Wetmore v. Bresnen, 03-18-00467-CV
| Decision Date | 18 December 2019 |
| Docket Number | NO. 03-18-00467-CV,03-18-00467-CV |
| Parties | Benjamin Wetmore, Appellant v. Steve Bresnen, Appellee |
| Court | Texas Court of Appeals |
NO. D-1-GN-15-002332, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING
In this interlocutory appeal, Benjamin Wetmore—a nonparty to the underlying suit—challenges the trial court's denial of his Texas Citizens Participation Act (TCPA) motion to dismiss both Steve Bresnen's postjudgment subpoena to depose Wetmore and a related motion to compel and for sanctions. See generally Tex. Civ. Prac. & Rem. Code §§ 27.001-.011; see also id. § 51.014(a)(12) (). For the reasons stated below, we affirm.
This interlocutory appeal arises out of an underlying lawsuit between Bresnen and the American Phoenix Foundation, Inc. (APF), a Texas nonprofit corporation. On May 26, 2015, Bresnen sent a letter to APF requesting to inspect its financial records under sections 22.352 and 22.353 of the Texas Business Organizations Code. See Tex. Bus. Org. Code §§ 22.352 (Financial Records and Annual Reports), .353 (Availability of Financial Information for Public Inspection). After APF declined the request, Bresnen sued in Travis County district court seeking both a writ of mandamus requiring APF to comply with Bresnen's request and temporary injunctive relief requiring APF to maintain the records in proper form. Wetmore was originally APF's attorney of record, but in June 2016 he moved to withdraw because of "ethical considerations" and APF's previously stated desire to terminate representation. The district court granted the withdrawal request in December 2016. Bresnen then applied for the court to enter an order appointing a receiver for APF.
On January 4, 2017, APF filed a certificate of termination with the secretary of state to wind up the entity. Three days later, the district court entered a default judgment, noting that APF "appeared by and through its custodian of records, Joseph Basel"—APF's CEO—but "did not appear by counsel and wholly made default." The district court awarded a writ of mandamus directing Basel, as custodian of APF's records, to produce specified financial records and a financial report to Bresnen. The district court then appointed Dan Shelley as receiver to take possession of certain designated APF business records and "to perform such actions with respect to the claims in this action as may be permitted by law for terminated not-for-profit corporations."
In early February 2018, Bresnen served Wetmore with a subpoena and deposition notice. Wetmore responded with a motion to quash and Bresnen, in turn, responded with a motion to compel the deposition. In his motion to compel, Bresnen alleged that Wetmore and Basel "withdrew several hundred thousand dollars from [APF's] bank account" in 2015 through 2016 and "paid that money to themselves and companies they control," but that "there are no invoices, receipts, payment records, accounting files or any other documentation to support these payments."Because the records at the time of the transaction were maintained at "Wetmore's personal residence," according to Bresnen, he sought "to take the deposition of Mr. Wetmore in aid of the Court's January, 2017 judgment which commanded that those records be provided to Plaintiff."
On February 21, the district court entered an order that Wetmore show cause on March 7 that he provided Shelley with the required information. After the show cause hearing, the district court signed an order granting the motion to compel and ordering that Wetmore appear for a deposition on March 12. Wetmore did not attend the March 12 deposition and instead filed a notice of appeal from the order to compel the deposition, which we later dismissed for want of prosecution.1 See Wetmore v. Bresnen, No. 03-18-00158-CV, 2018 WL 3078892, at *1 (Tex. App.—Austin June 22, 2018, no pet.) (mem. op.).
After Wetmore missed the deposition, Bresnen filed a motion to enforce the deposition order and for contempt. After a hearing, the trial court issued a show cause notice requiring Wetmore to appear and demonstrate why he should not be held in contempt for failing to appear for his deposition. After the show cause hearing, the district court signed an order of discovery sanctions against Wetmore in the amount of $1,288.70 for failing to appear for the deposition and ordered Wetmore to attend and give deposition testimony on April 3. On April 3, Wetmore appeared for a deposition and notified counsel that he was represented by an attorney who desired to appear by telephone. On April 5, Bresnen filed another motion to compel and forsanctions, complaining that Wetmore's attorney admitted he was not authorized to practice in Texas, provided argumentative objections during the deposition, and instructed Wetmore not to answer questions in bad faith.
On April 10, Wetmore filed a motion to dismiss under the TCPA as a "non-party subpoenaed witness and former counsel to Defendant" APF. In his TCPA motion, Wetmore raised standing issues; complained that the district court was "issu[ing] illegal orders compelling post-judgment discovery on matters unrelated to his underlying case . . . under threat of contempt and jail"; asserted that Bresnen's "recent efforts to compel the testimony of Mr. Wetmore expose [Bresnen]'s attempt to hijack the court as his own tool of discovery abuse"; and requested "dismissal of [Bresnen]'s case" under the TCPA. Wetmore asserted that because he had "established by a preponderance of the evidence that [Bresnen]'s suit and illegal attempts to compel deposition testimony relate to [APF]'s (and by extension, Mr. Wetmore's) exercise of his first amendment rights . . . the burden shifts" to Bresnen under the TCPA to establish each essential element of the claims in question, which Bresnen cannot do because "his remedy has already been achieved by having been granted a default judgment."
Bresnen filed special exceptions to Wetmore's motion, asserting that "Wetmore's motion to dismiss, however, fails to specify how Bresnen's motion [to compel and for sanctions] affects his 'exercise' of any of the rights protected by that statute" and that the application of the TCPA "in this context is unconstitutional because it would deprive this Court of its inherent authority to enforce its own orders." After a hearing, the district court sustained Bresnen's special exceptions and denied Wetmore's motion to dismiss, concluding that "Wetmore's motion fails toidentify any 'legal action' by Bresnen that is based on Wetmore's exercise of rights protected by [the TCPA]" and "[a]s a matter of law, [the TCPA] does not provide Wetmore with a remedy because the Legislature cannot enact legislation that would interfere with this Court's inherent authority to enforce its own orders." Wetmore now appeals this order denying his TCPA motion.
In this interlocutory appeal, Wetmore raises seven issues. In his first issue, Wetmore argues that the trial court improperly denied the TCPA motion. In his second through fourth issues, Wetmore raises jurisdictional issues, challenging the existence of the statutory cause of action and Bresnen's standing in the underlying suit against APF. In his fifth through seventh issues, Wetmore raises constitutional and preemption challenges to the statutory provisions of the Texas Business Organizations Code that serve as the basis of the underlying suit. We first address Wetmore's TCPA issue and then turn to the jurisdictional issues, which we construe as a collateral attack on the final judgment in the underlying suit. Finally, we address Wetmore's constitutional and preemption issues. Overruling all of Wetmore's issues, we affirm.
The TCPA provides a procedure for expeditiously dismissing a nonmeritorious "legal action" that "is based on, relates to, or is in response to" the moving party's exercise of three statutorily defined rights: the right of association, the right of free speech, and the right to petition (the TCPA Rights). See Tex. Civ. Prac. & Rem. Code § 27.005(b); Hersh v. Tatum, 526 S.W.3d 462,463 (Tex. 2017). "Legal action" is defined as "a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief." Tex. Civ. Prac. & Rem. Code § 27.001(6). The exercise of the TCPA Rights are also broadly defined by statute, and each requires a "communication" which "includes 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)-(4).
The express purpose of the TCPA is "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" and it "shall be construed liberally to effectuate its purpose and intent fully." Id. §§ 27.002, .011. To that end, "the Legislature has provided a two-step procedure to expedite the dismissal of claims brought to intimidate or to silence a defendant's exercise of these First Amendment rights." ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (per curiam) . First, the party moving for dismissal pursuant to the TCPA bears the burden to show "by a preponderance of the evidence that the legal action is based on, relates to, or is in response to" the moving party's exercise of its TCPA Rights. Tex. Civ. Prac. & Rem. Code § 27.005(b). Second, "[o]nce a movant meets her burden to prove that the [TCPA] applies, the burden shifts to the...
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