Opinion
NO. 03-19-00908-CV
08-13-2020
Francis Campone and Sai Temple of Spiritual Healing, Inc., Appellants v. Steven Kline and Phaedra Kline, Appellees
FROM THE 98TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-15-004361 , THE HONORABLE MAYA GUERRA GAMBLE, JUDGE PRESIDING MEMORANDUM OPINION
Francis Campone and Sai Temple of Spiritual Healing, Inc., sued Steven and Phaedra Kline for defamation. The trial court granted the Klines' motion for summary judgment, and Campone and Sai Temple appeal. For the reasons explained below, we will reverse the portion of the summary-judgment order awarding the Klines attorney's fees, remand that issue for further proceedings, and affirm the remainder of the summary-judgment order.
BACKGROUND
Campone, a spiritualist minister and healer, started Sai Temple in 2006 and is its president and chief executive officer. The Klines were members of the Sai Temple community, and Steven served as Sai Temple's main volunteer and volunteer coordinator for about five years and was Campone's "right hand man." In 2013, Steven resigned from Sai Temple and ceased his association with it.
In September 2015, Campone filed the underlying lawsuit upon hearing that Steven was telling people that Campone was having "inappropriate sexual relationships with women." The Klines filed a motion to dismiss under the Texas Citizen's Participation Act (TCPA), which the trial court granted. On appeal, this Court affirmed the dismissal order except for Campone's and Sai Temple's claims against Steven related to one conversation that Steven allegedly had with Charlotte Michelson, which claims we remanded for further proceedings because the TCPA motion was untimely as to them. See Campone v. Kline, No. 03-16-00854-CV, 2018 WL 3652231, at *1 (Tex. App.—Austin Aug. 2, 2018, no pet.) (mem. op.). Steven's allegedly defamatory statements to Michelson included that Campone had or was having an affair with a married woman.
Because the factual and procedural background of the parties' relationship and dispute is recounted in detail in our prior opinion, we dispense with any further recitation of the background here. See Campone v. Kline, No. 03-16-00854-CV, 2018 WL 3652231, at *2-4 (Tex. App.—Austin Aug. 2, 2018, no pet.) (mem. op.).
On remand, the Klines filed a traditional and no-evidence motion for summary judgment. The trial court granted the motion without specifying the grounds on which its determination was based, and Sai Temple and Campone appeal.
DISCUSSION
Sai Temple and Campone challenge each ground that the Klines asserted in their summary-judgment motion: (1) that Sai Temple cannot provide any admissible evidence to support three of the requisite four elements of its defamation claim, and that Campone cannot provide any admissible evidence to support two of the requisite elements; (2) that Sai Temple's and Campone's claims are barred by the statute of limitations; (3) that Steven's statement to Michelson was protected by the common-law qualified privilege; and (4) that the Klines are entitled to attorney's fees for the non-Michelson claims that were dismissed under the TCPA, which dismissal was affirmed on appeal. We need address only the second and fourth issues, which dispose of our review.
Whether the discovery rule tolls limitations
In their second issue, Campone and Sai Temple contend that their claims were not barred by the statute of limitations because the limitations period was tolled by the discovery rule, which they pleaded. A one-year statute of limitations applies to an action for defamation, Tex. Civ. Prac. & Rem. Code § 16.002(a), and an action for defamation accrues when the defamatory statement is published, San Antonio Credit Union v. O'Connor, 115 S.W.3d 82, 96 (Tex. App.—San Antonio 2003, pet. denied) (citing Kelley v. Rinkle, 532 S.W.2d 947, 949 (Tex. 1976)). However, the discovery rule applies to an action for defamation when a defamatory statement is "inherently undiscoverable" or not a matter of public knowledge. Velocity Databank, Inc. v. Shell Offshore, Inc., 456 S.W.3d 605, 609 (Tex. App.—Houston [1st Dist.] 2014, pet. denied); Newsom v. Brod, 89 S.W.3d 732, 736 (Tex. App.—Houston [1st Dist.] 2002, no pet.).
To be "inherently undiscoverable," an injury need not be impossible to discover but it must be, by nature, unlikely to be discovered within the prescribed limitations period despite due diligence. S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996). In such cases, the limitations period begins to run when the plaintiff learns, or through the exercise of reasonable diligence should have learned, of the existence of the defamatory statement. Childs v. Haussecker, 974 S.W.2d 31, 37 (Tex. 1998). Whether the discovery rule applies in a given context is a question of law, and whether a party has exercised reasonable diligence in discovering allegedly defamatory statements is generally a fact question. See San Antonio Credit Union, 115 S.W.3d at 96-99.
The Klines contend that Sai Temple's defamation claim is barred as a matter of law because, even if the discovery rule applies, Sai Temple did not join the lawsuit as a plaintiff until March 4, 2016—more than a year after Sai Temple, through Campone, first discovered Kline's alleged communication to Michelson. We agree and conclude, therefore, that the trial court properly granted summary judgment on Sai Temple's defamation claim on the basis of limitations. See Childs, 974 S.W.2d at 37; see also Campone, 2018 WL 3652231, at *9 (holding that because Campone and Sai Temple had actual notice of different alleged instances of Steven's defamation besides the Michelson conversation for more than a year before filing suit, claims arising from those instances were time-barred).
We now turn to Campone's claim that the discovery rule applies and that there is a material fact issue as to whether he exercised reasonable diligence in discovering the Michelson communication. First, we note that Steven's alleged statement to Michelson is a separate actionable communication with an independent injury from the prior alleged statements he made to others. See Texas Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 587 (Tex. App.—Austin 2007, pet. denied) ("Texas law treats each alleged defamatory publication as a single transaction with an independent injury." (citing Akin v. Santa Clara Land Co., 34 S.W.3d 334, 340 (Tex. App.—San Antonio 2000, pet. denied))). Thus, while we must consider the circumstances surrounding the Michelson statement in determining whether Campone's injury was unlikely to be discovered within the limitations period, see S.V., 933 S.W.2d at 7, we must conduct an analysis independent from that which we conducted in Campone, in which we determined whether Steven's alleged statements prior to the Michelson one were time-barred, see Campone, 2018 WL 3652231, at *9 ("Steven showed by a preponderance of the evidence that appellants' claims against him (other than the claim related to Michelson) are time-barred." (emphasis added)).
The relevant circumstances surrounding the Michelson statement include:
• Campone's affidavit testimony that in February 2014—a couple of months before the alleged Michelson conversation—he discovered that Steven had been spreading false rumors about his "having affairs with women who had attended" Sai Temple and "became aware that persons who had been involved in [Sai] Temple's work and in healing sessions were disappearing."
• Campone's affidavit testimony that (a) on February 18, 2014, his wife, Rupal (who was treasurer of the temple), sent Steven a "cease and desist" letter "demanding that he stop making false statements about" Campone, and (b) he and Rupal "did not take any further action regarding the reports that [they] had heard."
• Steven's March 1, 2014 email to Rupal acknowledging receipt of the cease-and-desist letter and responding, "The statement that I made false and defamatory statements against [Campone] is incorrect. Apparently the context of discussions I had with a very few people was not precisely, accurately and completely communicated."
• Michelson's affidavit testimony that, nearly two months later, on April 30, 2014, Steven allegedly told her that Campone "was having an affair with" a married woman.
• Michelson's affidavit testimony that she "attended healing sessions with" Campone beginning in 2007; attended "almost every Monday night session, once per week, until April 2014"; "occasionally participated in [Campone's] intensives and group sessions"; and "made a cash donation in an amount varying between $20.00 and $100.00" at each Monday night session plus a one-time check donation of $5,000.
• Michelson's personal calendar entries indicating that she had nearly weekly meetings with Campone from February 24 through April 22, 2014.
• Michelson's affidavit testimony that after Steven told her about the alleged affair, she "stopped going to see" Campone because she "was afraid of what" Steven had told her.
• Campone's affidavit testimony that, after he and Rupal moved to California in October 2015 in part "because people were no longer attending" Sai Temple or his healing sessions, he "continued to receive requests for healing from persons in Texas and traveled back to Texas to meet with these people as often as [he] was able."
• Campone's affidavit testimony that he returned to Texas in February 2015 because people had requested healing from him, including Michelson; that he had "on at least two [prior] occasions" healed Michelson of "an illness"; and that during his February healing session with Michelson, she told him "for the first time" that she had stopped coming to Sai Temple and asking him for healing because of what Steven had told her in April 2014.
• Michelson's affidavit testimony that although she stopped seeing Campone after what Steven told her because it "infected" her view of Campone's "reputation as a spiritualist, a healer, and as a person," she nonetheless "decided to tell [Campone] about the conversation in February 2015"; "eventually" realized that what Steven had told her "was not true"; and "started seeing [Campone] again" and making donations in October 2015 whenever Campone returned to town.
Besides the alleged affair, Michelson testified that on April 30, 2014, Steven told her that Campone "was a fake" and "never healed anyone"; that he had given Campone a "lot of money" and wanted it back; that Rupal "was a devil worshiper"; that Campone would "drain all the energy" away from Michelson; and that "everyone was going to see [someone else] now for healing."
In light of these circumstances, we conclude that Steven's allegedly defamatory statements to Michelson were not "unlikely to be discovered within the prescribed limitations period despite due diligence." See S.V., 933 S.W.2d at 7. First, and significantly, Campone did discover them during the applicable one-year limitations period—ten months after Steven allegedly made them—but waited seven months after discovering them before filing a lawsuit. Thus—even without any determination as to the level of diligence that these circumstances would require of Campone—it would strain reason to conclude that Campone's actual discovery of his injury during the limitations period could qualify it as the type of injury that is unlikely to be discovered therein.
Secondly, Campone admitted that he and Rupal "took no further actions" to investigate the rumors they had heard Steven was spreading after they sent the cease-and-desist letter, despite the fact that temple attendance dropped significantly thereafter, spurring the couple to move to California about eight months later. Furthermore, Michelson—who had (a) attended weekly healing sessions since 2007 and been a regular donor, (b) been healed at least twice by Campone, and (c) been meeting weekly with Campone in the months leading up to Steven's alleged statement to her—was one of the people who no longer attended Sai Temple in the aftermath of Campone's discovery of Steven's alleged statements. However, Michelson continued to meet with Campone for weekly meetings for at least two-and-a-half months after Campone learned of the first round of allegedly false statements that Steven was making and sent the cease-and-desist letter. Michelson's abrupt cessation of contact with Campone at least two months after Steven had allegedly made false statements to Sai Temple members would likely have put a reasonable person in Campone's circumstances on notice to investigate why she stopped meeting with him and have led to the conclusion that something troubling must have happened since the cease-and-desist letter to have caused Michelson to cease contact with him. Yet, Campone has provided no evidence that he made any attempt to contact Michelson to inquire about her abrupt cessation of contact. Also, Michelson's testimony that, despite ceasing contact with Campone in April 2014 because she was "afraid" of the things Steven had told her about him, she nonetheless reestablished contact with Campone within ten months and chose to tell him about Steven's statements. This indicates that it was not unlikely for Campone to have discovered the statements within the limitations period had he simply exercised due diligence by, for instance, reaching out to Michelson.
We hold that the discovery rule does not apply to the Michelson statements because they were not unlikely to be discovered within the limitations period despite due diligence. See S.V., 933 S.W.2d at 7. The trial court, therefore, properly granted summary judgment in favor of the Klines on their affirmative defense of limitations. Accordingly, we need not address Campone's first and third appellate issues (in which he contends that the trial court erred in granting the Klines summary judgment on their other two asserted grounds: that Campone presented no evidence on the elements of his defamation claim and that the Klines established the affirmative defense of qualified privilege).
Whether the Klines were entitled to summary judgment on their claim for attorney's fees
In their last issue, Campone and Sai Temple contend that the trial court erred in awarding attorney's fees to the Klines on the defamation claims that were dismissed (as affirmed by this Court on appeal) pursuant to the Klines' TCPA motion because there was a material fact issue as to whether the fees were properly segregated. While the TCPA entitles the Klines to an award of reasonable and necessary attorney's fees incurred in pursuing their TCPA motion, see Tex. Civ. Prac. & Rem. Code § 27.009, an award of attorney's fees cannot be made by summary judgment unless there is no material fact issue regarding the amount of fees that was reasonable and necessary, see Tex. R. Civ. P. 166a(a); Melton v. CU Members Mortgage, 586 S.W.3d 26, 37 (Tex. App.—Austin 2019, pet. denied) ("The attorney for the nonmovant may file an affidavit contesting the reasonableness of the movant's attorney's affidavit in support of attorney's fees, thus creating a fact issue.").
The Klines attached the affidavit of their attorney, James A. Reed, to support their request for attorney's fees. Reed averred that he segregated the fees and percentages of fees "applicable solely" to the plaintiffs' remaining, non-dismissed claims from those amounts applicable to the claims that were dismissed under the TCPA, attaching billing records and a spreadsheet he compiled segregating the fees, costs, and expenses.
Campone and Sai Temple contend that the affidavit of their attorney, John Thomas—which they attached to their response to the Klines' summary-judgment motion—creates a material fact issue as to the amount of attorney's fees to which the Klines are entitled with respect to their TCPA motion. Thomas averred that the attorney's fees attested to by the Klines' attorney "are not reasonable or necessary" because they "were not properly segregated from nonrecoverable fees." Thomas's affidavit continues:
The claims dismissed under the TCPA were only those new claims added in Plaintiff's second amended petition . . . . The original claims against Steven Kline that had been on file prior to that time were not dismissed. Yet, Defendants improperly seek to recover attorney's fees and costs for work done on those original claims before [the second amended petition was filed] . . . . Defendants claim 90% of the work done on the motion to dismiss and its appeal should be awarded when a proper allocation would be 50% at most since the dismissal of the core claims against Steven was reversed by the Court of Appeals. Finally, Defendants improperly seek to recover fees and costs for work that would have occurred in connection with the core claims against Steven that were not dismissed, whether or not the dismissed claims were present.
We conclude that Thomas's affidavit created a material fact issue on the reasonableness and necessity of the fees the Klines sought by opining that the Klines were seeking to recover fees and costs for work done before the dismissed claims were added—which assertion is supported by the dated billing records and spreadsheet submitted by Reed—and that Reed allocated too high a percentage to the work that was intertwined with work done on the "core" (Michelson) claims. See Melton, 586 S.W.3d at 37 (remanding issue of attorney's fees awarded on summary judgment for determination of reasonable amount because there was genuine issue of material fact concerning whether award improperly included fees for preparing for first appeal when applicable law did not so allow); Patton v. Teets, No. 03-99-00065-CV, 2000 WL 45650, at *3 (Tex. App.—Austin Jan. 21, 2000, no pet.) (not designated for publication) (concluding that although factual basis for non-movant's attorney's controverting opinion about reasonableness of attorney's fees was "not extensive," it nonetheless constituted "more than a conclusory statement" challenging reasonableness and created fact issue); General Specialties, Inc. v. Charter Nat'l Bank-Houston, 687 S.W.2d 772, 774 (Tex. App.—Houston [14th Dist.] 1985, no writ) (concluding that affidavit of non-movant's attorney averring that there was no direct connection between work actually done on case and amount of fees requested by movant's attorney and that much smaller amount would be reasonable for such work raised fact issue precluding summary judgment). Accordingly, we sustain appellants' fourth issue.
CONCLUSION
We reverse the portion of the trial court's summary judgment awarding the Klines attorney's fees, remand that issue for further proceedings, and affirm the remainder of the trial court's summary judgment.
/s/_________
Thomas J. Baker, Justice Before Chief Justice Rose, Justices Baker and Triana Affirmed in Part; Reversed and Remanded in Part Filed: August 13, 2020