Rafael Ortega, Rosara Investments, LLC, LMMM Houston #50 Ltd., and SOGA Investments, Ltd. v. Amin Abel, Mohamad Mustafa, Saeed Abdel Fatah, Ihab Aboushi, Hanna Hinnawi, Sameera Abel, Amy Latif, Joann Barghout, Super Bravo, Inc., Bravo Ranch, Inc., Abel, Inc., and Houston Bravo, Inc.

Summary

The Texas First Court of Appeals reviewed a judgment involving a covenant not to compete arising from the sale of grocery stores. The court held that the covenant's original geographic restrictions were unreasonable and that the trial court properly reformed them to a three-mile radius around the five stores sold, thereby precluding recovery of damages incurred before reformation. The court affirmed the trial court's judgment.

Holdings

1. A provision prohibiting Abel from owning or operating a Hispanic-themed grocery store in a defined area unless he first offered Ortega the right to become a partner functioned as a restraint on trade and was subject to the Texas Covenants Not to Compete Act.
2. Legally and factually sufficient evidence supported the trial court's determination that the original geographic restrictions were unreasonable because they imposed a greater restraint than necessary to protect Ortega's goodwill and business interests.
3. The court did not reach the damages issue because Ortega's argument depended on reversal of the reformation ruling, and the reformation ruling was affirmed.

Questions Presented

1. Whether the covenant's right-of-first-refusal provision constituted a restraint on trade governed by Texas Business and Commerce Code sections 15.50 and 15.51.
2. Whether legally and factually sufficient evidence supported reducing the covenant's geographic restriction from ten miles around numerous stores and locations to three miles around the five stores sold to Ortega.
3. Whether the trial court should have included the jury's damages award in the final judgment.

Disposition

affirmed