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Click here for the full text of this decision FACTS:Navigant Consulting Inc. brought this diversity action against former employees John Wilkinson and Sharon Taulman, alleging, inter alia, breach of fiduciary duty, breach of contract and misappropriation of trade secrets. The case was tried to a jury, which returned a verdict in favor of Navigant on all three claims. Wilkinson and Taulman were employees of Navigant Consulting Inc., a national consulting company. Wilkinson and Taulman managed the operations of Navigant’s claims administration practice in Dallas (the claims practice), which specialized in the administration of complex class-action settlements. Though they were at-will employees, Wilkinson and Taulman were bound by noncompete, nonsolicitation and confidentiality agreements. In April 2001, one of Navigant’s competitors, First Union, called Wilkinson and expressed an interest in acquiring the claims practice from Navigant. In response, Wilkinson and Taulman prepared and transmitted a proposal to First Union. This proposal promised the delivery of “all, or virtually all, the existing clients; plus accompanying employees” of the claims practice to First Union and set a purchase price of $22.5 million. The transaction was to be accomplished by “seek[ing] novation of [Navigant's] existing engagements into a management-owned corporation, and then simultaneously sell[ing] the capital stock to the buyer.” The “management-owned corporation” was an entity, unrelated to Navigant, owned by Wilkinson and Taulman. Wilkinson and Taulman did not inform Navigant that First Union had expressed an interest in buying the claims practice or that they had proposed to sell the claims practice in exchange for a payment to their own corporation. Nothing came of the offer to First Union, but Wilkinson and Taulman continued to try to sell the claims practice to other competitors of Navigant, including PriceWaterhouseCoopers (PWC) in July 2001, LECG LLC in May 2002 and Rust Consulting in June 2002. On Sept. 24, 2002, Wilkinson met with two Navigant corporate officers in Chicago. He did not inform them that he was simultaneously negotiating with LECG and had sought authority to act as LECG’s agent to negotiate with Navigant. Rather, he proposed to “take the business off [Navigant's] hands” in exchange for assuming Navigant’s obligation on the Thanksgiving Tower lease. Navigant rejected the offer. Two days later, on Sept. 26, Wilkinson and Taulman submitted their resignations, effective Sept. 30, and shortly thereafter accepted offers to join LECG. On Oct. 8, 2002, Navigant filed suit against Wilkinson and another Navigant employee who was subsequently dismissed. Taulman was added as a defendant in Navigant’s amended complaint. HOLDING:Affirmed in part; vacated and remanded in part. Navigant contends that Wilkinson and Taulman breached their fiduciary duty by attempting to sell the claims practice for their own benefit, disclosing Navigant’s confidential information to its competitors, soliciting Navigant’s employees and failing to disclose their plan to sell the claims practice before Navigant committed to a four-year lease. The first three actions, if proved, would constitute a breach of fiduciary duty. An employee in a position of trust and confidence who attempts to sell his employer’s business for personal gain violates the most basic norms of fair dealing and good faith, and the disclosure of confidential information and solicitation of employees are among the conduct specifically proscribed by Johnson and Abettor Trucking. The fourth action, which might be characterized as failing to disclose a plan to compete when an employer commits to a new lease, presents a more difficult question. The jury had a sufficient basis to conclude that Wilkinson and Taulman breached their fiduciary duties, including by failing to disclose their plans when the lease was signed. The mere fact that an employer signs a new lease does not give rise to a duty of disclosure in all employees who have plans to compete with the employer. But in this case, Wilkinson and Taulman were the two top employees in the Dallas office, and they had active roles in negotiating, recommending and signing the lease. There was also evidence that the plan to compete was itself wrongful, and that part of this plan was to use the lease as leverage against Navigant in future negotiations to acquire the claims practice on favorable terms. The reasonable inference for the jury to draw was that Wilkinson and Taulman had a conflict of interest on the lease, because though they were charged to act for Navigant’s benefit when recommending it, they also had an interest in seeing Navigant burdened with a liability that they could use as leverage against it in the future. Wilkinson and Taulman also argue that there is insufficient evidence to support the jury’s findings that their breaches of fiduciary duty proximately caused Navigant damage. The jury could have concluded that Navigant’s damages were in part caused by the fact that Wilkinson and Taulman provided LECG with information that enabled it to compete with Navigant on advantageous terms, thus diminishing Navigant’s ability to retain its employees and clients. In addition, the jury was entitled to draw the inference that Wilkinson and Taulman’s pre-resignation solicitations of Navigant employees prepared and encouraged them to leave Navigant and follow Wilkinson and Taulman to a competitor once they resigned, which had the effect of further undercutting Navigant’s ability to retain its own employees and, thus, its clients. Further, the jury found that the harm to Navigant resulted from malice or fraud on the part of both Wilkinson and Taulman. There was evidence to support the awards of exemplary damages. The district court examined the facts and proof in the case to see whether the issues were inextricably intertwined. After determining that all of Navigant’s claims were not inextricably intertwined, it awarded fees based on its assessment of the extent to which the claims were intertwined. However, the Texas Supreme Court has since ruled that intertwined facts do not make fees recoverable; rather, the question under the Texas Supreme Court’s 2006 decision in Tony Gullo Motors I, L.P. v. Chapa is whether discrete legal services advance both a recoverable and unrecoverable claim. Remand is therefore appropriate for consideration of the award of fees under the new standard established in Chapa. OPINION:King, J.; King, Garza and Benavides, JJ.

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