Opinion issued August 30, 2018 In The Court of Appeals For The First District of Texas ———————————— NO. 01-18-00049-CV ——————————— IN RE MICROVAST, INC., AND YANG WU, Relators Original Proceeding on Petition for Writ of Mandamus MEMORANDUM OPINION Microvast, Inc. and Yang Wu petition for a writ of mandamus, challenging the trial court’s order denying their motion to compel the production of privileged documents. Microvast and Wu are defendants in the underlying trial court case. Together, they assert that the plaintiff, Jeff Xu, waived his attorney-client privilege by voluntarily disclosing legal advice that he received and by “offensive use” of the privilege.1 We deny the petition. Background Jeff Xu sued Microvast and Wu, Microvast’s chief executive officer, claiming that they fraudulently induced Xu to execute a promissory note secured by shares of Microvast stock. Xu further alleges that Microvast and Wu defrauded him in connection with their demand that he return his shares of Microvast stock following his resignation from Microvast. Xu asserts that Microvast represented that the promissory note served “tax purposes” and that Microvast would not enforce it. Microvast’s Formation According to the pleadings, Xu was a professor of chemistry at Xiamen University in China. Xu is an expert in fuel energy storage technology. Wu recruited Xu to start a fuel energy storage business. Xu resigned from his professorship and began working full time for what eventually became Microvast. Microvast formally incorporated in Texas in October 2006. In December 2006, to support Xu’s immigration status, Microvast provided Xu with an employment offer letter. The letter stated that Xu would be Microvast’s chief technology officer. His compensation would include salary, benefits, and a 1 The underlying case is Jeff G. Xu v. Microvast, Inc. and Yang Wu, cause number 2015-48629, pending in the 295th District Court of Harris County, Texas, the Honorable Caroline Baker presiding. 2 “stock option” covering “7% of company’s outstanding shares and the terms will be discussed later.” Xu asserts that he asked Wu for stock instead of stock options. After additional discussions, Wu and Xu agreed that Xu would own 7% of the company. In February 2007, Wu emailed Xu a promissory note. Wu told Xu he had to sign it before Microvast could issue his stock representing 7% ownership in the company. Xu claims that Wu assured and promised that neither he nor Microvast would ever collect on the note. Xu signed the promissory note, which purported to loan Xu $770,000 secured by 15,400 shares of Microvast stock. Xu claims that he received no loan proceeds, and that he received the stock in exchange for joining Microvast. The note required Xu to pay $770,000 to Microvast on demand, or if no demand were made, then at the earlier of (1) 30 days after the termination of his employment or (2) December 31, 2013. The note also required Xu to pay interest on the outstanding amount. It gave Microvast a security interest in Xu’s shares of Microvast stock. The first two sentences of the pledge ...
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