Breakaway Practice, LLC v. Robert Lowther

• Court: Court of Appeals of Texas
• Decided: December 20, 2018
• Docket: 05-18-00229-CV
• Status: Published

Opinion

REVERSE and REMAND; and Opinion Filed December 20, 2018.

In The Court of Appeals Fifth District of Texas at Dallas No. 05-18-00229-CV

BREAKAWAY PRACTICE, LLC, Appellant V. ROBERT LOWTHER, Appellee

On Appeal from the 116th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-15706

MEMORANDUM OPINION Before Justices Bridges, Boatright, and Richter1 Opinion by Justice Richter Breakaway Practice, LLC filed a Rule 202 petition seeking to take a pre-suit deposition of

appellee Robert Lowther to investigate potential claims related to derogatory statements Lowther

made about Breakaway on Facebook. The trial court dismissed Breakaway’s petition pursuant to

the Texas Citizen’s Protection Act (TCPA). Breakaway appeals the trial court’s order. Because

we conclude Breakaway established a prima facie case for the relief requested in its Rule 202

petition, we reverse the trial court’s order and remand for further proceedings consistent with this

opinion.

1 The Honorable Martin Richter, Justice of the Court of Appeals for the Fifth District of Texas at Dallas, Retired, sitting by assignment. BACKGROUND

Breakaway provides strategic consultation services to dental practices. Under its “Affiliate

Program,” Breakaway contracts with participating dental practices, or “Affiliates,” to provide its

services in exchange for a percentage of the Affiliates’ gross revenue. Lowther is the President of

the Denali Group, Inc., a competitor of Breakaway. In October 2017, Lowther joined a private

Facebook group for Breakaway Affiliates and posted derogatory statements about Breakaway’s

business practices. According to Breakaway, the statements were false and, in the weeks that

followed, multiple Affiliates terminated or sought to terminate their contracts with Breakaway.

Breakaway filed a verified Rule 202 petition seeking to depose Lowther to investigate

potential claims arising out of Lowther’s statements. Breakaway intended to elicit testimony from

Lowther about, among other things, whether Lowther made the statements with knowledge of their

falsity and whether he made similar statements in other forums. Breakaway asserted it was

specifically seeking to investigate potential claims for tortious interference with contract, business

disparagement, and libel.

Lowther filed a motion to dismiss under the TCPA, commonly known as the Anti-Slapp

Act. See generally TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–.011 (West 2015). Lowther

asserted Breakaway’s petition was filed in response to the exercise of his right to free speech and

of association. Thus, he asserted the burden shifted to Breakaway to establish by clear and specific

evidence a prima facie case for each element of the potential claims it was seeking to investigate.

Lowther further asserted Breakaway could not do so. For example, Lowther argued that

Breakaway had no evidence of an intentional act of interference, which would be required to

support a claim for tortious interference with contract. Lowther also argued Breakaway had no

–2– evidence he made the statements with the degree of fault required to support claims for libel or

business disparagement.

In its response, Breakaway disputed its Rule 202 petition was based on, related to, or was

in response to Lowther’s communications. But regardless, Breakaway asserted it met its burden

to defeat Lowther’s motion by presenting a prima facie case for its Rule 202 petition; specifically,

that the likely benefit of the requested deposition outweighed the burden or expense of the

procedure. The trial court granted the motion and dismissed Breakaway’s petition. This appeal

followed.

APPLICABLE LAW

1. The Texas Citizen’s Protection Act

The TCPA protects citizens from retaliatory legal actions that seek to silence or intimidate

them on matters of public concern. In re Lipsky, 460 S.W.3d 579, 586 (Tex. 2015) (orig.

proceeding); TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–.011. The Act provides a special

procedure for the expedited dismissal of such suits. In re Lipsky, 460 S.W.3d at 586. The

defendant-movant has the initial burden to show by a preponderance of the evidence that the action

is based on, relates to, or is in response to the party’s exercise of the right of free speech, to petition,

or of association. TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.003, 27.005(b); In re Lipsky, 460

S.W.3d at 586. If the movant satisfies this burden, 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.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c); In re Lipsky, 460 S.W.3d at 587. The

Texas Supreme Court had explained that the phrase “clear and specific evidence” as used in the

TCPA requires a plaintiff to “provide enough detail to show the factual basis for its claim.” In re

Lipsky, 460 S.W.3d at 590–91.

–3– Section 27.006 of the TCPA, entitled “Evidence,” provides that, “[i]n determining whether

a legal action should be dismissed . . . the court shall consider the pleadings and supporting and

opposing affidavits stating the facts on which the liability or defense is based.” TEX. CIV. PRAC.

& REM. CODE ANN. § 27.006. Under this provision, pleadings are to be considered as evidence,

regardless of whether they are offered as such. See Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex.

2017) (under TCPA, trial court obliged to consider pleadings irrespective of whether formally

offered as evidence); Martin v. Bravenec, 04-14-00483-CV, 2015 WL 2255139, at *7 (Tex.

App.—San Antonio May 13, 2015, pet. denied) (noting section 27.006(a) is exception to general

rule that pleadings are not evidence); see also Walker v. Hartman, 516 S.W.3d 71, 79 (Tex. App.—

Beaumont 2017, pet. denied) (pleadings are considered “as evidence” under TCPA).

2. Texas Rule of Civil Procedure 202

Under Rule 202 of the Texas Rules of Civil Procedure, a person may petition the court for

an order authorizing the taking of a deposition to investigate a potential claim or suit. TEX. R.

CIV. P. 202.1(b). The trial court must order the deposition if “the likely benefit of allowing the

petitioner to take the requested deposition to investigate a potential claim outweighs the burden or

expense of the procedure.” TEX. R. CIV. P. 202.4(a)(2).

ANALYSES

On appeal, Breakaway does not dispute Lowther met his initial burden under the TCPA or,

therefore, that the burden shifted to it to establish a prima facie case for each element of the “claim

in question.”2 See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c). It asserts it met that burden

2 In the trial court, Breakaway argued the TCPA did not apply to Rule 202 petitions because they are not “legal actions” under the Act. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(6) (“’Legal action’ means a lawsuit cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief.”). By granting Lowther’s motion, the trial court necessarily concluded a Rule 202 petition is a legal action under the TCPA. This Court has yet to determine that issue. See, e.g., Glassdoor, Inc. v. Andra Group, LP, 05-16-00189-CV, 2017 WL 1149668, at *10 (Tex. App.—Dallas Mar. 24, 2017, pet. granted) (“we specifically do not decide whether a Rule 202 petition is a “legal action” for Chapter 27 purposes because, even if it were, appellants have failed to meet their burden [to show the trial court erred in denying their motion to dismiss].”). Nevertheless, Breakaway does not challenge the trial court’s order on that basis. Thus, for purposes of this

–4– by establishing a prima facie case for the elements of a Rule 202 petition. Lowther responds

Breakaway must show it established a prima facie case for each element of the potential claims it

was seeking to investigate. We have previously rejected Lowther’s position.

In Glassdoor, Inc. v. Andra Group, we held that to defeat a motion to dismiss directed to a

Rule 202 petition, the nonmovant is only required to establish a prima facie case for the relief

requested in the Rule 202 petition, not any claims it is seeking to investigate. Glassdoor, Inc. v.

Andra Group, L.P., 05-16-00189-CV, 2017 WL 1149668, at *10 (Tex. App.—Dallas Mar. 24,

2017, pet. granted); see also DeAngelis v. Protective Parents Coal., 556 S.W.3d 836, 854 (Tex.

App.—Fort Worth 2018, no pet.) (because Rule 202 allows a person to take a deposition to

determine whether a claim exists, “there is no way that the TCPA can be reasonably construed to

require a petitioner to establish clear and specific evidence of a prima facie case for the potential

cause of action.”). We further held the only “element” a Rule 202 petitioner must show is that

“the likely benefit of allowing the discovery outweighed the burden or expense of the procedure.”

Glassdoor, Inc., 2017 WL 1149668, at *10. Thus, to defeat a motion to dismiss directed to a Rule

202 petition, the nonmovant need only produce clear and specific evidence as to that “element.”

Id. We concluded the nonmovant in that case met its burden by presenting clear and specific

evidence of potentially actionable statements that were not time barred. See id. at *10. We reach

a similar conclusion here.

To show it established a prima facie case, Breakaway relies on its verified Rule 202 petition

and Lowther’s attached Facebook post. See Fawcett v. Grosu, 498 S.W.3d 650, 660 (Tex. App.—

Houston [14th Dist.] 2016, pet. denied) (nonmovant may rely on pleadings and attachments to

opinion, we presume the TCPA applies. See Dallas County v. Crestview Corners Car Wash, 370 S.W.3d 25, 43 (Tex. App.—Dallas 2012, pet. denied) (court may not consider unassigned error).

–5– establish prima facie case). The petition and the attachment provided details establishing the

factual basis for the claims Breakaway was seeking to investigate and also the reasons it sought

the requested deposition. Specifically, Breakaway’s petition, which was verified by its President,

stated that Lowther’s statements were false and that, in the weeks following the post, multiple

Affiliates terminated or tried to terminate their contracts with Breakaway. 3 Breakaway’s petition

identified the testimony it intended to elicit from Lowther, including whether Lowther made the

statements with knowledge of their falsity or with reckless disregard, the basis for his statements,

and the identity and participation of any other persons involved with the statements. Of note, the

testimony Breakaway was seeking to elicit related to the very elements that Lowther’s motion to

dismiss asserted Breakaway needed, but lacked, to survive a TCPA motion to dismiss. In effect,

Lowther acknowledged Breakaway’s need for the deposition. See In re Lipsky, 460 S.W.3d at

591-92 (TCPA requires a plaintiff to initially provide more “information” about an underlying

claim than usually required). Finally, we note that Lowther did not claim the burden or expense

of the procedure would be any greater than ordinarily expected.4 We conclude Breakaway met its

burden to establish a prima facie case for its Rule 202 petition. Therefore, the trial court erred in

dismissing the petition.5 See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c).

Breakaway also asserts it is entitled to the attorney’s fees it incurred in responding to

Lowther’s motion. Under section 27.009(b), if the court finds a motion to dismiss filed under the

TCPA “is frivolous or solely intended to delay, the court may award court costs and reasonable

attorney’s fees to the responding party.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.009(b). An

3 Lowther submitted an affidavit in support of his motion to dismiss admitting making the statements. 4 In that regard, we also note that, if a trial court ultimately grants a Rule 202 deposition, it can place limitations to reduce the burden and expense of the procedure. See TEX. R. CIV. P. 202.4(b) (order allowing pre-suit deposition “must contain any protections the court finds necessary or appropriate to protect the witness or any person who may be affected by the procedure.”). 5 Breakaway also asserts the trial court erred in dismissing its petition because it established the commercial-speech exemption applied to Lowther’s statements. See TEX. CIV. PRAC. & REM. CODE § 27.010(b); Castleman v. Internet Money Ltd., 546 S.W.3d 684, 686 (Tex. 2018) (TCPA’s expedited-dismissal procedure does not apply to some forms of commercial speech). Because Breakaway established a prima facie case for its Rule 202 “claim,” we need not determine whether it also established an exception to the Act.

–6– attorney’s fees award under section 27.009(b) is entirely discretionary and requires the trial court

to find the motion was frivolous or solely intended to delay. See Cruz v. Van Sickle, 452 S.W.3d

503, 525 (Tex. App.—Dallas 2014, pet. struck).

Here, the trial court did not, of course, find Lowther’s motion was frivolous or solely

intended to delay. To the contrary, the trial court granted the motion. The fact we have concluded

the trial court erred in doing so does not establish Lowther’s motion was frivolous or intended

solely to delay. Moreover, according to Breakaway, Lowther’s motion to dismiss was frivolous

and brought for delay because it was based on an incorrect premise, i.e., that Breakaway was

required to establish a prima facie case for each element of its potential claims. In other words,

Breakaway’s complaint concerns Lowther’s arguments about Breakaway’s burden to avoid

dismissal under the TCPA. Breakaway does not dispute that Lowther met his burden under the

Act. Thus, Breakaway’s complaint does not show the motion was frivolous or brought for delay.

We reverse the trial court’s order dismissing Breakaway’s Rule 202 petition and its award

of attorney’s fees to Lowther. We remand to the trial court for further proceedings consistent with

this opinion.

/Martin Richter/ MARTIN RICHTER JUSTICE, ASSIGNED

180229F.P05

–7– Court of Appeals Fifth District of Texas at Dallas JUDGMENT

BREAKAWAY PRACTICE, LLC, On Appeal from the 116th Judicial District Appellant Court, Dallas County, Texas Trial Court Cause No. DC-17-15706. No. 05-18-00229-CV V. Opinion delivered by Justice Richter. Justices Bridges and Boatright ROBERT LOWTHER, Appellee participating.

In accordance with this Court’s opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court for further proceedings consistent with this opinion.

It is ORDERED that appellant BREAKAWAY PRACTICE, LLC recover its costs of this appeal from appellee ROBERT LOWTHER.

Judgment entered this 20th day of December, 2018.

–8–