Opinion
No. 05-18-00039-CV
06-07-2018
LEGACYTEXAS BANK, LEONARD NICHOLSON, AND SHEEBA EAPEN, Appellants v. JAMES I. HARLAN, AN INDIVIDUAL, D/B/A JAMES I. HARLAN ATTORNEY AT LAW, Appellee
On Appeal from the 219th Judicial District Court Collin County, Texas
Trial Court Cause No. 219-04475-2017
MEMORANDUM OPINION
Before Justices Lang, Myers, and Stoddart
Opinion by Justice Stoddart
James I. Harlan, individually and on behalf of James I. Harlan Attorney at Law, brought numerous tort claims against LegacyTexas Bank, Leonard Nicholson, and Sheeba Eapen (collectively, "Legacy"). Legacy filed a motion to dismiss the claims pursuant to the Texas Citizens Participation Act ("TCPA") and the trial court denied the motion. In five issues, Legacy argues: (1) the trial court erred by denying the motion to dismiss; (2) Legacy established by a preponderance of the evidence that Harlan's claims relate to Legacy's right of free speech; (3) Harlan's claims are barred by absolute privilege applicable to judicial proceedings; (4) Harlan did not establish by clear and specific evidence a prima facie case of each element of each cause of action; and (5) the trial court erred by awarding attorney's fees to Harlan. We reverse the trial court's order, render judgment of dismissal with prejudice as to all causes of action, and remand to the trial court for further proceedings consistent with this opinion.
FACTUAL BACKGROUND
Harlan, an attorney, sought to cash three checks he received from a client at a LegacyTexas Bank at the Shops at Legacy in Plano, Texas. When the bank declined, Harlan asked Eapen, a Manager/Vice President for Legacy's Banking Center at the Shops at Legacy, why the bank would not cash the checks. Rather than providing an explanation, Eapen told Harlan to speak to his client. Harlan then threatened to sue the bank and Eapen and told Eapen the bank would terminate her employment in response to his lawsuit. Following the encounter, Eapen spoke to Nicholson, the bank's Associate General Counsel, and Nicholson subsequently sent a letter to Harlan stating:
LegacyTexas Bank endeavors to maintain a safe and harassment-free work environment. We have been notified that your recent interaction with our staff on or about August 12, 2016 has compromised that environment and therefore necessitate [sic] that you please refrain from using our banking centers until such time as a more professional decorum can be maintained.Other than Harlan, Nicholson did not show the letter to any person outside of Legacy.
Because your presence is no longer welcome on any LegacyTexas Bank property, our staff has been made aware of this fact and if you do enter any LegacyTexas Bank property, staff is instructed to immediately contact the police.
Harlan sued Legacy for defamation, intentional infliction of emotional distress, abuse of process, tortious interference with prospective business relations, and civil conspiracy. Harlan's claims are based on the communications between Nicholson and the bank's staff, as noted in Nicholson's letter. In response, Legacy filed a motion to dismiss pursuant to the TCPA, which the trial court denied. This appeal followed.
LAW & ANALYSIS
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 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. Initially the moving party must show by a preponderance of the evidence that the TCPA properly applies to the legal action against it, meaning, in this case, Legacy had to show the legal action is based on it exercise of the right of free speech. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b). If the movant meets its 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 shifts back to the movant to prove each essential element of any valid defenses by a preponderance of the evidence. Id. § 27.005(d).
We first consider whether Legacy met its burden. Legacy asserts Harlan's legal action is based on, relates to, or is in response to its exercise of the right of free speech and the communication to its employees was a matter of public concern. The statute defines the "exercise of the right of free speech" as a communication made in connection with a matter of public concern. Id. § 27.001(3). The statute further defines "matter of public concern" as an issue related to, among other things, "health and safety." Id § 27.001(7)(A). The statute does not require the communication be made publically. See ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 900 (Tex. 2017) ("we determined that the TCPA's plain language does not require communication in public form.").
Legacy attached an affidavit from Nicholson to its motion to dismiss. Nicholson avers he received information from Eapen regarding Harlan's conduct at the bank and, based on that information, he concluded Harlan:
was rude and harassing to Legacy personnel, threatened to get Legacy personnel fired, threatened harm to that personnel, and threatened suit against Legacy and/or its employees. Based on the seriousness of [Harlan's] conduct at the bank that was conveyed to me, I determined that [Harlan] should not be allowed to enter any Legacy property to protect Legacy's employees and customers from harassment and potential physical harm. . . . Based upon my concern for the safety of Legacy's
employees and Legacy's customers, caused solely by [Harlan's] conduct, I sent [Harlan] a letter . . . As stated in that letter, I made Legacy's staff aware by a telephone call to Sheeba Eapen that [Harlan] was no longer allowed in any Legacy facility and instructed them to contact the police if he entered onto Legacy's property. Again, I conveyed this information in [sic] for the safety and concern of Legacy's employees and customers. . . . I considered my statements about [Harlan] to be of significant public interest and public concern because they related to [the] safety and welfare of Legacy's employees and customers. I believed at the time, and still believe, that my statements were necessary to protect Legacy's employees and customers, and that Legacy's staff had a right to know about [Harlan's] conduct to prevent any further incidences.
The communication about Harlan from Nicholson to the bank's employees does not appear in the record. However, based on the description of the statement in Nicholson's affidavit, we conclude Legacy met its burden to show the communication related to a matter of public concern because it related to the safety and welfare of Legacy's employees and customers. See id. at 901 (citing TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(7)(A), (B)). We conclude Legacy met its burden to establish the TCPA applies to Harlan's lawsuit under the TCPA's free-speech prong.
Harlan argues the commercial-speech exemption removes this action from the TCPA. Harlan bore the burden to show the applicability of the commercial-speech exemption. See Kirkstall Rd. Enterprises, Inc. v. Jones, 523 S.W.3d 251, 253 (Tex. App.—Dallas 2017, no pet.). The commercial-speech exemption states the TCPA "does not apply to a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, . . . or a commercial transaction in which the intended audience is an actual or potential buyer or customer." TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(b). The intended audience of the statement must be the defendant's actual or potential customers. Castleman v. Internet Money Ltd., No. 17-0437, 2018 WL 1975039, at *5 (Tex. Apr. 27, 2018) (per curiam). The statement that forms the basis of Harlan's causes of action was made by Nicholson to the bank's employees. Harlan has not shown those employees are the bank's actual or potential customers. See id. Because Harlan did not show the speech was made to "an actual or potential buyer or customer," we conclude he failed to meet his burden to show the commercial-speech exemption applies.
We sustain Legacy's second issue.
Once Legacy met its burden, the burden shifted to Harlan to establish by clear and specific evidence a prima facie case for each essential element of his claims. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c). Harlan initially argues his causes of action are adequately pleaded based on the fair notice pleading standard of Texas Rule of Civil Procedure 47 and, therefore, he satisfied his burden. The Texas Supreme Court rejected this argument. See In re Lipsky, 460 S.W.3d at 590-91 ("Because the [TCPA] requires more, mere notice pleading—that is, general allegations that merely recite the elements of a cause of action—will not suffice."). Harlan next asserts he met his burden as defined by the statute. We consider each of his causes of action in turn.
A. Defamation
The essential elements of defamation when, as here, the party complaining of defamation is a private individual, are a false statement of fact (1) that was published to a third party; (2) defamed the complaining party; (3) was made with negligence; and (4) caused damages. Id. at 593. If the statement is defamatory per se, general damages such as loss of reputation and mental anguish are presumed. Id. In his affidavit filed in the trial court in opposition to Legacy's motion to dismiss, Harlan contends defamatory statements were made by Nicholson to bank employees about his interaction with Eapen. However, Harlan provided no evidence of the statement allegedly made by Nicholson to the bank staff. Thus, he did not provide clear and specific evidence Legacy made a false statement of fact or that the statement defamed him. Because Harlan failed to present clear and specific evidence of at least two elements of his defamation claim, we need not consider whether he provided evidence of the other elements.
B. Intentional Infliction of Emotional Distress
To establish a claim for intentional infliction of emotional distress, the complaining party must prove conduct that (1) was intentional or reckless; (2) was extreme and outrageous; and, (3) caused severe emotional distress. See GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 611 (Tex. 1999). Severe emotional distress means distress so severe that no reasonable person could be expected to endure it without undergoing unreasonable suffering. Williams v. First Tennessee Nat. Corp., 97 S.W.3d 798, 805 (Tex. App.—Dallas 2003, no pet.); see also GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 618 (Tex. 1999). Mere worry, anxiety, vexation, embarrassment, or anger are not enough, and there must be a high degree of mental pain and distress, but evidence of a physical manifestation is not required. Parkway Co. v. Woodruff, 901 S.W.2d 434, 443-44 (Tex. 1995); Williams, 97 S.W.3d at 805.
Harlan offers no evidence of any of the elements of intentional infliction of emotional distress, including that he suffered severe emotional distress. Harlan's affidavit states: "The disparaging correspondence from the Defendants are hurtful and the threat of criminal prosecution has had a chilling effect on me and has caused me not only a fear of a loss of a professional reputation regarding my honesty, virtue, integrity or reputation, but also serious mental anguish and emotional pain and suffering." However, this is not evidence of distress so severe that no reasonable person could be expected to endure it without undergoing unreasonable suffering. Because Harlan failed to present clear and specific evidence establishing a prima facie case for at least one element of his intentional infliction of emotional distress claim, we need not consider whether he provided evidence of the other elements.
C. Abuse of Process
An abuse-of-process claim requires: "(1) an illegal, improper, or 'perverted' use of the process, neither warranted nor authorized by the process, (2) an ulterior motive or purpose in exercising such use, and (3) damages as a result of the illegal act." Martinez v. English, 267 S.W.3d 521, 528 (Tex. App.—Austin 2008, pet. denied); see also Abuse of Process, BLACK'S LAW DICTIONARY (10th ed. 2014) ("The improper and tortious use of a legitimately issued court process to obtain a result that is either unlawful or beyond the process's scope."). Again Harlan offers no evidence in support of any of these elements. In his brief, Harlan states:
Harlan has already brought Appellants' abuses of process before the courts in various manners. For instance, Harlan's supplement to his Response to Defendants' Motion to Dismiss (and as here) demonstrated Appellants' inappropriate use of [TACP]. In the trial court, Harlan pointed out that the Bank's reliance on the statute was wholly pretextual and fabricated, that it falsely claimed applicability of the statute when the Bank was clearly ineligible to apply the statute, that its use was inapposite, and that the arguments used in its presentation were inapposite.If we assume the statements in Harlan's brief are the types of allegations that an abuse-of-process claim is meant to address, Harlan's argument is not evidence. Harlan failed to present clear and specific evidence establishing a prima facie case for any element of his abuse-of-process claim.
D. Tortious Interference with Prospective Business Relationships
A claim for tortious interference with prospective business relationships requires the claimant show: (a) a reasonable probability the plaintiff would have entered into a business relationship with a third party; (2) the defendant acted with a conscious desire to prevent the relationship from occurring or knew the interference was certain or substantially certain to occur as a result of the conduct; (3) the defendant's conduct was an independently tortious or unlawful act; (4) the interference proximately caused the plaintiff injury; and (5) the plaintiff suffered actual damage or loss as a result. Coinmach Corp. v. Aspenwood Apt. Corp., 417 S.W.3d 909, 923 (Tex.2013); Miller v. Talley Dunn Gallery, LLC, No. 05-15-00444-CV, 2016 WL 836775, at *15 (Tex. App.—Dallas Mar. 3, 2016, no pet.). Harlan did not provide any evidence of any element of this cause of action. In his brief, Harlan concedes he "has not yet been able to address all the required elements of tortious interference."
E. Civil Conspiracy
An action for civil conspiracy has five elements: (1) a combination of two or more persons; (2) the persons seek to accomplish an object or course of action; (3) the persons reach a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts are taken in pursuance of the object or course of action; and (5) damages occur as a proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005). Assuming Legacy's evidence that Eapen and Nicholson spoke to one another is sufficient to provide clear and specific evidence of the first element, Harlan failed to provide evidence of the other elements. In his brief, Harlan, without citation to the record, argues events occurred that would satisfy his burden. However, these events are not recited in his affidavit and he provided no other evidence to the trial court. Thus, we conclude Harlan failed to present clear and specific evidence establishing a prima facie case for the second, third, fourth, and fifth elements of his civil conspiracy claim.
We conclude Harlan failed to meet his burden to prove by clear and specific evidence a prima facie case of each essential element of each claim. We sustain Legacy's fourth issue.
Because we conclude Legacy met its burden to show by a preponderance of the evidence that the legal action is based on, relates to, or is in response to its exercise of the right of free speech, but Harlan did not meet his burden to establish by clear and specific evidence a prima facie case for each essential element of each of his claims, we conclude the trial court erred by denying Legacy's motion to dismiss. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005. We sustain Legacy's first issue.
Based on our resolution of Legacy's first, second, and fourth issues, we need not consider Legacy's argument in its third issue that Harlan's claims are barred by an absolute privilege applicable to judicial proceedings. See TEX. R. APP. P. 47.1.
In its fifth issue, Legacy argues the trial court erred by awarding attorney's fees to Harlan. The TCPA requires that a court that orders dismissal of a legal action under the chapter shall award the movant:
(1) court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require; andTEX. CIV. PRAC. & REM. CODE ANN. § 27.009 (a). Because we order dismissal of Harlan's claims, Harlan was not entitled to recover the relief provided for by section 27.009(a), but Legacy is. We sustain Legacy's fifth issue. We remand the cause to the trial court to award the relief provided for in section 27.009(a).
(2) sanctions against the party who brought the legal action as the court determines sufficient to deter the party who brought the legal action from bringing similar actions described in this chapter.
CONCLUSION
The trial court erred by denying Legacy's motion to dismiss and by awarding attorney's fees to Harlan. We reverse the trial court's denial of Legacy's motion to dismiss as to all causes of action and render judgment of dismissal with prejudice. We remand this cause to the trial court to award the relief provided for in section 27.009(a) of the civil practice and remedies code to Legacy.
/Craig Stoddart/
CRAIG STODDART
JUSTICE 180039F.P05
JUDGMENT
On Appeal from the 219th Judicial District Court, Collin County, Texas
Trial Court Cause No. 219-04475-2017.
Opinion delivered by Justice Stoddart. Justices Lang and Myers participating.
In accordance with this Court's opinion of this date, the trial court's order denying the motion to dismiss is REVERSED and judgment is RENDERED dismissing claims brought by James I. Harlan, an individual and d/b/a James I. Harlan Attorney At Law against appellants LegacyTexas Bank, Leonard Nicholson, and Sheeba Eapen with prejudice. The Court REMANDS the cause to the trial court to consider any request for relief by appellants pursuant to Texas Civil Practice and Remedies Code § 27.009(a).
It is ORDERED that appellant appellants LegacyTexas Bank, Leonard Nicholson, and Sheeba Eapen recover their costs of this appeal from appellee James I. Harlan, an individual and d/b/a James I. Harlan Attorney At Law. Judgment entered this 7th day of June, 2018.