Marshman v. Instrument Manufacturing Company
ORDER GRANTING Defendant's 29 Motion for Leave to File First Amended Answer; DENYING Plaintiff's 22 Amended Motion to Compel Answers to Interrogatories; and GRANTING IN PART AND DENYING IN PART Plaintiff's 23 Amended Motion to Compel Responses to Requests for Production. Signed by Judge Susan Hightower. (jv2)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
Case No. 1:20-CV-00972-RP
Before the Court are Plaintiff’s Amended Motion to Compel Answers to Interrogatories
(Dkt. 22) and Plaintiff’s Amended Motion to Compel Responses to Requests for Production
(Dkt. 23), both filed March 11, 2021; Defendant’s Motion for Leave to File First Amended
Answer, filed April 16, 2021 (Dkt. 29); and the associated response and reply briefs. The District
Court referred the motions to the undersigned Magistrate Judge for disposition, pursuant to
28 U.S.C. § 636(b)(1)(A), Federal Rule of Civil Procedure 72, and Rule 1(c) of Appendix C of the
Local Rules of the United States District Court for the Western District of Texas.
This is a contract dispute between Defendant Instrument Manufacturing Company
(“IMCORP”) and its former employee, Plaintiff Roger Marshman. Marshman alleges that
IMCORP breached the parties’ employment agreement by failing to pay him $786,147.22 in
commissions. Dkt. 1 ¶¶ 5, 15. Marshman filed suit on September 21, 2020, asserting claims for
breach of contract, fraud, quantum meruit, and promissory estoppel, and seeking attorneys’ fees
and a declaration that he was entitled to the commissions. IMCORP terminated Marshman’s
employment on October 6, 2020. Dkt. 6 ¶ 2.
On December 2, 2020, Marshman filed his First Amended Complaint, adding a request for
declaratory judgment that a non-compete agreement in his employment contract is unenforceable.
Dkt. 13. The following day, Marshman sent IMCORP a letter stating that he was considering
employment with two companies, Novinium and Megger. Dkt. 29-2 ¶ 7. Marshman asked whether
IMCORP had any legal basis to prohibit him from accepting a position with either company. Id.
Marshman alleges that IMCORP did not respond. Dkt. 20 at 2.
Marshman began working at Novinium on December 14, 2020. On February 8 and 9, 2021,
IMCORP asked Marshman to disclose the identity of his new employer, but Marshman refused.
Dkt. 29-2 ¶ 9. On February 10, 2021, IMCORP learned that Marshman had begun working for
Novinium, a client of its counsel’s firm, Jackson Lewis, P.C. Id. ¶¶ 10-11.
Because Marshman’s employment at Novinium created an irreconcilable conflict for its
counsel, IMCORP filed an Unopposed Motion to Substitute Counsel on March 17, 2021. Dkt. 24.
The motion’s Certificate of Conference states that Marshman was not opposed to the substitution
provided “the motion does not seek to extend any of the existing case deadlines, which it does
not.” Id. at 3. The Court granted IMCORP’s motion on March 18, 2021.
Defendant’s Motion for Leave to File Amended Answer
IMCORP seeks leave to file its First Amended Answer to Marshman’s Amended Complaint
after the scheduling order’s January 25, 2021 deadline to amend pleadings. Dkt. 12.
Federal Rule of Civil Procedure 16(b) governs amendments of pleadings after a scheduling
order deadline has expired. S & W Enters., LLC v. Southtrust Bank of Ala., NA, 315 F.3d 533, 536
(5th Cir. 2003). Rule 16(b) provides that a scheduling order “may be modified only for good cause
and with the judge’s consent.” FED. R. CIV. P. 16(b)(4). The good cause standard requires the party
seeking relief to show that the deadlines cannot reasonably be met despite the diligence of the
party needing the extension. S & W Enters., 315 F. 3d at 535. Four factors are relevant to a showing
of good cause: (1) the explanation for the failure to timely move for leave to amend; (2) the
importance of the amendment; (3) potential prejudice in allowing the amendment; and (4) the
availability of a continuance to cure such prejudice. Fahim v. Marriott Hotel Servs., Inc., 551 F.3d
344, 348 (5th Cir. 2008). When applying Rule 16(b), district courts have broad discretion to
preserve the integrity and purpose of the pretrial order. Campbell v. Griffin, 265 F. App’x 269, 271
n.4 (5th Cir. Feb. 8, 2008).
Once the moving party has demonstrated good cause to modify the scheduling order under
Rule 16(b), Rule 15(a)’s more liberal amendment standard applies. Cruz v. R2SONIC, LLC, 1:18CV-397-RP, 2019 WL 7667330, at *2 (W.D. Tex. May 6, 2019). Rule 15(a) “requires the trial
court to grant leave to amend freely, and the language of this rule evinces a bias in favor of granting
leave to amend.” Id. (quoting Lyn-Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286) (5th Cir.
2002). Under Rule 15(a), district courts may not deny leave to amend “absent a substantial reason
such as undue delay, bad faith, dilatory motive, repeated failures to cure deficiencies, or undue
prejudice to the opposing party.” Mayeaux v. La. Health Servs. & Indem. Co., 376 F.3d 420, 425
(5th Cir. 2004).
The Court examines the four good cause factors in turn.
1. Explanation for Failure to Timely Move to Amend
As stated above, IMCORP moved to amend on April 16, 2021, after the January 25, 2021
deadline to file motions to amend pleadings. IMCORP argues that the conflict of interest created
by Marshman’s intervening employment with Novinium prevented IMCORP from timely
requesting leave to amend. Marshman responds that IMCORP has no valid explanation for its
failure to meet deadlines, and that IMCORP’s motion to amend violates its agreement not to extend
case deadlines due to its substitution of counsel.
Marshman conflates the issues presented in his motions to compel with the analysis of
IMCORP’s motion to amend. It is undisputed that Marshman told IMCORP he was considering
employment with either Novinium or Megger on December 3, 2020, the day after he filed his First
Amended Complaint. IMCORP presents evidence that its previous counsel could not take a
position regarding the enforceability of Marshman’s non-compete agreement due to counsel’s
potential conflict with Novinium. Dkt. 29-2 ¶¶ 10-12. IMCORP learned that the potential conflict
had ripened into an actual conflict when it was informed that Marshman was working at Novinium
on February 10, 2021, after the deadline to amend had passed. Id. This information resulted in the
substitution of IMCORP’s counsel on March 18, 2021. Id. IMCORP’s new counsel sought leave
to amend its answer less than one month after the substitution. Dkt. 29.
Because an intervening event created a conflict that prevented IMCORP from timely moving
to amend, the Court finds that the first factor weighs in favor of IMCORP.
2. Importance of Amendment
The second factor also weighs in favor of IMCORP. IMCORP’s proposed Amended Answer
addresses Marshman’s new factual allegations regarding his non-compete agreement and asserts
affirmative defenses to his request for declaratory relief. Dkt. 13 ¶¶ 15-20, 22; Dkt. 29-1 ¶¶ 15-20,
22, 51-52. Granting IMCORP leave to file its Amended Answer ensures that all material facts and
claims are joined in a single case. See Turloff v. Restore Master Contracting, LLC, Civil No. SA17-cv-572-OLG, 2018 WL 6694835, at *2 (W.D. Tex. Jan. 4, 2018) (finding amendment important
in Rule 16 analysis because amended pleading asserted affirmative defenses not asserted in
3. Potential Prejudice
The third factor requires the Court to analyze whether Marshman would be prejudiced by the
amendment. When an opposing party has filed a motion for summary judgment, the Court must
scrutinize a party’s attempt to raise new theories by amendment. Parish v. Frazier, 195 F.3d 761,
764 (5th Cir. 1999).
IMCORP’s Amended Answer addresses the non-compete agreement, which is the subject of
Marshman’s pending motion for partial summary judgment, filed on April 2, 2021. Dkt. 28;
Dkt. 33 at 8. Marshman seeks judgment that the non-compete agreement is invalid and
unenforceable because it is unreasonably broad, and because IMCORP never signed or delivered
it. Dkt. 28 at 25. IMCORP’s Amended Answer contains affirmative defenses relating to
justiciability and reformation which it had not pled when Marshman filed his motion for partial
summary judgment. Dkt. 29-1 ¶¶ 51-52. Nevertheless, it appears that Marshman will not suffer
prejudice by IMCORP’s amendment because the parties addressed the issues of justiciability and
reformation in their summary judgment briefs. Dkt. 28 at 8-9, 24; Dkt. 31 at 7-15; Dkt. 34 at 9-10.
The parties’ anticipation of these issues mitigates the prejudice that otherwise might result from
amendment when a summary judgment motion is pending.
Moreover, this case has been pending for less than one year. Because discovery does not close
until July 30, 2021, Marshman has time to conduct discovery on any new issues raised by
IMCORP’s Amended Answer. The Court finds the third factor to be neutral.
4. Availability of a Continuance
Because neither party has requested a continuance, the final factor is neutral.
Conclusion as to Motion for Leave to Amend Answer
Having considered the relevant factors, the Court finds that IMCORP has shown good cause
under Rule 16(b) to modify the scheduling order. Accordingly, pursuant to Rule 15(a)(2), the Court
GRANTS Defendant’s Motion for Leave to File First Amended Answer (Dkt. 29).
Plaintiff’s Motions to Compel Discovery
Marshman asks the Court to compel IMCORP to answer one interrogatory and produce four
categories of documents. Marshman also seeks attorneys’ fees for his motions to compel.
A. Legal Standards and Analysis
Federal Rule of Civil Procedure 26(b)(1) provides that parties may obtain discovery “regarding
any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the
needs of the case.” FED. R. CIV. P. 26(b)(1). Generally, the scope of discovery is broad. Crosby v.
La. Health Serv. & Indem. Co., 647 F.3d 258, 262 (5th Cir. 2011). “A discovery request is relevant
when the request seeks admissible evidence or ‘is reasonably calculated to lead to the discovery
of admissible evidence.’” Id. (quoting Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812, 820
(5th Cir. 2004)). Information within the scope of discovery need not be admissible in evidence to
be discoverable. FED. R. CIV. P. 26(b)(1).
After a party has attempted in good faith to obtain discovery without court action, that party
may move for an order compelling disclosure or discovery. FED. R. CIV. P. 37(a)(1). “The court
must balance the need for discovery by the requesting party and the relevance of the discovery to
the case against the harm, prejudice, or burden to the other party.” Cmedia, LLC v. LifeKey
Healthcare, LLC, 216 F.R.D. 387, 389 (N.D. Tex. 2003) (citing Truswal Sys. Corp. v. Hydro-Air
Eng’g, Inc., 813 F.2d 1207, 1210 (Fed. Cir. 1987)).
1. Interrogatory No. 22
Interrogatory No. 22 states:
Please explain why IMCORP prohibited Marshman from advising
his clients . . . that IMCORP had used faulty test leads to perform
cable testing and used unapproved technology to identify faulty test
leads during November of 2019 – February of 2020.
Dkt. 22-3 at 8. IMCORP objects that the interrogatory seeks a legal conclusion and is premature,
immaterial, and irrelevant. Id. Marshman argues that IMCORP’s instruction not to disclose test
lead information is relevant because it negatively impacted Marshman’s ability to market services,
resulting in reduced commissions. Dkt. 22 at 9.
Marshman’s claims are based on unpaid commissions he allegedly earned while IMCORP’s
employee. Dkt. 13 ¶¶ 5, 14. Marshman does not claim that IMCORP owes him commissions for
sales that did not take place. The Court finds that this interrogatory seeks information that is neither
relevant nor reasonably calculated to lead to the discovery of admissible evidence. Accordingly,
the Court DENIES Marshman’s motion to compel as to Interrogatory No. 22.
2. IMCORP’s Prior Non-compete Disputes (Requests for Production No. 6-8)
Requests for Production 6, 7, and 8 seek documents relating to any previous disputes regarding
IMCORP’s non-compete agreement, as follows:
Request for Production No. 6: Please produce any and all
communications between IMCORP and Megger USA, Inc.
concerning the Employment, Invention, Confidentiality and NonCompete Agreement between IMCORP and Darren Byrne.
Request for Production No. 7: Please produce a copy of any
pleading filed in a Texas Court that IMCORP has sought to enforce
the terms of an [sic] IMCORP’s Employment, Invention,
Confidentiality and Non-Compete Agreement.
Request for Production No. 8: Please produce a copy of any
demand letter issued by IMCORP to a Texas resident or citizen
seeking to enforce the terms of IMCORP’s Employment, Invention,
Confidentiality and Non-Compete Agreement.
Dkt. 23-3 at 3-4. IMCORP objects to Requests No. 6 and 8 as irrelevant, overbroad, and seeking
“personal and potentially confidential or trade secret protected information” regarding non-parties.
Id. IMCORP objects to Request No. 7 “as it seeks publicly available information that Plaintiff can
obtain on his own.” Id. at 4. Marshman argues that the requests are relevant to his claim for
attorneys’ fees under TEX. BUS. & COMM. CODE 15.51(c), which states that a plaintiff may recover
costs and attorneys’ fees on a showing that a defendant knew a non-compete agreement was
unreasonable at the time of execution. Dkt. 13 ¶ 34; Dkt. 23 at 6.
The Court finds that the documents sought in these three requests for production are relevant
to Marshman’s claim for attorneys’ fees or reasonably calculated to lead to the discovery of
admissible evidence. The Court therefore GRANTS Marshman’s Motion to Compel as to any
documents within IMCORP’s possession, custody, or control responsive to Requests for
Production No. 6-8.
3. Download of Company Information (Requests for Production No. 13, 76-78)
Requests for Production No. 13, 76, 77, and 78 seek the data, documents, and emails relating
to IMCORP’s allegation that Marshman forwarded proprietary information to his personal email
account in violation of company policy. Dkt. 23-3 at 5, 22-23. The requests state:
Request for Production No. 13: Please produce a copy of the data
that was downloaded from Marshman’s laptop by IMCORP after
IMCORP picked up Marshman’s laptop computer.
Request for Production No. 76: Please produce a copy of every
document that IMCORP contends was improperly downloaded or
emailed by Marshman to himself or a competitor of IMCORP.
Request for Production No. 77: Any evaluation of Roy
Marshman’s email activity or documentation of Roy Marshman
forwarding his work related emails with attached documents to his
personal email address that IMCORP considered to be a violation of
company policy that resulted in IMCORP suspending
Mr. Marshman’s employment . . . .
Request for Production No. 78: A copy of the forensic analysis
that was performed on Roy Marshman’s email activity or the laptop
computer assigned to Roy Marshman during his employment of
[sic] IMCORP and the information and data that was considered by
IMCORP as the bases for IMCORP’s decision to terminate Roy
IMCORP argues that the requests are overbroad because they could encompass all email
Marshman sent or received over a three-year period. IMCORP further objects that the requests are
duplicative and argues that Marshman already has copies of documents he took in violation of
company policy. Instead, IMCORP agreed to produce a spreadsheet generated through forensic
examination of Marshman’s computer identifying the emails Marshman sent to his personal
account and the material he allegedly wrongfully downloaded or accessed.
Marshman contends that IMCORP’s Rule 26 disclosure shows the requests are relevant
because its list of relevant documents includes “[d]ata from Defendant’s laptop that Plaintiff
utilized while employed with Defendant.” Dkt. 23 at 6; Dkt. 23-4 at 5. Marshman also points out
that IMCORP previously agreed to produce this information after entry of a protective order.
Dkt. 27 at 4; Dkt. 23-3 at 5 (“Defendant states that it will produce a viewable copy of the requested
information in accordance with a protective order entered by the court in this lawsuit.”).
Although there is some overlap among the requests, the information sought is relevant to
IMCORP’s allegation that it fired Marshman for improperly sending company information to his
personal email address. Dkt. 29-1 ¶ 7. Marshman is not seeking all emails, as IMCORP contends,
but rather (1) forensic data from the laptop IMCORP alleges Marshman used to impermissibly
send confidential material, and (2) identification of the material IMCORP alleges that he
misappropriated. Accordingly, the Court GRANTS Marshman’s Motion to Compel as to Requests
No. 13 and 76-78.
4. Documents Concerning Marshman’s Supervisor (Request for Production No. 40-45,
63, and 89-90)
Requests for Production No. 40-45, 63, and 89-90 seek documents from or relating to
Marshman’s supervisor, Matt Spalding. Dkt. 23-3 at 12-14, 20, 25. Marshman requests emails
among Spalding and certain other individuals that are critical of Marshman, along with any
documents relating to Spalding’s efforts to demote or terminate Marshman. Id. at 12-14.
Marshman also requests Spalding’s self-evaluations and position descriptions, and documents
describing Spalding’s qualifications, responsibilities, and duties during his career at IMCORP. Id.
at 20, 25.
Marshman argues that the information is relevant to show that Spalding “harbored ill will
against Marshman” and “sabotaged” him through demotion and pay reductions. Dkt. 27 at 4.
IMCORP argues that alleged personal animosity between Spalding and Marshman is not relevant
to whether Marshman’s commissions were properly calculated. Dkt. 26 at 7. IMCORP objects to
the requests as unreasonable, duplicative, overbroad, irrelevant, and seeking confidential or trade
secret information. Dkt. 23-3 at 12-14, 20, 25.
To the extent the requests seek information unrelated to Marshman, such as Spalding’s selfevaluations and position descriptions, the Court finds the information irrelevant to Marshman’s
claims. To the extent the requests seek documents relating to Spalding’s communications and
actions regarding Marshman’s work performance and commissions, they are relevant.
Accordingly, the Court GRANTS Marshman’s Motion to Compel as to Requests No. 40 through
45 and 90 and DENIES Marshman’s Motion to Compel as to Requests No. 63 and 89.
5. Documents Regarding Faulty Test Leads (Requests for Production No. 101-07)
Request for Production 101 through 107 seek documents relating to IMCORP’s alleged
directives to Marshman not to disclose information regarding faulty test leads. Dkt. 23-3 at 27-29.
IMCORP objects to the requests as irrelevant. Id. As discussed above, discovery relating to sales
that did not take place are irrelevant to Marshman’s claims for unpaid commissions. Accordingly,
the Court DENIES Marshman’s motion to compel as to Requests for Production No. 101-07.
B. Conclusion as to Motions to Compel
Plaintiff’s Amended Motion to Compel Answers to Interrogatories (Dkt. 22) is DENIED and
Plaintiff’s Amended Motion to Compel Responses to Requests for Production (Dkt. 23) is
GRANTED IN PART and DENIED IN PART. The Court GRANTS the Motion to Compel as
to Requests for Production No. 6-8, 13, 40-45, 76-78, and 90. The Court DENIES the Motion to
Compel regarding all other Requests for Production. The Court further DENIES Plaintiff’s request
for attorneys’ fees.
SIGNED on June 3, 2021.
UNITED STATES MAGISTRATE JUDGE
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