A jury in Houston will decide whether deposition video and production company SmartDisk is owed about $6.4 million in breach of contract damages or if its former business partner, Lexitas, properly terminated the parties’ agreement and owes nothing.
Opening statements were made Monday afternoon in the trial before Business Court Judge Grant Dorfman. The trial is expected to last about a week. The group of 12 jurors and two alternates — seven men and seven women — were told by counsel for SmartDisk, Jason McManis of Ahmad Zavitsanos & Mensing, that the case is about “corporate greed and betrayal.”
McManis told jurors that SmartDisk, which specializes in deposition video production, partnered with a predecessor to Lexitas, which specialized in court reporting services, in a written agreement signed in 2016. Under the agreement, SmartDisk would be the “exclusive provider of video production and finishing services” to Lexitas in Texas.
“Lexitas, however, made a choice. A choice it was going to ignore those promises for its own benefit, for its own profit, and cast SmartDisk aside,” he said.
The changes in the business relationship began after Lexitas was purchased by a private equity company, McManis told jurors, and that’s when work that should have been funneled to SmartDisk under the agreement was instead outsourced to a company in Missouri.
SmartDisk, which filed suit in April 2025 for breach of contract and fraud, alleges it is owed about $3.4 million for work that should have been sent to it and another $3 million for what it described as Lexitas’ systematic underpayment of invoices, in violation of the agreement.
Counsel for Lexitas, Ryan Wooten of Orrick, told jurors a very different story during his opening statement Monday, explaining his client’s agreement with SmartDisk terminated in November 2019, when one private equity company sold Lexitas to a different private equity company.
Alternatively, he said, if jurors didn’t agree the contract terminated, there was no breach because Lexitas did not give SmartDisk’s work to another contractor. Instead, it chose to bring that work in-house.
“This is not a legal technicality,” he said. “It is a key part of the agreement.”
Wooten told jurors the theory that Lexitas systematically underpaid SmartDisk’ invoices “was invented for litigation” and that the company had made a business decision to centralize video production. Lexitas, he said, “used its own employees on its own payroll to do its own work.”
The real driver of this lawsuit, he said, was Lexitas’ decision to “politely decline” SmartDisk’s “multimillion-dollar asking price” to purchase the company and its assets. Wooten told jurors that after Lexitas declined to buy the company, a SmartDisk executive set about making secret recordings with Lexitas employees “to spring a trap and build a lawsuit out of nothing.”
He said the executive never raised concerns with Lexitas about possible breaches of the contract.
“That tells you something,” he said.
The trial is taking place in the Ceremonial Courtroom in the Harris County Civil District Courthouse, as the Texas Business Court has no assigned courtroom space. Lawyers for the parties have agreed to increase juror pay from the standard $58 a day to $250 a day.
SmartDisk is also represented by John Zavitsanos, Matt Davis, Savannah Ezelle, David Warden and Kelsi White of Ahmad Zavitsanos & Mensing.
Lexitas is represented by Andraya Flor, Michael Morehead, Tom Panighetti, Jeff Quilici and Robert Shwarts of Orrick.
The case number is 25-BC11B-0022.