Appealed from the Sixteenth Judicial District Court In and
for the Parish of St. Mary State of Louisiana Suit Number
130, 379 Honorable Gregory P. Aucoin, Presiding
Panagiotis Lafayette, LA Holden Hoggatt Franklin, LA Counsel
for Plaintiff/Appellee Turbine Powered Technology, LLC
G. Young Lafayette, LA John Alden Meade New Orleans, LA S.
Patrick Skiles Morgan City, LA Thomas T. Townsend
Natchitoches, LA Counsel for Defendants/ Appellants David
Crowe, Kenneth Braccio, Arizona Turbine Technology, LLC and
Advanced Turbine Services, LLC
BEFORE: GUIDRY, THERIOT, AND PENZATO, JJ.
David Crowe, Arizona Turbine Technology, Inc., Kenneth
Braccio, and Advanced Turbine Services, LLC, appeal from a
judgment of the trial court dismissing their motion to
dissolve a preliminary injunction granted in favor of
plaintiff, Turbine Powered Technology, LLC. For the reasons
that follow, we reverse and remand.
AND PROCEDURAL HISTORY
Mclntyre, II invented a turbine-powered equipment package for
hydraulic fracturing, trademarked as the "Frac Stack
Pack," which uses helicopter engines to power frac
pumps. Mclntyre founded and developed several companies
involving turbine-powered technology to use in the oil and
gas industry. Mclntyre granted one of these companies, MTT
Properties, LLC (MTTP), the exclusive right to make, have
made, use, offer for sale, and sell the Frac Stack Pack.
to capitalize on the value of the Frac Stack Pack and
turbine-powered frac technology, Mclntyre created Green Field
Energy Services, Inc., (Green Field) as a fracking operations
company. MTTP and Green Field subsequently formed and became
members of Turbine Powered Technology, LLC (TPT) to
manufacture the Frac Stack Packs. MTTP assigned the Frac
Stack Pack intellectual property to TPT.
September 22, 2011, TPT and Green Field entered into a
Turbine Driven Equipment License Agreement, under which TPT
granted Green Field an exclusive license to the Frac Stack
Pack trademark and an exclusive license to the Frac Stack
Pack technology. Pursuant to this agreement, Green Field
received the exclusive right to use, sell, lease, and
commercialize the Frac Stack Pack equipment purchased from
TPT under the agreement. However, TPT did not transfer
ownership of the frac intellectual property. During that
time, Danny Foley and George Jackson were employees of Green
subsequently executed a vendor agreement with Advanced
Turbine Services, LLC (ATS) on October 4, 2011, to provide
additional turbine-powered frac equipment to Green Field.
Pursuant to the vendor agreement, ATS agreed to provide TPT
with TF40 and TF55 turbine engines and digital engine
controls (FADEC and/or IDEC) to be used in the frac equipment.
ATS procured the digital engine controls hardware from its
subcontractor, Tucson Embedded Systems, Inc. (TES), and
resold the hardware to TPT. At the time, Kenneth Braccio
owned and managed ATS and David Crowe was the President,
Director, and majority shareholder of TES. TES subsequently
shipped engine controls directly to TPT. TES executed a
mutual non-disclosure agreement with Green Field, effective
June 16, 2013. Green Field filed for bankruptcy in October
2013, and the bankruptcy proceedings terminated its exclusive
license to TPT's intellectual property in the Frac Stack
Pack and derivative technology.
December 17, 2012, Braccio became an employee of TPT and
executed a non-disclosure and confidentiality agreement.
Crowe subsequently created Arizona Turbine Technology, LLC,
for which Kent Ellsworth was the agent for service of
process, and Arizona Turbine Technology, Inc. (AZT) to
produce and sell turbine-powered frac equipment. Crowe and
Braccio subsequently co-founded Turbine Industrial Power
Systems (TIPS). (R. 154) Thereafter, in July 2016, Crowe sold
his equity in TES back to the corporation. As part of this
agreement, Crowe released all interest in properties and
contracts of TES, except Eco-Stim Energy Solutions, Inc., and
TES released all claims of ownership or other interest in or
relating to AZTTech.
November 7, 2016, TPT filed a petition for damages and
injunctive relief, naming as defendants Crowe, Braccio,
Foley, Jackson, Ellsworth, Arizona Turbine Technology, LLC,
AZT, ATS, and TIPS. TPT alleged that defendants have usurped
and now claim ownership and legal rights in and to TPT's
intellectual property, trade secrets, and derivative
products. TPT asserted that defendants have no legitimate
legal right in or to TPT's intellectual property or
derivative intellectual property, including modifications of
turbine engine controls for hydraulic fracturing equipment.
TPT alleged that defendants publicly and repeatedly
represented themselves to be the owners of TPT's
proprietary technology and that AZT publicly placed photos
and descriptions of TPT's equipment and accomplishments
on its website, which is designed to mislead prospective
purchasers into contracting with AZT instead of TPT. TPT
alleged that as manager of AZT, Crowe has individually,
personally, and unlawfully misappropriated TPT's
intellectual property, namely digital engine control
modifications developed pursuant to and during the term of
the vendor agreement between TPT and ATS.
asserted that defendants AZT, Crowe, and Braccio publicly and
falsely represented that they and their affiliates own the
frac technology developed by and on behalf of TPT and that
the misrepresentations have damaged TPT's past, current,
and future business contracts and prospects. TPT alleged that
Foley, Jackson, Ellsworth, ATS, TIPS, and Braccio
participated in and aided and abetted AZT and Crowe's
attempted and actual misappropriation.
asserted claims for declaratory relief; breach of contract
for breach of the vendor agreement; bad faith breach of
contract; intentional and/or negligent misrepresentation,
detrimental reliance; fraud and fraud in the inducement;
violation of Louisiana Unfair Trade Practices and Consumer
Protection Law, La. R.S. 51:1401, et seq.; Louisiana Uniform
Trade Secrets Act, La. R.S. 51:1431-1439; criminal liability
for business record theft; tortious interference with
business relationships; unjust enrichment; breach of
fiduciary duty; and injunctive relief in the form of a
temporary restraining order, preliminary injunction, and
also filed an application for a temporary restraining order
and for preliminary injunction. TPT asserted that notice
would be futile and that security was dispensed with by
operation of law, because the vendor agreement and
nondisclosure agreement do not include or require applicant
to post security and the contracts constitute the law between
the parties. The trial court subsequently signed an order
granting the temporary restraining order on November 14,
2016. TPT requested service on all named defendants, and a
hearing on plaintiffs request for preliminary injunction was
set for January 3, 2017. At the January 3, 2017 hearing,
following submission of evidence by TPT, the trial court
granted TPT's request for a preliminary injunction.
Additionally, due to the failure of any of the defendants to
make an appearance, TPT moved for a preliminary default
against the defendants who had been served. The trial court
signed an order granting a preliminary injunction on January
5, 2017, against Ellsworth, Braccio, Arizona Turbine
Technology, LLC, AZT, ATS, and TIPS. The trial court also entered
a preliminary default against the same defendants and set a
hearing to confirm the default judgment for March 6, 2017.
Braccio, Arizona Turbine Technology, LLC, AZT, and ATS
thereafter filed exceptions to plaintiffs petition. However,
Ellsworth did not make an appearance on the record.
Therefore, following the March 6, 2017 hearing to confirm
default judgment, the trial court signed a judgment ordering
that a ...