Opinion
14-22-00305-CV
08-01-2023
TOM BENNETT, JAMES B. BONHAM CORPORATION, AND THE UNITED STATES INVENTION CORPORATION, Appellants v. D. TODD SMITH AND SMITH LAW GROUP, Appellees
On Appeal from the 98th District Court Travis County, Texas Trial Court Cause No. D-1-GN-21-000562
Panel consists of Chief Justice Christopher and Justices Bourliot and Wilson.
MEMORANDUM OPINION
Frances Bourliot Justice
Appellants Tom Bennett, James B. Bonham Corporation, and the United States Invention Corporation (collectively "Bennett") appeal a final order dismissing their legal action against appellees D. Todd Smith and Smith Law Group (collectively "Smith") under the Texas Citizens Participation Act (TCPA). Bennett contends that Smith failed in his initial burden to show by a preponderance of the evidence that the act applies. Smith asserts that Bennett's negligence and breach of professional responsibility claims are legal actions filed in response to his exercise of the right to petition. Concluding the conduct Bennett complains of falls within the scope of the TCPA, we affirm.
Chapter 27 of the Texas Civil Practice and Remedies Code embodies the Texas Citizens Participation Act and is known as the TCPA. Tex. Civ. Prac. & Rem. Code §§ 27.001-.011.
This case was transferred to our court from the Third Court of Appeals; therefore, we must decide the case in accordance with our sister court's precedent if our decision would be otherwise inconsistent with its precedent. See Tex. R. App. P. 41.3.
Background
On January 29, 2021, Bennett sued Smith. In his petition, Bennett alleged that he retained Smith for appellate representation after receiving two unfavorable judgments in the trial court. Smith represented Bennett in two prior appellate proceedings-one in the Third Court of Appeals and the second in the Texas Supreme Court. See Bennett v. Grant, 460 S.W.3d 220, 228 (Tex. App.-Austin 2015), rev'd & remanded in part, 525 S.W.3d 642, 645 (Tex. 2017). These suits arose from an infamous feud between Bennett and Randy Reynolds, neighboring cattle ranchers in San Saba. See Bennett v. Reynolds, 242 S.W.3d 866 (Tex. App.- Austin 2007), rev'd & remanded in part, 315 S.W.3d 867, 869 (Tex. 2010). The gist of the dispute and subject of prior appeals involved allegations that thirteen head of cattle belonging to Reynolds wandered onto Bennett's ranch, and that instead of returning them in a neighborly fashion, Bennett ordered his ranch hand, Larry Grant, to round up the cattle and sell them at auction. Bennett, 460 S.W.3d at 228.
According to Bennett, the judgments entered against him were "erroneous." Bennett asserted that he specifically instructed Smith to emphasize certain evidence excluded by the trial court that would be included in the appellate record. The excluded evidence consisted of an audio recording of Larry Grant and a transcription of the recording. Bennett suggested that this evidence demonstrated that Grant committed perjury in the trial court proceedings and was not a credible witness. Bennett believed that exclusion of this evidence constituted reversible error. Bennett avowed that Smith failed to challenge the trial court's evidentiary ruling on appeal, constituting professional negligence and misconduct.
On June 17, 2021, Smith answered with a general denial and raised several affirmative defenses. Smith asserted that Bennett's claims represented an improperly "fractured" legal malpractice claim. About a month later, on July 26, 2021, Smith filed his motion to dismiss under the TCPA, alleging that Bennett's claims should be dismissed because they were based on and in response to the "exercise of the right to petition" as defined in the TCPA. The TCPA motion to dismiss was set for a hearing on September 8, 2021.
One day prior to the scheduled hearing, Bennett emailed a request for a continuance and an untimely response to the motion to dismiss to Smith's attorney.Bennett, however, did not file these documents with the trial court. The trial court held a hearing on Smith's motion to dismiss, but Bennett failed to appear. The trial court took the TCPA motion and Bennett's response under advisement. Ultimately, the trial court granted Smith's motion to dismiss, dismissed Bennett's lawsuit, and ordered Bennett to pay Smith's counsel $10,880 in attorney's fees. Bennett timely appealed and raised a single issue.
Section 27.003 provides that "[a] party responding to the motion to dismiss shall file the response, if any, not later than seven days before the date of the hearing on the motion to dismiss unless otherwise provided by an agreement of the parties or an order of the court." Tex. Civ. Prac. & Rem. Code § 27.003(e).
Rule 21 provides that "[e]very pleading, plea, motion, or application to the court for an order, whether in the form of a motion, plea, or other form of request, unless presented during a hearing or trial, must be filed with the clerk of the court in writing, must state the grounds therefor, must set forth the relief or order sought, and at the same time a true copy must be served on all other parties, and must be noted on the docket." Tex.R.Civ.P. 21(a).
Discussion
In his sole issue on appeal, Bennett contends the trial court improperly concluded that Smith met his initial burden to show by a preponderance of the evidence that the TCPA applies.
I. Texas Citizens Participation Act
The TCPA has a dual purpose: "to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury." Tex. Civ. Prac. & Rem. Code § 27.002. We construe the TCPA liberally to effectuate its intent of safeguarding and encouraging citizens' constitutional rights to free speech, petition, and association while protecting the right to file a meritorious lawsuit. Id. §§ 27.002, 27.011(b); see also ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (per curiam).
The TCPA "protects citizens who petition or speak on matters of public concern from retaliatory lawsuits that seek to intimidate or silence them." In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015) (orig. proceeding). That protection comes in the form of a special motion to dismiss, subject to expedited review, for "any suit that appears to stifle the defendant's" exercise of those rights. Id. Reviewing a TCPA motion to dismiss requires a three-step analysis. Id.; see also Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018). As a threshold matter, the moving party must show by a preponderance of the evidence that the TCPA properly applies to the legal action against it. See Tex. Civ. Prac. & Rem. Code § 27.005(b). If the moving party meets that burden, the nonmoving party must establish by clear and specific evidence a prima facie case for each essential element of its claim. Id. § 27.005(c). If the nonmoving party satisfies that requirement, the burden finally shifts back to the moving party to prove each essential element of any valid defenses by a preponderance of the evidence. Id. § 27.005(d).
When determining whether a "legal action" should be dismissed, the trial court must consider the pleadings, the evidence that a court could consider under Texas Civil Procedure Rule 166a, and the "supporting and opposing affidavits stating the facts on which the liability or defense is based." Tex. Civ. Prac. & Rem. Code § 27.006(a). We view the pleadings in the light most favorable to the nonmovant, not blindly accepting a movant's attempts to characterize a nonmovant's claims as implicating protected expression but favoring the conclusion that the claims are not predicated on protected expression. Sloat v. Rathbun, 513 S.W.3d 500, 504 (Tex. App.-Austin 2015, pet. dism'd). As a matter of statutory construction, we review de novo a trial court's ruling on a TCPA motion to dismiss. Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 132 (Tex. 2019); Youngkin, 546 S.W.3d at 680; City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex. 2003).
II. Does the TCPA Apply to Bennett's Legal Action?
The parties dispute whether the TCPA applies in this case. Bennett argues that the trial court erred by granting Smith's motion to dismiss because (1) this suit is not based on, related to, or in response to Smith's exercise of the right to petition; (2) "communications" and "judicial" proceedings are present in "every instance of the lawyer-client relationship" but such conversations do not prohibit claims of negligence or breach of professional conduct; and (3) he is not suing Smith for any communication; rather, he is suing Smith for what he did not do, i.e., failing to emphasize certain evidence which had been excluded by the trial court. Conversely, Smith contends that he has met his burden under the first step of the TCPA analysis in showing that the TCPA applies to Bennett's suit because the claims against him are based on and in response to Smith's exercise of the right to petition. Relying on the expansive statutory definition of the "exercise of right to petition," Smith argues that Bennett's claims emanate from Smith's representation of Bennett in two prior appellate proceedings. Smith points to two "communications" that form the basis of Bennett's claims: (1) Bennett's instructions to Smith to "emphasize certain evidence which had been excluded by the trial court but included in the record for appellate review," and (2) the multiple briefs prepared by Smith on Bennett's behalf in a judicial proceeding. Smith suggests that these communications pertain to a judicial proceeding and bring this case within the scope of the TCPA.
We begin our inquiry with the threshold question of whether the act applies to the case before us. Under the plain language of the TCPA, "[i]f a legal action is based on, relates to, or is in response to a party's exercise of the right of free speech, right to petition, or right of association, that party may file a motion to dismiss the legal action." Tex. Civ. Prac. & Rem. Code § 27.003(a). Thus, for the TCPA to apply to this case, the claim brought against Smith need only relate to his exercise of the right to petition. See id. Pertinent here, the "exercise of the right to petition" includes "a communication in or pertaining to . . . a judicial proceeding." Id. § 27.001(4)(A)(i). A "communication" is broadly defined as "the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic." Id. § 27.001(1).
Bennett's claims are related to Smith's right to petition the courts. Though Bennett alleged claims for negligence and breach of professional responsibility, these claims are essentially a dressed-up legal malpractice claim, and there is no need to fracture the issues. Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 426-27 (Tex. App.-Austin 2009, no pet.) ("The rule against 'fracturing' professional negligence claims against attorneys holds that 'a case arising out of an attorney's alleged bad legal advice or improper representation' may not 'be split out into separate claims for negligence, breach of contract, or fraud [(or any other non-negligence theory)] because the real issue remains one of whether the professional exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise.'"); see, e.g., Hanna v. Williams, No. 03-22-00254-CV, 2022 WL 17490996, at *7 (Tex. App.-Austin Dec. 7, 2022, no pet.) (mem. op.) (naming and explaining the rule).
In his petition, Bennett alleged that: (1) he "instructed [Smith] to emphasize certain evidence which had been excluded by the trial court but included in the record for appellate review; (2) he urged Smith that Grant's testimony constituted perjury, and the exclusion of this testimony by the trial court "would have been perceived as reversible error"; (3) Smith "failed or refused" to prosecute the appeal on such grounds, which resulted in a judgment in excess of $500,000; and (4) Smith's failure to comply with Bennett's instructions amounted to professional negligence and misconduct.
In Mustafa, the plaintiff sued the defendant, who was a court-appointed amicus attorney, asserting causes of action based on the defendant's filings and oral statements in a suit affecting the parent-child relationship. Mustafa v. Pennington, No. 03-18-00081-CV, 2019 WL 1782993, at *1-2 (Tex. App.-Austin Apr. 24, 2019, no pet.) (mem. op.). The court concluded, under the prior version of the TCPA, that an alleged failure to communicate was in substance a criticism of communication and satisfied the defendant's initial TCPA burden. Id. at *3.
When an allegation of a failure to communicate is "in substance a criticism of [an attorney's] communication," the attorney will be considered to have been exercising his right to petition if the alleged failure occurred in or pertained to a judicial proceeding. See id.; see also Winstead PC v. USA Lending Grp., Inc., 664 S.W.3d 384, 392 (Tex. App.-Tyler Mar. 18, 2021, pet. filed) (mem. op.) (concluding that where basis of malpractice lawsuit was attorney's alleged failure to include request for damages in motion for default judgment filed on behalf of client, it nonetheless constituted "communication in a judicial proceeding" and fell under TCPA); Brown Sims, P.C. v. L.W. Matteson, Inc., 594 S.W.3d 573, 577 (Tex. App.- San Antonio 2019, no pet.) (concluding that attorneys filing answer in court on behalf of client were exercising right to petition even though client's professional-negligence claim was based on attorneys' "failure to make a communication" by not including affirmative defense in answer).
We note that the Third Court of Appeals precedent on this issue is not consistent with our court. As this court has determined, the TCPA right to petition is not implicated when the plaintiff-nonmovant's claims do not allege "communications." See Allied Orion Grp., LLC v. Pitre, No. 14-19-00681-CV, 2021 WL 2154065, at *3-4 (Tex. App.-Houston [14th Dist.] May 27, 2021, no pet.) (mem. op.) (because nonmovant's lawsuit did not assert "any claims based upon the making or submitting of any statement or document," TCPA did not apply); see also Neely v. Allen, No. 14-19-00706-CV, 2021 WL 2154125, at *8-10 (Tex. App.-Houston [14th Dist.] May 27, 2021, no pet.) (mem. op.) (holding TCPA did not apply because alleged conduct was not a communication); Sanchez v. Striever, 614 S.W.3d 233, 246 (Tex. App.-Houston [14th Dist.] 2020, no pet.) (same); KIPP, Inc. v. Grant Me the Wisdom Found., Inc., 651 S.W.3d 530, 538-39 (allegations based on failure to do something were not predicated on communications that would implicate the TCPA); see, e.g., DOJO Bayhouse, LLC v. Pickford, No. 14-20-00237-CV, 2021 WL 6050677, at *4 (Tex. App.-Houston [14th Dist.] Dec. 21, 2021, no pet.) (mem. op.) (holding TCPA does not encompass "a failure to communicate").
On the record before us, Bennett alleged that Smith filed a defective communication, i.e., the briefs in the two prior appellate proceedings, which failed to address evidence that was excluded in the trial court-an audio recording and transcription of the recording. Thus, Bennett's allegation of a "failure to communicate" is a "criticism of [Smith's] communication" and relates to a judicial proceeding; Smith was therefore exercising his right to petition the court. See Tex. Civ. Prac. & Rem. Code § 27.001(4)(A)(i). Because, under Third Court precedent, "it is clear from the plaintiff's pleadings that the action is covered by the [a]ct," Smith satisfied his initial burden to show Bennett's claims related to protected activity. See Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017).
Thus, the TCPA applies to the claims brought against Smith because the claims relate to a communication by Smith in or pertaining to a judicial proceeding. See Tex. Civ. Prac. & Rem. Code §27.003(a). Accordingly, Smith demonstrated by a preponderance of the evidence that the TCPA properly applies to this legal action. See id. § 27.005(b).
III. Did Smith Establish the Affirmative Defense of Statute of Limitations?
Because the TCPA applies, the burden shifted to Bennett to establish by clear and specific evidence a prima facie case for each essential element of his claims. See id. § 27.005(c). If he did so, Smith is still entitled to dismissal if he proves the essential elements of any valid defenses by a preponderance of the evidence. See id. § 27.005(d); see also Youngkin, 546 S.W.3d at 681. Assuming without deciding that Bennett met his burden, we nevertheless hold that Smith is entitled to dismissal because he established the affirmative defense of statute of limitations.
Negligence and legal malpractice claims are governed by a two-year statute of limitations. See Zidell v. Bird, 692 S.W.2d 550, 553 (Tex. App.-Austin 1985, no writ); see also Zive v. Sandberg, 644 S.W.3d 169, 174 (Tex. 2022) ("Claims for legal malpractice are subject to a two-year statute of limitations."); see generally Tex. Civ. Prac. & Rem. Code § 16.003(a). A cause of action generally accrues, and the statute of limitations begins to run when facts come into existence that authorize a claimant to seek a judicial remedy or, in cases governed by the discovery rule, when the claimant discovers or should have discovered the facts establishing the elements of a cause of action. See Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex. 1991); see also Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120 (Tex. 2001).
A legal malpractice claim is based on negligence because such a claim arises from an attorney's alleged failure to exercise ordinary care. Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989). A cause of action for legal malpractice arises from an attorney giving a client bad legal advice or by disobeying a client's lawful instruction. Zidell v. Bird, 692 S.W.2d 550, 553 (Tex. App-Austin 1985, no writ).
But in Hughes, the supreme court held that "when an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on the malpractice claim against the attorney is tolled until all appeals on the underlying claim are exhausted." 821 S.W.2d at 157. Unlike the legal-injury rule and discovery rule, which affect when a claim accrues, Hughes tolling is an equitable doctrine that tolls the running of limitations from the date of accrual through the date all appeals are exhausted. See id. at 156-57. For example, in Hughes, tolling ended when the supreme court overruled the malpractice plaintiffs' motion for rehearing on the appeal of the underlying claim because it was a court's ruling on "the last action of right" that the plaintiffs "could take and did take" with respect to the underlying suit. See id. at 158 n.6. However, in Zive, tolling ended when the supreme court denied the malpractice plaintiff's petition for review. 644 S.W.3d at 177. Thus, the date Hughes tolling ends is the date on which the court where the underlying claim is pending rules on the malpractice plaintiff's last action regarding that claim. See Zive, 644 S.W.3d at 179.
As discussed above, Smith represented Bennett in two prior appellate proceedings-one in the Third Court of Appeals and another in the Texas Supreme Court. See Bennett, 460 S.W.3d at 228; Bennett, 525 S.W.3d 645. After overruling Bennett's motion for rehearing, the supreme court remanded the underlying claim back to the Third Court of Appeals for remittitur, and the Third Court issued its mandate on January 9, 2019. Bennett did not file his original petition until January 29, 2021. Because Bennett filed his original petition well after Hughes tolling ended, whether it was after the Supreme Court denied rehearing or after the new judgment by the Court of Appeals, his malpractice claim-filed over two years later-is barred by limitations.
To the extent that Bennett argues on appeal that Smith did not prove Bennett's knowledge of the mandate, he did not raise this defense in the trial court. See Erikson v. Renda, 590 S.W.3d 557, 563 (Tex. 2019) (providing that the defendant need not negate the discovery rule to prove when the cause of action accrued unless the plaintiff pleads the discovery rule). On the face of the record, the case is barred by limitations because it was filed more than 2 years after Bennett's legal malpractice suit accrued. We hold that Smith conclusively proved that Bennett's claims were time-barred.
Conclusion
We conclude that Smith is entitled to dismissal under the TCPA. Assuming without deciding that Bennett carried his burden to make a prima facie case as to the elements of his claims against Smith, Smith is nonetheless entitled to dismissal under the affirmative defense of statute of limitations. The conduct Bennett complains of falls within the scope of the TCPA. Accordingly, we affirm the judgment of the trial court.