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Burlington Northern Railroad Company v. General Projection Systems. Inc.5/2/2000
GPS's computer files. Michaels testified that GPS's computers contained just over 200 confidential and proprietary files, unrelated to the Burlington project, that were copied or accessed. He stated that each file was worth $200, and that he arrived at this $200 figure by multiplying the average amount of time it would have taken GPS to create each file _ four hours _ by GPS's "billing rate" _ $50. Thus, at $200 a file, Michaels testified that the total value of the files was $40,000. Michaels admitted that, at the time of trial, GPS had these files in its possession and nothing prevented GPS from using them.
Burlington contends Michaels's testimony is not competent evidence of GPS's actual damages caused by Burlington's conversion and negligent handling of the computer files. The Texas Supreme Court's opinion in United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146 (Tex. 1997), is instructive on this issue. In Deaton, United Mobile Networks (UMN) purchased Deaton's business, including his customer list. Id. at 147. Deaton agreed not to compete with UMN for three years. When Deaton left UMN, however, he took a copy of the customer list and began to compete against UMN. UMN sought damages for Deaton's conversion of its customer list. As evidence of its conversion damages, UMN offered testimony that the customer list had a fair market value of $544,733.98. Id. at 148. The supreme court determined that such evidence was not competent evidence of UMN's conversion damages. The supreme court reached this conclusion because the evidence was undisputed that, after Deaton left UMN, UMN continued to use the customer list and generate income from it. UMN presented no evidence that it lost customers or income as a result of Deaton's conversion of the list. Id.
Here, it is undisputed that the computers and all the files were returned to GPS about three weeks after Burlington converted them. Michaels testified that at the time of trial, nothing prevented GPS from using those files. Although Michaels testified about the cost of creating the computer files, GPS did not present any evidence that it had to recreate any computer files while Burlington had its computers. While it is also undisputed that Burlington allowed GPS competitors to access and copy GPS's files and that files unrelated to the Burlington project were also copied, GPS did not present evidence that it lost business because its files had been accessed and copied. We conclude Michaels's testimony is not competent evidence of GPS's damages due to conversion and negligence regarding the computer files. The evidence is sufficient only to support $7000 of the $64,000 awarded in actual tort damages. We sustain Burlington's fourth point of error in part and overrule it in part.
Evidence of Malice or Gross Negligence
In its fifth point of error, Burlington contends the trial court erred in denying its motion for judgment notwithstanding the verdict and its motion for new trial because the evidence is legally and factually insufficient to prove Burlington's conduct was malicious or grossly negligent. The jury question on malice was conditioned on a yes answer to the conversion question. The jury question on gross negligence was conditioned on a yes answer to the negligence question. The jury found that Burlington acted with malice and with gross negligence.
To recover exemplary damages for conversion, the plaintiff must prove that the defendant acted with malice. Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 391 (Tex. 1997). Here, the jury was instructed on the statutory definition of malice applicable to this case:
"malice" means "an act that is carried out by the defendant with a flagrant disregar
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