the list of ES3 Buyers, “any subsidiaries, funds
or other entities, formed by the listed entities for the purposes of executing a transaction”
and “entities the individual contacts on the list are currently working for . . . .” 31 As in
Computek, the prohibition on business dealings with “subsidiaries, funds, or other
entities” depends on Defendants’ knowledge of the ownership structure of the companies
with whom they are attempting to enter a deal or it would require Defendants to perform
an inquiry prior to dealing with any new companies and is comparable to the language in
Computek that the Court found problematic. Similarly, the clause in paragraph 13 that
prohibits executing a transaction with entities and individuals on the list that “are
currently working for” the individual or entity would require Defendants to conduct an
30
Id.
31
Temporary Inj. ¶ 13, Dec. 18, 2024.
2d. Suppl. CR 316
inquiry prior to any transaction about the status of any individuals and employees employed
by the entity.
Rule 683 provides that a temporary injunction “shall describe in reasonable detail
and not by reference to the complaint or other document, the act or acts sought to be
restrained.” 32 The purpose of Rule 683’s specificity requirement is to “ensure that parties
are adequately informed of the acts they are enjoined from doing and the reasons for the
injunction.” 33 The Texas Supreme Court has required “strict compliance with Rule 683,
so that a temporary restraining order itself informs a party, unambiguously and with a
reasonable degree of specificity, of the conduct to be restrained.” 34 The requirements of
Rule 683 are mandatory and must be strictly followed. 35
Here, the order falls short of those specificity provisions. Therefore, the Court
modifies the two definitional provisions in paragraph 13, as reflected in the attached
Exhibit A, to more clearly specify the acts Kreines, Ryan and LMP are prohibited from
committing.
ii. Sufficiency of reasoning for issuance of temporary injunction
Defendants also allege the temporary injunction fails to provide sufficient reasons
for its issuance as required by Rule 683. Defendants contend that the temporary injunction
order “must explain the reasons why the court believes the applicant’s probable right will
32
TEX. R. CIV. P. 683.
McCaskill v. Nat'l Circuit Assembly, No. 05-17-01289-CV, 2018 WL 3154616, at *2 (Tex. App.—
33
Dallas June 28, 2018, no pet.) (mem. op.).
34
In re Luther, 620 S.W.3d at 723.
35
Id.; Qwest, 24 S.W.3d at 337.
2d. Suppl. CR 317
be endangered if the writ does not issue.” 36 Citing Home Asset, Inc. v MPT of Victory Lakes
Fcer LLC, an unpublished opinion from the Houston Court of Appeals, Defendants argue
that to the extent reasons were set forth in the temporary injunction issued by the Court,
they were conclusory and did not “articulate the factual basis on which it rests, effectively
insisting that the reader accept the writer’s say-so without explanation.” 37
In response, ES3 argues the temporary injunction sufficiently sets forth the reasons
for its issuance. ES3 notes the Court found it is likely to succeed in “proving Kreines
misappropriated ES3’s trade secrets for its own benefit and for the benefit of LMP and will
continue to do so,” that ES3 “will probably succeed on its breach of contract and tortious
interference claims against the Defendants based on factual findings,” that “Kreines and
Ryan violated the Agreements and continue to do so” that the “Plaintiff has shown there
would be a probable imminent and irreparable injury from the actions it seeks to enjoin”
and that it sets forth “the reason why ES3 would suffer probable, imminent and irreparable
injury absent an injunction.” 38
36
Def.s’ Mot. to Dissolve Temporary Inj. 18, Jan. 7, 2025; IPSecure, Inc. v. Carrales, No. 04-16-
00005-CV, 2016 WL 3342108, at *2 (Tex. App.—San Antonio June 15, 2016, no pet.)(mem. op.).
Home Asset, Inc. v MPT of Victory Lakes Fcer, LLC, No. 01-22-00441-CV, 2023 WL 3183322, at
37
*2 (Tex. App.—Houston [1st Dist.] May 2, 2023, no pet.) (mem. op.); Def.s’ Mot. to Dissolve
Temporary Inj. 18, Jan. 7, 2025.
38
Pl.’s Resp. to Def.s’ Mot. To Dissolve Temporary Inj. 21–22, Feb 14, 2025.
2d. Suppl. CR 318
Rule 683 requires a temporary injunction to include the “reasons for its issuance.” 39
That requirement is mandatory and a temporary injunction that does not meet it is subject
to being declared void and dissolved as it would constitute fundamental error. 40
While Defendants relies on Home Asset and Clark the underlying facts there are
distinguishable. In Home Asset, the Court found that a single sentence in a temporary order
that addressed irreparable injury, stating that “the appellees will be irreparably harmed if
the appellants are allowed to terminate the leases without explaining why doing so will
cause irreparable harm” was a “mere recital” and therefore insufficient under Rule 683
and therefore void. 41
The facts in Clark v. Hastings are also distinguishable. In Clark, the trial court
entered an injunction that it modified just two weeks later by entering a second order. 42
The Houston Appellate Court found the changes made by the second order to be of a
“substantive nature” making it the operative temporary injunction order subject to the
requirements of Rule 683. 43 The Court held the order contained no attempt to satisfy the
requirements of Rule 683 and both parties agreed the second order was insufficient. 44 The
Court also commented that even if both orders were read in tandem, the only language that
39
TEX. R. CIV. P. 683.
40
See Henke, 6 S.W.3d at 721.
41
2023 WL 3183322, at *2–3.
42
Clark v. Hastings Equity Partners, LLC, 651 S.W.3d 359, 363–64 (Tex. App. 2022).
43
Id. at 370.
44
Id. at 370, 371 n.8.
2d. Suppl. CR 319
provided the basis for the ruling was itself insufficient. 45 That portion of the order provided,
“The Respondents have violated certain covenants contained in the said Securities
Purchase Agreement and will, if not restrained, likely engage in conduct that will cause
Petitioners to suffer immediate and irreparable injury, loss or damage; and . . . the
threatened damage to Petitioners is impossible to accurately and fully assess.” 46 The Court
held this brief, conclusory explanation did not satisfy Rule 683.
The trial court’s order here is more detailed and contains significantly more
exposition than those in Clark. In fact, the trial court’s temporary injunction contained
multiple provisions that “set forth the reasons” for the issuance of the injunction. In
addition to the excerpts ES3 cited above, the temporary injunction begins by summarizing
parties briefing leading up to the temporary injunction. 47 It also contains paragraph 16
entitled “Probable, Imminent, And Irreparable Harm” that provides among other things
that: “Plaintiff has shown . . . the loss of exclusive use of its Trade Secrets, a loss of deals
with specific buyers, a decrease in gross profits, and a loss of employees, which is likely to
continue unless Defendants are enjoined.” 48 Paragraph 16 also recites that Ryan and
Kreines were “closely associated with Plaintiff’s goodwill, and by their actions they have
diluted Plaintiff’s goodwill with Plaintiff’s Buyers and will continue to do so.” 49 The
45
Id. at 374.
46
Id.
47
Temporary Inj. Page 1, Dec. 18, 2024.
48
Id. ¶ 16.
49
Id.
2d. Suppl. CR 320
imminent and irreparable injuries are identified as “misappropriation of trade secrets . . .
loss of goodwill and customers” and “breaches of their noncompetition agreements.” 50
And while the seven-page order does not provide an exhaustive exposition of the
factual basis underlying its conclusions and could have contained additional specificity, the
Court finds the order contains a sufficient description to “set forth the basis” of the
injunction.
iii. Bond Sufficiency
Finally, Defendants challenge the bond amount set by the trial court. Following the
hearing conducted in this matter, the trial court’s temporary injunction set ES3’s bond at
$25,000. Defendants contend the bond amount is inadequate and contrary to the evidence.
Defendants rely on Franklin Sav. Association v. Reese, a case from the Austin Court of
Appeals where the trial court found a $10,000 bond an improper and disproportionately
small sum, unable to protect the $25 to $50 Million property at issue. 51 They also rely on
Justice Young’s dissent in Van Huis v. Marine Ventures, Ltd., where he asserted that a
nominal bond in a high value case “could be tantamount to dispensing the bond requirement
altogether.” 52
In response, Plaintiff argues that the Defendants are attempting to relitigate issues
determined in the sound discretion of the court and that the bond amount is sufficient based
on the evidence. ES3 also contends Texas law requires evidence of lost-profits, not lost-
50
Id.
51
756 S.W.2d 14, 16 (Tex. App.—Austin 1988, no writ).
52
672 S.W.3d 22, 26 (Tex. 2023) (Young, J., dissenting).
2d. Suppl. CR 321
gross revenues, 53 and that Defendants have provided only evidence of lost-gross revenues.
Finally, ES3 cites Topheavy Studios, Inc. v. Doe, contending that without evidence of lost
profits, the $25,000 bond amount is sufficient as a matter of law. 54
Rule 684 requires the trial court to set a bond when it grants a temporary
injunction. 55 The text of the rule provides no guidance on the “amount of security” the
Court must require. 56 But courts have held that the purpose of a bond is to protect the
enjoined party from any possible damages occurring as a result of an improperly granted
injunction. 57 The amount of a bond is within the trial court's sound discretion, but a
temporary injunction issued without a bond is void. 58 And the failure to require a bond in
a sufficient amount does not render an injunction void. 59
“The purpose of the motion to dissolve is to provide a means to show that changed
circumstances or changes in the law require the modification or dissolution of the
53
See, e.g., Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 n.1 (Tex. 1992) (“The correct
measure of damages is lost net profit, not gross profits.”); Kellmann v. Workstation Integrations,
Inc., 332 S.W.3d 679, 684 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (same); MJAH
Holdings, LLC v. Henson, No. 03-18-00012-CV, 2019 WL 1413282, at *5 (Tex. App.—Austin Mar.
29, 2019, no pet.) (mem. op.) (same).
54
No. 03-05-00022-CV, 2005 WL 1940159, at *7–8 (Tex. App.—Austin Aug. 11, 2005, no pet.).
55
TEX. R. CIV. P. 684.
56
Id.
57
IAC, 160 S.W.3d at 203; Bayoud v. Bayoud, 797 S.W.2d 304, 312 (Tex. App.—Dallas 1990, writ
denied).
58
Whitlow v. Polley, 670 S.W.2d 318, 319 (Tex. App.—Tyler 1984, no writ) (emphasis added); IAC,
160 S.W.3d at 203.
59
El Paso, 729 S.W.2d at 888.
2d. Suppl. CR 322
injunction; the purpose is not to give an unsuccessful party an opportunity to relitigate the
propriety of the original grant.” 60
In this case, this Court did not conduct the underlying temporary injunction hearing,
hear the evidence, issue the temporary injunction, nor set the amount of the bond. The
parties have presented insufficient evidence of changed circumstances since the issuance
of the current bond. And while a motion to dissolve is the proper mechanism to address a
void temporary injunction—one where no bond was set—here the district court temporary
injunction set a bond, which met the threshold requirements of Rule 684. 61 Since the
Defendants have not demonstrated a change of circumstances since the temporary
injunction was granted, the Court does not reconsider nor modify the amount of the original
bond setting.
SUMMARY
The Court, after examining the pleading and documents, the arguments of counsel,
and all other matters properly before the Court, finds:
• That paragraph 13 of the Temporary Injunction entered in the 459th Travis County
on November 26, 2024 does not sufficiently meet the specificity requirement under
Rule 683 and therefore should be partially modified.
• The Temporary Injunction sufficiently set forth the reasons for its issuance as
required by Rule 683.
60
Tober, 668 S.W.2d at 836.
61
See Id.; TEX. R. CIV. P. 684.
2d. Suppl. CR 323
• That the trial court set a bond in the case in accordance with Rule 684 and that no
changed circumstances have been plead that warrant the reexamination of the
sufficiency of the bond amount.
Based on the foregoing, the Court ORDERS a modification of the Temporary
Injunction issued on November 26, 2024 as reflected in the attached Exhibit A, and the
Court issues a new Modified Temporary Injunction reflecting those modifications. The
Court denies all other relief requested.
Hon. Patrick K. Sweeten
Judge of the Texas Business Court
Third Division
DATED: April 7, 2025
2d. Suppl. CR 324
Exhibit A
2d. Suppl. CR 325
The Business Court of Texas,
Third Division
ES3 MINERALS, LLC, §
Plaintiff/Counter-Defendant, §
v. §
NICHOLAS KREINES, DAVID P. §
RYAN, LIBERTY MINERAL § Cause No. 24-BC03B-0005
PARTNERS LLC, NAK §
RESOURCES INC., AND CGR §
OIL AND GAS, LLC, §
Defendants/Counter-Plaintiffs. §
═══════════════════════════════════════
MODIFIED TEMPORARY INJUNCTION
═══════════════════════════════════════
On October 29–30th, 2024, the 459th District Court of Travis County heard Plaintiff ES3
Minerals, LLC’s (“Plaintiff” or “ES3”) Application for Temporary Injunction. On November 26,
2024, the district court issued a temporary injunction order. Later, the above-captioned case was
removed to this Court. This Court held a hearing on February 27, 2025, on Defendants’ Motion
to Dissolve Temporary Injunction and Plaintiff’s Opposed Motion to Modify Temporary
Injunction, Subject to Response to Motion to Dissolve and after examining the pleadings and
documents, the arguments of counsel, the evidence presented, and the full record, the Court finds
as follows:
2d. Suppl. CR 326
VALID CAUSES OF ACTION
1. Plaintiff has asserted valid causes of action.
I. PROBABLE RIGHT TO RELIEF
2. Plaintiff has shown a probable right to relief against Defendants Nicholas Kreines
(“Kreines”), David P. Ryan (“Ryan”), and Liberty Mineral Partners LLC (“LMP”).
A. DEFENDANT KREINES
3. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Kreines for (1) violations of trade secret
misappropriation under the Texas Uniform Trade Secrets Act (“TUTSA”), (2) breaches of
fiduciary duty, and (3) breaches of contract (confidentiality, non-solicitation-of-buyers, non-
solicitation-of-employees, and non-competition provisions).
4. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines kept and continues to use and disclose materials and information that are Plaintiff’s trade
secrets to land deals for Defendant LMP, including deals with Plaintiff’s Buyers; that Defendant
Kreines facilitated a deal for Defendant LMP with an existing Plaintiff Buyer while still employed
with Plaintiff; and that Defendant Kreines solicited and will continue to solicit Plaintiff’s Buyers
and employees for Defendant LMP’s benefit.
B. DEFENDANT RYAN
5. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Ryan for breaches of contract (non-solicitation-of-
buyers, non-solicitation-of-employees, and non-competition provisions). Plaintiff has also
sufficiently shown for this temporary injunction that the relevant provisions of Defendant Ryan’s
contract did not change after his brief absence from the company.
6. The Court finds that Plaintiff will probably succeed in showing that Defendant
2d. Suppl. CR 327
Ryan has made and will continue to make deals with Plaintiff’s Buyers.
C. DEFENDANT LMP
7. The Court finds that Plaintiff will probably succeed in showing that Defendant
LMP tortiously interfered with Plaintiff’s agreements with Defendants Kreines and Ryan
(including their noncompetition and non-solicitation provisions) and will continue to do so.
D. TRADE SECRETS MISAPPROPRIATED
8. The Court finds that Plaintiff will probably succeed on its claim that Plaintiff’s
Buyer information, including buyer lists, pricing information, contact information for key-decision
makers, the specific asset preferences of those buyers, and the details of the mineral interest
purchases of those buyers are Plaintiff’s trade secrets (“Trade Secrets”). The Court further finds
that Plaintiff will probably succeed on its claim that Plaintiff has taken reasonable measures under
the circumstances to keep this information secret, and this information derives independent
economic value, actual or potential, from not being generally known to, and not being readily
ascertainable through proper means by, other people who can obtain economic value from the
disclosure or use of the information. The Court further finds that Plaintiff will probably succeed
on its claim that Kreines misappropriated Plaintiff’s Trade Secrets for his own benefit and the
benefit of LMP and will continue to do so.
E. BREACH OF CONTRACT AND INTERFERENCE
9. The Court finds that Plaintiff will probably succeed on its claim that, as a condition
of employment with Plaintiff, Defendants Kreines and Ryan entered into Confidentiality, Non-
Competition and Non-Solicitation Agreements with identical terms (“Kreines Agreement” and
“Ryan Agreement” respectively, and together, “Agreements”).
10. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines has breached the Agreement’s confidentiality provisions by taking, using, and disclosing
2d. Suppl. CR 328
Plaintiff’s Confidential Information for his own benefit and for the benefit of Defendant LMP.
11. In Paragraph 4 of their respective Agreements, Kreines and Ryan agreed to the
following restrictions during employment with ES3 and for twenty-four (24) months thereafter:
Non-Competition; Non-Solicitation of Customers and Prospective
Customers. Employee acknowledges that in the course of fulfilling Employee's
responsibilities to ES3, Employee will be a representative of the company to, and
in some instances may be ES3's primary contact with, existing customers as of the
Termination date and prospective customers with whom ES3 has contacted within
the 24-month period preceding the Termination date (collectively, "Customers and
Prospective Customers"). Employee agrees that the goodwill and relationships
developed with ES3's Customers and Prospective Customers is a special, valuable
and unique asset of ES3 and should be used for the exclusive benefit of ES3.
Accordingly, Employee agrees that, during Employee's employment with ES3 and
for twenty-four (24) months thereafter, regardless of the reason for or manner of
termination, Employee will not, directly or indirectly, except in connection with
Employee's employment with ES3: . . .
(c) induce, solicit or take away (or attempt to induce, solicit, or take
away) any Customer or Prospective Customer of ES3 and/or encourage any
Customer or Prospective Customer to discontinue or limit its relationship with ES3;
… or
(e) divert or discourage any Customer or Prospective Customer from
entering into a business relationship with and/or obtaining products or services from
ES3.
12. The Court finds that Plaintiff will probably succeed on its claim that: (a) Defendants
Kreines and Ryan have breached the Agreements’ Non-Competition and Non-Solicitation
Provisions by using for their own benefit Plaintiff’s’ goodwill and that they have diluted Plaintiff’s
goodwill with Plaintiff’s Buyers; (b) Defendants Kreines and Ryan have induced, solicited and
taken away (and attempted to induce, solicit, or take away) Plaintiff’s Buyers and have encouraged
Plaintiff’s Buyers to discontinue or limit their relationship with ES3; (c) Defendants Kreines and
Ryan have diverted or discouraged Plaintiff’s Buyers from entering into a business relationship
with and/or obtaining products or services from ES3; and (d) Defendant LMP was aware of
Defendant Kreines and Ryan’s contractual obligations to Plaintiff and intentionally interfered.
2d. Suppl. CR 329
13. The Court finds that Plaintiff’s list of Plaintiff’s Buyers attached to this order ∗
(which is marked CONFIDENTIAL) are ES3 customers for whom Kreines was a representative
to and did business with on behalf of ES3 during the 24-month period preceding Kreines’s
termination date of January 31, 2024, and specifically includes the individuals and entities on the
list as well as any subsidiaries of those entities that are known to be subsidiaries by Kreines, Ryan
or LMP, and thus are within the definition of Customers and Prospective Customers under the
Agreements (“Plaintiff’s Buyers”). If an individual on the list begins working at a new entity, the
new entity is not included within the definition of Plaintiff’s Buyers, however the individual on
the list remains within the definition of Plaintiff’s Buyers and prohibitions on Kreines, Ryan and
LMP in this order apply to transactions where they have knowledge the individual is personally
involved.
14. In Paragraph 5 of their respective Agreements, Kreines and Ryan agreed to “that,
during Employee’s employment with ES3 and for twenty-four (24) months thereafter, regardless
of the reason for or manner of termination, Employee will not, on behalf of Employee or any other
person or entity except ES3, directly or indirectly hire, solicit, induce or encourage (or attempt to
hire, solicit, induce or encourage) any employee or officer of ES3 to terminate his/her relationship
with ES3, without the prior written consent of ES3.” The Court finds that Plaintiff will probably
succeed on its claim that Defendants Kreines and Ryan violated their Agreements by soliciting
Plaintiff’s employees, including Curtis Menchaca, inducing them to terminate their employment
with Plaintiff and work for LMP.
∗
The attached Plaintiff’s Buyers list has not been modified.
2d. Suppl. CR 330
15. The Court finds that Plaintiff will probably succeed on its claim that the
Agreements are valid, and the post-employment restrictions recited above were ancillary to or a
part of an otherwise enforceable agreement at the time the Agreements were made; ES3 performed
under the Agreements; and Defendants Kreines and Ryan violated the Agreements and continue
to do so.
II. PROBABLE, IMMINENT, AND IRREPARABLE HARM
16. The Court finds that Plaintiff has shown there would be a probable imminent, and
irreparable injury from the actions it seeks to enjoin. Plaintiff has shown the loss of exclusive use
of its Trade Secrets, a loss of deals with specific buyers, a decrease in gross profits, and a loss of
employees, which is likely to continue unless Defendants are enjoined. Defendants Ryan and
Kreines were closely associated with Plaintiff’s goodwill, and by their actions they have diluted
Plaintiff’s goodwill with Plaintiff’s Buyers and will continue to do so. Plaintiff’s probable,
imminent, and irreparable injuries include:
a) Defendant Kreines’s misappropriation of trade secrets.
b) Plaintiff’s loss of goodwill and customers.
c) Defendants Kreines’s and Ryan’s breaches of their noncompetition agreements.
17. Any suit for money damages would not be an adequate remedy of law to protect
Plaintiff’s rights.
IT IS, THEREFORE, ORDERED that, until the time of final trial on the merits:
1. DEFENDANT KREINES, and any person acting in concert or participation with him
who receives actual notice of this Order, is commanded forthwith through January 31, 2026, to
cease and desist, and otherwise refrain from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
above);
2d. Suppl. CR 331
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff; and
d) Conspiring to circumvent the restrictions imposed by sections a–c.
2. DEFENDANT RYAN, and any person acting in concert or participation with him who
receives actual notice of this Order, is commanded forthwith through August 23, 2025, to cease
and desist, and otherwise refrain, from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
above);
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff.
d) Conspiring to circumvent the restrictions imposed by sections a–c.
3. DEFENDANT LMP, and any person acting in concert or participation with LMP who
receives actual notice of this Order, is commanded forthwith to cease and desist, and otherwise
refrain, from tortiously interfering with Kreines and Ryan’s agreements with Plaintiff not to:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
above). This expires no later than twenty-four months after Defendants Kreines’s and
Ryan’s terminations of employment with Plaintiff;
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff. This expires no later than twenty-four months after
Defendants Kreines’s and Ryan’s terminations of employment with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff. This expires no later than twenty-four
months after Defendants Kreines’s and Ryan’s terminations of employment with
Plaintiff.
d) Conspiring to circumvent the restrictions imposed by sections a–c.
2d. Suppl. CR 332
IT IS FURTHER ORDERED that trial is set before the Court on October 20, 2025 at
9:00 a.m.
The Clerk of the above-entitled Court shall forthwith issue a Modified Temporary
Injunction in conformity with the law and the terms of this Order.
This Order shall expire at such time as this Court enters judgment in this cause.
The bond filed by Plaintiff in conjunction with the prior injunction on December 18, 2024,
shall be sufficient for the issuance of this Modified Temporary Injunction.
Hon. Patrick K. Sweeten
Judge of the Texas Business Court
Third Division
DATED: April 7, 2025
2d. Suppl. CR 333
TAB C
The Business Court of Texas,
Third Division
ES3 MINERALS, LLC, §
Plaintiff/Counter-Defendant, §
§
v.
§
NICHOLAS KREINES, DAVID P. §
RYAN, LIBERTY MINERAL § Cause No. 24-BC03B-0005
PARTNERS LLC, NAK RESOURCES, §
INC., AND CGR OIL AND GAS, LLC, §
Defendants/Counter-Plaintiffs. §
§
═══════════════════════════════════════
MODIFIED TEMPORARY INJUNCTION
═══════════════════════════════════════
On October 29–30th, 2024, the 459th District Court of Travis County heard Plaintiff ES3
Minerals, LLC’s (“Plaintiff” or “ES3”) Application for Temporary Injunction. On November 26,
2024, the district court issued a temporary injunction order. Later, the above-captioned case was
removed to this Court. This Court held a hearing on February 27, 2025, on Defendants’ Motion
to Dissolve Temporary Injunction and Plaintiff’s Opposed Motion to Modify Temporary
Injunction, Subject to Response to Motion to Dissolve and after examining the pleadings and
documents, the arguments of counsel, the evidence presented, and the full record, the Court finds
as follows:
2d. Suppl. CR 334
VALID CAUSES OF ACTION
1. Plaintiff has asserted valid causes of action.
I. PROBABLE RIGHT TO RELIEF
2. Plaintiff has shown a probable right to relief against Defendants Nicholas Kreines
(“Kreines”), David P. Ryan (“Ryan”), and Liberty Mineral Partners LLC (“LMP”).
A. DEFENDANT KREINES
3. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Kreines for (1) violations of trade secret
misappropriation under the Texas Uniform Trade Secrets Act (“TUTSA”), (2) breaches of
fiduciary duty, and (3) breaches of contract (confidentiality, non-solicitation-of-buyers, non-
solicitation-of-employees, and non-competition provisions).
4. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines kept and continues to use and disclose materials and information that are Plaintiff’s trade
secrets to land deals for Defendant LMP, including deals with Plaintiff’s Buyers; that Defendant
Kreines facilitated a deal for Defendant LMP with an existing Plaintiff Buyer while still employed
with Plaintiff; and that Defendant Kreines solicited and will continue to solicit Plaintiff’s Buyers
and employees for Defendant LMP’s benefit.
B. DEFENDANT RYAN
5. The Court finds that Plaintiff has sufficiently shown that it will probably succeed
on the merits of its claims against Defendant Ryan for breaches of contract (non-solicitation-of-
buyers, non-solicitation-of-employees, and non-competition provisions). Plaintiff has also
sufficiently shown for this temporary injunction that the relevant provisions of Defendant Ryan’s
contract did not change after his brief absence from the company.
6. The Court finds that Plaintiff will probably succeed in showing that Defendant
2d. Suppl. CR 335
Ryan has made and will continue to make deals with Plaintiff’s Buyers.
C. DEFENDANT LMP
7. The Court finds that Plaintiff will probably succeed in showing that Defendant
LMP tortiously interfered with Plaintiff’s agreements with Defendants Kreines and Ryan
(including their noncompetition and non-solicitation provisions) and will continue to do so.
D. TRADE SECRETS MISAPPROPRIATED
8. The Court finds that Plaintiff will probably succeed on its claim that Plaintiff’s
Buyer information, including buyer lists, pricing information, contact information for key-decision
makers, the specific asset preferences of those buyers, and the details of the mineral interest
purchases of those buyers are Plaintiff’s trade secrets (“Trade Secrets”). The Court further finds
that Plaintiff will probably succeed on its claim that Plaintiff has taken reasonable measures under
the circumstances to keep this information secret, and this information derives independent
economic value, actual or potential, from not being generally known to, and not being readily
ascertainable through proper means by, other people who can obtain economic value from the
disclosure or use of the information. The Court further finds that Plaintiff will probably succeed
on its claim that Kreines misappropriated Plaintiff’s Trade Secrets for his own benefit and the
benefit of LMP and will continue to do so.
E. BREACH OF CONTRACT AND INTERFERENCE
9. The Court finds that Plaintiff will probably succeed on its claim that, as a condition
of employment with Plaintiff, Defendants Kreines and Ryan entered into Confidentiality, Non-
Competition and Non-Solicitation Agreements with identical terms (“Kreines Agreement” and
“Ryan Agreement” respectively, and together, “Agreements”).
10. The Court finds that Plaintiff will probably succeed on its claim that Defendant
Kreines has breached the Agreement’s confidentiality provisions by taking, using, and disclosing
2d. Suppl. CR 336
Plaintiff’s Confidential Information for his own benefit and for the benefit of Defendant LMP.
11. In Paragraph 4 of their respective Agreements, Kreines and Ryan agreed to the
following restrictions during employment with ES3 and for twenty-four (24) months thereafter:
Non-Competition; Non-Solicitation of Customers and Prospective
Customers. Employee acknowledges that in the course of fulfilling Employee's
responsibilities to ES3, Employee will be a representative of the company to, and
in some instances may be ES3's primary contact with, existing customers as of the
Termination date and prospective customers with whom ES3 has contacted within
the 24-month period preceding the Termination date (collectively, "Customers and
Prospective Customers"). Employee agrees that the goodwill and relationships
developed with ES3's Customers and Prospective Customers is a special, valuable
and unique asset of ES3 and should be used for the exclusive benefit of ES3.
Accordingly, Employee agrees that, during Employee's employment with ES3 and
for twenty-four (24) months thereafter, regardless of the reason for or manner of
termination, Employee will not, directly or indirectly, except in connection with
Employee's employment with ES3: . . .
(c) induce, solicit or take away (or attempt to induce, solicit, or take
away) any Customer or Prospective Customer of ES3 and/or encourage any
Customer or Prospective Customer to discontinue or limit its relationship with ES3;
… or
(e) divert or discourage any Customer or Prospective Customer from
entering into a business relationship with and/or obtaining products or services from
ES3.
12. The Court finds that Plaintiff will probably succeed on its claim that: (a) Defendants
Kreines and Ryan have breached the Agreements’ Non-Competition and Non-Solicitation
Provisions by using for their own benefit Plaintiff’s’ goodwill and that they have diluted Plaintiff’s
goodwill with Plaintiff’s Buyers; (b) Defendants Kreines and Ryan have induced, solicited and
taken away (and attempted to induce, solicit, or take away) Plaintiff’s Buyers and have encouraged
Plaintiff’s Buyers to discontinue or limit their relationship with ES3; (c) Defendants Kreines and
Ryan have diverted or discouraged Plaintiff’s Buyers from entering into a business relationship
with and/or obtaining products or services from ES3; and (d) Defendant LMP was aware of
Defendant Kreines and Ryan’s contractual obligations to Plaintiff and intentionally interfered.
2d. Suppl. CR 337
13. The Court finds that Plaintiff’s list of Plaintiff’s Buyers attached to this order ∗
(which is marked CONFIDENTIAL) are ES3 customers for whom Kreines was a representative
to and did business with on behalf of ES3 during the 24-month period preceding Kreines’s
termination date of January 31, 2024, and specifically includes the individuals and entities on the
list as well as any subsidiaries of those entities that are known to be subsidiaries by Kreines, Ryan
or LMP, and thus are within the definition of Customers and Prospective Customers under the
Agreements (“Plaintiff’s Buyers”). If an individual on the list begins working at a new entity, the
new entity is not included within the definition of Plaintiff’s Buyers, however the individual on
the list remains within the definition of Plaintiff’s Buyers and prohibitions on Kreines, Ryan and
LMP in this order apply to transactions where they have knowledge the individual is personally
involved.
14. In Paragraph 5 of their respective Agreements, Kreines and Ryan agreed to “that,
during Employee’s employment with ES3 and for twenty-four (24) months thereafter, regardless
of the reason for or manner of termination, Employee will not, on behalf of Employee or any other
person or entity except ES3, directly or indirectly hire, solicit, induce or encourage (or attempt to
hire, solicit, induce or encourage) any employee or officer of ES3 to terminate his/her relationship
with ES3, without the prior written consent of ES3.” The Court finds that Plaintiff will probably
succeed on its claim that Defendants Kreines and Ryan violated their Agreements by soliciting
Plaintiff’s employees, including Curtis Menchaca, inducing them to terminate their employment
with Plaintiff and work for LMP.
∗
The attached Plaintiff’s Buyers list has not been modified.
2d. Suppl. CR 338
15. The Court finds that Plaintiff will probably succeed on its claim that the
Agreements are valid, and the post-employment restrictions recited above were ancillary to or a
part of an otherwise enforceable agreement at the time the Agreements were made; ES3 performed
under the Agreements; and Defendants Kreines and Ryan violated the Agreements and continue
to do so.
II. PROBABLE, IMMINENT, AND IRREPARABLE HARM
16. The Court finds that Plaintiff has shown there would be a probable imminent, and
irreparable injury from the actions it seeks to enjoin. Plaintiff has shown the loss of exclusive use
of its Trade Secrets, a loss of deals with specific buyers, a decrease in gross profits, and a loss of
employees, which is likely to continue unless Defendants are enjoined. Defendants Ryan and
Kreines were closely associated with Plaintiff’s goodwill, and by their actions they have diluted
Plaintiff’s goodwill with Plaintiff’s Buyers and will continue to do so. Plaintiff’s probable,
imminent, and irreparable injuries include:
a) Defendant Kreines’s misappropriation of trade secrets.
b) Plaintiff’s loss of goodwill and customers.
c) Defendants Kreines’s and Ryan’s breaches of their noncompetition agreements.
17. Any suit for money damages would not be an adequate remedy of law to protect
Plaintiff’s rights.
IT IS, THEREFORE, ORDERED that, until the time of final trial on the merits:
1. DEFENDANT KREINES, and any person acting in concert or participation with him
who receives actual notice of this Order, is commanded forthwith through January 31, 2026, to
cease and desist, and otherwise refrain from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
2d. Suppl. CR 339
above);
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff; and
d) Conspiring to circumvent the restrictions imposed by sections a–c.
2. DEFENDANT RYAN, and any person acting in concert or participation with him who
receives actual notice of this Order, is commanded forthwith through August 23, 2025, to cease
and desist, and otherwise refrain, from directly or indirectly:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
above);
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff.
d) Conspiring to circumvent the restrictions imposed by sections a–c.
3. DEFENDANT LMP, and any person acting in concert or participation with LMP who
receives actual notice of this Order, is commanded forthwith to cease and desist, and otherwise
refrain, from tortiously interfering with Kreines and Ryan’s agreements with Plaintiff not to:
a) Entering or negotiating any transaction with any of Plaintiff’s Buyers (as defined
above). This expires no later than twenty-four months after Defendants Kreines’s and
Ryan’s terminations of employment with Plaintiff;
b) Encouraging Plaintiff’s Buyers (as defined above) to discontinue or limit their
relationships with Plaintiff. This expires no later than twenty-four months after
Defendants Kreines’s and Ryan’s terminations of employment with Plaintiff; and
c) Soliciting any of Plaintiff’s employees or officers for employment or encouraging them
to terminate their relationships with Plaintiff. This expires no later than twenty-four
months after Defendants Kreines’s and Ryan’s terminations of employment with
Plaintiff.
d) Conspiring to circumvent the restrictions imposed by sections a–c.
2d. Suppl. CR 340
IT IS FURTHER ORDERED that trial is set before the Court on October 20, 2025 at
9:00 a.m.
The Clerk of the above-entitled Court shall forthwith issue a Modified Temporary
Injunction in conformity with the law and the terms of this Order.
This Order shall expire at such time as this Court enters judgment in this cause.
The bond filed by Plaintiff in conjunction with the prior injunction on December 18, 2024,
shall be sufficient for the issuance of this Modified Temporary Injunction.
Hon. Patrick K. Sweeten
Judge of the Texas Business Court
Third Division
DATED: April 7, 2025
2d. Suppl. CR 341
Exhibit A
2d. Suppl. CR 342
CONFIDENTIAL
PLAINTIFF'S BUYERS
"ES3 Buyers" shall mean any contact and/or decision maker who is/was associated with the following entities:
2d. Suppl. CR 343
CONFIDENTIAL
2d. Suppl. CR 344
CONFIDENTIAL
2d. Suppl. CR 345
CONFIDENTIAL
2d. Suppl. CR 346
TAB D
CONFIDENTIALITY, NON-COMPETITION
AND NON-SOLICITATION AGREEMENT
This CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION
AGREEMENT (this "Agreement") is entered into by and between ES3 MINERALS, LLC, a Texas
limited liability company ("ES3"), and DAVID P. RYAN ("Employee").
Recitals
WHEREAS, Employee desires gain employment as an employee of ES3 and ES3 desires to retain
Employee as a Landman;
WHEREAS, during the course of employment, Employee will gain access to Confidential
Information (as hereinafter defined), relating to the business of ES3, and ES3 has provided and will
continue to provide Employee with Confidential Information so Employee may use same for the
exclusive benefit of ES3;
WHEREAS, during the course of employment, ES3 has provided and will continue to provide
Employee with compensation, expense reimbursements in accordance with company policy, and contact
with customers and employees to assist Employee in developing goodwill for ES3, where applicable to
Employee's position; and
WHEREAS, ES3 and Employee desire to enter into this Agreement in order to set forth their
rights, limitations and obligations with respect to Confidential Information, solicitation of employees and
customers, and the other matters set forth herein.
NOW, THEREFORE, in consideration of the employment of Employee, the compensation paid
to Employee, and the access to Confidential Information and customers afforded to Employee, as well as
the other mutual promises herein, ES3 and Employee agree as follows:
1. Definitions. The terms used in this Agreement shall have the following meanings:
a. "Competing Business" means any business that: (i) actively solicits mineral
and/or royalty owners for the purpose of purchasing their oil and gas interests; (ii) partners with "end
buyers" to conduct "simultaneous closings" or "back to back" closings, so as to avoid having any
substantial capital expenditure in the transaction; or (iii} acquires Oil and Gas Leases for the purposes of
selling those leases for a profit, prior to exploiting by means of drilling for Oil and Gas production; or (iv)
is so similar in nature to ES3 that it would displace business opportunities or customers of ES3.
b. "Confidential Information" is information acquired by Employee in the course
and scope of his/her activities for ES3, both prior to and after execution of this Agreement, that is
designated by ES3 as "confidential" or that ES3 indicates through its policies, procedures or practices
should not be disclosed to anyone outside the company except through controlled means. Confidential
Information includes, without limitation, the identity of and contact information for Current and
Prospective Customers (as hereinafter defined), business strategies or plans, sales and/or marketing
strategies and techniques, research and development information regarding existing and prospective
products and services, financial statements and data, pricing and cost information, billing information,
personnel files and employee evaluations, payroll and commission structures and rates, computer
programs and software developed by or for ES3, custom enhancements to commercial software, computer
access passwords, information and material provided to ES3 by third parties in confidence and/or with
disclosure restrictions, and information concerning the services or products offered by ES3 which is not
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generally known to customers or competitors.
The controlled disclosure of Confidential Information to
customers, contractors or vendors for legitimate business purposes and the availability
of Confidential
Information to others outside ES3 through independent means will not remove it from being protected as
if
Confidential Information under this Agreement acquired by Employee through employment with ES3.
"Confidential Materials" means all memoranda, notes, records, reports, manuals, books, papers, letters,
customer lists, contracts, software programs, information and records, instructions, guides and manuals,
and other information relating to the business of ES3 (whether in written, graphic, recorded,
electronic or
other tangible form), which contain Confidential Information and which were furnished to Employce by
in connection with Employee's association with
ES3 or otherwise acquired or developed by Employee
ES3.
2. Confidential Information and Trade Secrets. During Employee's emplayment ES3 has
access to Confidential
provided and will continue to provide Employee with and/or permit Employee
Information and trade secrets applicable to Employee's position under ES3's normal policies and
that Confidential Information is highly sensitive
procedures. Employee understands and acknowledges
and that its unauthorized disclosure could place ES3 at a competitive disadvantage. Accordingly,
Employee agrees to use Confidential Information for the exclusive benefit
of ES3. Employee further
agrees that, during Employee's employment with ES3 and at
all times thereafter, Employee and all agents,
representatives and third parties acting on Employee's behalf shall:
disclose or use any
(a) keep strictly confidential and not directly or indirectly communicate,
Confidential Information for Employee's own benefit or for the benefit of any other
or entity, without the prior
person, partnership, proprietorship, association, corporation
written consent ofES3; and
(b) not copy, duplicate, record or otherwise reproduce any Confidential Information nor
otherwise disclose, disseminate or make the same available to any person who is not an
employee of ES3 or to any entity without the prior written consent of ES3.
in the
Employee is not prohibited from disclosing information that has already been properly placed
domain ES3 domain does not include limited disclosure to a contractor, Customer or
public by (public
to do so by
Prospective Customer), or from disclosing Confidential Information when compelled
subpoena or similar operation of law if Employee gives ES3 at least ten (10) days' advance written notice
of such disclosure.
3. Handling and Retum of Confidential Materials. All Confidential Materials are the
exclusive property of ES3 and shall not be removed from ES3's premises without the prior written
consent of ES3. If removed by consent, such Confidential Materials may be used only for the benefit of
ES3 in the ordinary course of business. All Confidential Materials in Employee's possession, custody or
control shall be returned to ES3 by Employee, immediately and without demand, upon termination of
at time if ES3 so demands.
Employee's employment with ES3 ("Termination"), and shall be returned any
Employee will not make or retain copies, summaries or abstracts of any Confidential Materials.
4. Non-Competition: Non-Solicitation of Customers and Prospective Customers. Employee
acknowledges that in the course of fulfilling Employee's responsibilities to ES3, Employee will be a
representative of the company to, and in some instances may be ES3's primary contact with, existing
customers as of the Termination date and prospective customers with whom ES3 has contacted within the
24 month period preceding the Termination date (collectively, "Customers and Prospective Customers").
Employee agrees that the goodwill and relationships developed with ES3's Customers and Prospective
Customers is a special, valuable and unique asset of ES3 and should be used for the exclusive benefit of
ES3. Accordingly, Employee agrees that, during Employee's employment with ES3 and for twenty-four
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will not, directly
(24) months thereafter, regardless of the reason for or manner of termination, Employee
or indirectly, except in connection with Employee's employment with ES3:
(a) directly compete with ES3;
(b) have any interest as an owner, investor, shareholder, partner, member, lender, director
officer, manager, employee, consultant, guarantor, representative, or agent or in any other
manner whatsoever, directly or indirectly, carry on or be engaged in (or make
preparations for carrying on or being engaged in), financially
or otherwise, or advise in
the establishment of, Competing Business within the state of Texas; provided, however,
to one
Employee may make solely passive investments in any Competing Business up
percent (1%) of the common stock of which is "publicly held," and of which Employee
shall not own or control, directly or indirectly;
(c) induce, solicit r take away (or attempt to induce, solicit, or take away) any Customer or
Customer te
Prospective Customer of ES3 and/or encourage any Customer or Prospective
discontinue or limit its relationship with ES3;
(d) call on, solicit, perform services for or accept work from any Customer or Prospective
Customer for the benefit of a Competing Business with which Employee becomes in any
way affiliated; or
(e) divert or discourage any Customer or Prospective Customer from entering into a business
relationship with and/or obtaining products or services from ES3.
5. Non-Solicitation of Employees. Employee agrees that, during Employee's employment
with ES3 and for twenty-four (24) months thereafter, regardless of the reason for or manner of
termination, Employee will not, on behalf of Employee or any other person or entity except ES3, directly
or indirectly hire, solicit, induce or encourage (or attempt to hire, solicit, induce or encourage) any
consent
employee or officer of ES3 to terminate his /her relationship with ES3, without the prior written
of ES3.
6. Reasonableness of Covenants. Employee agrees that the covenants in Paragraphs 2, 3, 4
and 5 of this Agreement are necessary and reasonable, are supported by valid consideration, and are
and
required to protect the legitimate business interests and goodwill of ES3. Employee acknowledges
agrees that enforcement by ES3 of such covenants will not create an undue hardship or unreasonably
interfere with Employee's ability to pursue a proper livelihood.
7. No Employment Contract. Employee understands and agrees that Employee's
employment with ES3 is on an "at will" basis and may be terminated by Employee or ES3 at any time,
with or without cause. Employee further understands and agrees that this Agreement is not, and shall not
be construed to create, any contract of employment, express or implied, which is for a specified term or
which in any way otherwise alters the "at will" status of Employee's employment.
8. No Other Agreements. Employee represents to ES3 that his/her employment with ES3
will not violate any agreement Employee has made that prohibits Employee from disclosing any
information Employee acquired prior to becoming employed by ES3. Employee has not previously, and
will not in the future, disclose to ES3 any proprietary or confidential information or trade secrets
will
belonging to any previous employer or others. Employee is not a party to any other agreement that
interfere with Employee's full compliance with this Agreement.
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421
9. Survival. The agreements and covenants of Employee in this Agreement and the rights
of ES3 there under shall survive termination, for whatever reason, of Employee's employment with ES3
and will remain in full force and effect for their stated duration.
10. Remedies. In the event of breach or threatened breach by Employee of any provision of
this Agreement, Employee acknowledges that ES3 will suffer immediate and irreparable harm that cannot
be accurately calculated in monetary damages. ES3 shall be entitled to (a) injunctive relief by temporary
restraining order, temporary injunction and/or permanent injunction, (b) recovery of
all attorney's fees
and costs incurred by £S3 in obtaining such relief; and (c) any other legal and equitable relief, including
monetary damages incurred as a result of said breach or threatened breach. ES3 may pursue any remedy
available, including declaratory relief, concurrently or consecutively in any order, and the pursuit of one
such remedy will not be deemed an election of remedies or waiver of the right to any other remedy. ES3
has the right to pursue partial enforcement and/or to seek declaratory relief regarding the enforceable
available
scope of this Agreement without penalty and without waiving ES3's right to pursue any other
remedy subsequent to declaratory relief. The assertion or existence of any claim or cause of action by
whether or not on this shall not constitute a defense to
Employee against ES3, predicated Agreement,
enforcement by ES3 of such agreements and covenants.
\l. Attorneys' Fees and Indemnification. The prevailing party in any legal proceedings
brought by or against the other party to enforce any provision of this Agreement shall be entitled to
recover against the non-prevailing party the reasonable attomeys' fees, court costs and other expenses
incurred by the prevailing party. Employee shall indemnify and hold ES3 harmless from any and all
damages and expenses, including court costs and attorneys' fees, that ES3 may
sustain as a result of
Employee's breach of the terms of this Agreement.
12. Notification. Employee agrees to notify any prospective entity with which Employee
becomes in any way associated after separation from employment with ES3 of the existence and
provisions of this Agreement. Employee authorizes ES3 to notify anyone employing or evidencing
an
intention to employ Employee of the existence and provisions of this Agreement. Employee waives and
releases ES3 from any claims, causes of action, or liability arising in connection with ES3's contact or
communications with such third parties concerning the existence, terms and enforcement of this
Agreement.
13. Notices. Any notices, consents, demands, requests, approvals and other communications
required or permitted under this Agreement by either party to the other shall be in writing and delivered
personally or placed in the United States Mail, certified or registered, return receipt requested, with
postage prepaid, to Employee or to ES3 at the addresses set forth below. Notices delivered personally
are
effective upon actual receipt; mailed notices are effective as of three (3) days after deposit in the United
States Mail. Either party may designate a different address by giving the other party written notice of
such change in the manner provided herein.
14. Modification. This Agreement may be modified, altered or amended only by written
instrument setting forth the amendment and signed by Employee and ES3 or by court order pursuant to
Paragraph 19 (Severability) below.
15. Waivers and Consents. The failure of ES3 to require the performance of any term or
condition of this Agreement, or the waiver by ES3 of any breach of this Agreement, shall not prevent the
subsequent enforcement of any term or condition nor be deemed a waiver of any subsequent breach. if
Employee becomes aware of any breach by ES3 of this Agreement, Employee must give ES3 written
notice of the alleged breach within seven (7) days thereof and give ES3 thirty (30) days to cure such
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alleged breach. Employee's failure to provide this notice and opportunity to cure to
ES3 will waive
Employee's right to assert such alleged breach at a later time.
16. Assignment. This Agreement is binding upon and shall inure to the benefit of Employee
and ES3 as well as their respective heirs, successors, legal representatives, executors and administrators.
ES3 may assign this Agreement to any of its affiliates or successors, including any person or entity
purchasing ail or substantially all of its business and assets or with which ES3 merges or consolidates.
17. Severability. Should any term or provision of this Agreement be determined by a court to
be illegal, invalid or unenforceable, such term or provision will be deemed not to be a part hereof;
however, the other portions of this Agreement shall remain in full force and effect. It is the parties' intent
that the covenants herein be enforced to the fullest extent permitted by applicable law. Accordingly,
should a court of competent jurisdiction determine that the scope of any covenant is too broad to be
enforced as written, the parties request that the court reform the covenant to the maximum time period,
the largest territory, the broadest scope of activity, or other limitation, which such court would find
reasonable and enforceable and which effectively protects the business interests of ES3.
18. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
INTERPRETED, ENFORCED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. This Agreement shall be construed as a whole, according to its fair meaning, and
not strictly for or against ES3 or Employee.
Knowing and Voluntary Agreement. EMPLOYEE ACKNOWLEDGES THAT HE/SHE
19,
HAS BEEN AFFORDED ADEQUATE TIME TO REVIEW AND CONSIDER THE TERMS IN THIS
AGREEMENT, AND EMPLOYEE UNDERSTANDS HIS/HER RIGHT TO DISCUSS ANY AND ALL
ASPECTS OF THIS AGREEMENT WITH AN ATTORNEY OR OTHER REPRESENTATIVE OF
HIS/HER CHOICE, EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ
THIS AGREEMENT, THAT HE/SHE FULLY UNDERSTANDS ITS TERMS, AND THAT
EMPLOYER AND ES3 HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN
RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY ES3 OTHER THAN THOSE
CONTAINED HEREIN.
IN WITNESS WHEREOF, ES3 and Employee have executed this Agreement on and with an
effective date of October 1,2017.
BS3: EMPLOYEE:
ES3 Minerals, LLC,
a Texas limited liability company
By:
Ill. President Name. David P. Ryan
Address: 13215 Bee Cave Parkway Address: 202 Duffy Lane
Suite B-120 Austin, Texas 78738
Austin, Texas 78738
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TAB E
CONFIDENTIALITY, NON-COMPETITION
AND NON-SOLICITATION AGREEMENT
This CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION
AGREEMENT (this "Agreement") is entered into by and between ES3 MINERALS, LLC, a Texas
limited liability company ("ES3"), and NICK KREINES ("Employee")
,
Recitals
WHEREAS, Employee desires gain employment as an employee of ES3 and ES3 desires to retain
Employee as a Landman;
WHEREAS, during the course of employment, Employee will gain access to Confidential
Information (as hereinafter defined), relating to the business of ES3, and ES3 has
provided and will
continue to provide Employee with Confidential Information so Employee may use same for the
exclusive benefit of ES3;
WHEREAS, during the course of employment, ES3 has provided and will continue to provide
Employee with compensation, expense reimbursements in accordance with company policy, and contact
with customers and employees to assist Employee in developing goodwill for ES3, where
applicable to
Employee's position; and
WHEREAS, ES3 and Employee desire to enter into this Agreement in order to set forth their
rights, limitations and obligations with respect to Confidential Information, solicitation of
employees and
customers, and the other matters set forth herein.
NOW, THEREFORE, in consideration of the employment of Employee, the compensation paid
to Employee, and the access to Confidential Information and customers afforded to
Employee, as well as
the other mutual promises herein, ES3 and Employee agree as follows:
1. Definitions. The terms used.in this Agreement shall have the following meanings:
a. "Competing Business" means any business that: (i) actively solicits mineral
and/or royalty owners for the purpose of purchasing their oil and gas interests; (ii)
partners with "end
buyers" to conduct "simultaneous closings" or "back to back" closings, so as to avoid having any
substantial capital expenditure in the transaction; or (iii) acquires Oil and Gas Leases for the
purposes of
selling those leases for a profit, prior to exploiting by means of drilling for Oil and Gas production; or (iv)
is so similar in nature to ES3 that it would displace business opportunities or customers of ES3.
b. "Confidential Information" is information acquired by Employee in the course
and scope of his/her activities for ES3, both prior to and after execution of this
Agreement, that is
designated by ES3 as "confidential" or that ES3 indicates through its policies, procedures or practices
should not be disclosed to anyone outside the company except through controlled means. Confidential
Information includes, without limitation, the identity of and contact information for Current and
Prospective Customers (as hereinafter defined), business strategies or plans, sales and/or marketing
strategies and techniques, research and development information regarding existing and prospective
products and services, financial statements and data, pricing and cost information, billing information,
personnel files and employee evaluations, payroll and commission structures and rates, computer
programs and software developed by or for ES3, custom enhancements to commercial software, computer
access passwords, information and material provided to ES3 by third parties in confidence and/or with
disclosure restrictions, and information concerning the services or products offered by ES3 which is not
1
425
generally known to customers or competitors. The controlled disclosure of Confidential Information to
customers, contractors or vendors for legitimate business. purposes and the availabili of Confidential
ty
Information to others outside ES3 through independe means will not remove it from
nt being protected as
Confidential Information under this Agreement if acquired by
Employee through employment with ES3.
"Confidential Materials" means all memoranda, notes, records,
reports, manuals, books, papers, letters,
customer lists, contracts, software programs, information and records,
instructions, guides and manuals,
and other information relating to the business of ES3 (whether in
written, graphic, recorded, electronic or
other tangible form), which contain Confidential Information and which were furnished to
Employee by
ES3 or otherwise acquired or developed by Employee in connection with
Employee's association with
ES3.
2. Confidential Information and Trade Secrets. During Employee
's employment ES3 has
provided and will continue to provide Employee with and/or permit Employee access to Confidential
Information and trade secrets applicable to Employee's position under ES3's normal
policies and
procedures. Employee understands and acknowledges that Confidential Information is highly sensitive
and that its unauthorized disclosure could place ES3 at a
competitive disadvantage. Accordingly,
Employee agrees to use Confidential Information for the exclusive benefit of ES3. Employee further
agrees that, during Employee's employment with ES3 and at all times thereafter, Employee and all
agents,
representatives and third parties acting on Employee's behalf shall:
(a) keep strictly confidential and not directly or indirectly communicate, disclose or use any
Confidential Information for Employee's own benefit or for the benefit of
any other
person, partnership, proprietorship, association, corporation or entity, without the prior
written consent of ES3; and
(b) not copy, duplicate, record or otherwise reproduce any Confidential
Information, nor
otherwise disclose, disseminate or make the same available to
any person who is not an
employee of ES3 or to any entity without the prior written consent of ES3.
Employee is not prohibited from disclosing information that has already been properly placed in the
public domain by ES3 (public domain does not include limited disclosure to a contractor, Customer or
Prospective Customer), or from disclosing Confidential Information when compelled to do so by
subpoena or similar operation of law if Employee gives ES3 at least ten (10) days' advance written notice
of such disclosure.
3. Handling and Return of Confidential Materials. All Confidential Materials are the
exclusive property of ES3 and shall not be removed from ES3's premises without the
prior written
consent of ES3. If removed by consent, such Confidential Materials
may be used only for the benefit of
ES3 in the ordinary course of business. All Confidential Materials in Employee's
possession, custody or
control shall be returned to ES3 by Employee, immediately and without
demand, upon termination of
Employee's employment with ES3 ("Termination"), and shall be returned at any time if ES3 so demands.
Employee will not make or retain copies, summaries or abstracts of any Confidential Materials.
4. Non-Competition: Non-Solicitation of Customers and Prospective Customers. Employee
acknowledges that in the course of fulfilling Employee's responsibilities to ES3, Employee will be a
representative of the company to, and in some instances may be ES3's primary contact with, existing
customers as of the Termination date and prospective customers with whom ES3 has contacted within the
24 month period preceding the Termination date (collectiv
ely, "Customers and Prospective Customers").
Employee agrees that the goodwill and relationships developed with ES3's Customers and Prospective
Customers is a special, valuable and unique asset of ES3 and should be used for the exclusive benefit of
ES3. Accordingly, Employee agrees that, during Employee's employment with ES3 and for
twenty-four
2
426
(24)months. thereafter, regardless of the reason for or manner of termination, Employee will not, directly
or indirectly, except in connection with Employee
's employment with ES3:
(a) directly compete with ES3;
{b) have any interest as an owner, investor, shareholder,
partner, member, lender, director,
officer, manager, employee, consultant, guarantor, representative, or agent or in
any other
manner whatsoever, directly_or indirectly carry on or be
engaged in {or make
preparations for carrying on or being engaged in), financially or otherwise, or advise in
the establishment of, a Competing Business@ithin the state of
Texas> provided, however,
Employee may make solely passive investments in any Competing Business up to one
percent (1%) of the common stock of which is "publicly held," and of which Employee
shall not own or control, directly or indirectly;
{c) induce, solicit or take away (or attempt to induce, solicit, or take away) any Customer or
Prospective Customer of ES3 and/or encourage any Customer or Prospective Customer to
discontinue or limit its relationship with ES3;
(d) call on, solicit, perform services for or accept work from any Customer or
Prospective
Customer for the benefit of Competing Business with which
a
Employee becomes in any
way affiliated; or
(e) divert or discourage any Customer or Prospective Customer from
entering into a business
relationship with and/or obtaining products or services from ES3.
5. Non-Solicitation of Employees. Employee agrees that, during
Employee's employment
with ES3 and for twenty-four (24) months thereafter, regardless of the reason for or manner of
termination, Employee will not, on behalf of Employee or any other person or entity
except ES3, directly
or indirectly hire, solicit, induce or encourage (or attempt to hire,
solicit, induce or encourage) any
employee or officer of ES3 to terminate his/her relationship with ES3, without the prior written consent of
ES3.
.6 Reasonableness of Covenants. Employee agrees that the covenants in
Paragraphs 2, 3, 4
and 5 of this Agreement are necessary and reasonable, are
supported by valid consideration, and are
required to protect the legitimate business interests and goodwill of ES3. Employee acknowledges and
agrees that enforcement by ES3 of such covenants will not create an undue hardship or unreasonably
interfere with Employee's ability to pursue a proper livelihood.
7. No Employment Contract. Employee understands and agrees that Employee's
employment with ES3 is on an "at will" basis and may be terminated by Employee or ES3 at any time,
with or without cause, Employee further understands and agrees that this
Agreement is not, and shall not
be construed to create, any contract of employment, express or
implied, which is for a specified term or
which in any way otherwise alters the "at will" status of Employee
's employment.
8. No Other Agreements. Employee represents to ES3 that his/her employm
ent with ES3
will not violate any agreement Employee has made that prohibits Employee from disclosing
any
information Employee acquired prior to becoming employed by ES3.
Employee has not previously, and
will not in the future, disclose to ES3 any proprietary or confidential information or trade secrets
belonging to any previous employer or others. Employee is not a party to any other agreement that will
interfere with Employee's full compliance with this Agreement.
3
427
9, Survival. The agreements and covenants of Employee in this
Agreement and the rights
of ES3 there under shall survive termination, for whatever reason, of
Employee's employment with ES3
and will remain in full force and effect for their stated duration.
10. Remedies. in the event of breach or threatened breach
by Employee of any provision of
this Agreement, Employee acknowledges that ES3 will suffer immediate and
irreparable harm that cannot
be accurately calculated in monetary damages. ES3 shall be entitled to
(a) injunctive relief by temporary
restraining order, temporary injunction and/or permanent injunction; (b) recovery of all
attorney's fees
and costs incurred by ES3 in obtaining such relief; and
(c) any other legal and equitable relief, including
monetary damages incurred as a result of said breach or threatened breach. ES3 may pursue
any remedy
available, inclading declaratory relief, concurrently or consecutively in any order, and the pursuit of one
such remedy will not be deemed an election of remedies or waiver of the
right to any other remedy. ES3
has the right to pursue partial enforcement and/or to seek
declaratory relief regarding the enforceable
scope of this Agreement without penalty and without waiving ES3's right to pursue any other available
remedy subsequent to declaratory relief. The assertion or existence of any claim or cause of action
by
Employee against ES3, whether or not predicated on this Agreement, shall not constitute a defense to
enforcement by ES3 of such agreements and covenants,
11, Attorneys' Fees and Indemnification. The prevailing party in
any legal proceedings
brought by or against the other party to enforce any provision of this Agreement shall be entitled to
recover against the non-prevailing party the reasonable attorneys' fees, court costs and other
expenses
incurred by the prevailing party. Employee shall indemnify and hold ES3 harmless from
any and all
damages and expenses, including court costs and attorneys' fees, that ES3 may sustain as a result of
Employee's breach of the terms of this Agreement.
12. Notification. Employee agrees to notify any prospectiv entity with which
e Employee
becomes in any way associated after separation from employme
nt with ES3 of the existence and
provisions of this Agreement. Employee authorizes ES3 to notify anyone employing or evidencing an
intention to employ Employee of the existence and provisions of this
Agreement. Employee waives and
releases ES3 from any claims, causes of action, or liability
arising in connection with ES3's contact or
communications with such third parties concerning the existence, terms and enforcement of
this
Agreement.
13, Notices. Any notices, consents, demands, requests, approvals and other communications
required or permitted under this Agreement by either party to the other shall be in writing and delivered
personally or placed in the United States Mail, certified or registered, return receipt requested, with
postage prepaid, to Employee or to ES3 at the addresses set forth below. Notices delivered personally are
effective upon actual receipt; mailed notices are effective as of three (3)
days after deposit in the United
States Mail. Either party may designate a different address by
giving the other party written notice of
such change in the manner provided herein.
14. Modification. This Agreement may be modified, altered or amended
only by written
instrument setting forth the amendment and signed by Employee and ES3 or
by court order pursuant to
Paragraph 19 (Severability) below.
15. Waivers and Consents. The failure of ES3 to require the performan of
ce any term or
condition of this Agreement, or the waiver by ES3 of any breach of this
Agreement, shall not prevent the
subsequent enforcement of any term or condition nor be deemed a waiver of any subsequent breach. If
Employee becomes aware of any breach by ES3 of this Agreement, Employee must give ES3 written
notice of the alleged breach within seven (7) days thereof and
give ES3 thirty (30) days to cure such
4
428
alleged breach. Employee's failure to provide this notice and opportunity to cure to ES3 will waive
Employee's right to assert such alleged breach at a later time.
16. Assignment. This Agreement is binding upon and shall inure to the benefit of Employee
and ES3 as well as their respective heirs, successors, legal representatives, executors and administrators.
ES3 may assign this Agreement to any of its affiliates or successors, including any person or entity
purchasing all or substantially all of its business and assets or with which ES3 merges or consolidates,
17 Severability Should any term or provision of this Agreement be determined by a court to
be illegal, invalid or unenforceable such term or provision will be deemed not to be a
part hereof:
however, the other portions of this Agreement shall remain in full force and effect It is the parties' intent
that the covenants herein be enforced to the fullest extent permitted by applicable law
Accordingly,
should a court of competent jurisdiction determine that the scope of any covenant is too broad to be
forced as written, the parties request that the court reform the covenant to the maximum time
peri od,
the largest territory, the broadest scope of activity, or other limitation, which such court would find
reasonable and enforceable and which effectively protects the business interests of ES3.
18. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
INTERPRETED, ENFORCED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. This Agreement shall be construed as a whole, according to its fair meaning, and
not strictly for or against ES3 or Employee.
19, Knowing and Voluntary Agreement. EMPLOYEE ACKNOWLEDGES THAT HE/SHE
HAS BEEN AFFORDED ADEQUATE TIME TO REVIEW AND CONSIDER THE TERMS IN THIS
AGREEMENT, AND EMPLOYEE UNDERSTANDS HIS/HER RIGHT TO DISCUSS ANY AND ALL
ASPECTS OF THIS AGREEMENT WITH AN ATTORNEY OR OTHER REPRESENTATIVE OF
HIS/HER CHOICE. EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ
THIS AGREEMENT, THAT HE/SHE FULLY UNDERSTANDS ITS TERMS, AND THAT
EMPLOYEE AND ES3 HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN
RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY ES3 OTHER THAN THOSE
CONTAINED HEREIN.
IN WITNESS WHEREOF, ES3 and Employee have executed this Agreement on and with an
effective date of August 12,2019.
ES3: EMPLOYEE:
ES3 Minerals, LLC,
a Texas limited liability company
ardJ Stanton ITI, President Name: Nick Kreines
Address: 13215 Bee Cave Parkway Address: 3501 FM 620 S.
Suite B-120 Apt. 14105
Austin, Texas 78738 Austin, Texas 78738
5
429
TAB F
Tex. Bus. & Com. Code § 15.50
*** This document is current through the 2023 Regular Session; the 1st C.S.; the 2nd C.S.; the
3rd C.S. and the 4th C.S. of the 88th Legislature; and the November 7, 2023 general election
results. ***
Texas Statutes & Codes Annotated by LexisNexis® > Business and Commerce Code > Title 2
Competition and Trade Practices (Chs. 15 — 22) > Chapter 15 Monopolies, Trusts and
Conspiracies in Restraint of Trade (Subchs. A — E) > Subchapter E Covenants Not to Compete
(§§ 15.50 — 15.52)
Sec. 15.50. Criteria for Enforceability of Covenants Not to Compete.
(a) Notwithstanding Section 15.05 of this code, and subject to any applicable provision of
Subsection (b), a covenant not to compete is enforceable if it is ancillary to or part of an
otherwise enforceable agreement at the time the agreement is made to the extent that it
contains limitations as to time, geographical area, and scope of activity to be restrained
that are reasonable and do not impose a greater restraint than is necessary to protect the
goodwill or other business interest of the promisee.
(b) A covenant not to compete relating to the practice of medicine is enforceable against
a person licensed as a physician by the Texas Medical Board if such covenant complies
with the following requirements:
(1) the covenant must:
(A) not deny the physician access to a list of his patients whom he had seen or
treated within one year of termination of the contract or employment;
(B) provide access to medical records of the physician’s patients upon
authorization of the patient and any copies of medical records for a reasonable fee
as established by the Texas Medical Board under Section 159.008, Occupations
Code; and
(C) provide that any access to a list of patients or to patients’ medical records
after termination of the contract or employment shall not require such list or
records to be provided in a format different than that by which such records are
maintained except by mutual consent of the parties to the contract;
(2) the covenant must provide for a buy out of the covenant by the physician at a
reasonable price or, at the option of either party, as determined by a mutually agreed
upon arbitrator or, in the case of an inability to agree, an arbitrator of the court whose
decision shall be binding on the parties; and
(3) the covenant must provide that the physician will not be prohibited from providing
continuing care and treatment to a specific patient or patients during the course of an
acute illness even after the contract or employment has been terminated.
Page 2 of 2
Tex. Bus. & Com. Code § 15.50
(c) Subsection (b) does not apply to a physician’s business ownership interest in a
licensed hospital or licensed ambulatory surgical center.
History
Enacted by Acts 1989, 71st Leg., ch. 1193 (S.B. 946), § 1, effective August 28, 1989; am. Acts
1993, 73rd Leg., ch. 965 (H.B. 7), § 1, effective September 1, 1993; am. Acts 1999, 76th Leg.,
ch. 1574 (H.B. 3285), § 1, effective September 1, 1999; am. Acts 2001, 77th Leg., ch. 1420
(H.B. 2812), § 14.729, effective September 1, 2001; am. Acts 2009, 81st Leg., ch. 971 (H.B.
3623), § 1, effective September 1, 2009.
Texas Statutes & Codes Annotated by LexisNexis®
Copyright © 2025 All rights reserved.
End of Document
TAB G
Tex. Gov’t Code § 25A.004
*** This document is current through the 2023 Regular Session; the 1st C.S.; the 2nd C.S.; the
3rd C.S. and the 4th C.S. of the 88th Legislature; and the November 7, 2023 general election
results. ***
Texas Statutes & Codes Annotated by LexisNexis® > Government Code > Title 2 Judicial
Branch (Subts. A — M) > Subtitle A Courts (Chs. 21 — 30) > Chapter 25A Business Court (§§
25A.001 — 25A.020)
Sec. 25A.004. Jurisdiction and Powers.
(a) Subject to Subsections (b), (c), (d), (e), and (f), the business court has the powers
provided to district courts by Chapter 24, including the power to:
(1) issue writs of injunction, mandamus, sequestration, attachment, garnishment, and
supersedeas; and
(2) grant any relief that may be granted by a district court.
(b) Subject to Subsection (c), the business court has civil jurisdiction concurrent with
district courts in the following actions in which the amount in controversy exceeds $5
million, excluding interest, statutory damages, exemplary damages, penalties, attorney’s
fees, and court costs:
(1) a derivative proceeding;
(2) an action regarding the governance, governing documents, or internal affairs of an
organization;
(3) an action in which a claim under a state or federal securities or trade regulation
law is asserted against:
(A) an organization;
(B) a controlling person or managerial official of an organization for an act or
omission by the organization or by the person in the person’s capacity as a
controlling person or managerial official;
(C) an underwriter of securities issued by the organization; or
(D) the auditor of an organization;
(4) an action by an organization, or an owner of an organization, if the action:
(A) is brought against an owner, controlling person, or managerial official of the
organization; and
(B) alleges an act or omission by the person in the person’s capacity as an owner,
controlling person, or managerial official of the organization;
Page 2 of 3
Tex. Gov’t Code § 25A.004
(5) an action alleging that an owner, controlling person, or managerial official
breached a duty owed to an organization or an owner of an organization by reason of
the person’s status as an owner, controlling person, or managerial official, including
the breach of a duty of loyalty or good faith;
(6) an action seeking to hold an owner or governing person of an organization liable
for an obligation of the organization, other than on account of a written contract signed
by the person to be held liable in a capacity other than as an owner or governing
person; and
(7) an action arising out of the Business Organizations Code.
(c) The business court has civil jurisdiction concurrent with district courts in an action
described by Subsection (b) regardless of the amount in controversy if a party to the
action is a publicly traded company.
(d) The business court has civil jurisdiction concurrent with district courts in the following
actions in which the amount in controversy exceeds $10 million, excluding interest,
statutory damages, exemplary damages, penalties, attorney’s fees, and court costs:
(1) an action arising out of a qualified transaction;
(2) an action that arises out of a contract or commercial transaction in which the
parties to the contract or transaction agreed in the contract or a subsequent
agreement that the business court has jurisdiction of the action, except an action that
arises out of an insurance contract; and
(3) subject to Subsection (g), an action that arises out of a violation of the Finance
Code or Business & Commerce Code by an organization or an officer or governing
person acting on behalf of an organization other than a bank, credit union, or savings
and loan association.
(e) The business court has civil jurisdiction concurrent with district courts in an action
seeking injunctive relief or a declaratory judgment under Chapter 37, Civil Practice and
Remedies Code, involving a dispute based on a claim within the court’s jurisdiction under
Subsection (b), (c), or (d).
(f) Except as provided by Subsection (h), the business court has supplemental
jurisdiction over any other claim related to a case or controversy within the court’s
jurisdiction that forms part of the same case or controversy. A claim within the business
court’s supplemental jurisdiction may proceed in the business court only on the
agreement of all parties to the claim and a judge of the division of the court before which
the action is pending. If the parties involved in a claim within the business court’s
supplemental jurisdiction do not agree on the claim proceeding in the business court, the
claim may proceed in a court of original jurisdiction concurrently with any related claims
proceeding in the business court.
(g) Unless the claim falls within the business court’s supplemental jurisdiction, the
business court does not have jurisdiction of:
(1) a civil action:
(A) brought by or against a governmental entity; or
Page 3 of 3
Tex. Gov’t Code § 25A.004
(B) to foreclose on a lien on real or personal property;
(2) a claim arising out of:
(A) Subchapter E, Chapter 15, and Chapter 17, Business & Commerce Code;
(B) the Estates Code;
(C) the Family Code;
(D) the Insurance Code; or
(E) Chapter 53 and Title 9, Property Code;
(3) a claim arising out of the production or sale of a farm product, as that term is
defined by Section 9.102, Business & Commerce Code;
(4) a claim related to a consumer transaction, as that term is defined by Section
601.001, Business & Commerce Code, to which a consumer in this state is a party,
arising out of a violation of federal or state law; or
(5) a claim related to the duties and obligations under an insurance policy.
(h) The business court does not have jurisdiction of the following claims regardless of
whether the claim is otherwise within the court’s supplemental jurisdiction under
Subsection (f):
(1) a claim arising under Chapter 74, Civil Practice and Remedies Code;
(2) a claim in which a party seeks recovery of monetary damages for bodily injury or
death; or
(3) a claim of legal malpractice.
History
Acts 2023, 88th Leg., ch. 380 (H.B. 19), § 1, effective September 1, 2023.
Texas Statutes & Codes Annotated by LexisNexis®
Copyright © 2025 All rights reserved.
End of Document
TAB H
Tex. Gov’t Code § 25A.006
*** This document is current through the 2023 Regular Session; the 1st C.S.; the 2nd C.S.; the
3rd C.S. and the 4th C.S. of the 88th Legislature; and the November 7, 2023 general election
results. ***
Texas Statutes & Codes Annotated by LexisNexis® > Government Code > Title 2 Judicial
Branch (Subts. A — M) > Subtitle A Courts (Chs. 21 — 30) > Chapter 25A Business Court (§§
25A.001 — 25A.020)
Sec. 25A.006. Initial Filing; Removal and Remand.
(a) An action within the jurisdiction of the business court may be filed in the business
court. The party filing the action must plead facts to establish venue in a county in a
division of the business court, and the business court shall assign the action to that
division. Venue may be established as provided by law or, if a written contract specifies a
county as venue for the action, as provided by the contract.
(b) If the business court does not have jurisdiction of the action, the court shall, at the
option of the party filing the action:
(1) transfer the action to a district court or county court at law in a county of proper
venue; or
(2) dismiss the action without prejudice to the party’s rights.
(c) If, after an action is assigned to a division of the business court, the court determines
that the division’s geographic territory does not include a county of proper venue for the
action, the court shall:
(1) if an operating division of the court includes a county of proper venue, transfer the
action to that division; or
(2) if there is not an operating division of the court that includes a county of proper
venue, at the option of the party filing the action, transfer the action to a district court
or county court at law in a county of proper venue.
(d) A party to an action filed in a district court or county court at law that is within the
jurisdiction of the business court may remove the action to the business court. If the
business court does not have jurisdiction of the action, the business court shall remand
the action to the court in which the action was originally filed.
(e) A party to an action filed in a district court or county court at law in a county of proper
venue that is not within an operating division of the business court or the judge of the
court in which the action is filed may not remove or transfer the action to the business
court.
Page 2 of 3
Tex. Gov’t Code § 25A.006
(f) A party may file an agreed notice of removal at any time during the pendency of the
action. If all parties to the action have not agreed to remove the action, the notice of
removal must be filed:
(1) not later than the 30th day after the date the party requesting removal of the
action discovered, or reasonably should have discovered, facts establishing the
business court’s jurisdiction over the action; or
(2) if an application for temporary injunction is pending on the date the party
requesting removal of the action discovered, or reasonably should have discovered,
facts establishing the business court’s jurisdiction over the action, not later than the
30th day after the date the application is granted, denied, or denied as a matter of law.
(g) The notice of removal must be filed with the business court and the court in which the
action was originally filed. On receipt of the notice, the clerk of the court in which the
action was originally filed shall immediately transfer the action to the business court in
accordance with rules adopted by the supreme court, and the business court clerk shall
assign the action to the appropriate division of the business court.
(h) The filing of an action or a notice of removal in the business court is subject to
Section 10.001, Civil Practice and Remedies Code.
(i) Removal of a case to the business court is not subject to the statutes or rules
governing the due order of pleading.
(j) Removal of a case does not waive a defect in venue or constitute an appearance to
determine personal jurisdiction.
(k) The judge of a court in which an action is filed may request the presiding judge for the
court’s administrative region to transfer the action to the business court if the action is
within the business court’s jurisdiction. The judge shall notify all parties of the transfer
request and request a hearing on the transfer request. After a hearing on the request, the
presiding judge may transfer the action to the business court if the presiding judge finds
the transfer will facilitate the fair and efficient administration of justice. The business court
clerk shall assign an action transferred under this subsection to the appropriate division of
the business court.
(l) The business court judge on establishment of jurisdiction and venue over an action
shall by order declare the county in which any jury trial for the action will be held as
determined under Section 25A.015.
History
Acts 2023, 88th Leg., ch. 380 (H.B. 19), § 1, effective September 1, 2023.
Texas Statutes & Codes Annotated by LexisNexis®
Copyright © 2025 All rights reserved.
Page 3 of 3
Tex. Gov’t Code § 25A.006
End of Document
TAB I
Tex. R. Civ. P. 355
The State and Federal rules are current through March 25, 2025. Local District rules are
updated periodically throughout the year.
TX - Texas Local, State & Federal Court Rules > TEXAS RULES OF CIVIL PROCEDURE > PART
III. RULES OF PRACTICE IN THE BUSINESS COURT
Rule 355. Action Removed to the Business Court.
(a) Notice of Removal Required. A party to an action originally filed in a district court or
county court at law may remove the action to the business court by filing a notice of
removal with:
(1) the court from which removal is sought; and
(2) the business court.
(b) Notice Contents. The notice must:
(1) state whether all parties agree to the removal;
(2) plead facts to establish:
(A) the business court’s authority to hear the action; and
(B) venue in a county in an operating division of the business court; and
(3) contain a copy of the district court’s or county court at law’s docket sheet and all
process, pleadings, and orders in the action.
(c) Notice Deadline.
(1) When Agreed. A party may file a notice of removal reflecting the agreement of all
parties at any time during the pendency of the action.
(2) When Not Agreed. If all parties have not agreed to remove the action, the notice
of removal must be filed:
(A) within 30 days after the date the party requesting removal of the action
discovered, or reasonably should have discovered, facts establishing the business
court’s authority to hear the action; or
(B) if an application for temporary injunction is pending on the date the party
requesting removal of the action discovered, or reasonably should have
discovered, facts establishing the business court’s authority to hear the action,
within 30 days after the date the application is granted, denied, or denied by
operation of law.
(d) Effect of Notice. A notice of removal to the business court is not subject to due
order of pleading rules. Filing a notice of removal does not waive a defect in venue or
constitute an appearance waiving a challenge to personal jurisdiction.
Page 2 of 2
Tex. R. Civ. P. 355
(e) Clerk Duties. On receipt of a notice of removal, the clerk of the court from which
removal is sought must immediately transfer the action to the business court. The
business court clerk must assign the action to the appropriate operating division of the
business court. If the division has more than one judge, then the clerk must randomly
assign the action to a specific judge within that division.
(f) Remand.
(1) When Required. If the business court determines, on motion or its own initiative,
that removal was improper, the business court must remand the action to the court
from which the action was removed.
(2) Motion to Remand.
(A) A party may file a motion to remand the action in the business court based on
improper removal. Except as provided in (B), the motion must be filed within 30
days after the notice of removal is filed.
(B) If a party is served with process after the notice of removal is filed, the party
seeking remand must file a motion to remand within 30 days after the party enters
an appearance.
(3) On Business Court’s Own Initiative. The business court must provide the parties
10 days’ notice of its intent to remand on its own initiative and an opportunity to be
heard on any objection.
History
Added by Texas Supreme Court, Misc. Docket No. 24-9037, effective September 1, 2024.
Texas Local, State & Federal Court Rules
Copyright © 2025 All rights reserved.
End of Document
TAB J
Tex. R. Civ. P. 683
The State and Federal rules are current through March 25, 2025. Local District rules are
updated periodically throughout the year.
TX - Texas Local, State & Federal Court Rules > TEXAS RULES OF CIVIL PROCEDURE > PART
VI. RULES RELATING TO ANCILLARY PROCEEDINGS > SECTION 5. Injunctions
Rule 683. Form and Scope of Injunction or Restraining Order.
Every order granting an injunction and every restraining order shall set forth the reasons
for its issuance; shall be specific in terms; shall describe in reasonable detail and not by
reference to the complaint or other document, the act or acts sought to be restrained; and
is binding only upon the parties to the action, their officers, agents, servants, employees,
and attorneys, and upon those persons in active concert or participation with them who
receive actual notice of the order by personal service or otherwise.
Every order granting a temporary injunction shall include an order setting the cause for
trial on the merits with respect to the ultimate relief sought. The appeal of a temporary
injunction shall constitute no cause for delay of the trial.
Texas Local, State & Federal Court Rules
Copyright © 2025 All rights reserved.
End of Document
TAB K
Tex. R. Civ. P. 684
The State and Federal rules are current through March 25, 2025. Local District rules are
updated periodically throughout the year.
TX - Texas Local, State & Federal Court Rules > TEXAS RULES OF CIVIL PROCEDURE > PART
VI. RULES RELATING TO ANCILLARY PROCEEDINGS > SECTION 5. Injunctions
Rule 684. Applicant’s Bond.
In the order granting any temporary restraining order or temporary injunction, the court
shall fix the amount of security to be given by the applicant. Before the issuance of the
temporary restraining order or temporary injunction the applicant shall execute and file
with the clerk a bond to the adverse party, with two or more good and sufficient sureties,
to be approved by the clerk, in the sum fixed by the judge, conditioned that the applicant
will abide the decision which may be made in the cause, and that he will pay all sums of
money and costs that may be adjudged against him if the restraining order or temporary
injunction shall be dissolved in whole or in part.
Where the temporary restraining order or temporary injunction is against the State, a
municipality, a State agency, or a subdivision of the State in its governmental capacity,
and is such that the State, municipality, State agency, or subdivision of the State in its
governmental capacity, has no pecuniary interest in the suit and no monetary damages
can be shown, the bond shall be allowed in the sum fixed by the judge, and the liability of
the applicant shall be for its face amount if the restraining order or temporary injunction
shall be dissolved in whole or in part. The discretion of the trial court in fixing the amount
of the bond shall be subject to review. Provided that under equitable circumstances and
for good cause shown by affidavit or otherwise the court rendering judgment on the bond
may allow recovery for less than its full face amount, the action of the court to be subject
to review.
Texas Local, State & Federal Court Rules
Copyright © 2025 All rights reserved.
End of Document
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Melissa Ethridge on behalf of James Parker
Bar No. 24027591
methridge@lglawfirm.com
Envelope ID: 105120293
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Amended Brief for Appellants
Status as of 9/3/2025 7:06 AM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Ryan Clinton rdclinton@dgclaw.com 9/2/2025 7:34:36 PM SENT
Laine Weatherford Schmelzer lwschmelzer@dgclaw.com 9/2/2025 7:34:36 PM SENT
Kaycie Martinez kcmartinez@dgclaw.com 9/2/2025 7:34:36 PM SENT
James F.Parker jparker@lglawfirm.com 9/2/2025 7:34:36 PM SENT
Gabrielle C.Smith gsmith@lglawfirm.com 9/2/2025 7:34:36 PM SENT
Sydney P.Sadler ssadler@lglawfirm.com 9/2/2025 7:34:36 PM SENT
Michael D.Marin mmarin@boulettegolden.com 9/2/2025 7:34:36 PM SENT
Tori B.Bell tori@boulettegolden.com 9/2/2025 7:34:36 PM SENT
Steven Garrett steven@boulettegolden.com 9/2/2025 7:34:36 PM SENT
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