Restrained former coin company employees can start selling coins again, appeals court says

By David Yates | Nov 5, 2008

A pair of former coin company employees who had been enjoined from doing business in the U.S. can start again, ruled the Texas' Ninth Court of Appeals last week.

A pair of former coin company employees who had been enjoined from doing business in the United States can start again, ruled the Texas' Ninth Court of Appeals last week.

A year ago, the Record reported on a suit filed by Austin-based U.S. Money Reserve Inc. in which the company sought a temporary and permanent injunction against a band of former employees who formed their own coin company by allegedly stealing the company's consumer accounts.

On Nov. 13, 2007, Jefferson County Judge Bob Wortham, 58th Judicial District, held a hearing and granted U.S Money Reserve's temporary injunction request, which prohibited several of its former employees from selling coins in the U.S. until Jan. 25, 2011.

Two of the defendants in U.S Money Reserve's suit, Chad Poole and Terry Fendley, disagreed with the judge's decision and submitted an interlocutory appeal.

On Oct. 30 Beaumont justices reversed and remanded Judge Wortham's decision, dissolving the injunction.

"We hold that, while the trial court did not abuse its discretion in granting a temporary injunction to preserve the status quo, it did abuse its discretion in crafting the temporary injunction order," stated an opinion authored by Justice Charles Kreger.

"We declare the temporary injunction order void and dissolve the order because it is overly broad and fails to comply with Rule 683 of the Texas Rules of Civil Procedure. Tex. R. Civ. P. 683."

Rule 683 pertains to the form and scope of an injunction or restraining order.

"The trial court's order granting the temporary injunction in favor of U.S. Money Reserve does not set forth any reasons for issuance of the temporary injunction or otherwise state any reason why the identified probable injury is an irreparable one for which U.S. Money Reserve has no legal remedy," the opinion states.

"Further, the order does not include a date setting the matter for trial as required by Rule 683. Tex. R. Civ. P. 683. Instead, the order attempts to enjoin the parties through a date certain in the future, Jan. 25, 2011. The purpose of a temporary injunction is to preserve the status quo through the date of trial."

In its original suit U.S. Money Reserve, also known as United States Rare Coin & Bullion Reserve (USRCB), named as defendants Cecil Roberts, doing business as United States Money Exchange; Jason Braquet and Ed Seymour, doing business as JTB Coins; Chad Poole, Terry Fendley and Bill Truman.

According to the plaintiff's petition, on Oct. 17, 2007, Braquet, a former USRCB employee, left the company to work with other former employees "to divert sales of coins from numerous customers of plaintiff."

"Instead of making an honest living, these defendants were literally stealing the business of plaintiff, as well as stealing credit card information from plaintiff's customers, all in violation of criminal statutes," the suit said. "The defendants have acted as a joint enterprise…"

To prove its allegations, USRCB hired local private investigator Philip Klein to probe the former employees who had left the company "on suspicious circumstances."

Klein wrote in his affidavit that USRCB was experiencing "strange calls" from current customers saying that United States Money Exchange charged their credit cards for products ordered from USRCB.

The suit says defendants Seymour, Poole, Fendley, Truman, Braquet and Roberts violated their non-compete agreements when they quit, stole USRCB trade secrets and formed their own rival coin companies.

"The defendants, jointly and severally, have committed negligence, gross negligence, tortuous interference with business relationships and conversion of plaintiff's trade secrets…," the suit said.

USRCB is seeking to recover actual and punitive damages.

The company is represented by attorney John S. Morgan of the Lindsay & Morgan law firm.

Poole and Fendley are represented in part by attorneys Todd C. Collins and Mark E. Dykes.

Appeals case No. 09-08-137 CV
Trial case No. A180-741

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