United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED March 3, 2022 No. 20-50671 Lyle W. Cayce Clerk

Johnny Thomas, a Bankruptcy Trustee of Performance Products, Inc.; Carolyn Pearcy, in her capacity as Trustee of the Pearcy Family Trust, Trustee of the Pearcy Marital Trust, and Executor of the Estate of James Pearcy,

Plaintiffs—Appellees,

versus

Lou Ann Hughes; Advanced Probiotics, L.L.C.; Performance Probiotics, L.L.C.,

Defendants—Appellants.

Appeal from the United States District Court for the Western District of Texas USDC No. 5:16-CV-951

Before Clement, Haynes, and Wilson, Circuit Judges. Cory T. Wilson, Circuit Judge: A federal jury found that Lou Ann Hughes fraudulently transferred assets, that Hughes and Performance Probiotics, LLC misappropriated trade secrets, that Hughes was personally liable for the actions of her company through corporate veil-piercing, and that Hughes breached her fiduciary duty as an attorney. The jury awarded over $1.4 million in compensatory damages and $1.2 million in exemplary damages. The district court then entered its Case: 20-50671 Document: 00516223471 Page: 2 Date Filed: 03/03/2022

No. 20-50671

final judgment, which confirmed the jury’s damages awards, enjoined Hughes from continuing to misappropriate Pearcy’s trade secrets, and ordered Hughes to disgorge compensation received from Performance Probiotics. On appeal, Hughes challenges the district court’s evidentiary rulings, final judgment, attorney’s fees award, and denial of post-judgment relief on various grounds. We slightly MODIFY the district court’s final judgment to prevent the possibility of double recovery. Otherwise, we AFFIRM. I. A. In 1993, James Pearcy founded Performance Products, Inc. (“PPI”), which developed and sold probiotic supplements for livestock. In 2006, Pearcy decided to sell PPI to his attorney, Lou Ann Hughes. The parties executed an agreement under which Hughes paid Pearcy $400,000 for the stock of PPI and $50,000 for a non-compete agreement. Alongside the sale agreement, PPI (now controlled by Hughes) agreed to pay Pearcy licensing royalties for the use of his proprietary formulations. Specifically, PPI agreed to pay Pearcy fourteen percent of net sales up to a total payment of $1,350,000 over five years. The licensing agreement also provided that at the end of the five-year period in 2011, PPI would have the option to purchase Pearcy’s formulas for $100,000. But PPI did not fully pay the royalties owed to Pearcy. As a result, in July 2007 Pearcy sued both Hughes and PPI in state court in Comal County, Texas. See Hughes v. Pearcy, No. 03-10-319-CV, 2014 WL 7014353, at *1 (Tex. App.—Austin Dec. 8, 2014, pet. denied) (mem. op.). In February 2010, the Comal County jury returned a verdict in Pearcy’s favor. The jury found that PPI had breached the licensing agreement, that PPI had

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misappropri