MVS Int'l Corp. v. Int'l Adver. Solutions, LLC

• Decision Date: 11 October 2017
• Docket Number: No. 08-16-00173-CV,08-16-00173-CV
• Citation: 545 S.W.3d 180
• Parties: MVS INTERNATIONAL CORPORATION and Manuel Saturno, Appellants, v. INTERNATIONAL ADVERTISING SOLUTIONS, LLC, Next Level Firm, LLC, Rene Rascon, Appellees.
• Court: Texas Court of Appeals

545 S.W.3d 180

MVS INTERNATIONAL CORPORATION and Manuel Saturno, Appellants,

v.INTERNATIONAL ADVERTISING SOLUTIONS, LLC, Next Level Firm, LLC, Rene Rascon, Appellees.

No. 08-16-00173-CV

Court of Appeals of Texas, El Paso.

October 11, 2017

ATTORNEY FOR APPELLEES: Hon. Doris Sipes, 310 N. Mesa, Suite 310, El Paso, TX 79901.

ATTORNEY FOR APPELLANT: Hon. David M. Mirazo, Mounce, Green, Myers, Safi, Paxson & Galatzan, P. O. Box 1977, El Paso, TX 79999-1977.

Before McClure, C.J., Rodriguez, and Palafox, JJ.

OPINION

ANN CRAWFORD McCLURE, Chief Justice

In this appeal, we deal with the ever-broadening application of TEX.CIV.PRAC.&REM.CODE ANN . § 27.001 et. seq. (West 2015), more commonly referred to as the Texas Citizens Participation Act (TCPA). This case began as a routine collections suit: a creditor sued several debtors for non-payment of a debt, as evidenced by unpaid invoices. The debtors counterclaimed, asserting that several cross-defendants conspired to falsify the invoices, and then communicated the fact of their subsequent non-payment to third-parties. The counterclaim triggered the creditors' use of the TCPA seeking to dismiss various counts of the counterclaim. While denying they improperly conspired or made the specific derogatory communications complained of, the creditors contended that the communications as alleged would implicate their rights to free speech, right of petition, and right of association as those terms are uniquely defined by the TCPA. After it dismissed some, but not all, of the counterclaims for other reasons, the trial court decided the TCPA motion was moot. We disagree with that conclusion reverse and remand in part.

FACTUAL SUMMARY

This suit began as an action to collect a debt. MVS International Corp. (MVS) sued International Advertising Solutions, LLC (IAS) and Next Level Firm, LLC (Next Level) for $60,115.45 allegedly owed for unpaid advertising and other services. MVS runs a radio station. IAS and Next Level are advertising agencies that buy ad time and design media campaigns on behalf of their clients.

This otherwise mundane commercial dispute took an unusual twist when IAS and Next Level, along with their principal, Rene Rascon, (collectively the Appellees) filed an Original Counterclaim and Third Party Claim. The pleading added new parties, including MVS’s General Manager, Manuel Saturno. It also added Southwest University and its principals as defendants (Southwest defendants).¹ The gist of the Counterclaim’s factual allegations contend that in 2014, Rascon and the Southwest defendants settled a legal dispute between themselves, but the Southwest defendants continued to harbor animosity towards Rascon. The Southwest defendants and Saturno were close friends, and allegedly developed a plan to injure the credit and business reputation of Appellees. According to the Counterclaim, the Southwest defendants paid Saturno $300,000 in exchange for MVS changing computerized invoice records to add false charges to Appellees' accounts. MVS would then sue on the unpaid invoices as evidenced by the original petition in this case. The Counterclaim further alleged that MVS and Saturno reported to the credit bureaus that the false billings were unpaid, and published to "other public media outlets" that Appellees were "deadbeats" and advised others not to do business with them.

After deposing Rascon and serving paper discovery, MVS and Saturno responded to the Counterclaim with a series of motions. They moved to dismiss under TEX.R.CIV.P. 13 and 91a, as well as TEX.CIV.PRAC.&REM.CODE ANN. § 9.011 and § 10.001 (West 2017). And pertinent to this appeal, they filed a motion on April 4, 2016, to dismiss the case under the TCPA. The TCPA motion claimed that the allegations in the Counterclaim were based on, related to, or were asserted in response to Appellants' right to free speech, right to petition and right of association.

Appellees responded by filing Defendants' Supplemental Answer and Counter Plaintiffs and Third Party Plaintiffs Amended Claims (the amended Counterclaim).² The amended pleading omitted some earlier factual allegations, such as the contention that the counter-defendants had reported the bad debt to the credit bureaus, or had somehow retrieved and changed filings made with the FCC. The core of the factual allegations, however, were the same: based on an agreement with the Southwest defendants and payment from them, MVS and Saturno had changed and falsified its invoices for advertising that consequently went unpaid.

They then reported the bad debt along with other disparaging comments to others in the industry who stopped doing business with Appellees.

From these factual allegations, Appellees alleged these causes of action: (1) civil conspiracy; (2) breach of contract; (3) fraud; (4) interference with business relations; (5) business disparagement; (6) defamation and intentional infliction of emotional distress; (7) violation of the Deceptive Trade Act and (8) spoliation. MVS and Saturno filed a supplement to their TCPA motion to dismiss, addressing the newly added causes of action.

Appellees then filed a First Supplemental Claim for Breach of Settlement Agreement alleging that the Southwest defendants had agreed to a non-disparagement clause in their earlier settlement agreement. They claimed that the Southwest defendants breached that clause by defaming them, and accused Rascon of having stolen from the Southwest defendants. The supplemental petition further claimed that the Southwest defendants enlisted MVS and Saturno "to repeat such statements to other media outlets." The supplemental petition described MVS and Rascon as agents of the Southwest defendants for spreading the derogatory information to other media outlets.

The trial court granted MVS and Saturno’s Rule 91a motion in part, dismissing Appellees' DTPA, statutory fraud, breach of FCC rules, breach of Chapter 32 of the Texas Penal Code, and spoliation claims. The trial court also dismissed the infliction of emotional distress claims made by the corporate entities IAS and Next Level. Finally, the trial court dismissed the breach of contract claims asserted against Saturno individually. The court awarded MVS and Saturno attorney’s fees under their Rule 91a motion. After noting that the Rule 91a and TCPA motions were argued together, the trial court concluded that the TCPA motion was moot. MVS and Saturno then filed this interlocutory appeal. TEX.CIV.PRAC.&REM.CODE ANN. § 51.014(a)(12) (West Supp. 2016)(authorizing an appeal from an interlocutory order that "denies a motion to dismiss filed under [the TCPA]").

CONTROLLING LAW

The Legislature passed the TCPA 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 ANN. § 27.002. To that end, we are to construe the act "liberally to effectuate its purpose and intent fully." Id. § 27.011(b).

The Act provides a two-step process to protect the exercise of those rights. ExxonMobil Pipeline Co. v. Coleman , 512 S.W.3d 895, 898-99 (Tex. 2017) ; In re Lipsky , 460 S.W.3d 579, 586 (Tex. 2015) (orig. proceeding). Under the first step, a defendant invokes the TCPA by timely moving to dismiss a claim upon an initial showing, supported by a preponderance of the evidence, that the plaintiff’s claim "is based on, relates to, or is in response to the [movant’s] exercise of: (1) the right of free speech; (2) the right to petition; or (3) the right of association." TEX.CIV.PRAC.&REM.CODE ANN. § 27.005(b).

Though the stated purpose of the TCPA is to protect certain constitutionally protected rights, the manner in which those rights are statutorily defined is not coextensive with constitutional jurisprudence. For instance, the TCPA defines "exercise of the right of free speech" as "a communication made in connection with a matter of public concern." Id. at § 27.001(3). A communication is broadly defined to include "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). A matter of public concern "includes an issue related to: (A) health or safety; (B) environmental, economic, or community well-being; (C) the government; (D) a public official or public figure; or (E) a good, product, or service in the marketplace." Id. § 27.001(7). Applying this language, the Texas Supreme Court held that "the plain language of the Act merely limits its scope to communications involving a public subject—not communications in public form." Lippincott v. Whisenhunt , 462 S.W.3d 507, 509 (Tex. 2015). The court reiterated that view in Coleman , holding that internal communications between company employees were protected by the Act. Coleman , 512 S.W.3d at 901 ; see also Elite Auto Body LLC v. Autocraft Bodywerks, Inc. , 520 S.W.3d 191, 202 (Tex.App.—Austin, no pet. h.) ("Very recently, however, the Texas Supreme Court in Coleman seems to have put to rest any notion that any constitutional connotations of ‘right of association,’ ‘right of free speech,’ or ‘right to petition’ should inform the meaning of the TCPA’s corresponding ‘exercise of’ definitions....").

If the defendant successfully makes a showing under the first step, then the burden shifts to the plaintiff to "establish[ ] by clear and specific evidence a prima facie case for each essential element of the claim in question." [Emphasis added]. Id. § 27.005(c). The Act does not define the term "clear and specific evidence." We therefore give the words their plain or common meaning. FKM P’ship, Ltd. v. Bd. of Regents of Univ. of Hous. Sys. , 255 S.W.3d 619, 633 (Tex. 2008) (use of plain or common meaning when words or phrases are not defined by statute or have not acquired a special or technical meaning). The ...