Joint and Several Liability for Breach of Fiduciary Duty

When may a defendant be held jointly and severally liable for the tortious conduct of another? Civil Conspiracy, Aiding and Abetting, Knowing Participation

The classic statement was given by Professors Prosser and Keeton as follows:

All those who, in pursuance of a common plan or design to commit a tortious act, actively take part in it, or further it by cooperation or request, or who lend aid or encouragement to the wrongdoer, or ratify and adopt the wrongdoer's acts done for their benefit, are equally liable.

W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 46, at 323 (5th ed. 1984) (quoted in Juhl v. Airington, 936 S.W.2d 640, 643 (Tex. 1996)).

Texas law provides three distinct bases for imposing on one person joint and several liability for the tortious conduct of another: contract, causation, and participatory conduct. Each of these bases involves different legal concepts, different public policies, and different elements and applicability. Unfortunately, Texas appellate courts often confuse the different theories, intermingle the elements, and use the incorrect terminology. The recent Houston [1st Dist.] court of appeals decision, Wooters v. Unitech Int'l, Inc., 01-15-00174-CV, 2017 WL 372165 (Tex. App.—Houston [1st Dist.] Jan. 26, 2017), is an apt example of the failure to distinguish these distinct bases of these different theories of liability.

In litigation involving shareholder oppression and other internal disputes in closely-held companies, these theories of joint and several liability are incredibly important. Often majority shareholders and directors who engage in oppressive conduct have no direct legal duty against the minority shareholders they oppress. Often the money and opportunities that corporate officers and directors misappropriate are funneled into other entities that are controlled by or aligned with the disloyal officer and directors, but the recipients of the stolen assets may not themselves owe any duty to the corporation. Often a judgment against the party owing the primary duty and committing the actual tort is worthless. In many such cases, justice can only be done if all the involved parties are held jointly and severally liable for the misconduct. We have previously explored these concepts in the context of joint and several liability for the breach of trust cause of action and the individual liability of majority shareholders and officers and directors for the tort of stock conversion

Conspiracy Elements

A defendant may be held liable for the tort of another if the defendant has entered into an agreement, the legal result of which is such liability. The Restatement of Torts calls this “concert of action.” Texas jurisprudence calls it civil conspiracy or joint enterprise. Civil conspiracy imposes joint and several liability on the defendant because that is the legal consequence of an agreement entered into between the defendant and the tortfeasor. An apt analogy is that the defendant and the tortfeasor agree to become "partners" or "joint venturers" in the commission of a specific tort on in an enterprise that includes tortious misconduct, and all of the "partners" are jointly and severally liable for the partnership obligations, including tort damages. The critical element of establishing joint and several liability under this theory is a meeting of the minds. Civil conspiracy requires a meeting of the minds as to a specific object, which is itself unlawful or which is to be accomplished by unlawful means. Having entered into the agreement, the defendant becomes jointly and severally liable for all conduct that is done in furtherance of the conspiracy, including conduct in which the defendant has no direct participation, including conduct of which the defendant may not have specific knowledge, and including conduct that may have been completed prior to the defendant’s having joined the conspiracy. Joint and several liability under a conspiracy theory flows from the agreement, not from the defendant’s specific conduct, and a defendant may be jointly and severally liable for harm caused by the conspiracy even if the conspiracy is terminated prior to the defendant’s active participation. (Even if the bank robbers are apprehended in the bank, the get away driver is still jointly and severally liable). Because a specific meeting of the minds is necessary, there is no such thing as a conspiracy to be negligent, and one may not conspire with someone within one’s control, such as an agent or a wholly-owned corporation.

Aiding and Abetting

The second basis for joint and several liability is that the conduct of the defendant caused the tort to occur either by inducing, encouraging, or assisting in its commission. This is the basis of common-law aiding and abetting liability and is set forth in section 876 of the Second Restatement of Torts. Although Texas has never formally adopted that section of the restatement, numerous Texas cases discuss its elements, and numerous Texas cases recognize such joint and several liability when the conduct of the defendant is a “substantial factor” in the accomplishment of the tort. In these cases, there need not be an agreement or a meeting of the minds, but the defendant must have knowledge of the nature of the tortious conduct. Furthermore, the defendant’s actions need not be an independent violation of a legal duty. The two types of cases that are the most common situations for this theory of liability are where the defendant persuades another to commit a tort or knowingly provides the means to do so, or when the defendants are mutually committing a tort, but only one causes the damage, such as two teenagers drag racing and one gets into a accident. Because liability is based on causation, rather than agreement, this theory can be used to hold agents and controlled entities jointly and severally liable. This cause of action also applies to negligent conduct, but it does not apply to conduct done prior to the defendant’s involvement or completely without his knowledge for which he is not a substantial cause.

Participation in the Tort

The third basis is that the defendant personally participated in the tort. This third basis is not, strictly speaking, vicarious liability because the basis for liability is the wrongful conduct of the defendant himself. The defendant is not being held liable for the wrongful acts of another, but is being held primarily liable for his own tort. If two defendants beat up the plaintiff, then both are primarily liable for battery. The participation theory is not a theory of liability but one of damages. The defendant is only liable if he violated a legal duty; however, the plaintiff is not responsible for distinguishing the damage cause by one of the participants’ fists from the other. Both participants are jointly and severally liable for the entire damage caused. This theory of joint liability applies both to intentional and negligent torts.

Knowing Participation in a Breach of Fiduciary Duties.

This last joint tortfeaser concept seems straight-forward in all situations, except in a breach of fiduciary duties. All persons have a legal duty not to inflict bodily injury on others, but only some persons (and very few) owe fiduciary duties. Therefore, the same harmful conduct that two defendants jointly inflict may be a breach of fiduciary duties for one and not for the other. For example, a disloyal agent might sell property belonging to his principal at an unfairly low price to a third party (and perhaps receive a kickback from that third party). In that situation, the agent is breaching a fiduciary duty, but the third party is not. Yet the breach of fiduciary duties could not happen without the active participation of the third party. Texas law has developed a unique doctrine to address that situation because of the necessity of enforcing fiduciary duties. A defendant is jointly and severally liable for knowing participation in the breach of fiduciary duties by another, even if the defendant does not himself otherwise owe fiduciary duties to the plaintiff. This theory extends the fiduciary duties to the non-fiduciary when the non-fiduciary knowingly participates in a breach of fiduciary duties committed by one who owes such duties. By proving (1) that the tortfeasor owed fiduciary duties to the plaintiff and that the tortfeasor breached those fiduciary duties, and (2) that the non-fiduciary defendant knowingly participated in that breach, then the law imposes a fiduciary duty on the defendant, and the plaintiff has a claim of primary liability against the non-fiduciary defendant for breach of fiduciary duties. In such cases, the plaintiff is not required to distinguish the damages caused by one defendant from the other. Both are jointly and severally liable for all the damages caused by the breach because both participated in the commission of the same breach. This theory requires knowledge on the part of the non-fiduciary defendant, but not an agreement between the defendants. The non-fiduciary defendant may become liable simply by knowingly taking advantage of a breach of fiduciary duties that he had no role in inducing or causing. Because liability flows from actions, rather than agreement, there is no liability for breaches of fiduciary duty in which the defendant did not participate, and liability may be imposed on agents and controlled entities. The public policy underlying this theory is the protection of the fiduciary relationship, and Texas courts have not applied the theory outside of the fiduciary context.

Bad Reasoning in Wooters v. Unitech

Facts

The opinion of the court of appeals is somewhat selective in its statement of the facts. The full appellate briefing is available online.

Unitech is a company that sells products and services to customers in the offshore and subsea oil and gas production business. The case involved disloyalty by two Unitech employees, Chris Kutach and Jason Pennington. Pennington was hired in 2010 as a sales manager. Kutach was hired in October 2011 as a service manager and served as the project manager for the “Sipem Project,” a subsea oil and gas development project near China.

Kutach had long wanted to start his own subsea services company and discussed the possibility of forming such a company with Pennington. In October 2011, Kutach met with Pennington and another employee at a Tex–Mex restaurant, where they discussed Kutach's plan to form a company called Infinity Subsea. Following the October meeting, Pennington registered an Internet domain name for a company to be called Infinity Subsea and began to draft a business plan for the company.

The theory of the case seems to have been that Pennington and Kutach formed a plan to build their new company utilizing the information and resources of Unitech, which would necessarily have involved the breach of their fiduciary duties as employees.

Part of the plan involved the theft and use of trade secrets. The plaintiff proved that the Houston office of the company’s founder was broken into in November 2011, a short time after Unitech hired Kutach. Thereafter, the company retained a private investigator to conduct surveillance, and he captured recordings of Kutach discussing Unitech's trade secrets and Kutach's plan to form a competing company. Pennington was discovered in possession of documents containing Unitech's product designs and had no legitimate business reason for having those confidential documents.

During December 2011, Kutach and Pennington secretly communicated with Fjell, a Unitech competitor, and while on Unitech business, and had a secret meeting with a Fjell employee who had once worked for Unitech. At this meeting, Kutach and Pennington were provided with a Fjell presentation that included Fjell's new subsea product line. Kutach admitted that some of the product designs appeared to be “strikingly similar” to Unitech's products. Kutach admitted that Fjell “would have to have taken information to be able to replicate the plates as closely as they did.” Fjell had no prior subsea experience, and the Fjell products reflected unauthorized access to Unitech's confidential and proprietary designs. The plaintiff’s theory, which the jury found to be true, was that Kutach and Pennington were the source of the competitor’s access to the Unitech confidential information and provided the information in exchange for an agreement to have their new company provide services to Fjell customers purchasing that equipment.

At the same time, Pennington purposely sabotaged Unitech’s Saipem Project by signing a contract on behalf of Unitech to provide products for an amount that was 40 percent less than the market price, without Unitech's authorization.

By December 10, Kutach began communicating with his industry contacts—which included some of Unitech's customers—to solicit investments for the new venture. Kutach and Pennington also discussed Infinity Subsea with other Unitech employees, including the possibility that they could join the company when it was operational.

Lawsuit

Unitech, which had been secretly monitoring these activities, fired Kutach and Pennington on January 17, 2012. Unitech then formulated a sting operation. A Unitech employee, who knew about Kutach and Pennington's activities, informed Kutach and Pennington that he had located a potential investor. A meeting was arranged to meet with the investor on January 21 in Houston at which they presented their business plan.

Armed with evidence of the meeting, Unitech sued Kutach, Pennington, and alleged co-conspirators, for breach of fiduciary duties, theft of trade secrets, and conversion. The plaintiff obtained a temporary injunction, effectively squelching the defendants’ plans, and sought permanent injunctive relief and monetary damages, including the development costs of its trade secrets, damages for signing the below-market-value agreement with Saipem, the salaries that Unitech had paid to Kutach and Pennington, Unitech's costs to replace and retrain its employees, and Unitech's investigation costs and expenses. The jury found Kutach and Pennington liable on all three theories and awarded more than $7 million in damages. Neither defendant appealed.

Conspiracy Claim Against Tim Wooters

The appeal concerned a judgment against Tim Wooters for conspiring with Kutach and Pennington. The jury found that Wooters was part of a conspiracy with Kutach and Pennington to breach their fiduciary duties, but that he was not part of a conspiracy to steal trade secrets or to convert Unitech’s property. The trial court’s judgment held Wooters jointly and severally liable for all damages awarded against Kutach and Pennington for breach of fiduciary duties. The court of appeals reversed the judgment, holding that there was no evidence of the conspiracy to breach fiduciary duties. The court withdrew its original opinion and substituted a new one reaching the same result after a motion for rehearing.

The evidence showed that Kutach had previously worked with Wooters, who was an engineering manager with technical expertise in the industry, and had shared with him his desire to start a subsea company back in the 1990s, and that Kutach and Wooter had remained in contact through the subsequent years. In late 2011, Kutach invited Wooters to a meeting at a Brazilian restaurant, where Kutach and Pennington discussed with Wooters “the possibilities of opening up a business.” As of December 15, the Kutach-Pennington business plan contained a job description tailored to the technical skills that Wooters possessed, but did not mention Wooters by name. The court of appeals opinion states that “[n]either Kutach nor Pennington had yet approached Wooters about involvement in the new company.” However, it seems unlikely that this fact was undisputed given the prior meeting. Between December 15 and early January, Wooters was in frequent contact with Kutach by telephone, text, and email, ostensibly for the purpose of recruiting Wooters to join Unitech. The plaintiff argued that the inference should be drawn that the defendants were actively discussing the formation of the new company, particularly given that many of the texts were deleted, that Unitech had not requested Kutach to recruit Wooters and had no interest in hiring him, and that Kutach and Pennington clearly intended to launch their new company very soon and desired to have Wooters be a part of it rather than Unitech.

On January 10, Wooters had a lengthy telephone conversation with Kutach, after which Kutach texted Pennington: “Tim said if we can build an alliance with Fjell he would be willing to share patents and compete against Unitech and others.” That same day, the defendants copied Wooters on an email containing the Fjell presentation showing its possession of the stolen designs.

On January 19, two days after they were fired, Kutach and Pennington met with Wooters at a steak restaurant and showed him the Infinity Subsea business plan, which he had not seen previously. Apparently, Wooters had already agreed to join the venture, because the group discussed each of their roles in the business, and that Wooters was to be the company's designer. Wooters also attended the January 21st meeting with the purported investor, and the business plan presented at that meeting attached Wooter’s resume and listed him as a “principal owner/investor.”

Civil Conspiracy Tort

The court of appeals held: “Civil conspiracy is a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means.” (citing Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). The essential elements of a civil conspiracy are (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. (citing Juhl v. Airington, 936 S.W.2d 640, 644 (Tex. 1996); Triplex Commc'ns v. Riley, 900 S.W.2d 716, 719 (Tex. 1995). The jury found that Wooters conspired with Kutach and Pennington in the breach of their fiduciary duties as employees. The record clearly established numerous unlawful, overt acts by Kutach and Pennington that proximately caused damage to Unitech, including the theft and continued possession of designs and trade secrets, the solicitation of employees and customers, the failure to disclose the possession of trade secrets by a competitor, and the unauthorized signing of a contract that resulted in a significant loss to Unitech. The hard question was whether Wooters had agreed to be a part of that conduct—that he, Kutach, and Pennington had a meeting of the minds on the unlawful object to be accomplished or the unlawful course of action. In reviewing the legal sufficiency of the evidence, the court correctly noted: “For conspiracy claims, the proof is often based on circumstantial evidence.” The evidence must raise a reasonable inference as to the agreement made by the three defendants.

The court next turned to an examination of what specific conduct of Kutach and Pennington constituted a breach of fiduciary duties. The court held: “An employee may not (1) appropriate the company's trade secrets; (2) solicit the former employer's customers while still working for his employer; (3) solicit the departure of other employees while still working for his employer; or (4) carry away confidential information.” (citing Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 512 (Tex. App.–Houston [1st Dist.] 2003, no pet.). However, “[a]n at-will employee may properly plan to go into competition with his employer and may take active steps to do so while still employed and may secretly do so with other employees, without disclosing his plans to his employer.” (quoting Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 201 (Tex. 2002). Therefore, many of the facts in the case clearly fell within permissible planning and were not actionable. Merely proving that Wooters was aware that Kutach and Pennington were planning to start their own business while still employees of Unitech and agreeing to eventually join with them in that business would not be sufficient to prove a conspiracy to breach fiduciary duties. There must have been a meeting of the minds as to some unlawful conduct.

Confusion Between Civil Conspiracy and Knowing Participation

The court of appeals’ opinion runs off the rails when the discussion turns to the nature of the proof necessary to establish Wooter’s participation in the conspiracy. The court stated: “A defendant's liability for civil conspiracy depends on participation in an underlying tort for which the plaintiff seeks to hold the defendant liable.” This is clearly an incorrect statement of the law. Conspiracy requires an agreement, a meeting of the minds as to the tortious object, not actual participation in the underlying tort.

The court amplified that error in its statement of Texas law governing conspiracy to breach fiduciary duties:

Texas has recognized a cause of action for conspiracy to breach a fiduciary duty in transactions in which a third party knowingly participates in an employee's breach of fiduciary duty during his employment and the third party improperly benefits from it. See Kinzbach Tool Co. v. Corbett–Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 514 (1942) (holding third-party competitor liable for knowing participation in breach of fiduciary duty when it paid employee commission to obtain technology owned by employer at favorable price); Paschal v. Great W. Drilling, Ltd., 215 S.W.3d 437, 450 (Tex. App.–Eastland 2006, pet. denied) (holding wife liable for knowing participation in employee's embezzlement where funds were placed in joint account and wife benefitted from stolen funds).

The “knowing participation” theory described by the Texas Supreme Court in Kinzbach Tool, and its progeny, is not civil conspiracy. It is an entirely different theory of liability. Civil conspiracy is based on an agreement as to the object of the conspiracy. It requires no action whatsoever by the plaintiff. “Knowing participation” requires action by the defendant, actual participation in a transaction that the defendant knows is a breach of fiduciary duties, but does not require a meeting of the minds between the non-fiduciary defendant and the fiduciary.

That error was further compounded by the court’s erroneous addition of a new element that a defendant can only be liable for civil conspiracy if the he actually receives a benefit from the underlying tort:

Finally, Unitech adduced no evidence that Wooters benefitted from Kutach's and Pennington's breaches of their fiduciary duties. See Kinzbach Tool, 160 S.W.2d at 511–12 (finding evidence of a conspiracy where competing company secretly paid competitor's employee commission and obtained use of technology at favorable price); Paschal, 215 S.W.3d at 442 (evidence of embezzled funds placed in joint account and used to purchase five life insurance policies with wife as beneficiary sufficient to find conspiracy and place constructive trust on life insurance proceeds); see also Int'l Bankers Life Ins. v. Holloway, 368 S.W.2d 567, 570 (Tex. 1963) (personal profits from commissions on sale of stock and sale of personal shares coupled with evidence of undisclosed participation in sale sufficient to establish conspiracy by company officers to defraud company)

Factually, a defendant’s receipt of a benefit is usually the case. People rarely do things, particularly dishonest things that might result in liability, without a motivation such as the expectation of receiving a benefit. The defendant’s receipt of such a benefit is often an important fact in establishing the defendant’s motivations and state of mind, but it is emphatically not an element either of civil conspiracy or of knowing participation. Moreover, the court’s statement that “[u]nlike Kutach and Pennington, who as employees had received compensation from Unitech, Wooters received no payment or promise of future payment, either from Unitech or from the nascent competing business,” is nonsense on its face. Wooters clearly expected to benefit from participation in the new company as a “principal” and “investor.” The fact that the lawsuit and the temporary injunction prevented that benefit from being realized does not negate liability.

Legal Sufficiency Review

The court held: “With respect to the theft of Unitech's design information, we observe that the jury found that Kutach and Pennington committed theft, but it refused to find that Wooters conspired with them in committing that theft, and Unitech has not challenged that adverse finding.” However, the negative finding on a conspiracy to commit the theft or conversion cannot be used as an affirmative finding of the opposite, and is not relevant on a review of the legal sufficiency of the evidence. The evidence, as recited in the opinion, seems clearly to indicate that the actual theft and conversion predated Wooter’s involvement, and the jury’s finding of no meeting of the minds as to those specific torts makes sense, but the question of whether there was a meeting of the minds as to the use of the stolen information by the new company is something altogether different.

On this issue, the court noted: “No witness testified that Wooters knowingly participated in obtaining confidential product designs from Unitech, used them, or knew that they had been stolen.” That observation would be pertinent if the conspiratorial meeting of the minds could only be proven by direct testimony. However, Texas law strongly recognizes that circumstantial evidence is the usual way in which conspiracies are proven. In this case, the evidence showed that Wooters had significant knowledge and expertise in subsea design, that he knew that the employees (while still employees) were seeking an alliance with Fjell as the basis of their new business, that he had been shown the stolen designs in the possession of Fjell, that he agreed (if not prior to the termination, within days thereafter) to join in a business founded on acts that went well beyond mere preparation and included theft of trade secrets, profiting from a competitors use of the trade secrets, and sabotage of Unitech and its employee and customer relationships. The evidence shows numerous communications among the co-conspirators, many of which were destroyed, and the jury must have found that Wooters was lying about his communications and knowledge during the relevant period. This strong circumstantial case must constitute “some evidence” that Wooters knew that the entire basis of the competitive advantage of the enterprise he agreed to join was founded on a series of fiduciary duty breaches.

The court of appeals opinion concludes: “Because no evidence demonstrates that Wooters knowingly participated in unlawful conduct for an improper gain beyond evidence of participation in plans to compete when Kutach's and Pennington's employment ended, no evidence supports a finding against Wooters for civil conspiracy to breach a fiduciary duty.” If the plaintiff’s theory had been “knowing participation,” then the court’s conclusion would necessarily follow. Wooters did not personally participate in any of the conduct that caused damage to Unitech. He might very well have participated in the exploitation of the theft of trade secrets by the new company, but that participation was cut short by astute legal action before any further damages could be inflicted. However, the plaintiff clearly chose to plead and submit the case against Wooters on a conspiracy theory, rather than a knowing participation theory. Under a conspiracy theory, Wooter would be liable for acts in furtherance of the conspiracy that occurred prior to his joining the conspiracy and for acts committed by his co-conspirators in which he had no direct participation. The only question the court should have addressed is whether the circumstantial evidence raised a reasonable inference that Wooters agreed with the other defendants to be part of a company that would exploit and benefit from the breach of fiduciary duties found by the jury. The plain language of the opinion indicates that the court missed that issue. The result is bad legal analysis, and quite likely an unjust result. 

Compare Civil Conspiracy Analysis in Paschal v. Great Wesern Drilling

Interestingly, Paschal v. Great W. Drilling, Ltd., 215 S.W.3d 437 (Tex. App.—Eastland 2006, pet. denied), a case that the Wooters court relied on heavily, got the conspiracy analysis correct and reached the opposite result on analogous facts. In Paschal, the husband of the defendant had embellezed more than $1.5 million from his employer over a number of years and used the money to support the lifestyle of himself and his wife and to purchase life insurance policies to which his wife was the beneficiary. The husband was eventually caught and died in an automobile accident while fleeing from the FBI. The employer sued the wife on a conspiracy to breach fiduciary duties theory seeking chiefly to recover the life insurance proceeds. The Paschal court cited to the Kinzbach Tool opinion, not for support of conspiracy liability, but only on the liability of employees for breach of fiduciary duties, and the opinion makes it very clear that the liability of the wife was premised solely on a civil conspiracy tort and not on the "knowing participation" doctrine stated in Kinzbach Tool.

The jury found that the wife was part of a conspiracy with her husband to breach her husband's fiduciary duties to his employer, and the court of appeals held that the evidence was legally sufficient. As in Wooters, the wife had no actual participation in any of the actions constituting breach of fiduciary duties. There was no testimony that the wife was told that the money was stolen. As in Wooters, the only direct testimony regarding the wife's knowledge was her own testimony repeatedly denying any such knowledge. There was an agreement--a written agreement--between the husband and the wife executed at about the same time as the thefts began, but the written agreement said absolutely nothing about the theft and only committed the husband to pay certain expenses, purchase life insurance, and give the wife an allowance of $500 a month. Yet, the court held that the evidence was sufficient to raise an inference of the wife's knowledge of the theft and meeting of the minds:

there was evidence which supports an inference that Marilyn had actual knowledge that Alan was stealing large sums of money from Great Western. Alan injected several thousands of dollars a month into the family's finances which greatly exceeded the amount of the wages which he and Marilyn reported to the IRS. The large amount of money that Alan embezzled, coupled with the absence of any other possible source for this windfall, is evidence which supports an inference that Marilyn had actual knowledge that Alan embezzled the funds from his employer in his role as a revenue accountant for Great Western. The unusual circumstances surrounding the marital contract that Alan and Marilyn executed strengthens the inference of concerted action on their part.

Id. at 455. In Paschal, the husband and wife entered into an agreement, which the husband performed using the stolen money, and the wife obviously benefited from the stolen money. In Wooters, the defendant entered into an agreement with the employees to become a principal owner in a business founded on the theft of trade secrets, and the defendant obviously intended to benefit from the use of the stolen trade secrets. In Pachal, the court found it significant that the wife had filed false tax returns concealing the additional income. In Wooters, the defendant lied to the jury regarding his knowledge of the venture prior to the termination of the co-conspirators' employment and his knowledge of the stolen designs being utilized by Fjell--a fact that the jury obviously considered significant and which the court of appeals dismissed as irrelevant. The only significant difference between the critical facts of the two cases is that in Paschal the defendant was able to enjoy the "fruits" of the theft, while in Wooters the temporary injuction prevented the defendant from doing so.

The court in Paschal emphasized the importance of inferences arising from circumstantial evidence, quoting an 1854 Texas Supreme Court opinion:

When men enter into conspiracies, they are not likely to call in a witness. They resolve their schemes clandestinely and in secret. Their purpose is imposition and deception; and secrecy is necessary to its accomplishment. In such cases the injured party must necessarily have recourse to circumstantial evidence. For it is only by the inferences and deductions which men properly and naturally draw from the acts of others in such cases, that their intentions can be ascertained. They are not likely to proclaim them in the hearing of witnesses.

Paschal v. Great W. Drilling, Ltd., 215 S.W.3d at 453. Relying on International Bankers v. Holloway, the court held that the evidentiary standard is as follows: 

The general rule is that conspiracy liability is sufficiently established by proof showing concert of action or other facts and circumstances from which the natural inference arises that the unlawful, overt acts were committed in furtherance of common design, intention, or purpose of the alleged conspirators. It is not required that each and every act of a conspirator be shown to have been in concert with the others or that it be established by direct evidence that all combined at a given time prior to each transaction. Inferences of concerted action may be drawn from joint participation in the transactions and from enjoyment of the fruits of the transactions.

It would seem that the plaintiff's evidence in Wooters at least met this standard and that the drawing of inferences, the weighing of the conflicting evidence, and the determination of the credibility of the witnesses was solely in the province of the jury.