Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc.

• Decision Date: 02 June 2016
• Docket Number: NO. 01–14–00687–CV,01–14–00687–CV
• Citation: 500 S.W.3d 26
• Parties: The Better Business Bureau of Metropolitan Houston, Inc., The Better Business Bureau of Metropolitan Houston Education Foundation, Dan Parsons, Chris Church, Church Enterprises, Inc., Gary Milleson, Ronald N. McMillan, D'Artagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow, Appellants v. John Moore Services, Inc. and John Moore Renovation, LLC, Appellees
• Court: Texas Court of Appeals

500 S.W.3d 26

The Better Business Bureau of Metropolitan Houston, Inc., The Better Business Bureau of Metropolitan Houston Education Foundation, Dan Parsons, Chris Church, Church Enterprises, Inc., Gary Milleson, Ronald N. McMillan, D'Artagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow, Appellants

v.John Moore Services, Inc. and John Moore Renovation, LLC, Appellees

NO. 01–14–00687–CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued June 2, 2016

Bobbie L. Stratton, Lori Hood, Douglas Pritchett, Jr., Tamar Madden, for Appellee.

Lauren B. Harris, Susan K. Hellinger, Jeffrey R. Elkin, M. Harris Stamey, for Appellant.

Panel consists of Justices Keyes, Bland, and Massengale.

OPINION

Jane Bland, Justice

This is a second state court lawsuit involving parties who are in a dispute over membership in an association that circulates business ratings to consumers in the Houston area, and the ratings themselves. Our court dismissed the first suit based on the Texas Citizens' Participation Act. See Tex. CIv. Prac. & Rem. CODE ANN. §§ 27.001 –27.011. In this interlocutory appeal in the second lawsuit, we determine whether we have jurisdiction over the appeal. Concluding that we do, we examine whether the requirements for dismissal under the TCPA have been met in the second state court lawsuit. We conclude that they have. Accordingly, we reverse the denial by operation of law of the motion to dismiss under the TCPA and remand the case for the trial court to award court costs, reasonable attorney's fees, and other expenses incurred by the appellants in defending themselves against John Moore's legal action, and impose sanctions on John Moore as the trial court determines sufficient to deter John Moore from bringing similar actions.See id. § 27.009(a).

BACKGROUND

The Better Business Bureau of Metropolitan Houston, Inc. (the Houston BBB), the Better Business Bureau of Metropolitan Houston Education Foundation, Dan Parsons, Chris Church, Church Enterprises, Inc., Gary Milleson, Ronald N. McMillan, D'Artagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow appeal the trial court's denial by operation of law of their motion to dismiss brought under the TCPA. The Houston BBB is a non-profit corporation that provides the general public with consumer information and reviews about local businesses. John Moore Services, Inc. and John Moore Renovation, LLC, (collectively, John Moore) are home services companies that provide plumbing, electrical, security and home renovation services to consumers in Houston and the surrounding areas. Don Valentine is the Owner and President of John Moore. Dan Parsons is the Chief Executive Officer of the Houston BBB. Valentine is a former Chairman of the Houston BBB Board of Directors, and John Moore was a member of the Houston BBB from 1971 until it resigned in November 2010.

The parties are embroiled in a dispute over the Houston BBB's ratings for local area businesses that it publishes on its website. Before December 2010, the Houston BBB published an “A+” rating for John Moore. Around that time, the BBB changed its ratings criteria, which adversely affected John Moore's BBB rating. John Moore protested the changes but could not persuade the Houston BBB to raise John Moore's rating, leading John Moore to resign its membership in the Houston BBB. John Moore's resignation coincided with the Houston BBB's decision to revoke John Moore's accreditation and membership with the Houston BBB.

John Moore continued to use the Houston BBB's logo in its advertising about awards that John Moore had received from the Houston BBB in the past; the Houston BBB viewed these displays as an infringement on its trademark, and claimed that its rules provide that only currently accredited Houston BBB members may advertise using the Houston BBB logo. John Moore also attempted to affiliate with other branches of the BBB, namely the Bryan–College Station BBB and the Dallas BBB, by contending that its “home office” was now located in these cities. When an investigation revealed that John Moore did not have operations in these cities, the branches rescinded its affiliation with them. In April 2012, the Houston BBB gave John Moore an “F” rating and posted information about the parties' dispute. In the two years prior to that rating, John Moore was listed as “NR” or “not rated” because its business headquarters was listed as having moved, first to Bryan–College Station, and then to Dallas.

The Houston BBB sued John Moore in federal court, seeking a declaration that John Moore desist in using its name and logos. See Cause No. 4:12–CV–00964; Better Bus. Bureau of Metro. Houston, Inc. et al. v. John Moore Servs., Inc. et al. ; in the United States District Court for the Southern District of Texas, Houston Division. The parties resolved the federal suit when Don Valentine filed a declaration that John Moore would no longer use the Houston BBB name or logo.

John Moore then filed two state court lawsuits, including the one that has prompted this appeal. Because the relationship between the first and second lawsuits factors in our disposition, we discuss the procedural history of both.

The First Lawsuit

The first state court lawsuit involved most of the parties to this appeal, and this court thoroughly described the background of that case in the course of deciding an interlocutory appeal.See Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 350–51 (Tex.App.—Houston [1st Dist.] 2013, pet. denied) (BBB I ). In summary, John Moore sued the Houston BBB, alleging numerous causes of action relating to the Houston BBB's business ratings and reviews. Id. at 351. John Moore alleged claims for fraud, tortious interference with existing and prospective business relationships, business disparagement and defamation.

The Houston BBB moved to dismiss under the TCPA, asserting that John Moore's legal action was “based on, relates to, or is in response to” the exercise of the Houston BBB's right of free speech and that John Moore lacked evidence that demonstrated a prima facie case for each element of its claims. Id. After the trial court denied the motion to dismiss, the Houston BBB filed an interlocutory appeal. Tex. Civ. Prac. & Rem. CODE ANN. § 27.003.

While that appeal was pending, the trial court issued a docket control order, which required joinder of any additional party by November 16, 2012, and imposed an April 6, 2013 deadline for filing amended and supplemental pleadings. That docket control order set trial for July 5, 2013. The parties proceeded with discovery and, when the docket deadlines neared, filed an agreed motion for continuance, which the trial court granted. The new docket control order extended the pleading amendment deadline until July 26, 2013, and reset trial for October 21, 2013.

On July 16, 2013, our court issued an opinion reversing the trial court's denial of the Houston BBB's motion to dismiss the first lawsuit under the TCPA. Our court held that the Houston BBB had satisfied its burden under the TCPA to show that John Moore's claims in the lawsuit related to or were in response to the exercise of the Houston BBB's right of free speech. Furthermore, our court determined that John Moore had failed to sustain its burden to avoid dismissal under the TCPA. Id. Accordingly, our court remanded the case for proceedings to award costs, attorney's fees, expenses, and sanctions as mandated under the TCPA. Id.

John Moore then filed an amended petition in the trial court in BBB I —two months after the trial court's extended pleading amendment deadline and this court's first opinion in the case. The amended petition added members of the Houston BBB's board of directors, the Houston BBB's president, and the Houston BBB's Education Foundation. The amended petition alleged the following:

• The Better Business Bureau of Metropolitan Houston Education Foundation: John Moore claimed that the Foundation's director encouraged John Moore to display the Award of Excellence emblem and the BBB logo in its advertising, which became an issue between the parties. The Foundation also was a party to the federal trademark infringement lawsuit against John Moore.

• Dan Parsons, the Houston BBB President: According to the amended petition, Parsons, “engaged in a personal campaign to damage John Moore's business throughout Texas” by manipulating and misleading the Houston BBB board and committee members into seeking revocation of John Moore's membership and by influencing other regional Bureaus into denying John Moore headquarter status outside of Houston.

• Houston BBB Board of Directors members: Chris Church, Gary Milleson, Ronald N. McMillan, D'Artagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow are named as directors who allegedly conspired with Parsons and the Houston BBB to end John Moore's membership status, arbitrarily change its rating by the Houston BBB, and unlawfully restrain John Moore by impairing its ability to compete in and forcing it from the Houston market.

The amended petition also added state law antitrust claims against the Houston BBB and the other defendants, based on an alleged tying agreement to produce “unbiased ratings and fair commentary.” On the Houston BBB's motion, the trial court struck John Moore's amended pleading, relying on the automatic stay provision of Chapter 51 of the Civil Practice and Remedies Code, which the Legislature had by that time amended to apply to TCPA appeals. See Tex. Civ. Prac. & Rem. CODE ANN. § 51.014(a)(12) (West 2015) (eff.Jun. 14, 2013).

John Moore petitioned the Supreme Court of Texas for review of our court's decision in the interlocutory appeal. See id. § 51.014(b) (West 2015). The Supreme Court denied John Moore's petition for review on February 14, 2014. John Moore Servs., Inc. v. Better Bus. Bureau of Metro. Houston, Inc., No. 13–0658 (Tex. Feb. 14, 2014). At that point, BBB I returned to the trial court for the required...