John Moore Services, Inc. and John Moore Renovation, LLC v. the Better Business Bureau of Metropolitan Houston Inc.

• Court: Court of Appeals of Texas
• Decided: April 20, 2015
• Docket: 01-14-00906-CV
• Status: Published

Opinion

ACCEPTED 01-14-00906-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 4/20/2015 7:28:25 PM CHRISTOPHER PRINE CLERK

Cause No. 01-14-00906-CV __________________________________ FILED IN IN THE COURT OF APPEALS 1st COURT OF APPEALS HOUSTON, TEXAS FOR THE FIRST DISTRICT OF TEXAS 4/20/2015 7:28:25 PM HOUSTON, TEXAS CHRISTOPHER A. PRINE Clerk

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC, Appellants, v. THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., Appellees.

Appeal from the 269th District Court of Harris County, Texas Cause No. 2012-35162

BRIEF OF APPELLANTS

Douglas Pritchett, Jr. Texas Bar No. 24007877 JOHNSON, TRENT, WEST & TAYLOR, L.L.P. 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (Telephone) (713) 222-2226 (Facsimile) BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. Lori Hood Texas Bar No. 09943430 1301 McKinney Street, Suite 3700 Houston, Texas 77010 (713) 650-9700 (Telephone) (713) 650-9701 (Facsimile) ATTORNEYS FOR APPELLANTS JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC

Oral Argument Requested IDENTITY OF PARTIES AND COUNSEL

Pursuant to Texas Rule of Appellate Procedure 38.1(a), the following is a

list of all parties and the names and addresses of all counsel:

I. APPELLANTS:

John Moore Services, Inc. John Moore Renovation, LLC

Counsel for Appellants:

Douglas Pritchett, Jr. JOHNSON, TRENT, WEST & TAYLOR, L.L.P. 919 Milam Street, Suite 1700 Houston, Texas 77002 Telephone: (713) 222-2323 Facsimile: (713) 222-2226

Lori Hood BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. 1301 McKinney Street, Suite 3700 Houston, Texas 77010 (713) 650-9700 (Telephone) (713) 650-9701 (Facsimile)

i II. APPELLEES:

The Better Business Bureau of Metropolitan Houston, Inc.

Counsel for Appellees:

Lauren B. Harris Jeffrey R. Elkin Susan K. Hellinger M. Harris Stamey PORTER HEDGES LLP 1000 Main Street, 36th Floor Houston, Texas 77002 Telephone: (713) 226-6624 Facsimile: (713) 226-6224

ii TABLE OF CONTENTS

Page IDENTITY OF PARTIES AND COUNSEL .............................................................i

TABLE OF AUTHORITIES ..................................................................................... v

STATEMENT OF THE CASE ............................................................................... vii

ISSUES PRESENTED........................................................................................... viii

STATEMENT OF FACTS ........................................................................................ 1

SUMMARY OF THE ARGUMENT ........................................................................ 5

ARGUMENT AND AUTHORITIES ........................................................................ 6

I. THE HOUSTON BETTER BUSINESS BUREAU DID NOT ESTABLISH ENTITLEMENT TO ATTORNEYS’ FEES AND SANCTIONS ..................................................................................... 6

A. Except in the Most Simple of Cases, Documentation Is the Only Practical Means of Determining the Reasonableness of Fees ............................... 6

B. The Redactions and Bulk Billing in the Houston BBB’s Invoices Result in Legally Insufficient Evidence of Attorneys’ Fees ................................. 10

1. The Invoices Did Not Specifically Identify the Services Performed ..................................... 11

2. The Invoices Did Not Specifically Identify the Costs of Performing Various Tasks ................................................................. 15

C. The Expert’s Ipse Dixit Is Not Legally Sufficient Evidence of Necessity and Reasonableness ......................................................................... 16

iii II. THERE SHOULD BE A NEW TRIAL CONSIDERING THE PROPRIETY OF ATTORNEYS’ FEES IN LIGHT OF JOHN MOORE’S REMAINING CLAIMS ............................................................. 20

A. John Moore’s Antitrust Claims Should Have Been Heard in the Same Proceeding as Its Earlier Claims ........................................................................... 22

B. The Antitrust Claims Were (and Remain) Legally Viable ........................................................................... 23

C. The Splitting of John Moore’s Claims Creates in Unacceptable Risk of Inconsistent Adjudications ............................................................................ 24

PRAYER ................................................................................................................26

CERTIFICATE OF COMPLIANCE ....................................................................... 28

CERTIFICATE OF SERVICE ................................................................................ 28

APPENDIX ..............................................................................................................29

iv TABLE OF AUTHORITIES

Cases Page(s)

Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497 (Tex. 1995) ........................................................................17, 18

Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999) .............................................................................. 19

City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013) ....................................................................8, 11, 15

City of San Antonio v. Pollack, 284 S.W.3d 809 (Tex. 2009) .............................................................................. 19

Coastal Transport Co., Inc. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227 (Tex. 2004) .............................................................................. 16

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238 (Tex. 1985) ........................................................................20, 21

El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012) ................................... 6, 7, 8, 10, 11, 12, 14, 15, 16

Elizondo v. Krist, 415 S.W.3d 259 (Tex. 2014) .............................................................................. 19

In re Ethyl Corp., 975 S.W.2d 606 (Tex. 1998) .............................................................................. 22

Finger v. Southern Refrigeration Servs., 881 S.W.2d 890 (Tex. App.—Houston [1st Dist.] 1994, writ denied).................................................................................................................23

Lone Star Ford, Inc. v. McCormick, 838 S.W.2d 734 (Tex. App.—Houston [1st Dist.] 1992, writ denied).................................................................................................................25

Lone Star Gas Co. v. The Rd. Comm’n of Tex., 767 S.W.2d 709 (Tex. 1989) ................................................................................ 6

v Long v. Griffin, 442 S.W.3d 253 (Tex. 2014) ........................................................................11, 12

Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998) .............................................................................. 16

Natural Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150 (Tex. 2012) .............................................................................. 16

Schaefer v. Tex. Empl. Ins. Ass’n, 612 S.W.2d 199 (Tex. 1980) ........................................................................16, 17

Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381 (Tex. 1985) .............................................................................. 23

Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897 (Tex. 2004) .............................................................................. 20

Statutes TEX. CIV. PRAC. & REM. CODE § 27.005(a) .............................................................. 4

TEX. CIV. PRAC. & REM. CODE § 27.009(a) ............................................................. 24

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12) ........................................................ 4

TEX. CIV. PRAC. & REM. CODE § 51.014(b) (effective June 14, 2013) ................1, 23

Rules TEX. R. APP. P. 43.3 ................................................................................................... 6

vi STATEMENT OF THE CASE

Nature of the case: John Moore brought this case alleging various torts and attempted to amend its petition to add several additional claims. CR4. This appeal arises out of a judgment for attorneys’ fees awarded to the Better Business Bureau of Metropolitan Houston (the “Houston BBB”). CR115.

Course of Proceedings: After the court of appeals reversed the trial court’s denial of the Houston BBB’s motion to dismiss, the Houston BBB requested attorneys’ fees, costs, and sanctions. App. E; Supp. CR _. The question was tried to a jury, and the jury returned a verdict in favor of the Houston BBB. CR108; App.N.

Disposition: The trial court rendered judgment on the jury’s verdict and awarded sanctions against John Moore. CR115; App.O.

vii ISSUES PRESENTED

1. The Texas Supreme Court requires evidence of specific tasks and of the time required to complete them in order to support a finding that fees are reasonable and necessary. The Appellees’ evidence obscures the tasks performed and the time required to perform them, requiring the jury to rely on the ipse dixit of an interested witness as to reasonableness and necessity. Is Appellees’ evidence legally sufficient?

2. A finding that fees are reasonable and necessary depends on the results obtained. Through the actions of the Appellees in opposing the joinder of claims (either by amendment or by consolidation), the jury was not presented with the entire dispute (namely, the antitrust claims) and could not consider the ultimate results obtained. Must a new trial be ordered to allow the jury to consider the measure of overall success Appellee has enjoyed?

viii STATEMENT OF FACTS

This is an appeal of the attorneys’ fees judgment in the first lawsuit (Cause

No. 12-35162) filed by John Moore. App. A; Supp. CR_ (Original Petition). 1 On

September 27, 2013, while the interlocutory appeal brought by The Better Business

Bureau of Metropolitan Houston, Inc. (the “Houston BBB”) was pending, John

Moore filed a first amended petition. CR4. The amended petition joined several

new parties and new claims (significantly, claims that the Houston BBB’s conduct

was a restraint on trade or an attempt to monopolize). Id. John Moore requested

and received leave to file this petition, which the Houston BBB opposed. App. B;

Supp. CR _ (Order of October 11, 2013). The order granting leave to file stated

that no further amendments were permitted absent leave of court. Id.

After the trial court granted leave to file, the Houston BBB moved to strike

the amended petition. CR43. The Houston BBB argued, for the first time, that an

amendment to the interlocutory appeal statute required that all proceedings be

stayed. CR43 (citing TEX. CIV. PRAC. & REM. CODE § 51.014(b) (effective

June 14, 2013)). On November 1, 2013, the trial court struck the amended petition

and signed an order staying proceedings. App. C; Supp. CR_ (Order of

November 1, 2013).

1 The district clerk has indicated that the Supplemental Record is expected to be completed in a matter of days. In order to ensure the timely filing of its brief, John Moore has included key items in the Appendix. 1 John Moore preserved its claims from the amended petition by filing a

second lawsuit (Cause No. 13-76215). App. M; Supp. CR_ (Order of August 11,

2014). John Moore requested that the second lawsuit be heard by the 269th

District Court, which was also the court with jurisdiction over the first lawsuit. Id.

This second lawsuit was also challenged by the Houston BBB under the Anti-

SLAPP statute. Id.

After the mandate issued on the interlocutory appeal, the Houston BBB filed

a motion seeking attorneys fees, costs, expenses and sanctions in the first lawsuit.

App. E; Supp. CR_ (Motion for Award of Attorneys’ Fees, Court Costs, Expenses

and Sanctions). The motion was supported by an affidavit by attorney Jeffrey

Elkin. Id.; Supp. CR_ (Exhibit C). After the hearing on the motion was set, John

Moore responded, arguing that it was entitled to a jury trial on the question of the

necessity and reasonableness of the fees. App. G, H; Supp. CR_ (Order of June 4,

2014), _ (Response and Objection to Defendant’s Motion). The response (which

was filed with leave of court) controverted the Houston BBB’s affidavit with an

affidavit by attorney Lori Hood. App. H; Supp. CR_ (Exhibit A); 2RR18. John

Moore also moved for consolidation, but the trial court did not rule as the issue had

not been set for hearing and was premature. 2RR30-31. The court requested that

John Moore raise the consolidation issue again after the court had ruled on the

merits of the motion to dismiss in the second lawsuit. 2RR31.

2 The attorneys’ fees were tried before a jury within a month of these rulings.

CR108. The Houston BBB offered several exhibits, which were admitted into

evidence, including a set of heavily redacted invoices and several summaries.

DX3 & 4-9. It also offered the expert testimony of Jeffrey Elkin, who opined that

the attorneys’ fee amounts in DX3 were reasonable and necessary based on his

review and knowledge of the specific details contained in the un-redacted invoices.

3RR165, 167-74, 183, 198.

The jury found attorneys fees in the following amounts:

a. For representation in the trial court before and during Houston BBB’s original interlocutory appeal.

Answer: $106,369.28

b. For representation in the Court of Appeals for the original interlocutory appeal.

Answer: $81,360.80

c. For representation at the petition for review stage to the Supreme Court of Texas for the original interlocutory appeal.

Answer: $37,982.08

d. For representation in the trial court after the original interlocutory appeal was decided.

Answer: $24,289.28

CR111-12; App.N.

3 The Houston BBB moved for judgment on August 4, 2014, and the motion

was heard four days later. App. J; Supp. CR_ (Motion for Entry of Final

Judgment); but see HARRIS CTY L. R. 3.3.3 (requiring 10 days notice). Meanwhile,

the motion to dismiss in the second lawsuit had been overruled by operation of

law. TEX. CIV. PRAC. & REM. CODE § 27.005(a) (30 days after June 27, 2014

hearing). Because John Moore believed that the motion to dismiss had been

denied, it included a motion to consolidate in the response to the motion for

judgment and set the motion for hearing at the same time as the Houston BBB’s

motion for judgment. App. K & L; Supp. CR_ (Motion to Consolidate), _ (Notice

of Hearing). John Moore also asked that the jury’s verdict be disregarded. Id.

The trial court refused to hear the motion to consolidate or the motion to

disregard. 5RR22. The judgment was signed at the hearing on Friday, August 8,

2014. CR115. Meanwhile, a notice of interlocutory appeal under TEX. CIV. PRAC.

& REM. CODE § 51.014(a)(12) was filed in the second lawsuit six days later, on

Thursday, August 14, 2014.

4 SUMMARY OF THE ARGUMENT

The Houston BBB seeks recovery of attorneys’ fees, which it cannot recover

for two alternative reasons: (1) its evidence is not legally sufficient to support the

verdict or judgment or (2) the issue should not have been presented to the jury

without consideration of all of John Moore’s claims.

The Texas Supreme Court has ruled that attorneys’ fees evidence in all but

the simplest of cases must be sufficiently detailed to allow the jury to meaningfully

evaluate the application. At a minimum, the evidence must identify the specific

tasks undertaken and quantify the time expended on those tasks. The Houston

BBB has obscured both of these essential elements and attempted to replace them

with generalized categorization of fees, which is an approach already rejected by

the Supreme Court. Furthermore, the expert opinion offered by the Houston BBB

is no evidence because it is based on the assumption that the invoices would show

that the fees were reasonable and necessary, an assumption not supported by the

evidence.

Alternatively, a new trial is necessary in which the jury will be presented

with the merits of John Moore’s antitrust claims as well as the Houston BBB’s

claim for attorneys’ fees on the claims that have been dismissed. Only then could

the jury and court determine whether the fees are reasonable and necessary as well

as just and equitable, respectively.

5 ARGUMENT AND AUTHORITIES

The standard of review in this case is one of legal sufficiency because John

Moore argued that there was no competent evidence to support the jury’s findings.

Therefore, the correct disposition would be for this Court to render the judgment

that the trial court should have rendered. TEX. R. APP. P. 43.3; Lone Star Gas Co.

v. The Rd. Comm’n of Tex., 767 S.W.2d 709, 710 (Tex. 1989) (when there is no

suggestion that the evidence is not fully developed in the trial court, a remand

would serve no purpose).

I. THE HOUSTON BETTER BUSINESS BUREAU DID NOT ESTABLISH ENTITLEMENT TO ATTORNEYS’ FEES AND SANCTIONS.

The Houston BBB concedes that the jury could not determine whether the

Houston BBB attorneys’ fees were reasonable without looking at the invoices

submitted by Porter Hedges. 3RR165. Therefore, if the invoices are legally

inadequate, so too is the Houston BBB’s evidence.

A. Except in the Most Simple of Cases, Documentation Is the Only Practical Means of Determining the Reasonableness of Fees.

The Houston BBB has the burden to document the hours spent on a task and

the value of those hours if it seeks to recover attorneys’ fees. El Apple I, Ltd. v.

Olivas, 370 S.W.3d 757, 761 (Tex. 2012). The Texas Supreme Court considered

whether detailed billing invoices are necessary to support an award of attorneys’

fees or whether an attorney’s affidavit containing general assurances that the fees

6 were reasonable and necessary may support an award of fees. Id. at 761-62.

Rejecting the plaintiff’s argument that his fees could be supported by a mere

affidavit, the Court stated that “a trial court should obtain sufficient information to

make a meaningful evaluation of the application for attorney’s fees.” Id. at 762.

The Court concluded that “[w]hile Texas courts have not routinely required

billing records or other documentary evidence to substantiate a claim for attorney’s

fees, the requirement has merit in contested cases under the lodestar

approach.” Id. (emphasis added). As the Houston BBB seeks attorneys’ fees in

this contested case, it should provide adequately detailed records to support its

claim.

Indeed, the Houston BBB concedes that the jury may best determine

reasonableness by studying the billing invoices.

Q: Where would be the best place for the jury to look to understand exactly what work was done to incur those fees?

A: The invoices themselves. The monthly invoices would be the most detailed, and then the summaries try to break it up to be a little more easy to read and understand. But the detail is in the invoices.

3RR165 (referencing DX3). Thus, the only place to find what specific work the

Houston BBB’s attorneys performed would be in the billing invoices. The

affidavit and the summaries deal only with generalities. See infra p. 10.

Few attorneys have such a memory that they can retain the details of what

tasks were performed in even a routine case lasting more than a few days. 7 Therefore, it is necessary, “in all but the simplest cases,” to keep contemporaneous

records of the time spent in order to provide the required detail showing the nature

of the work, who performed it, the rates, when it was performed, and the amount of

time spent on the task. El Apple I, 370 S.W.3d at 763. This case certainly did not

qualify as the most simple of cases.

Here, the Houston BBB kept billing records, but excuses its heavy redaction

and the unintelligibility of those records based on privilege and confidentiality

concerns. 4RR9, 28; DX3. But attorneys redact substance from their invoices at

their own risk.

The Supreme Court admonished attorneys who expect to seek fees to

anticipate the need and “document their time much as they would for their own

clients.” El Apple I, 370 S.W.3d at 763 (emphasis added). The Houston BBB

should not expect its attorneys’ fees to be paid by John Moore with less

information than it has demanded from its attorneys. This is a goose gander

problem. Indeed, the Supreme Court requires that “[a] similar effort should be

made when an adversary is asked to pay instead of the client.” City of Laredo v.

Montano, 414 S.W.3d 731, 736 (Tex. 2013). Yet, an order requiring John Moore

to pay its fees on faith is precisely what the Houston BBB expects.

8 Indeed, good practice confirms the Supreme Court’s direction. Attorneys

who seek to recover fees avoid including privileged information in the entries from

the start.

It’s always been my practice to write my time so that I can show it to anybody. I oftentimes ask jurors to reimburse me or reimburse my client for attorneys’ fees, and I want them to be able to see what I’ve done.

4RR60. The Houston BBB’s own attorneys would never expect their client to pay

an invoice that was redacted.

Mr. Elkin: Now, the invoice that went to the BBB didn’t have any redactions. . . . The one to the BBB showed completely what the work was done so they could review it and make sure that they thought it was appropriate.

3RR134. Yet the Houston BBB expected the jury to “make sure” that the fees

were appropriate without this information.

The Houston BBB attempted to meet its burden of proof by providing billing

records whose meaning was obscured by heavy redaction. It attempted to make up

for the unintelligibility of the records by offering the testimony of the billing

attorney, who stated that he reviewed the un-redacted records and that the fees for

the tasks recorded on the invoices were reasonable and necessary. 3RR198. The

question here is whether legally insufficient invoices may be bolstered by the ipse

dixit of an expert witness. The answer is that they cannot. See infra pp. 14-17.

9 Good practice and the direction of the Supreme Court agree that attorneys

should anticipate the need to use their invoices as evidence. Therefore, they should

keep their time records in such a way that their meaning will not be obscured by

the redaction of substantive information in order to protect privilege. The Houston

BBB did not satisfy this standard.

B. The Redactions and Bulk Billing in the Houston BBB’s Invoices Result in Legally Insufficient Evidence of Attorneys’ Fees.

A major problem that attorneys’ fees evidence may have is that it can lack

the “specificity” necessary to decide whether the fee is reasonable and necessary.

El Apple I, 370 S.W.3d at 763. The Supreme Court has defined the “minimum”

evidence necessary to support a finding that attorneys’ fees are reasonable and

necessary:

1. documentation of the services performed;

2. who performed them;

3. at what hourly rate;

4. when they were performed; and

5. how much time the work required.

Id. at 764. The Houston BBB’s redactions prevent the jury from evaluating what

specific tasks were performed (requirement #1). The Houston BBB’s bulk billing

prevent the jury from determining how much time was devoted to specific tasks

(requirement #5).

10 1. The Invoices Did Not Specifically Identify the Services Performed.

One of the minimum requirements established by the Texas Supreme Court

for the recovery of attorneys’ fees is that there must be documentation of the

specific services that were performed. El Apple I, 370 S.W.3d at 764. The Court

emphasized that general statements are insufficient; the party “must provide

evidence of the time expended on specific tasks to enable the fact finder to

meaningfully review the fee application.” Long v. Griffin, 442 S.W.3d 253 (Tex.

2014) (emphasis added).

In Long v. Griffin, the plaintiff brought two claims that could support an

award of attorneys’ fees: a contract claim and a declaratory judgment action. Id. at

255. To support his claim for fees, the plaintiff presented affidavits that identified

various general tasks (discovery, hearings, motions, and a trial) and that identified

the total number of hours and the rates for the attorneys, but did not “inform the

trial court the time spent on specific tasks.” Id. at 255 (citing El Apple I, 370

S.W.3d at 764-65; City of Laredo v. Montano, 414 S.W.3d 731, 736-37 (Tex.

2013)). The Court held that the general categories identified by the evidence were

legally insufficient to support an award of attorneys’ fees. Id. at 254-55.

Here, the Houston BBB provides a general breakdown of the categories

under which its fees were billed. DX7; 8RR108. The fees are broken into general

categories: (a) Motion to Dismiss ($78,983.50); (b) Interlocutory Appeal (Court of 11 Appeals—$127,126.25, Texas Supreme Court—$43,902.00); (c) Written

Discovery ($59,347.10); (d) Enforcing Stay of Proceedings ($37,952.00);

(e) Mediation ($18,419.00). Id. This generic breakdown of categories is legally

insufficient evidence under the holding of Long. Long, 442 S.W.3d at 255 (“no

evidence accompanied the affidavit to inform the trial court the time spent on

specific tasks.”); see also El Apple I, 370 S.W.3d at 763. The summaries provided

in the defense exhibits are not legally sufficient evidence. DX6, 7, 8; 8RR107-10.

The Houston BBB also provided redacted copies of its attorneys’ invoices.

DX3; 8RR9-105. Before June 2013, the invoices contain bulk billing entries in

which it is impossible to know how much time was spent on any particular task.

DX3; 8RR9-71. These entries are legally insufficient for this reason alone, see

infra pp. 13-14, but the descriptions are also heavily redacted. The Houston BBB

agrees that the full detail of the invoices is not available to the jury.

Q. The full detail of what you did is not discernable by us as we read this invoice, correct?

A. Correct.

3RR223.

For example, the first page of the invoices exhibit includes the task “draft

and revise [BLANK] letter” and “Communications with Ms. Christiansen

regarding [BLANK].” DX3; 8RR9. The second invoice bills to “meet with J.

Elkin to discuss issues identified in the Petition including [BLANK];” “review the 12 Original Petition and draft [BLANK] revise same and send to J. Elkin for review

and comment;” and “communication to Mr. Parsons and Ms. Christiansen

forwarding [BLANK].” DX3; 8RR11-12.

The redactions after June 2013 made the invoices, if anything, less

intelligible. First, the Houston BBB began to redact the name of the recipient of

the invoices. DX3; 8RR72. The jury cannot even tell who was billed. Further, the

tasks (despite the absence of bulk billing) become more obscure:

DX3; 8RR73. This excerpt is merely an example of the type of redaction that

occurs throughout the invoices. Some tasks were not redacted at all, but the jigsaw

13 puzzle presented by the ninety-six page exhibit leaves too many holes for a jury to

see the entire picture. Without all the data, the jury could not determine whether

the fees as a whole were reasonable and necessary. And the Houston BBB only

offered an opinion as to the fees as a whole. 3RR167-68, 174, 183. There are

simply too many missing pieces to make heads or tails of the work done on this

case.

The Houston BBB did not attempt to fill in these blanks with testimony.

Indeed, its witness had no recollection of what these tasks involved at the time he

testified.

A: Back in June 2012, you’re asking me today to tell you the time I spent “finalizing and forwarding same.”

Q: You can’t do it, can you?

A: Sitting here today. I cannot do it.

3RR196. This is precisely the problem that the Supreme Court noted in El Apple.

With invoices that were deliberately redacted to remove the substantive

work that was done, the Houston BBB has not and cannot reconstruct the specific

tasks that were performed in this representation. Id. The Houston BBB concedes

that the invoices are the best place to find the details of the work performed, or

they would be, if they were complete. 3RR165. Without complete records, there

is no legally sufficient evidence that the fees were reasonable and necessary.

14 2. The Invoices Did Not Specifically Identify the Costs of Performing Various Tasks.

Another minimum requirement for the recovery of attorneys’ fees is that

there must be a record of the time required to complete a specific task. El Apple I,

370 S.W.3d at 764. The Houston BBB claims that there is no requirement to

itemize the tasks, but its position is contrary to the established authority.

[A] lodestar calculation requires certain basic proof, including itemizing specific tasks, the time required for those tasks, and the rate charged by the person performing the work.

City of Laredo, 414 S.W.3d at 736 (emphasis added). The Houston BBB’s bulk

billing entries fail to itemize specific tasks or the time required for them. DX3;

8RR9-71.

The first entry on the first invoice contains at least five tasks and a single

time entry. DX3; 8RR9. Because of the redaction, it is impossible to exclude the

possibility that it contains six tasks, but the addition of one or more tasks does not

change the problem. There is no way to know how much time was spent on any of

the particular tasks. Id. This problem repeats itself throughout the invoices until

June 2013, when the invoices mostly stopped the practice of bulk billing. DX3;

8RR72. As more half of the invoices are structured in such a way that the jury

cannot determine the amount of time spent on specific tasks, the invoices are

legally insufficient evidence.

15 Without the ability to judge the case as a whole, the jury lacked the data

necessary “to make a meaningful evaluation of the application for attorney’s fees.”

El Apple I, 370 S.W.3d at 762. The invoices do not support the verdict or the

judgment.

C. The Expert’s Ipse Dixit Is Not Legally Sufficient Evidence of Necessity and Reasonableness.

Generalities such as the number of pleadings filed, the amount of discovery

in the case, and the length of the case “provide[] none of the specificity needed for

the trial court to make a meaningful lodestar determination.” El Apple I, 370

S.W.3d at 763. But generalities and conclusory opinions are all the evidence the

Houston BBB offers to support the jury’s decision.

When an expert’s opinion is based on facts that are never established at trial,

the opinion is no evidence and is legally insufficient to support a verdict. Natural

Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 159 (Tex. 2012) (market value

opinion must be supported by a factual basis, offered into evidence); Schaefer v.

Tex. Empl. Ins. Ass’n, 612 S.W.2d 199, 205 (Tex. 1980). An expert’s bare opinion

that something is reasonable is not “some evidence.” Schaefer, 612 S.W.2d at 205.

Furthermore, the requirement that evidence be legally sufficient is over and above

the requirement that an expert’s opinion be reliable. Coastal Transport Co., Inc. v.

Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004); Maritime

Overseas Corp. v. Ellis, 971 S.W.2d 402, 412 (Tex. 1998). 16 In Schaefer, the expert stated that there was a reasonable probability that the

plaintiff had a certain disease caused by a bacteria that could be found in bird

droppings. Id. at 202-203. The evidence was that the plaintiff’s employment

frequently required him to be in contact with soil contaminated by bird droppings.

Id. at 203. However, the soil was never tested to confirm that the bacteria was, in

fact, present. Id. Because the expert assumed that the bacteria was present at the

plaintiff’s workplace but the evidence never established this fact, the expert

opinion was based on “possibility, speculation, and surmise.” Id. at 204.

Therefore, it was not legally sufficient evidence to support a finding in favor of the

plaintiff. Here, the legal expert assumes that the details of the invoices support his

conclusion that the specific tasks performed were reasonable and necessary.

In a similar case, the expert’s opinion that the plaintiff’s frostbite injury was

caused by the application of a spray antiseptic, assumed facts that were, in fact,

contradicted by the evidence. Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497,

499 (Tex. 1995). The expert explained that his opinion that the injury was caused

by frostbite was depended on his assumption that there was no redness of the skin

and that the plaintiff did not follow the directions for application. Id. The

uncontradicted evidence was that the plaintiff’s skin turned red and that she

followed the directions. Id. Because the expert’s assumptions were not supported

17 by any evidence, it had no “probative value and cannot support a verdict or

judgment.” Id.

Here, the Houston BBB’s expert on legal fees states that his review of the

information in the un-redacted invoices allowed him to conclude that the fees

billed were reasonable and necessary.

I would personally review each draft [invoice] in detail to make sure that, in my opinion, the work that was done was necessary and the time that was spent was reasonable and the amount charged was reasonable.

3RR135. Significantly, the opinion offered by the expert that the totality of the

fees requested was reasonable and necessary is all or nothing.

Q. Mr. Elkin, as an expert on attorneys’ fees, what is your opinion as to the reasonableness of the $375,000 that the BBB is requesting today?

A. In my opinion, it’s reasonable.

...

The time spent as reflected in these invoices was reasonable.

Q. So taking into consideration these Andersen factors, is it your opinion today that $375,000 is a reasonable fee for the services that were provided by Porter Hedges to the BBB . . . in defense of a SLAPP suit?

A. Yes. I believe so.

3RR167, 174, 83. The expert did not opine task by task, indeed, he admittedly

could not. 3RR196. Based on the expert’s opinion, the jury had to either accept

18 the entire amount or none of it. There was no guidance given to the jury in the

expert’s opinion that would guide it in finding some lesser amount.

The expert’s opinion as to this ultimate issue is based on the truth of the

specific task information contained in the un-redacted drafts. 3RR135. This

specific information was never put into evidence. The expert essentially told the

jurors that they should trust that he had reviewed the data supporting the total and

that he found it to be reasonable, therefore, they should too. This is precisely the

kind of ipse dixit that has been repeatedly criticized by the Texas appellate courts.

“Bare, baseless opinions will not support a judgment even if there is no objection

to their admission in evidence.” Elizondo v. Krist, 415 S.W.3d 259, 254 (Tex.

2014) (quoting City of San Antonio v. Pollack, 284 S.W.3d 809, 816 (Tex. 2009));

see also Burrow v. Arce, 997 S.W.2d 229, 235 (Tex. 1999) (“[I]t is the basis of the

witness’s opinion, and not the witness’s qualifications or his bare opinion alone,

that can settle an issue as a matter of law; a claim will not stand or fall on the mere

ipse dixit of a credentialed witness.”). The opinion should be rejected as no

In short, when the jury is left with nothing more to rely on than the ipse dixit

of the expert because the underlying information is not put into evidence, the

opinion will not support a verdict or judgment. Elizondo, 415 S.W.3d at 266. As

now Chief Justice Hecht has said, it is “not enough” when “the only bridge

19 between [an expert’s] credentials, experience, and observations on one side, and

[the expert’s] opinions on the other, is [the expert’s] own veracity.” Volkswagen of

Am., Inc. v. Ramirez, 159 S.W.3d 897, 913 (Tex. 2004) (Hecht, J. concurring).

The Houston BBB’s evidence does nothing more than tell the jury, “trust our

expert, he has seen the un-redacted invoices,” but the Supreme Court says that this

is not enough.

II. THERE SHOULD BE A NEW TRIAL CONSIDERING THE PROPRIETY OF ATTORNEYS’ FEES IN LIGHT OF JOHN MOORE’S REMAINING CLAIMS.

In the motion for new trial, John Moore presented the question of whether a

new trial was necessary based on “the amount involved and results obtained.”

CR129; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985)

(“A trial court’s plenary jurisdiction gives it not only the authority, but the

responsibility to review any pretrial order upon proper motion.”). The result in

question was whether the Houston BBB prevailed in seeking dismissal of John

Moore’s claims.

John Moore attempted to join new claims by amending its petition, and the

trial court erred by refusing to permit the amendment on motion by the Houston

BBB. CR43; App. C; Supp. CR_ (Order of November 1, 2013). Furthermore, in

responding to the motion for entry of judgment, John Moore argued that the

attorneys’ fees could be fairly determined only if the cases were consolidated and

the merits of all of John Moore’s claims could be considered at the same time. 20 App. H at 2, 9; Supp. CR_ (Response and Objections to Defendant’s Motion).

The trial court expressly considered and rejected these consolidation arguments

when rendering the judgment requested by the Houston BBB.

[T]o the extent parts of your motions that I have sustained objections to also contain arguments that would be responsive to the request for a judgment, I am going to go ahead and enter a final judgment today on this.

5RR27. 2 The trial court considered and rejected John Moore’s position.

Finally, John Moore moved to consolidate the two lawsuits so that the merits

of all of its claims could be considered in determining the appropriate award of

attorneys’ fees. App. K; Supp. CR_ (Motion to Consolidate). The motion was

noticed for hearing. App. L; Supp. CR_ (Notice of Hearing). The trial court

improperly refused to hear the consolidation motion. 5RR22; Downer, 701 S.W.2d

at 241 (trial court has an obligation to reconsider pretrial rulings when presented

with a proper motion). The jury should have been permitted to consider the

success or failure of John Moore’s additional claims that are now pending in the

second lawsuit when deciding on the appropriate verdict.

A. John Moore’s Antitrust Claims Should Have Been Heard in the Same Proceeding as Its Earlier Claims.

A court should not permit a claim to proceed to trial and judgment separately

from a related claim when doing so results in an injustice. In re Ethyl Corp., 975

2 The trial court sustained the Houston BBB’s objections to John Moore’s motion to consolidate. 5RR22.

21 S.W.2d 606, 610 (Tex. 1998). The Texas courts have looked to the Federal Rules

in determining the considerations governing consolidation. Id. at 611, n.1. Key

considerations are:

whether the specific risks of prejudice and possible confusion [are] overborne by the risk of inconsistent adjudications of common factual and legal issues, the burden on the parties, witnesses and available judicial resources posed by multiple lawsuits, the length of time required to conclude multiple suits as against a single one, and the relative expense to all concerned of the single-trial, multiple-trial alternatives.

Id. Thus, there are four basic considerations governing consolidation: (1) a

balancing of the risks and (2) the burden, (3) time, and (4) expense of multiple

trials.

The second, third, and fourth factors have already shown that consolidation

would have been much more efficient. The two lawsuits have been an

unnecessarily increased burden on the parties and the courts. The resolution of

these matters has been extended, and there has already been one trial, with the

certainty that another will follow. But this is all spilt milk for the most part. The

key consideration here is the harm to John Moore that may be caused by

inconsistent adjudications.

B. The Antitrust Claims Were (and Remain) Legally Viable.

As urged in the appeal of the second lawsuit (Cause No. 01-14-00687-CV),

res judicata does not apply here because John Moore’s attempts to bring these

22 claims in a single suit were frustrated as the Houston BBB repeatedly blocked the

efforts. See Finger v. Southern Refrigeration Servs., 881 S.W.2d 890, 895-96

(Tex. App.—Houston [1st Dist.] 1994, writ denied). John Moore first brought the

new claims in the first lawsuit by amendment. CR4. The Houston BBB objected

and the trial court struck the pleading based on a newly enacted stay provision that

applied by its own terms only to appeals filed after its effective date. CR43, 76;

App. C; Supp. CR_ (Order of November 1, 2013); TEX. CIV. PRAC. & REM. CODE

§ 51.014(b). As there was no automatic stay in effect under the terms of the

statute, the trial court erred in refusing to allow the joinder of claims.

Even if the Houston BBB were correct in its interpretation of the new

statute, it cannot cause a claim to be split at its own initiative and then seek to

apply res judicata. Id.; Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697

S.W.2d 381, 384 (Tex. 1985) (“the res judicata effects of an action cannot preclude

litigation of claims that a trial court explicitly separates or severs from that

action.”). For this and for the other reasons stated, John Moore’s claims for

antitrust violations are not barred by res judicata and were appropriately brought in

the original lawsuit.

John Moore’s antitrust claims are legally viable because it has provided

prima facie proof based on clear and specific evidence of each of the elements of

its claims. These arguments are detailed in the briefing in the appeal from the

23 second lawsuit (Cause No. 01-14-00687-CV). Thus, the Houston BBB has not

been and will not be entirely successful in obtaining a dismissal of John Moore’s

legal action. TEX. CIV. PRAC. & REM. CODE § 27.009(a). Its failure should be

considered by the jury at the very least, assuming that it is entitled to fees for a

partial success.

C. The Splitting of John Moore’s Claims Creates an Unacceptable Risk of Inconsistent Adjudications.

The judgment for attorneys’ fees create a risk of inconsistent adjudication

against John Moore. The Houston BBB will receive attorneys’ fees and sanctions

as the prevailing party on a motion to dismiss under Chapter 27 for certain causes

of action, while remaining liable to John Moore for the same underlying conduct

with regard to other causes of action (namely, antitrust). Thus, John Moore would

be considered a non-prevailing party in the first lawsuit and a prevailing party in

the second, based on the same harmful conduct.

Most if not all of the fees incurred by the Houston BBB apply equally to

both lawsuits: the research into the Anti-SLAPP statute (at the trial court level and

on appeal), the discovery, the investigation of John Moore’s allegations, the

mediation. DX7, 8RR107. These tasks are intertwined as are the fees. The work

enforcing the stay provision created the split of the claims and exposed John

Moore to the inconsistent findings. DX7, 8RR109. It would be perverse to award

24 the Houston BBB attorneys’ fees for creating inefficiency in a statute intended to

make the process more efficient.

The Houston BBB cannot explain how it would be prejudiced or what

confusion would occur were these claims to be consolidated or heard as originally

pleaded in the amended petition. Lone Star Ford, Inc. v. McCormick, 838 S.W.2d

734, 738 (Tex. App.—Houston [1st Dist.] 1992, writ denied). Indeed, the

separation of the claims is more apt to cause confusion by suggesting to the jury

that the Houston BBB was entirely successful in its motion to dismiss. Thus, the

judgment forces John Moore to finance the Houston BBB’s defense of John

Moore’s valid claims even when it has shown that there is merit to its complaint

that the Houston BBB has violated the norms of conduct and caused harm.

Even if the Houston BBB had presented some evidence that its fees were

reasonable and necessary, John Moore would still be entitled to a new trial. The

trial court considered and rejected John Moore’s argument that the fees could not

be properly determined piecemeal. In other words, the Houston BBB’s fees

relating to its original motion to dismiss are excessive considering that John

Moore’s antitrust theories are valid and supportable. Furthermore, the amount of

fees is contrary to justice and equity for the same reason. Therefore, a new trial

should be granted in the alternative.

25 PRAYER

WHEREFORE, PREMISES CONSIDERED, John Moore Services, Inc. and

John Moore Renovation, LLC respectively request that this Court reverse the

judgment of the trial court and render judgment that Appellee take nothing. In the

alternative, John Moore requests that the Court reverse the judgment of the trial

court and remand for a new trial on attorneys’ fees and on John Moore’s claims in

the second lawsuit. John Moore also requests all such other and further relief, in

law or in equity, to which it may be justly entitled.

26 Respectfully submitted,

/s/ Douglas Pritchett, Jr. Douglas Pritchett, Jr. State Bar No. 24007877 dpritchett@johnsontrent.com JOHNSON, TRENT, WEST & TAYLOR, L.L.P. 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (Telephone) (713) 222-2226 (Facsimile)

BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. Lori Hood Texas Bar No. 09943430 lhood@bakerdonelson.com 1301 McKinney Street, Suite 3700 Houston, Texas 77010 (713) 650-9700 (Telephone) (713) 650-9701 (Facsimile)

ATTORNEYS FOR APPELLANTS JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC

27 CERTIFICATE OF COMPLIANCE This brief complies with the type-volume limitation of Texas Rule of

Appellate Procedure 9.4(i)(2)(B) because the brief contains 5,833 words, excluding

the parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1).

This brief complies with the typeface and type style requirements of Texas

Rule of Appellate Procedure 9.4(e) because this brief has been prepared in a

proportionally spaced typeface using Microsoft Word in 14-point Times New

Roman font for text in the body and 12-point Times New Roman font for

footnotes.

/s/ Douglas Pritchett, Jr. Douglas Pritchett, Jr.

CERTIFICATE OF SERVICE On this the 20th day of April 2015, the foregoing was served on the following persons by electronic service:

Lauren B. Harris Jeffrey R. Elkin M. Harris Stamey Porter Hedges LLP 1000 Main Street, 36th Floor Houston, Texas 77002 Attorneys for Appellants

/s/ Douglas Pritchett, Jr. Douglas Pritchett, Jr. 406233

28 Cause No. 01-14-00906-CV __________________________________

IN THE COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS HOUSTON, TEXAS

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC, Appellants, v. THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., Appellees.

APPENDIX

A. Original Petition (6-18-12)

B. Order Granting Motion for Continuance (10-11-13)

C. Notice of Hearing – Motion for Reconsideration (10-21-13)

D. Order Striking Amended Petition , Granting Motion for Reconsideration (11-01-13)

E. Motion for Award of Attorneys’ Fees (4-11-14)

F. Second Amended Notice of Hearing – Motion for Award of Attorneys’ Fees (5-27-14)

G. Order Setting Hearing on Award of Attorneys’ Fees (6-04-14)

H. Plaintiffs’ Response to Motion for Award of Attorneys’ Fees (6-13-14)

I. Order Denying Defendant’s Motion for Award (6-19-14)

29 J. Defendant’s Motion for Entry of Judgment (8-04-14)

K. Plaintiffs’ Motion to Consolidate (8-07-14)

L. Notice of Hearing regarding Motion to Consolidate (8-07-14)

M. Order Granting Motion to Dismiss (8-11-14)

N. Charge of the Court (7-22-2014)

O. Final Judgment (8-8-2014)

30 Exhibit A Filed 12 June 18 P2:54 Chris Daniel - District Clerk Harris County 2012-35162 / Court: 269 ED101J016933517 By: Charleta Johnson

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § § v. § § HARRIS COUNTY, TEXAS THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § § JUDICIAL DISTRICT COURT

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC's ORIGINAL PETITION AND REQUEST FOR DISCLOSURE

TO THE HONORABLE JUDGE OF THIS COURT:

COME NOW, Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC,

herein collectively referred to as "John Moore" or "Plaintiffs," in the above numbered and styled

cause, complaining of Defendant, The Better Business Bureau of Metropolitan Houston, Inc., herein

referred to as "Houston BBB" or "Defendant," and in support thereof would respectfully show the

Court as follows:

I. DISCOVERY LEVEL

Pursuant to Rule 190.4 of the Texas Rules of Civil Procedure, Plaintiffs request discovery

be conducted under Level 3. CertifiedDocumentNumber:52536293-Page1of19

II. PARTIES

1. John Moore Services, Inc. is a for-profit corporation organized and existing under

the laws of the State of Texas, whose principal place of business is located in Harris County,

Texas. 2. John Moore Renovation, LLC is a limited liability company organized and

existing under the laws of the State of Texas, whose principal place of business is located in

Harris County, Texas.

3. The Better Business Bureau of Metropolitan Houston, Inc. is a nonprofit

corporation organized and existing under the laws of the State of Texas, whose principal place of

business is in Harris County, Texas. Defendant Better Business Bureau of Metropolitan

Houston, Inc. may be served with citation and process by and through its Registered Agent,

William Parsons, at 1333 West Loop South, Suite 1200, Houston, Texas. Service is requested at

this time.

III. JURISDICTION AND VENUE

4. This Court has jurisdiction over the claims stated herein in that the amount

claimed by Plaintiffs exceeds the minimum jurisdictional limits of the Court.

5. Venue of this cause of action is proper in Harris County, Texas since all or part of

the causes of action set forth herein arose in Harris County, Texas.

IV. BACKGROUND FACTS

6. To gain a commercial advantage for its members, Defendant has published false

statements on its website about Plaintiffs. Defendant is not a government agency or one working

for the good of consumers. Defendant is putatively run by a board (of its own members) but is CertifiedDocumentNumber:52536293-Page2of19

really tightly controlled by its President, Dan Parsons ("Parsons"). The Defendant and Parsons

deem it appropriate to rate direct competitors (who are not members) without any quantifiable

standards or research. In this instance, Defendant has impugned the character and reputation of

John Moore's business in a number of ways including publishing on its website that, based on

Defendant's presumably "independent and unbiased" ratings, John Moore has "an F rating

2 currently at the BBB Houston and South Texas." This statement is false and directly impugns

John Moore's credibility, skill, professionalism, character, and reputation. Plaintiffs requested

Defendant remove the rating (for reasons detailed below). In response, Defendant changed its

website to indicate that John Moore has "No Rating," yet it maintains the "F" rating in the notes

section of the webpage and adds additional comments that wrongfully disparage Plaintiffs.

Defendant asserts a misguided claim of free speech, but Defendant's actions are commercial

speech, intended to obtain an economic benefit, and are false.

7. John Moore Services, Inc. ("John Moore") was formed in 1965 as a small

plumbing company. Today, it is one of Houston's largest family-owned and operated home

services company with over 500 employees, serving over a half million Texas homeowners. In

the past forty-seven (47) years, John Moore has grown from a modest Houston-based plumbing

company to a complete home services organization in the areas of Houston, Galveston, and

Bryan-College Station. John Moore specializes in air conditioning, heating, electrical, plumbing,

attic insulation, pest control, water damage restoration, custom windows and doors, home

security systems, lawn treatment systems and complete design/build services for home

remodeling.

8. Through the use of extensive advertising, John Moore has become a household

name in Houston and the surrounding areas. Over the years, John Moore has spent millions of CertifiedDocumentNumber:52536293-Page3of19

dollars on advertisements, including advertising on the Internet, its company website, company

vehicles, radio, television, and print ads. John Moore's slogan, which is included in almost all of

its mediums of advertisements is, "Call John and Get Moore"-a catchphrase that John Moore

has turned into a memorable jingle in its radio and television advertisements.

3 9. Because the household services market is so saturated and competitive in Houston

and the surrounding areas, John Moore has had to spend a great deal of money on research and

development ("R&D") to increase its market share and business. As a result of this R&D, John

Moore has not only invested millions in advertising but has also spent money to become a

member of the Better Business Bureau of Metropolitan Houston, the Better Business Bureau of

Bryan-College Station, and a member of the Better Business Bureau of Dallas.

10. The Council of Better Business Bureaus ("CBBB") is the national organization

for Better Business Bureaus ("BBB") in the United States and Canada. The CBBB is a nonprofit

organization whose stated mission is to instill consumer confidence in businesses, to contribute

to a "trustworthy marketplace for all," and to develop and administer self-regulation programs in

advertisements for the business community.

11. The CBBB supports 116 independent BBBs across the United States. According

to its advertising, these independent BBBs are supposed to serve their local communities by

rating businesses in their communities for the benefit of local consumers. These BBBs are run

by their dues-paying members. The Houston BBB has a board but the organization is controlled

and run with an iron fist by its long time President, Dan Parsons. BBBs review/rate both

accredited and non-accredited businesses. BBBs around the country have been accused,

including by the Connecticut Attorney General, of using the rating system for the benefit of CertifiedDocumentNumber:52536293-Page4of19

companies who pay for membership. This is commonly known as "pay to play."

12. Being an "accredited" business in a BBB is equivalent to saying that a business is

a "member" of that BBB. Accredited simply means that a company applied to become a

member, paid their fee to join, and is now a "member" of a BBB. BBBs take it upon themselves

to rate members as well as nonmembers. This is the ultimate in "pay to play" since members

4 rate nonmembers including those that are direct competitors under the theory that the BBB

knows best.

13. The Better Business Bureau of Metropolitan Houston, Inc. ("Houston BBB") is

one of the 116 BBBs supported by the CBBB. The Houston BBB provides services for its

member businesses located in Houston and the surrounding areas.

14. John Moore was a member in good standing of the Houston BBB for thirty-one

(31) years from 1971through2010. The CBBB implemented a new letter rating system in 2009.

John Moore was consistently rated an A+ Accredited Business and received the Better Business

Bureau Education Foundation's ("Education Foundation") Award for Excellence for eight (8)

consecutive years.

15. John Moore was the recipient of the Award of Excellence from the years 2003-

2010. Throughout all of the years that John Moore won the Award for Excellence, there were

never any restrictions on advertising the award, including no restriction for the length of time a

business could advertise the receipt of an Award ofExcellence. 1

16. In fact, during the years John Moore won the Award of Excellence, John Moore

was strongly encouraged by the Vice President of Marketing for the BBB and by the executive

director of the Education Foundation to prominently display the Award of Excellence name and

logo on all of John Moore's mediums of advertising. The Education Foundation encouraged CertifiedDocumentNumber:52536293-Page5of19

award recipients to prominently advertise its name and logo in order to increase the interest of

local businesses and consumers in its awards competition. In fact, the Education Foundation

even provided the artwork needed for winners to advertise their success. Even after John Moore

1 In May of 2011, after John Moore had won its 2010 Award of Excellence, the Education Foundation began imposing restrictions on the advertisement of the Award of Excellence. These restrictions were not in place at anytime when John Moore won the award. In fact, discussions between the Education Foundation and the CBBB concluded that the new restrictions could not be made retroactive.

5 parted ways with the Houston BBB, the Vice President of Marketing for the BBB and the

Education Foundation encouraged John Moore to continue advertising its awards. As a result,

John Moore spent millions of dollars advertising with the Awards of Excellence.

17. In its last three years as a member of the Houston BBB, John Moore was rated as

an A+ business, the highest rating possible, and in over thirty-one (31) years with the Houston

BBB, John Moore never had a single unresolved complaint. Between 2006 and 2009, John

Moore grew at an annual rate of 35%. This significant increase in business led to a proportional

increase in consumer complaints, all of which were settled by John Moore. For reasons not

related to the CBBB nationally prescribed formula for rating businesses, the Houston BBB on

two different occasions arbitrarily changed the "A+" rating for John Moore to "Not Rated" and

then back to "A+," effectively punishing John Moore for matters unrelated to its treatment of

customers. Plaintiffs complained about the matter to Parsons. Parsons refused to address the

matter. This rating change was in direct violation of the mathematical formula established by the

CBBB for published ratings of businesses.

18. After these arbitrary ratings were made, the Houston BBB Membership

Committee held a meeting to discuss the membership qualification of John Moore. 2 This

meeting included a discussion of the increase in the number of complaints filed against John

Moore-an increase in complaints that was proportional to John Moore's growth rate over the CertifiedDocumentNumber:52536293-Page6of19

years, a factor the Houston BBB Membership Committee at the urging of Parsons did not take

into consideration, which was in violation of the rating scale established by the CBBB. The

Houston BBB Membership Committee meeting was conveniently led and steered by the owner

of a direct major competitor of John Moore. The Houston BBB Membership Committee decided

2 Defendant's webpage for John Moore admits that the Houston BBB was voting to revoke John Moore's membership when John Moore resigned.

6 to end John Moore's membership status with the Houston BBB, but before this ruling was

referred to the full Executive Committee of the BBB and then to the full Board of Directors for a

proper vote and before John Moore could appeal the biased decision under CBBB regulations,

the Chairman of the Board of the Houston BBB and Parsons threatened John Moore that if John

Moore tried to appeal this decision and did not quickly accept the vote, John Moore would pay a

heavy price.

19. Rather than engage in a war with media darling Parsons, John Moore

involuntarily resigned from the Houston BBB on November 23, 2010. 3 John Moore then applied

for relocation of its headquarters for membership with the Bryan-College Station BBB. After

conferring with the Houston BBB, the Bryan-College Station BBB accepted and approved John

Moore's application to upgrade its regular membership to headquarter status. John Moore was a

member of the Bryan-College Station BBB with an A+ rating from November 2010 up until

April 20, 2012. At that time Houston BBB by and through Parsons interfered and John Moore's

Bryan-College Station headquarter status was revoked and sent back to the Houston BBB.

Throughout 2011, John Moore had an A+ rating with the Bryan-College Station BBB with no

complaints from the Houston BBB. John Moore was then accepted for membership April 10,

2012 to the Dallas BBB. John Moore's Dallas rating was an A+.

20. A full year after John Moore's involuntary resignation from the Houston BBB, CertifiedDocumentNumber:52536293-Page7of19

and after a full year of A+ ratings from the Bryan-College Station BBB, the Houston BBB and

the Education Foundation filed a lawsuit in federal court against John Moore for, among other

things, trademark infringement. The lawsuit complains of John Moore's advertisements, which

display the Awards of Excellence logo received by John Moore.

3 Defendant John Moore Renovation, LLC was removed by the Houston BBB sometime after November 23, 2010.

7 21. After the filing of its federal complaint and during the time John Moore had been

an accredited A+ member of the Bryan-College Station BBB, the Houston BBB has continued to

maintain a listing for John Moore on its website. Instead of placing the "usual neutral" statement

on the website that John Moore is a business who is affiliated with the Bryan-College Station

BBB, the Houston BBB has written extensive libelous, disparaging, and untruthful commentary

under its John Moore listing. In effect, the Houston BBB has started a smear campaign against

John Moore.

22. First, the Houston BBB in bold and at the top of its John Moore listing page

states, "This Business is not BBB accredited," which is untrue, as John Moore is BBB accredited

with the Bryan-College Station BBB and the Dallas BBB. 4 John Moore went from being an

eight-time Awards of Excellence winner to no longer being an accredited business. The

statement that John Moore is not BBB accredited is inaccurate and misleading and has damaged

John Moore's reputation.

23. Even more suspect is the fact that John Moore went from being rated as an "A+"

business to an "F" rated business overnight and now to a "No Rating" business. In fact, the

Houston BBB does not even hide the reasoning for this sudden decline. Boldly listed on

Defendant's webpage for John Moore as one of the factors for the sudden and abrupt lowered

rating is the direct reference to the trademark litigation filed by Defendant in federal court CertifiedDocumentNumber:52536293-Page8of19

against Plaintiffs. Specifically, Defendant complains in bold on the John Moore webpage of

John Moore's "ongoing and fraudulent use of its Awards For Excellence, service marks."

Defendant continues by admitting that "John Moore Services DID in fact participate, enter and

win the local awards that they display. However, this use of the marks for those awards is

4 Defendant now admits, in the notes section of its John Moore webpage, that John Moore is accredited in the Bryan-College Station BBB, despite listing at the top of its John Moore page that "[t]his business is not BBB accredited."

8 clearly laid out and may ONLY be used by CURRENT Accredited Businesses in the BBB

service area in which the awards were won. John Moore Services has continuously violated the

stated rules for this logo use." This issue of whether or not the rules for the advertisement of the

Awards of Excellence is "clearly laid out" and that the awards may "only be used by

CURRENT Accredited Businesses in the BBB service area" is a disputed fact in the federal

litigation. It is clear that the Defendant is using its website to slander and disparage John

Moore's business, by changing John Moore's "A+" rating to an "F" rating then to "No Rating,"

as a direct result of the Defendant's federal lawsuit filed against Plaintiffs.

24. In April of 2012, Houston BBB continued its vendetta against Plaintiffs by

internally strong arming the Plaintiffs' headquarters away from Bryan-College Station BBB.

Houston BBB did this in contradiction with the CBBB national standards. Houston BBB now

maintains that it is the only BBB that can rate Plaintiffs, which means other BBBs are now

forced to adopt the Houston BBB rating for John Moore. In addition, the Houston BBB asserts

that it is the only BBB that is permitted to address Plaintiffs' consumer complaints.

25. The Houston BBB took its vendetta against John Moore one step further by

making false and disparaging statements against John Moore through its consumer phone lines.

Now, when consumers call the Houston BBB phone lines inquiring about John Moore, they are

being told that John Moore is not an accredited business and in fact, would never be an CertifiedDocumentNumber:52536293-Page9of19

accredited business, reflecting the "F" rating and "No Rating" of the business on the website.

These slanderous statements by Houston BBB employees have damaged the reputation of John

Moore and will continue to damage the business of John Moore until it is stopped.

26. The Houston BBB is allegedly an independent rating agency whose mission is to

set standards for marketplace trust and to instill consumer confidence through its ratings.

9 According to its website, the values of the BBB are to "[b]e honest and ethical in all of [their]

business activities;" "[t]reat everyone with integrity[,] . . . respect and dignity;" and

"communicate with honesty." The Houston BBB is not only in violation of state laws, but it is in

violation of its own mission statement and statement of values. The Houston BBB proudly

labels itself as the "guardian" of honesty and integrity in business practices while willfully

libeling and maligning John Moore who was an A+ rated business that has never had an

unresolved complaint with the Houston BBB.

27. Plaintiffs requested that the Houston BBB remove Plaintiffs from its website.

· Houston BBB refused.

28. Houston BBB's actions have caused and continue to cause irreparable damage to

the reputation of Plaintiffs.

V. CAUSES OF ACTION

A. TORTIOUS INTERFERENCE WITH EXISTING AND PROSPECTIVE BUSINESS RELATIONSHIPS

29. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

30. Defendant has intentionally tortiously interfered with the existing and prospective

business of Plaintiffs. Defendant is attempting to apply retroactive restrictions on Awards of

Excellence won by John Moore in the years 2003-2010 in an effort to force John Moore to CertifiedDocumentNumber:52536293-Page10of19

remove its advertisements which display that John Moore was the winner of the Awards of

Excellence for those years. The removal of the Awards of Excellence from John Moore's

company website, vehicles, television, radio, and print advertisements will cost John Moore

millions of dollars and will reflect poorly on its existing and prospective business relationships.

31. Defendant has also intentionally tortiously interfered by attempting to force

Plaintiffs from advertising that they are BBB members, even though Plaintiffs are members of

10 other cities' BBBs. If Defendant is successful in forcing Plaintiffs to remove from their

company website, vehicles, television, radio, and print advertisements all references to Plaintiffs'

legitimate membership in the BBB, Plaintiffs will incur millions of dollars in expenses, and the

removal of the BBB name will reflect poorly on their existing and prospective business

relationships.

32. Further, Defendant has intentionally tortiously interfered by failing to adhere to

the CBBB's mathematical formula for determining John Moore's rating, which would have

taken, in fact, into account John Moore's compound annual growth rate of 35% between 2006

and 2010. Defendant took no standards into account when it gave Plaintiff an "F" rating and

"No Rating." Defendant has refused to adjust its formula, which if adjusted would reflect a

proportional increase in consumer complaints with the growth of John Moore, because

Defendant does not want John Moore's ratings to be high. In fact, overnight, John Moore went

from being an "A+" rated business to an "F" rated business to a "No Rated" business, all in

furtherance of Defendant's intent to tortiously interfere with Plaintiffs' existing and prospective

business relationships.

33. Similarly, Defendant has intentionally tortiously interfered by failing to adhere to

the CBBB's policy to exclude pricing complaints. Per the policies established by the CBBB, the CertifiedDocumentNumber:52536293-Page11of19

Houston BBB is not supposed to include straight pricing complaints in a business' complaint

records, nor should it include pricing complaints in its overall rating of a business. However,

because of the Houston BBB' s desire to tortiously interfere with Plaintiffs' existing and

prospective business relationships, it has incorporated pricing complaints into its rating of John

Moore, thereby unfairly decreasing the rating of John Moore.

11 34. In that same regard, Defendant has intentionally tortiously interfered by

deceptively listing that there are 294 complaints against John Moore, implying 131 of those

complaints occurred in the last twelve months, when Defendant had previously indicated there

were only two (2) complaints against John Moore. Further, these 294 complaints make up

pricing complaints and past complaints against John Moore, which have already been resolved.

The listing of 294 more complaints on Defendant's website was not done until after Defendant

filed a lawsuit against Plaintiffs in federal court. In John Moore's over thirty-one (31) years as a

member of the Houston BBB, it never had a single unresolved complaint.

35. Defendant has intentionally tortiously interfered by enlisting a smear campaign

against Plaintiffs on the Houston BBB website by writing extensive libelous, disparaging, and

untruthful commentary under its John Moore listing.

36. Defendant has intentionally tortiously interfered by untruthfully writing on the

Houston BBB website that Plaintiffs are not members of a BBB when in fact Plaintiffs are

members of other BBBs.

37. Defendant has intentionally tortiously interfered by untruthfully telling consumers

who call the Houston BBB phone lines that Plaintiffs are not accredited businesses and that

Plaintiffs would never be accredited businesses with the BBB. CertifiedDocumentNumber:52536293-Page12of19

38. Further, Defendant has intentionally tortiously interfered by unjustifiably and

maliciously changing John Moore's rating on its website from "A+" to "F" then to "No Rating"

in furtherance of Defendant's intent to tortiously interfere with Plaintiffs' existing and

prospective business relationships. The downgrade of John Moore's rating was predetermined

based on Defendant's federal lawsuit.

12 39. Defendant's conduct and communications reflect that it will continue to tortiously

interfere with Plaintiffs' business if not enjoined from doing so by this Court.

40. As a result of Defendant's tortious interference, Plaintiffs have already suffered

and will continue to suffer harm to their existing and prospective business relationships. If

Defendant's are not enjoined, Plaintiffs' harm will be irreparable both financially as well as to

their business reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs'

business in an amount which currently exceeds the minimal jurisdictional limits of this Court.

41. In addition, because the tortious acts were committed intentionally, willfully and

maliciously, Defendant should be held liable for exemplary damages.

B. FRAUD

42. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

43. Defendant, among other things, falsely represented to (1) John Moore that it could

continue advertising its receipt of the Awards of Excellence, even after John Moore was no

longer a member of the Houston BBB, by not placing any restrictions on the awards when they

were given to John Moore from 2003 through 2010; (2) Plaintiffs that Plaintiffs cannot advertise

with the BBB trademark(s), registered to the Council of Better Business Bureaus, Inc., since they

are no longer members of the Houston BBB; (3) Plaintiffs that the Houston BBB would not CertifiedDocumentNumber:52536293-Page13of19

count price complaints in a business' complaint record nor would the Houston BBB factor price

complaints into the overall rating of a business; (4) Plaintiffs that the Houston BBB is an

independent and unbiased rating agency; and (5) Plaintiffs that the Houston BBB follows its

mission statement and values statement that claims the Houston BBB's goal is to "[b]e honest

and ethical in all of its business activities;" "[t]reat everyone with integrity[,] ... respect and

dignity;" and "communicate with honesty."

13 44. Defendant made these false representations to Plaintiffs knowingly and with the

intent to deceive Plaintiffs. Plaintiffs reasonably and justifiably relied on the representations

made by the Defendant to their detriment. As a direct and proximate result of their reasonable

and justifiable reliance on the representations made by Defendant, Plaintiffs have suffered and

will continue to suffer damages in an amount to be determined at trial.

C. BUSINESS DISPARAGEMENT

45. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

46. Defendant published disparaging words about Plaintiffs' economic interests that

were false. Specifically, Defendant published false statements on its website, including this

statement on John Moore's page: "This Business is not BBB accredited[,]" impugning the

character and reputation of John Moore's business. Defendant has also published on its website

that based on Defendant's presumably "independent and unbiased" ratings, John Moore has "an

F rating currently at the BBB Houston and South Texas." This statement is false and directly

impugns John Moore's credibility, skill, professionalism, character, and reputation.

47. Defendant maliciously published these statements and without privilege. These

false and malicious communications have played a substantial part in inducing existing and

prospective consumers from hiring Plaintiffs to perform their home services needs. The Better CertifiedDocumentNumber:52536293-Page14of19

Business Bureau name is generally widely recognized and trusted. By falsely explaining on the

John Moore listing that John Moore is "F" rated, Defendant has effectively steered all consumers

away from hiring John Moore whose financial health depends on the services it provides to

consumers. Plaintiffs have been directly harmed and will continue to suffer damages in an

amount to be determined at trial.

14 D. DEFAMATION

1. Libel

48. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

49. Defendant published false and defamatory statements of fact about Plaintiffs on

its website. Specifically, Defendant published the following false fact on the John Moore link on

their website: "This Business is not BBB accredited."

50. The statement is false because John Moore is a member ("accredited") in other

BBBs. John Moore may not be a member ("accredited") by the Houston BBB, but it is a

member ("accredited") by a BBB.

51. This statement is defamatory as libel because it is a written statement that injures

the reputation of John Moore by falsely informing the public that John Moore is not BBB

accredited. This statement, at a minimum, is defamatory on its face.

52. Defendant also published on its website that, based on Defendant's presumably

"independent and unbiased" ratings, John Moore has "an F rating currently at the BBB Houston

and South Texas."

53. This statement is false because Defendant's rating of John Moore was not based

on an independent and unbiased rating scale. In fact, Defendant directly disobeyed the

mathematical formula provided to it by the CBBB when rating John Moore with an "F" rating. CertifiedDocumentNumber:52536293-Page15of19

The rating is supposed to be based on John Moore's services, not on Defendant's own vendetta

against Plaintiffs, which is evidenced by Defendant's federal complaint.

54. This statement is defamatory as libel because it is a written statement that injures

the reputation of John Moore by falsely informing the public that based on an unbiased rating

15 scale, John Moore went from being "A+" rated one day to "F" rated the next then to "No Rating"

the next. This statement, at a minimum, is defamatory on its face.

55. Defendant acted with actual malice and, at a minimum, with negligence in writing

these false and defamatory statements.

56. As a direct and proximate result of Defendant's words, Plaintiffs have been

injured, and their injuries will be irreparable both financially as well as to their business

reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs' businesses in

an amount which currently exceeds the minimal jurisdictional limits of this Court.

2. Slander

57. Plaintiffs re-allege and incorporate by reference all preceding paragraphs.

58. Defendant published through oral communication slanderous statements to

consumers, including existing and prospective customers of Plaintiffs. Specifically, Defendant's

employees, who received their information from Defendant, made and continue to make false

and disparaging statements about Plaintiffs to consumers who call the Defendant's phone lines.

When consumers call the Houston BBB phone lines inquiring about Plaintiffs, they are being

told by Defendant's employees that Plaintiffs are not accredited businesses and in fact, would

never be accredited businesses. CertifiedDocumentNumber:52536293-Page16of19

59. These statements are false, as explained previously, because Plaintiffs are

members ("affiliates") of a BBB.

60. These statements are defamatory as slander because they are spoken to third

parties and injure the reputation of Plaintiffs by falsely informing the public that Plaintiffs are

not BBB accredited. These statements, at a minimum, are defamatory on their face.

16 61. Defendant acted with actual malice and, at a mm1mum, with negligence m

speaking these false and defamatory statements.

62. As a direct and proximate result of Defendant's words, Plaintiffs have been

injured, and their injuries will be irreparable both financially as well as to their business

reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs' businesses in

an amount which currently exceeds the minimal jurisdictional limits of this Court.

E. EQUITABLE REMEDIES

63. Plaintiffs re-allege and incorporate by reference all preceding paragraphs.

64. The acts of Defendant are not merely unfair, but represent a deliberate, calculated

and malicious course of action to unlawfully harm the business and goodwill of Plaintiffs.

Additionally, Defendant benefitted from Plaintiffs' extensive advertisement of the Award of

Excellence and the BBB organization. In fact, the Education Foundation encouraged award

recipients to prominently advertise its name and logo in order to increase the interest of local

businesses and consumers in its awards competition. Even after John Moore parted ways with

the Houston BBB, the Education Foundation encouraged John Moore to continue advertising its

awards to promote interest in the awards. In fact, during all the years that John Moore used the

awards logo in its advertising, participation in the awards competition has grown significantly

and steadily. The BBB Education Foundation has benefitted from John Moore's advertising of CertifiedDocumentNumber:52536293-Page17of19

the awards through the logo.

65. On equitable grounds, Defendant should not be allowed to be unjustly enriched at

the expense of Plaintiffs. Plaintiffs are entitled to temporary and permanent relief, and to recover

their actual damages, including reasonable attorneys' fees, which are in excess of the minimum

jurisdictional limits of this Court.

17 VI. JURY DEMAND

66. Plaintiffs demand a jury trial and tender the appropriate fee with this Petition.

VII. CONDITIONS PRECEDENT

67. All conditions precedent to Plaintiffs' claims for relief have been performed or

have occurred.

VIII. REQUEST FOR DISCLOSURES

Pursuant to Texas Rule of Civil Procedure 194, you are requested to disclose, within

thirty (30) days of the service of this request, the information or material described in Rule

194.2.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs, JOHN MOORE SERVICES,

INC. and JOHN MOORE RENOVATION, LLC, respectfully request that the Court issue

citation for the Defendant, THE BETTER BUSINESS BUREAU OF METROPOLITAN

HOUSTON, INC., and that, upon final trial, Plaintiffs, JOHN MOORE SERVICES, INC. and

JOHN MOORE RENOVATION, LLC, have judgment against Defendant, THE BETTER

BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., for damages in excess of the

minimum jurisdictional limits of this Court, including actual and punitive damages, pre and post

judgment interest thereon at the highest legal rate allowed, together with costs of Court, CertifiedDocumentNumber:52536293-Page18of19

reasonable attorneys' fees and for such other and further relief, both general and specific, at law

and in equity, to which Plaintiffs may show themselves justly entitled.

18 Respectfully submitted,

JOHNSON, TRENT, WEST & TAYLOR, LLP

By: Lod. M I ¥f?C, Lori Hood I State Bar No. 09943430 Brian P. Johnson Texas Bar No. 10685700 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (713) 222-2226 (facsimile) lhood@johnsontrent.com bjohnson@johnsontrent.com

Attorneys for Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC CertifiedDocumentNumber:52536293-Page19of19

19 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 52536293 Total Pages: 19

Chris Daniel, DISTRICT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit B Filed 13 October 04 A10:50 Chris Daniel - District Clerk Harris County ~F~ ED101 J017752205 By: Jerri Coble NO. 2012-35162 LFILX JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § § v. § § HARRIS COUNTY, TEXAS THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC., ET AL. § § 269th JUDICIAL DISTRICT COURT

ORDER

On this day came on to be heard Plaintiffs' Motion for Continuance and to Extend the

Deadlines in the Docket Control Order. After considering the motion and reviewing the

pleadings on file, the Court is of the opinion that the motion should be GRANTED. It is

therefore,

ORDERED, that this case be reset for trial on the two week trial docket beginning on

JUDGE PRESIDING CertifiedDocumentNumber:57785942-Page1of1

256783 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 57785942 Total Pages: 1

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit C Filed 13 October 21 P5:58 Chris Daniel - District Clerk Harris County ED101J017781339 By: Jerri L. Coble

CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § § V. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § § 269TH JUDICIAL DISTRICT COURT

NOTICE OF HEARING

Please take notice that Defendant The Better Business Bureau of Metropolitan Houston,

Inc.’s Motion for Reconsideration and to Vacate Prior Rulings, Strike Plaintiffs’ Amended

Petition, and Quash Discovery has been set for oral hearing before the 269th Judicial District

Court, Harris County, Texas, on Friday, November 1, 2013, at 10:00 a.m.

Dated: October 21, 2013.

Respectfully submitted,

PORTER HEDGES LLP

/s/ Jeffrey R. Elkin By: Jeffrey R. Elkin State Bar No. 06522180 jelkin@porterhedges.com M. Harris Stamey State Bar No. 24060650 hstamey@proterhedges.com Jonna N. Summers State Bar No. 24060649 jsummers@porterhedges.com 1000 Main Street, 36th Floor CertifiedDocumentNumber:57898801-Page1of2

Houston, Texas 77002 (713) 226-6617 – Office (713) 226-6217 – Fax

ATTORNEYS FOR DEFENDANT, THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.

1 3486979v1 CERTIFICATE OF SERVICE

I certify that a true and correct copy of foregoing document has been served upon all counsel of record on the 21st day of October 2013, as follows:

Lori Hood ☐ By facsimile transmission Tamara Madden ☒ By electronic transmission 919 Milam Street, Suite 1700 ☐ By deposit in the United States Mail Houston, TX 77002 ☒ By CMRRR (713) 222-2323 (telephone) (713) 222-2226 (facsimile) ☐ By hand-delivery lhood@johnsontrent.com tmadden@johnsontrent.com Attorneys for Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC

/s/ Jeffrey R. Elkin Jeffrey R. Elkin CertifiedDocumentNumber:57898801-Page2of2

2 3486979v1 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 57898801 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit D CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § ~THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC Plaintiffs, F 1hr!-'o!e1D v. tl1trlct Clerk HARRIS COUNTY, TEXAS

THE BETTER BUSINESS BUREAU OF Ol Z0 ~V 13 METROPOLITAN HOUSTON, INfiroe: _....:~k~~:=:----- Defendant. !:irris ooun·~~9if'H .JUQICIAL DISTRICT COURT By B~pmy

ORDER GRANTING DEFENDANT'S MOTION FOR RECONSIDERATION AND TO VACATE PRIOR RULINGS, STRIKE PLAINTIFFS' AMENDED PETITION. AND QUASH DISCOVERY

Before the Court is Defendant The Better Business Bureau of Metropolitan Houston,

Inc.'s Motion for Reconsideration and to Vacate Prior Rulings, Strike Plaintiffs' Amended

Petition, and Quash Discovery ("the Motion"). Having considered the Motion, any response and

reply thereto, the pleadings, and the applicable law, the Court finds that the Motion should be,

and hereby is, GRANTED in its entirety. It is, therefore,

ORDERED'that Plaintiff's First Amended Original Petition is stricken in its entirety. It

is further,

ORDERED that the Order on Plaintiffs' Motion for Continuance and to Extend the

Deadlines in the Docket Control Order signed October 11, 2013, is hereby vacated. It is further, CertifiedDocumentNumber:58115848-Page1of2

ORDERED that the Trial Preparation Order signed October 11, 2013, is hereby vacated.

It is further,

ORDERED that the Docket Control Order signed October 15, 2013, is hereby vacated. It

ORDERED that Defendant The Better Business Bureau of Metropolitan Houston, Inc. is

not required to respond or object to Plaintiffs' Second Request for Production to Defendant

1 Better Business Bureau of Metropolitan Houston, Inc. until further order of this Court, if any. It

ORDERED that Plaintiffs' Notice of Intention to Take Deposition on Written Questions

of American Residential Services a/k/a ARS Rescue Rooter ("ARS") and subpoena duces tecum

is hereby quashed in its entirety and that Plaintiffs are required to immediate Iy notify ARS of

same.

SIGNED this 1!!.__ day of ~~, 2013. - ~ JUDGE PRESIDING CertifiedDocumentNumber:58115848-Page2of2

2 3484638 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 58115848 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit E 4/11/2014 7:27:14 PM Chris Daniel - District Clerk Harris County Envelope No. 978599 By: GAYLE FULLER

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendant. § 269TH JUDICIAL DISTRICT COURT

DEFENDANT THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.'S MOTION FOR AWARD OF ATTORNEYS' FEES, COURT COSTS, EXPENSES, AND SANCTIONS AND FOR ENTRY OF FINAL JUDGMENT

Defendant The Better Business Bureau of Metropolitan Houston, Inc. ("Houston BBB")

files this Motion for Award of Attorneys' Fees, Court Costs, and Expenses, and Sanctions, and

for Entry of Final Judgment, and in support thereof would show the Court as follows:

I. THE HOUSTON BBB IS ENTITLED TO RECOVER ITS FEES, COURT COSTS, EXPENSES, AND SANCTIONS UNDER CHAPTER 27.

Pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code ("Chapter 27"),

the Houston BBB moves to recover its reasonable and necessary attorneys' fees, court costs, and

expenses incurred in defending this legal action brought by Plaintiffs John Moore Services, Inc.

and John Moore Renovation, LLC (collectively "John Moore"). The Houston BBB also seeks at CertifiedDocumentNumber:60397672-Page1of11

least $50,000 in sanctions to deter John Moore from bringing similar actions in the future.

Section 27.009(a) of the statute provides that "[i]f the court orders dismissal of a legal

action under this chapter, the court shall award to the moving party:

(1) court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require;

1 3691198 (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."

TEX. Crv. PRAC. & REM. CODE ANN.§ 27.009(a) (West 2014) (emphasis added).

On July 16, 2013, the First Court of Appeals held that the Houston BBB "satisfied its

burden under [Chapter 27] to show that John Moore's claims against it are based on, relate to, or

are in response to, the exercise of [its] free speech rights," and that John Moore "failed to sustain

its burden to show, by clear and specific evidence, a prima facie case for each essential element

of its claims .... " The Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., No.

01-12-00990-CV, 2013 WL 3716693, *12 (Tex. App.-Houston [1st Dist.] 2013, pet. denied).

It "remand[ed] the case to the trial court for further proceedings" under Section 27.009(a) of

Chapter 27. Id. 1 Upon remand, the trial court is to grant the "motion[] to dismiss and award [the

defendant] reasonable attorney's fees and court costs in accordance with section 27.009(a)."

Fitzmaurice v. Jones, 417 S.W.3d 627, 634 (Tex. App.-Houston [14th Dist.] 2013, no pet.).

A. The Award of Fees, Costs, and Expenses to the Houston BBB is Mandatory, Equitable, and Just.

It has been established that this legal action against the Houston BBB improper! y

interfered with the Houston BBB's exercise of its right to free speech, and that John Moore did

not have sufficient evidence to present even a prima facie case in support of its claims. John CertifiedDocumentNumber:60397672-Page2of11

Moore Servs., Inc., 2013 WL 3716693 at *12. As a result, under Section 27.009(a), the award of

attorneys' fees, costs, and expenses to the Houston BBB is mandatory. TEX. Crv. PRAC. & REM.

CODE ANN. § 27.009(a); Sierra Club v. Andrews County, 418 S.W.3d 711, 720 (Tex. App.-El

Paso 2013, pet. filed) ("As the prevailing party, Sierra Club is entitled [under Chapter 27] to an

John Moore's petition for review to the Texas Supreme Court was denied on February 14, 2014, and mandate issued from the First Court of Appeals on April 3, 2014. See Exhibit A, Mandate.

2 3691198 award of reasonable attorney's fees and costs established by the evidence."); Alphonso v.

Deshotel, 417 S.W.3d 194, 200 (Tex. App.-El Paso 2013, no pet.) ("[Chapter 27] mandates the

award of attorney's fees and costs to a successful movant."); see also Bocquet v. Herring, 972

S.W.2d 19, 20--21 (Tex. 1998) ("Statutes providing that a party 'may recover,' 'shall be

awarded', or 'is entitled to' attorney fees are not discretionary."). 2

Moreover, during the course of this legal action, John Moore refused to take reasonable

steps to limit the litigation costs; e.g., John Moore refused to agree to stay discovery during the

pendency of the Houston BBB's interlocutory appeal, John Moore served extensive written

discovery on the Houston BBB including seventy-six (76) separate requests for documents which

required the Houston BBB to review and produce over 5,000 pages of documents, and John

Moore attempted to add causes of action and defendants to the lawsuit even after the First Court

of Appeals ruled in favor of the Houston BBB and a mandatory statutory stay of all proceedings

was in place. 3 Given that the Houston BBB prevailed in the face of John Moore's conduct, the

award of fees, costs, and expenses is equitable and just under the circumstances.

B. The Attorneys' Fees, Court Costs, and Expenses Incurred by the Houston BBB are Reasonable and Necessary.

The Houston BBB submits the affidavit of its attorney-in-charge, Jeffrey R. Elkin, along

with all of the invoices reflecting the legal work performed by Porter Hedges LLP ("Porter CertifiedDocumentNumber:60397672-Page3of11

Hedges") on behalf of the Houston BBB in connection with this legal action as evidence of the

2 Citi1tg D.F. W. Christia1t Television, Inc. v. Thornton, 933 S.W.2d 488, 490 (Tex.1996) (applying TEX. C1v. PRAC. & REM.CODE§ 38.001(8)); Arthur Anderse1t & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (discussing "reasonable and necessary attorneys' fees" under TEX. Bus. & COM. CODE§ 17.50(d)); Ragsdale v. Progressive Voters League, 790 S.W.2d 77, 86 (Tex. App.-Dallas 1990), aff'd in part and rev'd in part Oil other grounds, 801 S.W.2d 880 (Tex.1990) (applying former TEX. ELEC. CODE§ 251.008, recodified as§ 253.131). 3 Plaintiffs' First Amended Petition ("Amended Petition") was filed on September 27, 2013 (attached as Exhibit B), two months after the July 16, 2013 decision by the First Court of Appeals (Ex. A, Mandate).

3 3691198 reasonable and necessary attorneys' fees, court costs, and expenses incurred by the Houston

BBB. See Exhibit C, Affidavit of Jeffrey Elkin ("Elkin Aff."), with Invoices attached as Ex. 2.

Whether fees are reasonable and necessary is a question of fact. Bocquet, 972 S.W.2d at

20-21. The Texas Supreme Court has delineated the following factors courts must consider

when determining the reasonableness of a fee:

(a) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;

(b) the likelihood ... that the acceptance of the particular employment will preclude other employment by the lawyer;

(c) the fee customarily charged in the locality for similar legal services;

(d) the amount involved and the results obtained;

(e) the time limitations imposed by the client or by the circumstances;

(f) the nature and length of the professional relationship with the client;

(g) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(h) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Arthur Andersen & Co. v. Perry Equip. C01p., 945 S.W.2d 812, 818 (Tex. 1997) (citing TEX.

DISCIPLINARY R. OF PROF'L CONDUCT 1.04, reprinted in TEX. Gov'T CODE, tit. 2, subtit. G app.

(STATE BAR RULES art. X, § 9)). "A litigant need not present evidence on each of these factors. CertifiedDocumentNumber:60397672-Page4of11

The trial court may also consider the entire record, the evidence presented on reasonableness, the

amount in controversy, the common knowledge of the participants as lawyers and judges, and the

4 3691198 relative success of the parties." Weaver v. Jamar, 383 S.W.3d 805, 814 (Tex. App.-Houston

[14th Dist.] 2012, no pet.). 4

The reasonableness of a fee can be established as a matter of law where clear, direct, and

uncontroverted evidence is submitted and the opposing party fails to disprove the testimony

despite having had the opportunity to do so. Cleveland v. Taylor, 397 S.W.3d 683, 701 (Tex.

App.-Houston [1st Dist.] 2012, pet. denied). Since this action was filed on June 18, 2012, the

Houston BBB has incurred $390,858.35 in legal fees, $62.35 in court costs, and $6,237 .77 in

expenses defending against John Moore's claims. Ex. C, Elkin Aff. 1111 8, 11. The fees, costs,

and expenses are broken out on a monthly basis as follows:

Month/Year Fees Court Costs Expenses Monthly Totals June 2012 $4,017.50 $0.00 $0.00 $4,017.50 July 2012 $11,224.50 $0.00 $132.01 $11,356.51 Au011st 2012 $37,314.50 $28.00 $155.80 $37,498.30 September 2012 $25,056.00 $0.00 $481.79 $25,537.79 October 2012 $7,017.00 $2.35 $40.80 $7,675.15 November 2012 $459.50 $0.00 $581.32 $1,040.82 December 2012 $4,109.00 $0.00 $70.64 $4,179.64 2012 Total $89,198.00 $30.35 $1,462.36 $91,305.71 January 2013 $29,035.00 $0.00 $235.48 $29,270.48 February 2013 $62,205.25 $0.00 $827.01 $63,032.26 March2013 $22,745.50 $19.00 $443.60 $23,208.10 April 2013 $41,732.10 $0.00 $1,474.92 $43,207.02 May2013 $34,886.00 $13.00 $251.26 $35,150.26 June 2013 $5,751.50 $0.00 $55.22 $5,806.72 July 2013 $12,927.50 $0.00 $0.00 $12,927.50 CertifiedDocumentNumber:60397672-Page5of11

AuQUst 2013 $3,727.50 $0.00 $0.00 $3,727.50 September 2013 $4,177.50 $0.00 $0.00 $4,177.50 October 2013 $46,198.50 $0.00 $268.17 $46,466.67 November 2013 $5,837.50 $0.00 $125.76 $5,963.26 December 2013 $11,553.00 $0.00 $595.42 $12,148.42 2013 Total $280,776.85 $32.00 $4,276.84 $285,085.69 January 2014 $13,348.50 $0.00 $498.57 $13,847.07 4 Citing Acad. Co1p. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex. App.-Houston [14th Dist.] 2000, no pet.); Rapid Settlements, Ltd. v. Settlement Funding, LLC, 358 S.W.3d 777, 786 (Tex. App.- Houston [14th Dist.] 2012, no pet.).

5 3691198 Month/Year Fees Court Costs Exnenses Monthlv Totals February 2014 $821.50 $0.00 $0.00 $821.50 March 2014 $6,713.50 $0.00 $0.00 $6,713.50

GRAND TOTAL $390,858.35 $62.35 $6,237.77 $397' 773.47

Id. A detailed description of the professional services performed by Porter Hedges for the

Houston BBB on a day-to-day basis in defending against Plaintiffs' legal action is contained in

the monthly invoices attached to Mr. Elkin's affidavit. Id. at~ 9, Ex. 2.

In addition to the foregoing fees and expenses, the Houston BBB expects to incur at least

$30,000 in legal fees after March 31, 2014 in connection with (i) finalizing this motion; (ii)

reviewing and responding to any response filed by Plaintiffs; and (iii) preparing for and attending

a hearing on the motion, if required. Id. at ~ 12. In the event of an appeal of the fee award, the

Houston BBB seeks $50,000 for fees, costs, and expenses to defend the award in the court of

appeals, and an additional $50,000 if a petition for review is filed in the Texas Supreme Court.

Id.

As explained in Mr. Elkin's affidavit, based on the knowledge and professional

experience he has gained as a commercial trial attorney practicing in Harris County, Texas for

the past 26 years, the circumstances of the case including the novelty and complexity of the

Chapter 27 motion practice, and the Arthur Andersen factors, the fees, expenses, and costs CertifiedDocumentNumber:60397672-Page6of11

incurred by the Houston BBB in defending against John Moore's legal action are reasonable and

were necessary. Id. at~~ 13-31. It is also Mr. Elkin's professional opinion that the estimated

additional fees to be incurred in connection with this motion, any associated hearing, and an

appeal, if any, are reasonable based on the course and conduct of the litigation thus far and

should likewise be awarded by the Court in accordance with section 27.009(a). Id. at~~ 13-31.

6 3691198 Because John Moore will be unable to offer any material evidence to the contrary, the Houston

BBB's fees, costs, and expenses should be awarded in full.

C. The Court Should Impose at least $50,000 in Sanctions Against John Moore to Deter It From Bringing Similar Actions.

In addition to attorneys' fees, "Section 27.009(a)(2) provides that if the court orders

dismissal, it 'shall award to the moving party ... sanctions against the party who brought the legal

action as the court determines sufficient to deter the party ... from bringing similar actions."'

Kinney v. ECG Attorney Search, Inc., 03-12-00579-CV, 2013 WL 4516106, *1 (Tex. App.-

Austin Aug. 21, 2013, no pet.) (mem. op.) (citing TEX. Crv. PRAC. & REM. CODE ANN. §

27.009(a)(2)).

An award of sanctions against John Moore is appropriate here because John Moore has

already demonstrated its continued willingness to try to improperly limit the Houston BBB's

legitimate exercise of its right of free speech. First, John Moore filed - more than two months

after the First Court of Appeals held that the Houston BBB's Motion to Dismiss should be

granted and that this legal action should, therefore, be dismissed - the Amended Petition which

improperly sought to join nine (9) new defendants and add thirteen (13) causes of action.

Compare Ex. A, Mandate to Ex. B, Amended Petition. The Amended Petition was based upon

the same set of facts alleged in its Original Petition, including the Houston BBB's business CertifiedDocumentNumber:60397672-Page7of11

review and rating of John Moore. Ex. B. Amended Petition~~ 15-41.

Second, after the Court struck the Amended Petition due to John Moore's violation of the

statutory stay of all trial court proceedings (see TEX. Clv. PRAC. & REM. CODE ANN. §

51.014(b)), John Moore continued its attack on the Houston BBB's exercise of its right of free

speech by filing a new legal action (the "Second Legal Action") against the Houston BBB and its

officers and volunteer directors that is practically identical to the Amended Petition, arises out of

7 3691198 the same set of core facts as John Moore's Original Petition here, and, importantly, centers

around the Houston BBB's exercise of its right of free speech through its business reviews and

ratings. See John Moore's First Amended Original Petition in Cause No. 2013-76215 ("New

Petition"), attached hereto as Exhibit D. 5 John Moore's filing of the Second Legal Action

demonstrates that sanctions need to be imposed to deter John Moore from continuing to interfere

with the Houston BBB's exercise of its right to free speech through publishing its business

reviews and ratings.

An award of $75,000 in sanctions pursuant to Chapter 27 was recently upheld by the

Austin Court of Appeals in a similar action where the plaintiff had filed a second lawsuit in

Texas after its claims were dismissed in California under California's version of the Anti-SLAPP

statute. Kinney, 2013 WL 4516106, *9-10, a copy of which is attached as Exhibit E. The

plaintiff in Kinney, like John Moore, had filed multiple actions against the defendant for the

same harm asserted under various legal theories, and in one of those actions a court had awarded

the defendant $45,000 in attorneys' fees. Id. at *10. Acknowledging that Section 27.009(a)(2)

"gives the trial court broad discretion to determine what amount is sufficient to deter the party

from bringing similar actions in the future[,]" the Austin Court of Appeals concluded that the

sanction of $75,000 had a direct relationship to the plaintiff's conduct and that the trial court did

not abuse its discretion in determining that a lesser sanction would have been insufficient to deter CertifiedDocumentNumber:60397672-Page8of11

further actions by the defendant. Id.

Given that John Moore has demonstrated its intent to continue to file and prosecute

meritless lawsuits against the Houston BBB that improperly seek to restrict the Houston BBB's

5 Although Plaintiffs' Original Petition in Cause No. 2013-76215 was initially filed in the 129th Judicial District Court of Harris County, Texas, the lawsuit was transferred upon the granting of an agreed motion by the parties to this Court. As of the filing of this Motion, the Houston BBB 's Chapter 27 Motion to Dismiss in Cause No. 2013- 76215 is pending and set to be heard on May 23, 2014.

8 3691198 exercise of its right of free speech (see Ex. A, Mandate; Ex. D, New Petition), and the fact that

the Houston BBB has already incurred over $90,000 in attorneys' fees in defending against the

Second Legal Action (Ex. C, Elkin Aff. at~ 31), an award of at least $50,000 in sanctions against

John Moore is necessary and appropriate under section 27.009(a)(2) to deter John Moore from

bringing any subsequent legal actions prohibited by Chapter 27.

II. CONCLUSION AND PRAYER

Plaintiffs' lawsuits against the Houston BBB are precisely the type of legal actions that

Chapter 27 is designed to discourage. The First Court of Appeals ruled that the Houston BBB's

motion to dismiss should be granted and that the case be remanded back to this Court for further

proceedings under Section 27.009(a), which mandates the award of attorney's fees, court costs,

expenses, and sanctions in favor of the Houston BBB. Therefore, the Houston BBB prays for the

following:

1. The admission into evidence of the Affidavit of Jeffrey R. Elkin and the exhibits attached thereto;

2. The denial of any objections to the Affidavit of Jeffrey R. Elkin and/or the exhibits attached thereto by John Moore;

3. An award of $390,858.35 in attorneys' fees, $62.35 in court costs, and $6,237.77 in expenses, to be paid by John Moore to the Houston BBB within 90 days of the date final judgment is entered;

4. An award of an additional $30,000 for anticipated legal fees, court costs, and CertifiedDocumentNumber:60397672-Page9of11

expenses associated with this Motion, any hearing hereon, and the entry of final judgment;

5. An award of $50,000 for attorneys' fees and costs in the event an unsuccessful appeal is filed, and an award of $50,000 for attorneys' fees and costs if a petition for review is sought in the Texas Supreme Court;

6. That sanctions be imposed against John Moore and awarded to the Houston BBB of not less than $50,000 to discourage John Moore from filing of any similar actions against the Houston BBB in the future;

9 3691198 7. Entry of final judgment that Plaintiffs take nothing by their claims and causes of action against the Houston BBB; and

8. For such other and further relief to which it may be entitled.

Dated: April 11, 2014.

By: /s/J effrey R. Elkin Jeffrey R. Elkin, SBN 06522180 M. Harris Stamey, SBN 24060650 1000 Main Street, 36th Floor Houston, Texas 77002-6336 Telephone: (713) 226-6617 Telecopier: (713) 226-6217 jelkin@porterhedges.com mstamey@porterhedges.com

ATTORNEYS FOR DEFENDANT, THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC. CertifiedDocumentNumber:60397672-Page10of11

10 3691198 CERTIFICATE OF SERVICE

I certify that a true and correct copy of foregoing document has been served upon all counsel of record on the 11th day of April, 2014, as follows:

Lori Hood D By facsimile transmission Tamara Madden IZI By electronic transmission Brian P. Johnson D By deposit in the United States Mail 919 Milam Street, Suite 1700 D ByCMRRR Houston, TX 77002 (713) 222-2323 (telephone) D By hand-delivery (713) 222-2226 (facsimile) lhood@johnsontrent.com tmadden@johnsontrent.com bjohnson@johnsontrent.com

ATTORNEY FOR PLAINTIFFS, JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC

Isl Jeffrey R. Elkin Jeffrey R. Elkin CertifiedDocumentNumber:60397672-Page11of11

11 3691198 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 60397672 Total Pages: 11

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit F 5/27/2014 2:42:57 PM Chris Daniel - District Clerk Harris County Envelope No. 1367403 By: PAM ROBICHEAUX

NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § 269th JUDICIAL DISTRICT COURT

SECOND AMENDED NOTICE OF ORAL HEARING

Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC, hereby file this,

their Second Amended Notice of Oral Hearing on Defendant, the Better Business Bureau of

Metropolitan Houston, Inc.’s Motion for Award of Attorneys’ Fees, Court Costs, Expenses, and

Sanctions and For Entry of Final Judgment. The oral hearing, originally set for Friday, May 30,

2014 at 3:00 p.m., was moved to June 27, 2014 at 3:00 p.m. and then moved by the Court to June

6, 2014; however, due to scheduling conflicts, the hearing will go forward on June 27, 2014, at

3:00 p.m.

By: /s/ Lori Hood Lori Hood Texas Bar No. 09943430 Tamara Madden Texas Bar No. 00783720 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (713) 222-2226 (facsimile) lhood@johnsontrent.com tmadden@johnsontrent.com ATTORNEYS FOR PLAINTIFFS CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing instrument has been served upon all counsel of record pursuant to Rule 21 and Rule 21(a) of the TEXAS RULES OF CIVIL PROCEDURE on this 2ih day of May, 2014.

Jeffrey R. Elkin Via E-Service and Facsimile M. Harris Stamey Porter Hedges, LLP 1000 Main Street, 36th Floor Houston, Texas 77002 jelkin@porterhedges.com mstamey@porterhedges.com

Isl Lori Hood LORI HOOD

313986.1-04162014

2 05 1 27 1 2014 15:03 FAX 7132222228 JOHNSON & TRENT. LLP !41001 ********************* *** TX REPORT *** *********************

TRANSMISSION OK

TX/RX NO 0755 RECIPIENT ADDRESS 227*7132288217 DESTINATION ID ST. TIME 05/27 15: 02 TIME USE 01 '03 PAGES SENT 3 RESULT OK

~·JohnsonTrent 919 Milam, Suite 1700 Houston, TX 77001

(713) 222-1323 Telephone (713) 222-2226 Facsimile

FACSIMILE Th.ANSMITTAL

Number of Pages (including cover): 3 Date: May 27, 2014

Recipient FaxNwnber Tekph)ne Number Jeffrey R. Elkin (713) 226.6217 (713) 226-6617

From: Lori Hood Telephone: (713) 860-0547

MESSAGE:

Re: Cause No. 2012-35162; John Moore Services, Inc., et al v. The Bettel' Business Bureau of Metropolitan Houston, Inc.; 269th Judicial District Court of Harris County, Texas

PLEASE SEE ATTACHED. THANK YOU.

CQnfidentlality Notice: The documents accompanying this facsimile transmission contain confidential infonnation which is legally privileged and intended only for the use of the recipient named below. We request immediate notification by telephone of misrouted facsimile trmsrnissions so that we can arrange for return of those documents to us. If you receive this facsimile in error, you are hereby notified that any disclosure, i.::opying, distribution or the taking ofany action in reliance on the contents of this faxed infonnation is strictly prohibited.

Any Difficulties, Please Call 713.222.2323 4J'; Johns 919 Milam, Suite 1700 nTrent Houston, TX 77002

(713) 222-2323 Telephone (713) 222-2226 Facsimile

FACSIMILE TRANSMITIAL

Recipient Fax Number T e1eph one 1'.T i •• __ , ________

Jeffrey R. Elkin (713) 226-6217 (713) 226-6617

Re: Cause No. 2012-35162; John Moore Services, Inc., et al v. The Better Business Bureau of Metropolitan Houston, Inc.; 269th Judicial District Court of Harris County, Texas

Confidentiality Notice: The documents accompanying this facsimile transmission contain confidential information which is legally privileged and intended only for the use of the recipient named below. We request inunediate notification by telephone of misrouted facsimile transmissions so that we can arrange for return of those documents to us. If you receive this facsimile in error, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the contents of this faxed information is strictly prohibited.

Any Difficulties, Please Call 713.222.2323

Charge: Client No.: -~3=2=3_ _ _ __ Matter No.: -~O~O~O~O~l_ _ __ 5/27/2014 EnlA'llope Details

P1int this page

Case # 201235162 Case Information Location Harris County - 269th Civil District Court Date Filed 05/27/2014 02:42:57 PM Case Number 201235162 Case Description Assigned to Judge Attorney Lori Hood Finn Name Johnson Trent West & Taylor LLP Filed By Alexandria Chaffin Filer Type Attorney Fees Convenience Fee $0.06 Total Court Case Fees $0.00 Total Court Filing Fees $0.00 Total Court Service Fees $2.00 Total Filing & Service Fees $0.00 Total Service Tax Fees $0.00 Total Provider Service Fees $0.00 Total Provider Tax Fees $0.00 Grand Total $2.06 Payment Account Name Johnson Trent EFile Transaction Amount $2.06 Transaction Response Transaction ID 2268941 Order# 001367403-0

No Fee Documents Not Answers Filing Type EFileAndServe Filing Code No Fee Documents Not Answers Filing Description Second Amended Notice of Hearing Reference Number 323.1 Comments Status Submitting

https://efile.txcourts.gov/EnlA'llopeDetails.aspX?enl.€1opeguid=a5d1e842-82dd-4820-8c20-e6fb71c524a5 1/2 5/27/2014 En.elope Details

Fees Court Fee $0.00 Service Fee $0.00 Documents Lead Document 2nd Amended Notice ofHearing.pdf [Original]

eService Details N ame/Ernail Firm Service Type Status Served Date!fime Opened M. Harris Stamey Porter Hedges, EServe Not Sent No Not Opened hstamey@porterhedges.com LLP Jeffrey R Elkin Porter Hedges EServe Not Sent No Not Opened jelkin@porterhedges.com LLP Jeffrey Elkins EServe Not Sent No Not Opened jelkin@porterhedges.com Johnson, Trent, Tamara M. Madden W &T Not Opened est 1 ayor, EServe Not Sent No trnadden@JohnsonTrent.com L.L.P.

Lori Hood EServe Not Sent No Not Opened fuood@johnsontrent.com M. Harris Stamey EServe Not Sent No Not Opened mstamey@porterhedges.com

https://efi le.txcourts .g ov/EnwlopeDetai ls.aspX?enwlopeg ui d=a5d1 e842-82dd-4820-8c20-e6fb71 c524a5 212 Exhibit G JUN-04-2014 16:15 From:7132281331 Porter Hedges LLP

NO. 2012..JS 162

JOHN MOORE SERVICES, INC. et al.,

Plainliffe,

vs. HARRIS COllNTY, TEXAS

THE BETIER BUSINESS BUR.EA{) OF METROPOLITAN HOUSTON, ThTC.,

Defendant. 269'1'.H JUDICIAL DISTRICT

ORDER SEIIING HEARING The Cr.mrt held a telephone conference this afternoon to resolve the scheduling diffiM"ences that the

Parties have confronted over when to hear Defendant's Motion for Award of Attorneys• Fees, Court Costs,

Expenses, and Sanotions and for Entry of Final. Judament. Lead counsel agreed that all sides are a"V"ailable to

attend a bearing at 9:00 a.m. on Thursday~ June 19. 2014. Therefore. the Court ORDERS that it will hold a hearing on Defendant's Motioril for Awar\'.l of

Attorneys• Fees, Court Costs, Expenses, and Sanctions and for Entry of Final Judgment on I!!grsday, Jane 19.

2014 at 2:,00 a.m. The Court ORDERS that this hearing ma.y not be reset e4(ccpt by Court order.

TI1ci Court funher ORDERS Plalntftf to serve and file any response to Defendant~s motion. by Thursday,

June 12, 2014.

The Court further ORDERS that each Party serve a tiopy of this Order irnn1edlately on all other Parties

by facsimile and either certified mail, renun-rcceipt requested or hand·deHvery. The Court further ORDERS

eaoh Party to file a. Certificate of Service with the Court describing the m.a.n.nt.\r in which the Party sel"\led the Order.

SIGNED at Ho\IS!on, Tex.. this 4" day of J1U1e, ~) "'

HOJlj)anHfude ~ .Judge. 2691" Judicial Djstrict Court

RECOllC&R'& PillilMORAHi::iiir.i I m~ IMtrum•ni is of poor q.111lity :)1 lnl: lime of lma11iflll Exhibit H 6/13/2014 9:10:56 AM Chris Daniel - District Clerk Harris County Envelope No. 1530705 By: PAM ROBICHEAUX

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § § v. § § HARRIS COUNTY, TEXAS THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § 269th JUDICIAL DISTRICT COURT

PLAINTIFFS’ RESPONSE AND OBJECTION TO DEFENDANT’S MOTION FOR AWARD OF ATTORNEYS’ FEES, COURT COSTS, EXPENSES, AND SANCTIONS AND FOR ENTRY OF FINAL JUDGMENT AND PLAINTIFFS’ MOTIONS TO CONSOLIDATE AND TO COMPEL

Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC, (“John Moore”

or “Moore”) hereby file this their Response and Objection to Defendant, The Better Business

Bureau of Metropolitan Houston, Inc.’s (“Houston BBB” or “BBB”) Motion for Award of

Attorneys’ Fees, Court Costs, Expenses, and Sanctions and for Entry of Final Judgment

(“Motion”) and, in support thereof, state as follows.

SUMMARY OF THE ARGUMENT

The Houston BBB, by and through its counsel Porter Hedges, LLC, ("Porter Hedges"),

seeks an award of $390,858.35 in fees, $6,237.77 in expenses, $62.35 in court costs, and $50,000

in sanctions. There are two considerations to an award of attorneys’ fees under Chapter 27: (1) Certified Document umber: 61188586 Page 1 of 21

whether they are reasonable and necessary and (2) whether they are equitable and just.1 The first

consideration is a question for the factfinder, which in this case is a jury. The second is a

question for the judge sitting in equity.

1 While section 27.009 says “reasonable attorney’s fees,” necessity is inseparable under Texas jurisprudence from reasonableness. See infra, at p.6. In other words, unnecessary fees would be unreasonable. Therefore, this motion includes the concept of necessity when discussing the fact issues that must be decided. The primary issue before the trier of fact will be whether the amount sought by Porter

Hedges in its Motion is reasonable and necessary. TEX. CIV. PRAC. & REM. CODE § 27.009(a).

As the Houston BBB seeks nearly $400,000.00 in fees and expenses, close examination and

careful consideration of its Motion and evidence is indeed warranted. It is against this backdrop

that the trier of fact is asked to review the fees and expenses at issue. Even if the Houston BBB

has presented some evidence that the fees are reasonable and necessary, it has not presented

conclusive evidence. Therefore, a fact finding will be required, and John Moore has requested a

jury and paid the jury fee in this case.

The primary issue before the judge will be whether the amount sought by Porter Hedges

is just and equitable and whether John Moore must bear sanctions. TEX. CIV. PRAC. & REM.

CODE § 27.009(a), (b). Because the Houston BBB has not achieved a dismissal of all claims that

John Moore has brought, it is not at all clear that it would be just or equitable to award attorneys’

fees or sanctions based on the Houston BBB’s partial victory. Furthermore, the Houston BBB’s

own arguments emphasize the uncertainty that the parties confronted with this newly enacted

statute. There was a great amount of uncertainty in 2012 whether Chapter 27 should be

interpreted to apply to the claims made in this lawsuit, or what standard of proof John Moore

would be required to establish to survive a motion to dismiss. Under these circumstances, it is

neither equitable nor just to award almost half a million dollars in fees and sanctions against John Certified Document umber: 61188586 Page 2 of 21

Moore.

BACKGROUND

John Moore filed suit against the Houston BBB for reputational torts, fraud, and

interference with prospective and existing contracts. The BBB argued that the claims against it

arose out of its right to participate in government by freely speaking, associating, and petitioning

2 and filed a motion to dismiss under section 27.005 of the Texas Civil Practice and Remedies

Code (the Anti-SLAPP statute).

During the pendency of the Anti-SLAPP motion, this Court allowed only limited

discovery, i.e., the production of BBB consumer complaints.

In response to the Anti-SLAPP motion, John Moore argued that the statute did not apply

under the circumstances, and presented evidence in support of each essential element of its

claims. The Court signed an order denying the BBB’s motion to dismiss.

In response to this Court’s denial of its motion, the Houston BBB elected to file an

interlocutory appeal. As the Houston BBB notes, the preparation of this case for trial continued.

Both parties engaged in discovery. In the end, the First Court of Appeals reversed this Court’s

order, and John Moore’s petition for review was denied. The case was remanded to the trial

court for further proceedings.

In light of the court of appeals’ decision, John Moore amended it petition to assert causes

of action (1) that were supported and suggested by the evidence discovered after the motion to

dismiss was denied and (2) that would not implicate the Houston BBB’s speech rights. Pursuant

to the Houston BBB’s motion, that amended petition was struck, forcing John Moore to file the

causes of action in a separate suit and giving the Houston BBB another bite at the Chapter 27

apple. Certified Document umber: 61188586 Page 3 of 21

Defendant now seeks recovery of attorney’s fees, expenses and court costs under section

27.009(a) of the Anti-SLAPP statute. The statute provides that costs and “reasonable” attorney’s

fees shall be awarded to the moving party as “justice and equity may require.” Id. As noted

below, the determination as to the reasonableness of fees is a fact issue for the trier of fact. John

Moore reiterates its demand from its original petition that a jury consisting of twelve good and

3 lawful jurors be duly qualified, tested, selected, and impaneled and the case proceed to trial on the

reasonableness and necessity of the requested attorney’s fees, expenses and court costs and any and

all other fact issues.

John Moore also asks that the court consolidate the cases.

ARGUMENT

The Houston BBB does not state the basis for its motion. In the latest conference with

the Court, the Houston BBB has characterized it as a motion for judgment in preparation for a

bench trial. At other times, the Houston BBB’s attorneys have characterized it as a motion for

summary judgment. In either event, the motion cannot be granted.

First, a bench trial is not appropriate. John Moore filed a jury demand, paid the fee, and

this case is pending on the jury docket. Reasonableness of attorneys’ fees is a question for the

fact finder, which, in this case, is a jury. Second, the Houston BBB has not presented conclusive

evidence that the fees are reasonable and necessary. Indeed, it is not certain that the Houston

BBB has presented competent evidence at all. Finally, an award of fees would be neither just

nor equitable at this time, and the question of sanctions is premature and overreaching as to

amount.

I. REASONABLENESS OF ATTORNEYS’ FEES IS AN ISSUE FOR THE JURY.

John Moore is entitled to a jury trial on the question of reasonableness of attorneys’ fees. Certified Document umber: 61188586 Page 4 of 21

Chapter 27 requires a determination of “reasonable attorney’s fees.” TEX. CIV. PRAC. & REM.

CODE § 27.009(a)(1). Because this is a fact issue and because John Moore has requested a jury

trial in this case, this issue cannot be tried to the bench. The BBB even admits in its Motion that

whether fees are reasonable and necessary is a question of fact, citing Bocquet v. Herring, 972

S.W.2d 19, 20-21. (Tex. 1998). See Motion, p. 4.

4 Fee shifting provisions in which the reasonableness of a fee must be determined present a

jury issue. The Texas Supreme Court has consistently interpreted similar fee shifting provisions

to raise fact questions on the issues of reasonableness and necessity that entitle the party against

whom the fees are to be assessed to demand a jury trial. See Transcontinental Ins. Co. v. Crump,

330 S.W.3d 211, 213 (Tex. 2011) (and cases cited therein); see also Commerce & Indus. Ins. Co.

v. Ferguson-Stewart, 339 S.W.3d 744, 748-49 (Tex. App.—Houston [1st Dist.] 2011, pet.

denied) (reversing and remanding for a jury trial the bench trial judgment awarding attorneys’

fees). Chapter 27 is indistinguishable from other similar fee shifting provisions as discussed

below.

Like the Citizens’ Participation Act, the Texas Labor Code mandates that “the court”

award attorneys’ fees to a workers’ compensation claimant under a fee shifting provision.

Crump, 330 S.W.3d at 213. The injured worker submitted his attorneys’ fees to the bench and

the trial court awarded fees, but the insurer argued that it was entitled to a jury determination

under the statute. Id. at 214. The Texas Labor Code provides:

An insurance carrier . . . is liable for reasonable and necessary attorney’s fees . . . if the claimant prevails on an issue on which judicial review is sought . . . . [T]he court shall apportion and award fees to the claimant’s attorney only for the issues on which the claimant prevails. In making that apportionment, the court shall consider the factors prescribed . . . .

TEX. LAB. CODE § 408.221 (emphasis added). The Texas Supreme Court noted that the statute Certified Document umber: 61188586 Page 5 of 21

mentioned “the court” but was “silent on the critical judge-or-jury question.” Crump, 330

S.W.3d at 229. The Court considered this silence to create an ambiguity and relied on the

common law interpretations of other fee-shifting provisions to resolve the ambiguity. Id.

The Court noted that fee shifting provisions generally raise a fact issue. Id. at 230 (“In

general, the reasonableness of statutory attorney’s fees is a jury question.”). For example, the

Public Information Act also states that “the court” is to assess the amount of reasonable and 5 necessary fees. Id. at 230 (citing TEX. GOVT. CODE § 552.323). The Texas Supreme Court

determined this to be a jury question. See City of Garland v. Dallas Morning News, 22 S.W.3d

351, 367 (Tex. 2000).

Likewise, the Declaratory Judgment Act permits “the court” to award reasonable and

necessary fees. TEX. CIV. PRAC. & REM. CODE § 37.009. Because reasonableness and necessity

are both fact issues, they are questions that are committed to a jury. Crump, 330 S.W.3d at 231

(citing Bocquet, 972 S.W.2d at 21). Applying this general rule to the statute in Crump, the Court

decided that the Texas Workers’ Compensation Act’s fee shifting provision preserved the right

to “submit the issue of the reasonableness and necessity of a claimant’s attorney’s fees, where

disputed, to a jury.” Id. at 231.

Thus, in three other fee shifting provisions mandating or authorizing “the court” to award

fees, the Texas Supreme Court has determined that “the court” means the jury when it comes to

the questions of reasonableness or necessity.2 Just like those provisions, section 27.009 of the

Civil Practice and Remedies Code requires “the court” to award “reasonable attorney’s fees.”

TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). Section 27.009 should be interpreted consistently

with the fee shifting provisions discussed above. Therefore, “the court” must mean “the jury” on

the issue of reasonableness.

As set forth in the Hood Affidavit, there is at least a fact issue as to whether the Houston Certified Document umber: 61188586 Page 6 of 21

BBB’s fees are reasonable. Ex. A (Affidavit of Lori Hood). John Moore has requested a jury

and paid the jury fee. This case is on the jury docket. John Moore is entitled to have a jury find

these facts.

2 On the other hand, “the court” refers to the judge when it comes to determining whether justice or equity would permit the award of fees. Crump, 330 S.W.3d at 231.

6 II. THE HOUSTON BBB HAS NOT PRESENTED CONCLUSIVE EVIDENCE THAT THE ATTORNEYS’ FEES ARE REASONABLE AND NECESSARY.

The Houston BBB’s evidence of attorneys’ fees is not conclusive. Indeed, it may not

even be legally sufficient.

A. The Houston BBB Must Provide Sufficient Evidence to Allow the Fact Finder to Make a Determination.

The Anti-SLAPP statute mandates the award of “reasonable” attorneys’ fees in an

amount that satisfies “justice and equity.” TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1). Texas

jurisprudence has always considered reasonableness and necessity together. See, e.g., El Apple I,

Ltd. v. Oivas, 370 S.W.3d 757, 762-63 (Tex. 2012) (considering necessity of the fees as a

component of reasonableness). Thus, the Houston BBB is tasked with providing evidence that

its attorneys’ fees are both reasonable and necessary.

For the fact finder to make a meaningful determination and for the Court to conduct a

meaningful review, the Houston “must provide sufficient details of the work performed.” Id. at

764. This includes, “at a minimum, documentation of the services performed, who performed

them and at what hourly rate, when they were performed, and how much time the work

required.” Id. The El Apple requirements have been elaborated upon to require “evidence of the

time spent on specific tasks.” Long v. Griffin, __ S.W.3d __, 2014 WL 1643271, at *3 (Tex.

April 25, 2014). Certified Document umber: 61188586 Page 7 of 21

The BBB bears the burden of proof in support of its Motion, and cannot simply provide

general statements of the time spent multiplied by the hourly rate to the trier of fact. Id. The

Texas Supreme Court has provided further guidance in the form of factors that should be

considered when determining whether the requested compensation is reasonable. These

guidelines are known as the “Anderson Factors” and are set forth below:

7 a. the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;

b. the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

c. the fee customarily charged in the locality for similar legal services;

d. the amount involved and the results obtained;

e. the time limitations imposed by the client or by the circumstances;

f. the nature and length of the professional relationship with the client;

g. the experience, reputation, and ability of the lawyer or lawyers performing the services; and

h. whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

John Moore objects to the BBB’s purported evidence in support of its Motion, see infra,

pp. 15-17, and asserts that the jury is entitled to assess the credibility of the BBB’s witnesses and

determine the weight of the evidence and decide whether the BBB has met its burden of proof to

recover fees and expenses in this matter.

B. The Houston BBB Does Not Even Purport to Present Conclusive Evidence That Its Fees Are Reasonable and Necessary.

Even if the Houston BBB’s evidence passes the legal sufficiency test, it is certainly not

conclusive. Indeed, the fees may well be unreasonable as a matter of law. Certified Document umber: 61188586 Page 8 of 21

1. The Houston BBB’s proposed fee award is “patently unreasonable” according to Justice Hecht.

In a case involving an eight-day trial, three depositions, and approximately 2,500 pages

of document production, Justice Hecht opined that 890 hours of attorney time at a rate of over

$500 per hour was “patently unreasonable.” El Apple I, Ltd., 370 S.W.3d at 765 (Hecht, J.

concurring, joined by Wainwright, J. and Willet, J.). Justice Hecht also found it significant that

8 the attorneys for the opposing side spent only 266.7 hours at less than half the billing rate. Id. at

766. As Justice Hecht said, “Statutory fee-shifting is not a bonanza. It should take into account

what the market should.” Id.

In this case, the Houston BBB prepared and filed eight contested pleadings and motions

in this Court including its 3-page answer and 10-page motion to dismiss. Ex. A ¶ 13. The

Houston BBB also produced approximately 12,000 pages of documents and participated in

several hearings. Id. In the appellate courts, the Houston BBB prepared and filed a brief of

appellant, a reply brief of appellant, and a response to petition for review. Id. There was no trial.

Discovery was limited, and no depositions were taken. Id. The Houston BBB seeks a bonanza

for its attorneys that is not consistent with the market.

Furthermore, the fee invoices covering the periods from June 2012 through May 2013

(from the invoice dated July 23, 2012 through the invoice dated June 16, 2013) do not satisfy the

most basic requirement by showing the time billed and the rate for that time.

That proof should include the basic facts underlying the lodestar, which are: (1) the nature of the work, (2) who performed the service and their rate, (3) approximately when he services were performed, and (4) the number of hours worked.

El Apple, 370 S.W.3d at 763. These invoices do not show the rate for the persons performing the

work at the time they performed the work. Although the Elkin Affidavit provides billing rates Certified Document umber: 61188586 Page 9 of 21

for certain attorneys and legal staff, it does not provide the rates for all of the persons identified

in the invoices, and it does not provide the rates that were in effect at the time of the invoice.

Therefore, these invoices may not be considered.

Finally, the Houston BBB’s evidence of reasonableness does not satisfy the Long v.

Griffin standard. Long, at *2. The billing invoices provided include 610 entries. Of those, only

373 provide the time spent on a specific task as required by the Texas Supreme Court. Id.; See

9 Ex. B-1 (Affidavit of Amelia Irving). The other 267 combine multiple tasks and actions into a

single time entry (i.e., block billing), making it impossible to determine whether the time was

well-spent or wasted. Id. This form of block billing does not even permit the fact finder to break

the hours spent down into general categories such as discovery, research, pleadings, witnesses,

etc., and even if this kind of general breakdown were possible, it is inadequate under Supreme

Court precedent. See El Apple, 370 S.W.3d at 763 (holding that such categorization “provides

none of the specificity needed for the trial court to make a meaningful lodestar determination.”).

Without even the ability to consider the time spent on general activities, much less

specific tasks, the invoices are insufficient to support a finding that the fees included therein are

reasonable and necessary.

2. The Houston BBB has not produced conclusive evidence that the fees represented in the invoices have been incurred.

Section 27.009 only allows recovery of fees that have been “incurred.” TEX. CIV. PRAC.

& REM. CODE § 27.009(a)(1). The Elkin Affidavit does not establish which, if any, of the fees

invoiced were actually incurred by the Houston BBB in the sense that they were paid or that

there is an obligation to pay them in full. The Elkin Affidavit states that “Porter Hedges has

received payment for all work,” but it does not specify what that payment amount was.

Therefore, the Elkin Affidavit does not conclusively establish that the fees requested were Certified Document umber: 61188586 Page 10 of 21

incurred.

3. The Houston BBB has not produced conclusive evidence that the proposed fee award is reasonable and necessary.

As discussed above, the Houston BBB’s invoices and the Elkin Affidavit do not satisfy

the Texas Supreme Court’s specificity requirements and are, therefore, not even some evidence

of the reasonableness of fees, much less conclusive evidence. Indeed, much of the Elkin

Affidavit is conclusory, see infra, pp. 15-17, because it is largely an expression of opinion

10 without the underlying facts necessary to support the conclusion. Hou-Tex., Inc. v. Landmark

Graphics, 26 S.W.3d 103, 112 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Even if the

evidence were competent and were considered, it would raise a fact issue at best.

The reasonableness of the time spent in representing the Houston BBB is discussed only

in general terms in paragraphs 7 through 9. Paragraph 7 lists the kinds of legal tasks that one

would expect in any lawsuit, but only in vague terms. Paragraph 8 includes a chart of the month-

by-month billing. Paragraph 9 is intended to prove up the invoices. In paragraph 10, the time is

divided into four overlapping general categories. Paragraph 11 restates the total fees, costs, and

expenses allegedly incurred. Paragraph 12 provides a conclusory estimate of future legal fees.

None of these paragraphs discuss the reasonableness of the fees, much less relate the entries on

the invoices to any particular tasks and explain why they are reasonable. In short, they do not

provide any evidence that would allow a finder of fact to make a determination as to

reasonableness.

Following is a review of the Anderson factors and the Houston BBB’s treatment of each

in the Elkin Affidavit.

a. The time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly.

The work on this case was not complex or difficult for the Houston BBB. Ex. A ¶¶ 16- Certified Document umber: 61188586 Page 11 of 21

17. Chapter 27 was designed to allow a defendant to easily and efficiently impose an immediate

burden on the plaintiff to present “clear and specific prima facie evidence” of the elements of its

claim. Id. The Houston BBB accomplished this with a short, ten page motion to dismiss.

While Chapter 27 was a new statute in Texas, it was based on a model that has been

adopted in many states, and there had already been a number of other cases in Texas in which it

had been used by other Better Business Bureaus (notably Dallas) as a defensive tactic. Id. ¶ 17. 11 Therefore, the Houston BBB did not have to reinvent the wheel. Furthermore, the legal briefing

on the interpretation of the statute in the trial court and the court of appeals involved a

straightforward application of well-known and long-established precedent. Id. ¶ 16. This text-

based statutory construction was not difficult and involved legal authority that is so well known

that little research should have been necessary to supply the principles. Id.

b. The likelihood that the acceptance of the particular employment will preclude other employment by the lawyer.

Porter Hedges acknowledges in the Elkin Affidavit, that taking on this engagement did

not prevent the firm from accepting any other clients.

c. The fee customarily charged in the locality for similar legal services.

For a company the size of the Houston BBB, the rates indicated in the Elkin Affidavit

and, presumably, charged in the attached invoices were excessive. Ex. A ¶ 15. In the stratified

Houston legal market, small businesses like the Houston BBB (an in particular, non-profits)

simply do not engage firms that charge fees in the upper range of the market. Id. If they do

engage such firms, they do so at substantially discounted rates or as a pro bono matter. Id. For

example, the rates charged by John Moore’s attorneys were as much as 40% lower, resulting in

total fees incurred by John Moore of only $165,000 for precisely the same litigation. Id.

d. The amount involved and the results obtained. Certified Document umber: 61188586 Page 12 of 21

Except for a handful of days in the fall of 2013, before its First Amended Original

Petition was struck, John Moore did not seek a damage multiplier. Ex. A ¶ 19. Therefore, with

the exception of the fees incurred to contest this filing, Porter Hedges’ rationale that it spent

extra time on the case for the other 21 months of litigation due to this pleading is disingenuous.

12 Furthermore, Porter Hedges has obtained only a partial dismissal of John Moore’s claims

to date. This result, while beneficial to the Houston BBB, does not justify the suggestion that the

Houston BBB’s position has been fully vindicated or that John Moore’s claims have no merit.

An award of attorneys’ fees is premature on this factor.

e. The time limitations imposed by the client or by the circumstances.

There were no onerous time limits imposed in this litigation. Ex. A ¶ 20. Chapter 27

allows 60 days to prepare and file a motion to dismiss. TEX. CIV. PRAC. & REM. CODE

§ 27.003(b). The Houston BBB had ample time to prepare the ten-page motion. Ex. A ¶ 20.

In the interlocutory appeal, the Houston BBB requested and received two extensions of

time to file its principal brief, which John Moore did not oppose. Id. In the end, the Houston

BBB had 108 days to prepare and file its brief of appellant. Id. John Moore filed its brief in

response 35 days later. Id. After yet another extension of time, the Houston BBB had 27 days to

prepare and file a brief in reply. Id. There was no time pressure in the appal.

f. The nature and length of the professional relationship with the client.

Porter Hedges states that it has an almost 20 year relationship with the Houston BBB.

The Houston BBB is a not-for-profit enterprise that markets itself as a performer of good works

for the consumers of Houston. Ex. A ¶ 15. These types of clients are often represented pro bono Certified Document umber: 61188586 Page 13 of 21

or at substantially discounted rates and/or capped legal fees. Id. The Houston BBB’s evidence is

silent on its billing arrangement with the Porter Hedges. But the length of this relationship and

the nature of the Houston BBB’s activities suggest that, in the market, it would be able to engage

counsel for substantially less than the amount that it now suggests that it incurred. Id. ¶ 21.

13 g. The experience, reputation, and ability of the lawyer or lawyers performing the services.

Paragraph 14 set out the experience of some of the timekeepers who appear on the

invoices. But there are many entries that include timekeepers whose experience is unstated.

There is no evidence of reputation or of ability for any timekeeper.

Assuming that the lawyers involved were all “able” to a degree that is proportionate to

their experience, it appears that the time spent on this matter is not reflective of that ability. Ex.

A ¶ 22. For example, the appeal primarily involved basic, well-understood statutory construction

principles. Id ¶ 16. No new legal ground was explored in the textual analysis. Id. It was simply

a plain meaning-based legal argument. Id. The number of Texas Supreme Court cases setting

out the plain language standard of interpretation are so numerous, it would be difficult not to

know at least one off the top of the head. It is clear to John Moore that this legal argument

should not have required so much time to prepare both in terms of research and of drafting such

that it required two additional months of work. Id. ¶¶ 20, 22.

h. Whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

The Houston BBB states that its fee agreement was fixed, but the agreement is not

provided. Therefore, it is not certain what fees were incurred by the Houston BBB. The Elkin Certified Document umber: 61188586 Page 14 of 21

Affidavit states that “payment” has been made, but does not specify the amount of that payment.

Furthermore (and this may be an error, it is so unusual), the Elkin Affidavit states that the

fees are billed to the nearest six-tenths of an hour. If correct, this policy would be a substantial

departure from customary practice in the Houston legal market, and it would result in an

inordinate inflation of the Houston BBB’s legal invoices that would not be reasonable. Ex. A

¶ 23.

14 III. AN AWARD OF FEES AT THIS JUNCTURE WOULD BE NEITHER JUST NOR EQUITABLE.

For two reasons, the award of fees suggested by the Houston BBB would be neither

equitable nor just. First, the application of Chapter 27 to John Moore’s claims was not certain

and there is no serious dispute that John Moore has been harmed by the Houston BBB’s actions.

Ex. A ¶¶ 7-10.

Second, John Moore still has viable claims against the Houston BBB that arise out of this

transaction, which, but for the Houston BBB’s insistence, would be joined to this same lawsuit.

Under these circumstances, an award of over $400,000 in fees would serve neither justice nor

equity and would be premature.

Indeed, as the Houston BBB has repeatedly stated, the claims in the second suit (Cause

No. 2013-76215) arise out of the same transaction. The Houston BBB’s motion to strike John

Moore’s First Amended Original Petition in the fall of 2013 caused a de facto severance of John

Moore’s claims into separate cases, and John Moore objects that such a splitting of its claims is

improper and would result in prejudice to John Moore in the form of improper attempts by the

Houston BBB to assert res judicata.

John Moore does not believe that res judicata would apply under the circumstances. See

Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985) (“res

judicata effects of an action cannot preclude litigation of claims that a trial court explicitly Certified Document umber: 61188586 Page 15 of 21

separates or severs from that action”); Dolenz v. Continental Nat’l Bank, 620 S.W.2d 572, 575

(Tex. 1981) (res judicata does not apply when conduct by a party estops it from asserting the

prior active jurisdiction); see also Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex.

1988). But even though res judicata does not apply, the splitting of John Moore’s cause of

action is not consistent with Texas policy and should be corrected now that all statutory stays

preventing a consolidation have expired. See Pierce v. Reynolds, 329 S.W.2d 76, 78 (Tex. 1959) 15 (claim splitting is improper); Ryland Group, Inc. v. White, 723 S.W.2d 160, 162 (Tex. App.—

Houston [1st Dist.] 1986, no writ) (compulsory claims that arise out of the same transaction

cannot be split into a separate cause).

Under the circumstances, John Moore moves for consolidation of Cause No. 2013-76215

with this case. TEX. R. CIV. P. 174(a); cf. Wyatt., 760 S.W.2d at 247 (when the claims in a

second lawsuit should have been brought in a previously-filed case, the second suit should be

abated so the pleadings in the first suit can be amended to join the new claims). A consolidation

will allow the entire controversy to be decided at one time by a single jury.

IV. JOHN MOORE OBJECTS TO THE ELKIN AFFIDAVIT AS LEGALLY INSUFFICIENT TO SUPPORT AN AWARD OF ATTORNEYS’ FEES.

The Elkin Affidavit contains general and highly conclusory statements which are legally

insufficient to support an award of attorneys’ fees. A conclusory statement is “one that does not

provide the underlying facts to support the conclusion.” Hou–Tex, Inc., 26 S.W.3d at 112

(quoting Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.—Houston [1st Dist.] 1997, no

writ)). A general statement by an attorney that an amount sought is reasonable is not conclusive

proof on the question of reasonableness. Nguyen Ngoc Giao v. Smith & Lamm, P.C., 714 S.W.2d

144, 149 (Tex. App. —Houston [1st Dist.] 1986, no writ); see also, Burrow v. Acre, 997 S.W.2d

229, 236 (Tex. 1999) (expert must support opinion by reasoned basis). Furthermore, an Certified Document umber: 61188586 Page 16 of 21

agreement to pay an attorney a certain sum per hour is not proof of its reasonableness. Leal v.

Leal, 628 S.W.2d 168, 171 (Tex. App.—San Antonio 1982, no writ).

John Moore’s objections include but are not limited to Elkin Affidavit paragraphs 6, 20

and 25, which state that Porter Hedges billing rates are customary, reasonable and comparable to

similar law firms in Harris County, Texas. These statements are conclusory and provide no

underlying facts to support the conclusion.

16 John Moore further objects to Elkin Affidavit paragraph 8, which concludes that Moore

has asserted numerous, meritless claims. This is a factually unsupported opinion and does not

provide a valid basis for the award of attorneys’ fees.

The Elkin Affidavit is also objectionable as to paragraph 9 and the referenced invoices

attached as Exhibit 2. Specifically, the invoices contain multiple redactions to allegedly prevent

disclosure of attorney-client privileged material. The sheer number of redactions suggests that

the BBB, by and through its counsel, is not protecting attorney-client privilege but rather hiding

duplicative billing entries and unnecessary work product. John Moore objects that Elkin

Affidavit’s reliance on the invoices contained in Exhibit 2 is based on insufficient, unreliable and

conclusory evidence.

John Moore further objects to Elkin Affidavit paragraph 12, which contains an

unsupported and conclusory opinion that the BBB will incur $130,000.000 in legal fees to defend

and argue its Motion and any related appeals.

John Moore objects to Elkin Affidavit conclusory paragraphs 17, 18 and 22 which allude

to the “complexity” of the Lawsuit without providing factual evidence of how Chapter 27 is a

complex statute and delineating with specificity what legal analysis and research were required

to prosecute the BBB’s Motion. Certified Document umber: 61188586 Page 17 of 21

John Moore further objects to Elkin Affidavit paragraph 21 which contains the

conclusory statement that the hours expended by Porter Hedges, as reflected in the invoices

attached as Exhibit 2, were reasonable. John Moore re-asserts its objections to reliance on the

heavily redacted invoices as constituting insufficient and unreliable evidence.

17 John Moore objects to Elkin Affidavit paragraph 24 which concludes, without any

supporting factual evidence, that Porter Hedges professionals were precluded from other

employment due to the acceptance of this case.

John Moore further objects to Elkin Affidavit paragraph 28, which references the

experience, reputation and ability of Porter Hedges without providing any factual support. John

Moore also objects to the conclusory statement that Porter Hedges’ billing rates were reasonable

based on said experience.

John Moore objects to Elkin Affidavit paragraph 31, which states that Porter Hedges

expenses are reasonable based on the length and complexity of this litigation. These statements

are conclusory and provide no underlying facts to support the conclusion.

Finally, John Moore objects to Elkin Affidavit paragraph 32 as irrelevant to the BBB’s

Motion and unsupported by any evidence proffered in this matter.

In sum, the Elkin Affidavit contains conclusions unsupported by any reasoning

connecting them to the facts as to the time and rates billed on specific tasks that would support a

finding that the claimed attorneys’ fees are reasonable and necessary. Thus, the statements in the

Elkin Affidavit regarding attorneys’ fees are conclusory and there is no evidence to support the

reasonableness of these fees. Coastal Terminal Operators v. Essex Crane Rental Corp., 2004 Certified Document umber: 61188586 Page 18 of 21

Tex. App. LEXIS 7257 at pp. 21-24 (Tex. App.—Houston. [14th Dist.] 2004, no pet) (citing

Burrow, 997 S.W.2d at 235-37).

MOTION TO COMPEL RESPONSES TO MOORE’S DISCOVERY

John Moore objects to Defendant’s request for fees and expenses incurred prosecuting its

Motion to Dismiss. Among other reasons, these fees and expenses should be denied by the trier

of fact because Porter Hedges has provided no substantive discovery responses to John Moore

18 regarding these requests, despite the fact that John Moore specifically requested such

information in a request for production to the Houston BBB. Ex. C.

Defendant is in possession, custody or control of documents and information responsive

to John Moore’s request for production, yet Porter Hedges has produced no information

regarding fees and expenses it has incurred beyond the firm’s heavily redacted billing records.

John Moore is entitled to discovery on these fees and expenses in order to test their

reasonableness and necessity, and the Houston BBB should not be allowed to profit from its

blatant disregard for its discovery obligations. John Moore thus seeks an Order overruling the

Houston BBB’s objections and compelling production of the requested documents.

RESERVATION OF RIGHTS

John Moore expressly reserves the right to amend, modify, or supplement its Response to

Defendant’s Motion, and to assert additional grounds for objecting to the Motion, to the extent

discovery and expert analysis reveal additional issues concerning the propriety of compensation

sought in the Motion.

WHEREFORE, John Moore respectfully requests that this Court deny Defendant’s

Motion for Award of Attorneys’ Fees, Court Costs, Expenses, and Sanctions and for Entry of

Final Judgment and sustain John Moore’s objections to the evidence offered by Defendant Certified Document umber: 61188586 Page 19 of 21

contained herein. John Moore further requests that the Court grant its motion to consolidate and

consolidate Cause No. 2013-76215 into this case and for the trier of fact to hear evidence to

determine the facts raised by the parties. Finally, John Moore requests that the Court grant its

motion to compel a response to its discovery requests. John Moore also requests that this Court

grant such other and further relief as is equitable and just.

19 Certified Document umber: 61188586 Page 20 of 21

20 Respectfully submitted,

By: /s/ Lori Hood Lori Hood Texas Bar No. 09943430 Brian P. Johnson Texas Bar No. 10685700 Tamara Madden Texas Bar No. 00783720 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (713) 222-2226 (facsimile) lhood@johnsontrent.com bjohnson@johnsontrent.com tmadden@johnsontrent.com

ATTORNEYS FOR PLAINTIFFS

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing instrument has been served upon all counsel of record pursuant to Rule 21 and Rule 21(a) of the TEXAS RULES OF CIVIL PROCEDURE on this 12th day of June 2014.

Jeffrey R. Elkin Via E-Service M. Harris Stamey PORTER HEDGES, LLP 1000 Main Street, 36th Floor Certified Document umber: 61188586 Page 21 of 21

Houston, Texas 77002 jelkin@Porter Hedges.com mstamey@Porter Hedges.com

/s/ Tamara Madden TAMARA MADDEN

329881

21 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 61188586 Total Pages: 21

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit I CAUSENO. ~-35'f~1_

~tt ~re_ ~N1'ce~1 k. ef. aJ. , § IN THE DISTRICT COURT OF § Plaintiff(s), § § § HARRIS COUNTY, TEXAS § § § Defendant(s) § 269th JUDICIAL DISTRIC1;

The following matters are pending before the Court: CertifiedDocumentNumber:61265745-Page1of1

, 20I_:l.

FILED Chris Daniel District Clerk Hon Dan Hinde Judge, 2691h District Court JUN 19 2014 c2 r?j~ Time: tf t;nty, Texa~ - _ By Deputy I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 61265745 Total Pages: 1

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit J 8/4/2014 4:42:37 PM Chris Daniel - District Clerk Harris County Envelope No. 2045292 By: GAYLE FULLER

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § ~ § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendant. § 269TH JUDICIAL DISTRICT COURT

DEFENDANT'S MOTION FOR ENTRY OF FINAL JUDGMENT AND FOR AWARD OF COURT COSTS, EXPENSES, AND SANCTIONS i:

Defendant The Better Business Bureau of Metropolitan Houston, Inc. ("Defendant") files

this Motion for Entry of Final Judgment and for Award of Court Costs, Expenses, and Sanctions

against Plaintiffs John Moore Services, Inc. and John Moore Renovation, LLC (collectively

"Plaintiffs" or "John Moore") and in support thereof would show the Court as follows:

I. REQUEST FOR JUDGMENT ORDERING DISMISSAL OF PLAINTIFFS' CLAIMS

Pursuant to the judgment rendered by the First Court of Appeals on July 16, 2013, and

the mandate issued by that court on April 4, 2014, Defendant respectfully requests that the Court

enter a final judgment dismissing all of Plaintiffs' claims against Defendant with prejudice and

ordering that Plaintiffs take nothing on all of their claims. See The Better Bus. Bureau of Metro.

Houston, Inc. v. John Moore Servs., Inc., No. 01-12-00990-CV, 2013 WL 3716693, *12 (Tex.

App.-Houston [1st Dist.] 2013, pet. denied).

II. REQUEST FOR JUDGMENT ON JURY VERDICT FOR ATTORNEYS' FEES

Pursuant to Section 27.009(a)(l) of the Texas Civil Practice and Remedies Code

("Chapter 27"), the Court is required to award to the Defendant "the reasonable attorney's fees

... incurred in defending against this legal action .... " TEX. CIV. PRAC. & REM. CODE ANN. §

27.009(a)(l) (West 2014). On July 22, 2014, a jury rendered a verdict for $250,001.44 as the

1 3818625 amount of reasonable attorney's fees incurred by the Defendant in defending against this legal

action. See Exhibit A. Accordingly, Defendant respectfully requests that the Court enter a final

judgment requiring Plaintiffs to pay to Defendant its attorney's fees in at least the amount of

$250,001.44. 1

III. REQUEST FOR JUDGMENT AWARDING COURT COSTS, EXPENSES, AND SANCTIONS

Chapter 27 also requires the Court to award to the Defendant "court costs ... and other

expenses incurred in defending against the legal action .... " TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.009(a)(l) (West 2014). In addition, Chapter 27 calls for the Court to award "sanctions

against the party who brought the legal action as the court determines sufficient to deter the party

... from bringing similar actions described in this chapter."2

A. Trial Court Costs

Defendant requests that the Court enter a final judgment taxing all costs of court

expended or incurred in this lawsuit to Plaintiffs.

B. "Other Expenses"

Defendant requests that the Court enter a final judgment awarding Defendant $6,23 7. 77

for expenses incurred in defending against Plaintiffs' legal action, as established by the

testimony and exhibits (Defendant's Trial Exhibits 1, 3-4, 6) entered into evidence during the

July 21-22 jury trial.

Defendant agrees only to the form of judgment it is submitting to the Court and is not, in seeking entry of a final judgment, concurring with the jury's verdict or the content and result of the final judgment. First Nat'/ Bank v. Fojtik, 775 S.W.2d 632, 633 (Tex. 1989) (per curiam). 2 Section 27 .009(a) states that "[i]f the court orders dismissal of a legal action under this chapter, the court shall award to the moving party: (1) court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require; and (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." Tex. Civ. Prac. & Rem. Code Ann. § 27.009(a) (West 2014) (emphasis added).

2 3818625 C. Sanctions

Defendant requests that the Court enter a final judgment awarding at least $415,000.00 in

sanctions against Plaintiffs.

An instructive case is Kinney v. BCG Attorney Search, Inc., 03-12-00579-CV, 2014 WL

1432012, *9-10 (Tex. App.-Austin April 11, 2014, pet. filed) (mem. op.), where the Austin

Court of Appeals ruled that it was not an abuse of discretion for the trial court to award sanctions

pursuant to Chapter 27 in an amount equal to 1.66 times the defendant's attorney's fees.

(affirming sanctions of $75,000 based upon attorney's fees award of $45,000) (copy attached as

Exhibit B). In Kinney, the plaintiff filed a SLAPP lawsuit in Texas state district court that

"arose from the same factual background" as a previously filed SLAPP lawsuit in California

state court which the California court had dismissed. Kinney, 2014 WL 1432012, *8. The Texas

district court granted in part and denied in part the defendant's motion to dismiss under Chapter

27, and awarded $75,000 in sanctions under section 27.009(a)(2). Id. On appeal, the Austin

Court of Appeals reversed the trial court's denial in part of the motion to dismiss and otherwise

affirmed the trial court's ruling "in all other respects," including the $75,000 award of sanctions.

Id. at *1, 9-10.

With regard to the trial court's sanctions award, the Austin court initially observed that:

Section 27.009(a)(2) requires the trial court to award sanctions if it dismisses a claim pursuant to section 27 .003 and gives the trial court broad discretion to determine what amount is sufficient to deter the party from bringing similar actions in the future. It does not expressly require the trial court to explain how it reached its determination.

Id. at *9 (citations omitted). Noting that the California court had awarded the defendants

$45,000 in attorney's fees in connection with the dismissal of the California lawsuit, the Kinney

court held:

3 3818625 The record also shows a culmination of multiple actions ... concerning claims for the same harm asserted under various legal theories and that one of the prior actions resulted in an award of attorney's fees against [plaintiffs] in the amount of $45,000. Given the history of the litigation, the trial court could have reasonably determined that a lesser sanction would not have served the purpose of deterrence. In light of the trial court's findings and the record before us, as well as the broad discretion afforded the trial court by section 27.009, we conclude that the sanction has a direct relationship to [plaintiffs'] sanctionable conduct and that the trial court did not abuse its discretion in determining that a lesser sanction would have been insufficient to deter further actions by [plaintiff].

Id. (citations omitted). The appellate court added that the $45,000 in attorney's fees awarded to

the defendant in the California SLAPP litigation served as an effective "guidepost" of the

economic impact of the plaintiffs' sanctionable conduct in filing a SLAPP lawsuit in Texas and

provided support for the trial court to conclude that "a sanction of $75,000 was necessary to

deter [plaintiffs] from bringing similar actions in the future." Id. at *10.

Under the rationale and holding in Kinney, an award of sanctions against Plaintiffs in the

amount of at least $415,000 is appropriate. Like the plaintiffs in Kinney, Plaintiffs here have

demonstrated their intent to bring multiple SLAPP lawsuits against the Houston BBB that are

based on the "same factual background," concern "the same harm," and assert causes of action

that could have been averred here. Id. at *8-9. First, Plaintiffs filed-more than two months

after the First Court of Appeals ruled in favor of Defendant-Plaintiffs' First Amended Original

Petition ("Amended Petition")-which improperly sought to join nine new defendants and add

twelve causes of action. The Amended Petition was based upon the same set of facts and

circumstances alleged in Plaintiffs' Original Petition, the Houston BBB's business review and

rating of John Moore-and merely reflected counsel's ability to "conceive of different theories

4 3818625 ofreliefbased upon the same factual background.". Id. at *8; Plaintiffs' First Amended Original

Petition~~ 15-159 (Image No. 57565523).

Second, after the Court struck the Amended Petition due to Plaintiffs' violation of the

statutory stay of all trial court proceedings (see TEX. C1v. PRAC. & REM. CODE ANN. §

51.014(b)), Plaintiffs filed a separate lawsuit (the "Second Legal Action") that is essentially

identical to the Amended Petition, alleges the same set of core facts and circumstances as the

Original Petition here, and, importantly, asserts the same harm (loss of business revenue) and

seeks the same relief (money damages for such loss) as Plaintiffs sought in this lawsuit. See

Plaintiffs' First Amended Original Petition, filed with this Court in Cause No. 2013-76215

("New Petition"). 3

In short, Plaintiffs' filing of the Second Legal Action, like the filing of the Texas SLAPP

lawsuit by the plaintiffs in Kinney, supports a conclusion by this Court "that a lesser sanction

would not ... serve[] the purpose of deterrence." Id. at *9 ("Given the history of the litigation,

the trial court could have reasonably determined that a lesser sanction would not have served the

purpose of deterrence.") ..

In Kinney, the appellate court ruled that it was not an abuse of discretion for the trial

court to award sanctions under Chapter 27 in an amount equal to 1.66 times the amount of

attorney's fees awarded to the defendant in the first SLAPP lawsuit. Id. at *10. Here, the jury

determined the reasonable attorney's fees amount to be $250,001.44. That amount multiplied by

1.66 equals $415,000. Accordingly, Defendant requests that the Court (1) find that Plaintiffs

brought this lawsuit to deter or prevent Defendant from exercising its right of free speech, that

Plaintiffs have filed a subsequent lawsuit for the same purpose, and that, considering the above,

The Defendant requests that the Court take judicial notice of all of the papers on file and all of the proceedings in Cause No. 2013-76215 in connection with its awarding sanctions against Plaintiffs.

5 3818625 sanctions in at least the amount of $415,000 are necessary to deter Plaintiffs from bringing

subsequent SLAPP lawsuits and (2) based on the above, enter a final judgment requiring

Plaintiffs to pay to Defendant at least $415,000 in sanctions under Section 27.009(a)(2). TEX.

CIV. PRAC. & REM. CODE ANN. § 27.009(a)(l) (West 2014).

IV. CONCLUSION

In consideration of the foregoing, Defendant respectfully requests that the Court enter a

final judgment which provides for the following:

I. an order that Plaintiffs' claims against Defendant be dismissed with prejudice in their entirety and that Plaintiffs take nothing on all of their claims;

2. an award to Defendant of attorneys' fees incurred by Defendant in defending this legal action in an amount of at least $250,001.44;

3. that all costs of court incurred in this cause be taxed against Plaintiffs;

4. an award to Defendant of $6,237.77 for expenses incurred by Defendant in defending this legal action;

5. an award to Defendant of not less than $415,000 in sanctions against Plaintiffs; and

6. For such other and further relief to which it may be entitled.

Dated: August 4, 2014.

By: Isl Jeffrey R. Elkin Jeffrey R. Elkin, SBN 06522180 M. Harris Stamey, SBN 24060650 1000 Main Street, 36th Floor Houston, Texas 77002-6336 Telephone: (713) 226-6617 Telecopier: (713) 226-6217 jelkin@porterhedges.com mstamey@porterhedges.com

6 3818625 ATTORNEYS FOR DEFENDANT THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.

CERTIFICATE OF CONFERENCE

Counsel for Plaintiffs and Defendant have conferred in a reasonable effort to resolve the dispute without the necessity of Court intervention, and the effort failed. Therefore, it is presented to the Court for determination. Isl M. Harris Stamey M. Harris Stamey

I certify that a true and correct copy of foregoing document has been served upon all counsel ofrecord on the 4th day of August, 2014, as follows:

Lori Hood D By facsimile transmission Tamara Madden IZl By electronic transmission Brian P. Johnson D By deposit in the United States Mail 919 Milam Street, Suite 1700 D ByCMRRR Houston, TX 77002 (713) 222-2323 (telephone) D By hand-delivery (713) 222-2226 (facsimile) lhood@johnsontrent.com tmadden@johnsontrent.com bjohnson@johnsontrent.com

ATTORNEY FOR PLAINTIFFS, JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC

Isl M. Harris Stamey M. Harris Stamey

7 3818625 7 CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC, § § Plaintiffs, § § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC., § § Defendant. § 269th JUDICIAL DISTRICT

CHARGE OF THE COURT

Members of the Jury:

After the closing arguments, you will go to the jury room to decide the case, answer the questions that are attached, and reach a verdict You may discuss the case with other jurors only when you are all together m the jury room

Remember my previous mstructlons Do not discuss the case with anyone else, either in person or by any other means. Do not do any independent mvestigation about the case or conduct any research. Do not look up any words in dictionaries or on the Internet. Do not post information about the case on the Internet Do not share any special knowledge or experiences with the other jurors Do not use your phone or any other electronic device during your deliberations for any reason.

Any notes you have taken are for your own personal use. You may take your notes back into the jury room and consult them during deliberations, but do not show or read your notes to your fellow jurors during your deliberations. Your notes are not evidence. Each of you should rely on your independent recollection of the evidence and not be influenced by the fact that another juror has or has not taken notes.

You must leave your notes with the bailiff when you are not deliberating. The bailiff will give your notes to me promptly after collecting them from you. I will make sure your notes are kept in a safe, secure location and not disclosed to anyone. After you complete your deliberations, the bailiff will collect your notes. When you are released from jury duty, the bailiff will promptly destroy your notes so that nobody can read what you wrote.

FILED Chris Daniel District Clerk

EXHIBIT A I. INSTRUCTIONS FOR ANSWERING THE QUESTIONS

Here are the instructions for answering the questions.

1. Do not let bias, prejudice, or sympathy play any part m your decision.

2. Base your answers only on the evidence admitted in court and on the law that is in these instructions and questions Do not consider or discuss any evidence that was not admitted in the courtroom

3. You are to make up your own minds about the facts. You are the sole judges of the credibility of the witnesses and the weight to give their testimony. But on matters of law, you must follow all of my mstructions

4. If my instructions use a word in a way that is different from its ordinary meaning, use the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are important. No one should say that any question or answer is not important.

6. Answer "Yes" or "No" to all questions unless you are told otherwise. A "Yes" answer must be based on a preponderance of the evidence unless you are told otherwise. Whenever a question requires an answer other than "Yes" or "No," your answer must be based on a preponderance of the evidence unless you are told otherwise

The term "preponderance of the evidence" means the greater weight of credible evidence presented in this case. If you do not find that a preponderance of the evidence supports a "Yes" answer, then answer "No." A preponderance of the evidence is not measured by the number of witnesses or by the number of documents admitted in evidence. For a fact to be proved by a preponderance of the evidence, you must find that the fact is more likely true than not true

A fact may be established by direct evidence or by circumstantial evidence or both. A fact is established by direct evidence when proved by documentary evidence or by witnesses who saw the act done or heard the words spoken. A fact is established by circumstantial evidence when it may be fairly and reasonably inferred from other facts proved.

7. Do not decide who you think should win before you answer the questions and then just answer the questions to match your decision. Answer each question carefully without considering who will win. Do not discuss or consider the effect your answers will have.

8. Do not answer questions by drawing straws or by any method of chance.

9. Some questions might ask you for a dollar amount. Do not agree in advance to decide on a dollar amount by adding up each juror's amount and then figuring the average.

10. Do not trade your answers. For example, do not say, "I will answer this question your way if you answer another question my way."

2 11. Unless otherwise instructed, the answers to the questions must be based on the decision of at least 10 of the 12 jurors. The same 10 jurors must agree on every answer. Do not agree to be bound by a vote of anything less than 10 jurors, even if it would be a majority.

As I have said before, if you do not follow these instructions, you will be guilty of juror misconduct, and I might have to order a new trial and start this process over again. This would waste your time and the parties' money, and would require the taxpayers of this county to pay for another trial. If a juror breaks any of these rules, tell that person to stop and report it to me immediately.

II. DEFINITIONS

As used in this Charge, the following words have the following meanings:

1) "Houston BBB" means The Better Business Bureau of Metropolitan Houston, Inc.

2) "John Moore" means John Moore Services, Inc and John Moore Renovations, LLC.

r- ...... 0 <">

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s::s z d

What is a reasonable fee for the necessary services of Houston BBB's attorneys in defending against John Moore's legal action, stated in dollars and cents?

You are instructed that the following factors should be considered when determining the amount of attorneys' fees:

a. the time and labor involved, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly;

b. the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

c the fee customarily charged in the locality for similar services;

d. the amount mvolved and the results obtained;

e. the time limitations imposed by the client or the circumstances;

f. the nature and length of the professional relationship with the client,

g the experience, reputation and ability of the lawyer or lawyers performing the services; and

h. whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Answer with an amount for each of the following:

a. For representation in the trial court before and during Houston BBB's original interlocutory appeal.

Answer: $ I0 <.,., 3Co 9 • .?.sa

b. For representation in the Court of Appeals for the original interlocutory appeal.

Answer:$ g1, 3too. Bo

c. For representation at the petition-for-review stage to the Supreme Court of Texas for the original interlocutory appeal.

Answer: $ . 37. q13;:i.. •oS 4 d. For representation in the trial court after the original interlocutory appeal was decided.

Answer: $ ~4, c9eA . :l-~

e. For representation after this trial in the Court of Appeals.

Answer: $ _ __,,¢~---

f. For representation after this trial at the petition-for-review stage in the Supreme Court of Texas.

Answer:$ __JO____ ...__

g. For representation after this tnal at the merits-briefing stage in the Supreme Court of Texas.

Answer: $ _ ___.f4=----

h. For representation after this trial through oral argument and the completion of proceedings in the Supreme Court of Texas.

____ Answer.$ -~RJ

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IV.INSTRUCTIONS REGARDING THE PRESIDING JUROR

1. When you go into the jury room to answer the questions, the first thing you will need to do is choose a presiding juror

2. The presiding juror's duties are to:

a. have the complete charge read aloud if it will be helpful to your deliberations;

b. preside over your deliberations-meaning to manage the discussions and see that you follow these instructions;

c. give written questions or comments to the bailiff, who will give them to the judge;

d. write down the answers on which you agree;

e. get the signatures for the verdict certificate, and

f. notify the bailiff that you have reached a verdict.

Do you understand the duties of the presidmgjuror? If you do not, please tell me now.

V. INSTRUCTIONS FOR SIGNING THE VERDICT CERTIFICATE

1. Unless otherwise instructed, you may answer the questions on a vote of IO jurors. The same 10 jurors must agree on every answer in the charge. This means you may not have one group of 10 jurors agree on one answer and a different group of 10 jurors agree on another answer.

2. If 10 jurors agree on every answer, those 10 Jurors sign the verdict.

3. If 11 jurors agree on every answer, those 11 jurors sign the verdict.

4. If all 12 of you agree on every answer, you are unanimous and only the presiding juror signs the verdict.

5. All jurors should deliberate on every question You may end up with all 12 of you agreeing on some answers, while only 10 or 11 of you agree on other answers. But when you sign the verdict, only those 10 who agree on every answer will sign the verdict. (!)

~ Do you understand these mstructions? If you do not, please tell me now. 11.. I 00 ""

~ Judge, 269th District Court

6 CERTIFICATE

We, the jury, have answered the foregoing questions as indicated and return our answers into court as our verdict.

I certify that the jury was unanimous m answer to the following questions:

Answer "All" or list question, includmg subparts: _L.A........,_/...::../_ _ _ _ _ _ _ _ __

Printed Name of Juror Presiding

If the answers to some questions were not unanimous, the jurors who agreed to those answers must certify as follows.

We agree to the answers to the following questions:

List questions, including subparts:

SIGNATURE NAME PRINTED

1.

2.

3.

4.

r- 5. '+--< 0 r- Q) 6. ~ i:i.. I 7. - 00 V\

- 00 IC 8. IC ;..: Q) .D 9. § z Q 10. 8 ::I 0 0 11. 0 "O Q) 7 !+:: '€ Q) u I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this August 4. 2014

Certified Document Number: 61681158 Total Pages: 7

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Kinney v. BCG Attorney Search, Inc., Not Reported in S.W.3d (2014) ~~~~~~~~~~~~~~~~~~

38 IER Cases 170, 42 Media L. Rep. 1812

This is an interlocutory appeal from the trial court's partial 2014 WL 1432012 denial, and cross-appeal from its partial grant, of a motion SEE TX R RAP RULE 47.2 FOR DESIGNATION AND to dismiss under chapter 27 of the Texas Civil Practices and SIGNING OF OPINIONS. Remedies Code. See generally Tex. Civ. Prac. & Rem.Code MEMORANDUM OPINION §§ 27.001-.011. Chapter 27, known as the Texas Citizens Court of Appeals of Texas, Participation Act (TCPA), is an "anti-SLAPP" statute that Austin. permits defendants targeted by "Strategic Lawsuits Against Public Participation" or SLAPP suits to move for dismissal Appellant, Robert KINNEY//Cross-Appellants, if the action relates to the defendant's exercise of the right BCG Attorney Search, Inc.; and Professional of free speech, right to petition, or right of association. See Authority, Inc. d/b/a Legal Authority id § 27.003. BCG Attorney Search, Inc., and Professional v. Authority, Inc. d/b/a/ Legal Authority (sometimes jointly Appellees, BCG ATTORNEY SEARCH, INC.; BCG) sued Kinney for breach of contract, breach of fiduciary duty, and violations of the Lanham Act, see 15 U.S.C. § and Professional Authority, Inc. d/b/ a Legal l 125(a), based on statements Kinney made in a post on an Authority//Cross-Appellee, Robert Kinney. internet website. Kinney filed a motion to dismiss pursuant No. 03-12-00579-CV. April 11, 2014. to section 27.003 of the TCPA. The trial court granted the motion as to BCG's Lanham Act claim and awarded sanctions From the District Court of Travis County, 353rd Judicial against BCG. See Tex. Civ. Prac. & Rem.Code § 27.009(a) District, No. D-1-GN-12-001521, Gary Harger, Judge (2) (if trial court orders dismissal, it shall award sanctions as Presiding. it determines sufficient to deter party from bringing similar actions). The trial court denied the motion as to BCG's breach Attorneys and Law Firms of contract and breach of fiduciary duty claims. For the reasons that follow, we reverse the trial court's denial of the Daniel H. Byrne, Ariel Henderson, Dale L. Roberts, Eleanor motion as to the breach of contract and fiduciary duty claims, Ruffner, Fritz, Byrne, Head & Harrison, PLLC, Austin, render judgment dismissing those claims, and affirm the order TX, for Appellant, Robert Kinney//Cross-Appellants, BCG in all other respects. Attorney Search, Inc .; and Professional Authority, Inc. d/b/ a Legal Authority.

Martin J. Siegel, Law Office of Martin J. Siegel, P.C., FACTUAL AND PROCEDURAL BACKGROUND Houston, TX, Greggory A. Teeter, Teeter Law Firm, Dallas, TX, for Appellees, BCG Attorney Search, Inc.; and BCG and Legal Authority are two of more than 100 affiliated Professional Authority, Inc. d/b/a Legal Authority//Cross- job search websites, employment services, recruiting firms, Appellee, Robert Kinney. online employment news magazines, and student loan companies owned by Andrew Harrison Barnes. From 2002 to Robert E. Kinney, Austin, TX, pro se. 2004, Kinney worked for BCG, a legal recruiting company. Kinney contends his employment agreement with BCG Before Chief Justice JONES, Justices GOODWIN and was oral, confirmed by an offer letter that asked him FIELD. to keep the terms of the offer confidential. According to Opinion Barnes, the terms of Kinney's employment were governed by a written employment agreement signed by Kinney. The employment agreement, on which Kinney maintains his MEMORANDUM OPINION signature was forged, includes a confidentiality provision. MELISSA GOODWIN, Justice. After leaving BCG, Kinney formed a legal recruiting firm, Kinney Recruiting, Inc. In May 2008, Kinney made a *1 We withdraw our opinion and judgment dated August single post to an internet website describing BCG's business 21, 2013, and substitute the following in its place. Appellees' operations "based on his experience as a former employee" motion for rehearing is denied. and stating negative opinions of Barnes and his companies.

EXHIBIT B V'l'BStlavvNexr © 2014 Thomson Reuters. No claim to original U.S Government Works. Kinney v. BCG Attorney Search, Inc., Not Reported in S.W.3d (2014) 38 IER Cases 170, 42 Media L. Rep. 1812

The post was made anonymously and contained no reference BCG contends that the second reason stated by the to Kinney or his business. California court for concluding that plaintiffs had not demonstrated a probability of prevailing on the merits Barnes, BCG, and other related companies (jointly Barnes was "dicta." We do not agree with that construction of and BCG) brought suit in California state court against the court's order. Kinney, Kinney Recruiting, and other defendants who had 2 BCG Attorney Search v. Kinney, No. B223326, 2011 posted comments concerning Barnes and BCG on the Cal.App. Unpub. LEXIS 5460, 2011 WL 2936773 internet, asserting claims for libel, unfair competition, and (July 21, 2011) (not certified for publication) (cited for intentional interference with economic advantage. In the purposes of case history and res judicata analysis only). complaint, Barnes and BCG alleged that the statements See Cal. R. Court 8.l l 15(b)(l). were false and defamatory, had damaged the reputations of In May 2012, BCG filed this action against Kinney asserting Barnes and his companies, and had caused them to lose breach of the employment contract and breach of fiduciary customers and business opportunities, resulting in damages duty for Kinney's disclosure of confidential information and in the amount of at least $10 million. Kinney filed a violations of the Lanham Act for false and defamatory motion to strike under California's anti-SLAPP statute. See statements in Kinney's single online post. BCG alleged that it Cal.Civ.Proc.Code §§ 425.16-.18. The California court held had suffered reputational injury and lost revenues and profits that, with the exception of BCG, the plaintiffs had failed as a result of the post and sought damages of at least $1 to demonstrate a probability that they would prevail on the merits. See id § 425.16(b)(l) (cause of action arising from million. 3 Kinney filed a motion to dismiss pursuant to section defendant's right of petition or free speech subject to motion 27.003 of the TCPA. The trial court heard the motion on July to strike unless court determines plaintiff has established 3, 2012, and on that same day issued a "Court's Rendition on probability of prevailing on merits). Defendant's First Amended Motion to Dismiss and for Other Relief." Two days later the trial court issued and filed with *2 As reasons for its conclusion, the court stated that the clerk a document entitled "Amended Court's Rendition on (1) notwithstanding the allegations of unfair competition Defendant's First Amended Motion to Dismiss and for Other and interference with economic advantage, the gravamen Relief," in which the court "render[ed]" that (1) the conduct of the action was libel and the complaint was barred alleged regarding the Lanham Act or other claims of libel or by the one-year statute of limitations for libel, see id § disparagement is protected speech governed by the TCP A and 340(c), because Kinney and Kinney Recruiting had not (2) the breach of contract and breach of fiduciary duty claims been added as defendants until more than one year after stem from an alleged employment agreement, the validity of the posting of Kinney's comments and (2) the defendants which is a matter of fact, not law, to be determined by the trier had produced evidence that there was already a good deal of fact. Consequently, the trial court "render[ed] dismissal" of online discussion regarding plaintiffs' businesses when of the Lanham Act claim and denial of the motion to dismiss Kinney posted his remarks, which were based on first-hand as to the claims for breach of contract and breach of fiduciary knowledge and were statements of opinion that are privileged duty. In connection with the dismissal of the Lanham Act communications under section 47 of the California Civil claim, the trial court awarded $75,000 in sanctions against BCG. See Tex. Civ. Prac. & Rem.Code§ 27.009(a)(2). Code, 1 see id § 47(c) (defining privileged communication to include one made without malice by interested party to 3 Between the dismissal of the California action and the interested party). The California court also awarded Kinney and Kinney Recruiting more than $45,000 in attorney's fees institution of this action, BCG sought arbitration of and costs as the prevailing parties. See id § 4 25 .16(c ). As certain claims, but the arbitration did not occur. The parties offer differing explanations for why there was no for BCG, the court reasoned that it was Kinney's competitor arbitration. and was therefore exempt from the anti-SLAPP statute. See id § 425.17(c). Subsequently, however, the court dismissed *3 In the cover letter transmitting the amended rendition to BCG's claims as barred by limitations because BCG had not the parties, the trial court asked counsel for Kinney to prepare been added as a plaintiff until after the one-year statute of an order consistent with the rendition. Kinney submitted an limitations for libel had expired, see id. § 340(c), and the court order, to which BCG objected and proposed revisions. Kinney filed his notice of appeal on August 31, 2012, and BCG of appeal affirmed. 2 filed a "conditional" notice of cross-appeal on September

WestlawNexr@ 2014 Thomson Reuters. No claim to original U.S. Government Works. 2 Kinney v. BCG Attorney Search, Inc., Not Reported in S.W.3d (2014) 38 IER Cases 170, 42 Media L. Rep. 1812

14, 2012. 4 On November 9, 2012, the trial court signed the provides for interlocutory appeal of a trial court's express order as submitted by Kinney. The order included additional ruling on a motion to dismiss and have come to differing findings not contained in the rendition, including that (1) the conclusions. Compare KTRK TV. Inc. v. Robinson, 490 Lanham Act claims had been brought to deter or prevent S.W.3d 682, 688 (Tex.App.-Houston [1st Dist.] 2013, pet. Kinney from exercising his constitutional rights and for the denied) (finding jurisdiction over order denying motion); improper purpose of harassing Kinney and (2) considering San Jacinto Title Servs. of Corpus Christi, LLC v. Kingsley finding (1) and the previous litigation between the parties, Props., LP., -S.W.3d - - , No. 13-12--00352-CV, 2013 sanctions in the amount of $75,000 were necessary to deter Tex.App. LEXIS 5081, at *15, 2013 WL 1786632 (Tex.App.- BCG from bringing similar actions. Corpus Christi Apr. 25, 2013, pet. denied) (same); Direct Commercial Funding, Inc. v. Beacon Hill Estates, LLC, No. 4 14-12--00896-CV, 2013 Tex.App. LEXIS 1898, at *8-9, In filing a "conditional" notice of cross-appeal, BCG 2013 WL 407029 (Tex.App.-Houston [14th Dist.] Jan. 24, reserved its right to argue that the trial court's failure to 2013, order) (finding jurisdiction over order granting motion sign the order until more than 30 days after the hearing resulted in denial of the entire motion by operation that was interlocutory because of pending counterclaims) with of law under sections 27.005 and 27.008, an issue we Jennings v. Wallbuilder Presentations, Inc., 378 S.W.3d 519, address below. See Tex. Civ. Prac. & Rem.Code §§ 528-29 (Tex.App.-Fort Worth 2012, pet. denied) (finding 27.00S(a), .008(a). no jurisdiction over order denying motion); Lipsky v. Range Prod. Co., No. 02-12-00098-CV, 2012 Tex.App. LEXIS 7059, at *2, 2012 WL 3600014 (Tex.App.-Fort Worth DISCUSSION Aug 23, 2012, pet. denied) (mem.op.) (same). In its 2013 session, however, the legislature made several revisions to Standard of Review the TCP A, including a corollary revision to chapter 51 of the Tbe parties' issues concerning the TCP A present matters Civil Practices and Remedies Code, to address the apparent of statutory construction, which is a question of law that ambiguity in chapter 27 concerning interlocutory appeals. we review de novo. See Railroad Comm'n of Tex. v. Texas See Act of May 24, 2013, 83d Leg., R.S., H.B. 2935, § 4 Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, (codified at Tex. Civ. Prac & Rem.Code § 51.014(a)(12)) 624 (Tex.2011). Of primary concern is the express statutory (the amendment). The amendment to chapter 51 expressly language. See Galbraith Eng'g Consultants, Inc. v. Pochucha, provides for interlocutory appeal of a trial court's denial of 290 S. W.3d 863, 867 (Tex.2009). We apply the plain meaning a motion to dismiss filed under section 27.003. See id. The of the text unless a different meaning is supplied by legislative amendment is not expressly retroactive, nor does it contain a definition or is apparent from the context or the plain meaning savings clause for pending suits. See id. Because it received a leads to absurd results. Marks v. St. Luke's Episcopal Hosp., 319 S.W.3d 658, 663 (Tex.2010). "We generally avoid vote of two-thirds of all the members elected to each house, 5 construing individual provisions of a statute in isolation from the amendment became effective immediately. See Act of the statute as a whole [,]" Texas Citizens, 336 S.W.3d at May 24, 2013, 83rd Leg., R.S., H.B. 2935, § 6. Thus, we are 628, and we must consider a provision's role in the broader faced with the question of whether to apply the amendment statutory scheme, 20801, Inc. v. Parker, 249 S.W.3d 392, 396 to this case retroactively. (Tex.2008). We presume that ''the entire statute is intended to be effective [,]"Tex. Gov't Code § 311.021(2), and we 5 See http://www.capi tol.state.tx.us/BillLookup/ interpret it so as to give effect to every part, Parker, 249 History.aspx? LegSess= 83R & Bill=HB2935 (Actions/ S.W.3d at 396. Record Vote). *4 The Texas Constitution provides that "[n]o bill of attainder, ex post facto law, retroactive law, or any law Jurisdiction over Interlocutory Appeal impairing the obligation of contracts shall be made." Tex. Const. art. I, § 16. "However, not all statutes that apply Application ofAmendment to TCPA retroactively are constitutionally prohibited." Subaru ofAm., As a preliminary jurisdictional matter, we consider whether the TCP A authorizes this interlocutory appeal and cross- Inc. v. David McDavid Nissan, Inc. 84 S.W.3d 212, 219 (Tex.2002). A retroactive statute violates the constitution appeal. Since the enactment of chapter 27, our sister courts only if, when applied, it takes away or impairs vested rights. have wrestled with the question of whether section 27.008 Id Generally, courts presume that the legislature intends

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statutes and amendments to operate prospectively unless v. DeBord, 967 S.W.2d 352, 352-53 (Tex.1998). If Kinney's they are expressly made retroactive. Tex. Gov't Code § statements do not fall within the provisions of the TCPA, then 311.022; City ofAustin v. Whittington, 384 S. W.3d 766, 790 the amendment providing for interlocutory appeal when a trial (Tex.2012); University of Tex. Sw. Med. Ctr. v. Estate of court denies a motion to dismiss filed under the TCP A cannot Arancibia, 324 S.W.3d 544, 547 (Tex.2010). However, this apply. See id. general rule does not apply when the statute or amendment is procedural, remedial, or jurisdictional because such statutes 6 Kinney contends that BCG has waived this argument by generally do not affect vested rights. Whittington, 384 S. W .3d not presenting it in the trial court. However, because it at 790; Estate of Arancibia, 324 S.W.3d at 548. Procedural, pertains to this Court's jurisdiction, we will address it. remedial, and jurisdictional laws should be enforced as they See Freedom Communs., Inc. v. Coronado, 372 S.W.3d exist at the time the judgment is rendered. Whittington, 384 621, 623 (Tex.2012) (appellate court must consider its S.W.3d at 790; Estate of Arancibia, 324 S.W.3d at 547- jurisdiction even if consideration is sua sponte); Minton 48; Texas Mun. Power Agency v. Public Util. Comm'n, 253 v. Gunn, 355 S.W.3d 634, 639 (Tex.2011) (appellate S.W.3d 184, 198 (Tex.2007) Gurisdictional statutes should be court must determine its jurisdiction to consider appeal applied as they exist at time of judgment). before reaching merits).

*5 Section 27.003 provides that a party may file a motion In providing for interlocutory appeal, the amendment does not to dismiss if a legal action "is based on, relates to, or is in take away or impair the parties' vested rights. Rather, it is a response to [that] party's exercise of the right of free speech, jurisdictional statute that "speaks to the court's power rather right to petition, or right of association." Tex. Civ. Prac. & than to the parties' rights or obligations." See Subaru of Am., Rem.Code§ 27.003(a). Section 27.001(3) defines "exercise 84 S.W.3d at 220. It does not take away substantive rights of the right of free speech" as "a communication made in but simply changes the time at which an appellate court can connection with a matter of public concern." Id. § 27.001 (3). hear the case. See id. (citing Landgraf v. US! Film Prods., "Matter of public concern" is defined as including an issue 511 U.S. 244, 274 (1991) (new statute conferring or ousting related to "a good, product, or service in the marketplace." Id. jurisdiction merely changes tribunal that is to hear case and § 27.001 (7)(E). Section 27 .005(b) provides that a court "shall applies to existing cases)). Statutes like the amendment that dismiss a legal action against a moving party if the moving do not deprive the parties of a substantive right and address party shows by a preponderance of the evidence" that the the power of the court rather than the rights or obligations of action is based on, relates to, or is in response to the moving the parties should be applied in cases pending when the statute party's exercise of the right of free speech, right to petition, is enacted. See Whittington, 384 S.W.3d at 790; Estate of or right of association. Id. § 27.005(b). Arancibia, 324 S.W.3d at 548. Accordingly, we conclude that we must apply the amendment to this case, see Whittington, BCG contends that Kinney's statements do not relate to free 384 S.W.3d at 790; Estate ofArancibia, 324 S.W.3d at 548, speech because they were false and defamatory and thus not and would have jurisdiction over this interlocutory appeal if constitutionally protected. Kinney argues that determining the TCPA were properly invoked. whether a communication meets the statutory definition of the "exercise of the right of free speech" does not entail deciding whether the speech is true. We agree. Whether Kinney's Application of TCPA statements were defamatory and thus actionable is reviewable Because it also implicates our jurisdiction over this matter, in the second part of an appellate court's analysis, under we turn next to BCG's second issue on cross-appeal: whether section 27.005(c), which precludes dismissal ifthe plaintiff the TCPA applies to Kinney's statements. BCG argues establishes by clear and specific evidence a prima facie case that Kinney did not establish that the action relates to for each essential element of its claim. See id. § 27.005(c); Kinney's right of free speech or to petition. 6 See Tex. Civ. In re Lipsky, 411 S.W.3d 530, 543 (Tex.App.-Fort Worth Prac. & Rem.Code § 27.003(a). Although BCG does not 2013, orig. proceeding). However, "[t]he statutory definitions argue this issue as one of jurisdiction, if Kinney failed to for the exercise of the right of free speech and the exercise invoke the provisions of the TCP A, then this Court has no of the right to petition do not include language requiring us jurisdiction over an interlocutory appeal brought pursuant to to determine the truth or falsity of communications [in our its provisions. An interlocutory order is not appealable unless threshold determination of] whether a movant for dismissal a statute expressly provides for appellate jurisdiction. Stary has met its preliminary preponderance of the evidence burden

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under section 27.005(b)." In re Lipsky, 411 S.W.3d at 543; the statement must be made for the purpose of securing see also Harris Cnty. Hosp. Dist. v. Tomball Reg'/ Hosp., 283 sales in the goods or services of the person making the S.W.3d 838, 846 (Tex.2009) (court should not add language statement. See Newspaper Holdings, Inc. v. Crazy Hotel to statute when construing it). Assisted Living, Ltd., 416 S.W.3d Tl, 88-89 (Tex.App.- Houston [lst Dist.] 2013, pet. filed) (following four-prong Under section 27.001, a communication need only be analysis devised by Supreme Court of California in Simpson "in connection with a matter of public concern," which Strong-Tie Co., Inc. v. Gore, 49 Cal.4th 12, 109 Cal.Rptr.3d includes issues "related to a good, product, or service in 329, 230 P.3d 1117, 1129 (Cal.2010) for determining whether the marketplace." Tex. Civ. Prac. & Rem.Code§ 27.001(3), exemption applied under essentially identical California anti- (7)(E). The record shows that Kinney's online statements SLAPP statute and concluding statements did not arise out related to services BCG provides to the public and that of sale of goods or services of defendant); see also Better BCG's claims are based on those statements. Considering Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., the plain language of the TCPA, see Marks, 319 S.W.3d Inc ., No. 01-12-00990-CV, 2013 Tex.App. LEXIS 8756, at 663, and construing section 27.005 as a whole and in at *12-13, 2013 WL 3716693 (Tex.App.-Houston [1st Dist.] the context of the full statute, see Texas Citizens, 336 July 16, 2013, pet. denied) (construing section 27.0IO(b) in S.W.3d at 628, we conclude that Kinney has met his initial context of Better Business Bureau's statements concerning burden of showing by a preponderance of the evidence its selling of its memberships). In Newspaper Holdings, the that his statements were made in connection with a matter court applied the analysis of the California Supreme Court of public concern and that this action relates to those and concluded that the plaintiffs had the burden to show that statements so that the TCPA applies, see Tex. Civ. Prac. the exemption applied. 416 S.W.3d at 89; see also Better & Rem.Code§§ 27.001(3), (7)(E), .005(b); Avila v. Larrea, Bus. Bureau of Metro. Dallas v. BH DFW, Inc., 402 S.W.3d 394 S.W.3d 646, 655 (Tex.App.-Dallas 2012, pet. denied) 299, 309 (Tex.App.-Dallas 2013, pet. denied) (applying (allegedly false and defamatory broadcast statements about general rule that burden of proving statutory exception rests lawyer's services constituted exercise of right of free speech on party seeking benefit from exception to construction of and TCPA applied); see also Lipsky, 411 S.W.3d at 543 section 27.0lO(b)). The court then applied the Simpson four- (declining to decide whether statements were defamatory pronged test and held that the plaintiffs had not met their when determining whether plaintiffhad shown statements fell burden as to Newspaper Holdings (NHI), concluding that the within provisions of TCP A). "complained-of statements d[id] not arise out of the lease or sale of the goods or services that NHI sells-newspapers." *6 BCG also argues that the TCPA does not apply because 416 S.W.3d at 89. Kinney's statements are exempt under section 27.0lO(b). See Tex. Civ. Prac. & Rem.Code§ 27.0lO(b). Section 27.0lO(b) 7 Section 27.0lO(b) has been referred to as the provides that: "commercial speech" exemption. See Pena v. Pere!, 417 S.W.3d 552, 555 (Tex.App.-El Paso 2013, no This chapter does apply to a legal pet.); Newspaper Holdings, Inc. v. Crazy Hotel Assisted action brought against a person Living, Ltd., 416 S.W.3d 71, 88 (Tex.App.-Houston [1st primarily engaged in the business of Dist.] 2013, pet. filed). selling or leasing goods or services, We agree with the reasoning of our sister courts in Newspaper if the statement or conduct arises Holdings and BH DFW, Inc. that the plaintiff has the burden out of the sale or lease of goods, under section 27.01 O(b) to show that the statements arise from services, or an insurance product or the sale of the defendant's services so that the exemption a commercial transaction in which applies. BCG does not dispute that the statements must arise the intended audience is an actual or from the sale of Kinney's services but contends that his online potential buyer or customer. statements did "arise out of' the sale of those services because Kinney is in the business of selling legal recruiting services Id. 7 Section 27 .0 IO(b) thus provides, in relevant part, that and it is "obvious" that Kinney would not have made the a statement is exempt from the TCPA if the action is post had it not been for the fact that he and BCG were against a person primarily engaged in selling services and the statement arises from the sale of services. This provision competitors. 8 On the facts of this case, we do not find this has been construed to mean that for the exemption to apply, argument persuasive.

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the TCP A does not define "rule," the plain meaning of the 8 Although BCG initially states that the entire subject of verb is "to decide a legal point." See Black's Law Dictionary Kinney's post concerns legal services that are identical 1446 (9th ed.2009); see also Marks, 319 S.W.3d at 663 to those sold by Kinney, it ultimately argues that Kinney (we apply plain meaning unless meaning is supplied by made the statements because he was a competitor ofBCG legislature). In the rendition, the trial court expressly decided and the statements therefore" 'arise out of Kinney's sale the legal points as to dismissal of each claim and rendered of services." its decision or "ruling." CJ Tex. Fam.Code § 101.026 (" *7 Here, Kinney's statements were made anonymously and 'Render'" means the pronouncement by a judge of the court's made no reference whatsoever to his business or the sale of ruling on a matter.") (emphasis added). Further, in looking at his services. BCG offered no evidence that the post was " 'for the TCPA as a whole, see Texas Citizens, 336 S.W.3d at 628, the purpose of obtaining approval for, promoting, or securing we observe that section 27.008(b) refers not to the trial court's sales or leases of, or commercial transactions in, [Kinney's] "ruling" but to its "order." See Tex. Civ. Prac. & Rem.Code goods or services or in the course of delivering [Kinney's] § 27.008(b) (appellate court shall expedite appeal from a trial goods or services.' "See Newspaper Holdings, 416 S.W.3d court's order on a motion to dismiss). If the legislature had at 88 (quoting Simpson four-prong test); see also BH DF1¥, intended to require the trial court to sign an order within 30 402 S.W.3d at 309 (plaintiff offered no evidence statements days, it could have done so; instead the plain language of the arose out of defendant's commercial transaction and failed to statute requires only that the trial court "rule" within 30 days. establish exemption). We therefore conclude that BCG has See Marks, 319 S.W.3d at 663. not met its burden of showing that the statements arose out of the sale of Kinney's services so as to be exempted from *8 In Greene v. State, 324 S.W.3d 276, 280-82 (Tex.App.- the TCPA under section 27.0IO(b) and that, consequently, Austin 2010, no pet.), this Court drew a similar distinction the TCPA was properly invoked. We overrule BCG's second between a trial court's ruling and order, holding that a "letter issue on cross-appeal as to the application of the TCPA. ruling" stating that 'judgment is rendered for the plaintiffs" and requesting counsel to prepare a judgment for the court's signature, while insufficient to serve as an appealable order, Effect of Trial Court's Rendition can serve as the rendition of judgment if it is filed with the The final issue that implicates our jurisdiction over this appeal clerk. Id at 281. Here, the trial court rendered its decision is BCG's first issue in its cross-appeal. BCG contends that in writing, signed the rendition, and delivered it to the clerk. because the trial court did not sign an order until more than 30 We conclude that the amended rendition, signed two days days after the hearing, Kinney's entire motion to dismiss was after the hearing, was a timely "ruling" within the meaning overruled by operation of law. Section 27.005(a) provides of "rule" in sections 27.005 and 27.008 and the motion that the trial court "must rule" on a motion to dismiss no to dismiss was not overruled by operation of law under later than the 30th day following the date of the hearing on section 27.008(a). See id We overrule BCG's first issue on the motion, and section 27.008(a) provides that if the trial cross-appeal and conclude that we have jurisdiction over this court does not "rule on a motion to dismiss ... in the time interlocutory appeal and cross-appeal. prescribed by Section 27.005, the motion is considered to have been denied by operation of law .... " Tex. Civ. Prac. & Rem.Code §§ 27.005(a), .008(a). BCG argues that a signed Res Judicata order is required under section 27.005, that the rendition We turn, then, to Kinney's first issue on appeal. Kinney is not a signed order, and that the trial court's request for contends that this action is barred by res judicata based on counsel to prepare an order indicates the rendition was not the California court's order, an affirmative defense he asserted final. Consequently, BCG contends, the trial court did not below. As a preliminary matter, BCG argues that the TCPA rule within 30 days of the hearing, and the motion to dismiss does not require it to overcome Kinney's affirmative defenses. was overruled in its entirety by operation of law. See id § In the 2013 revisions to the TCPA, the legislature added 27.008(a). subsection (d) to section 27.005 providing that the trial court "shall dismiss" a case "if the moving party establishes by We do not find these arguments persuasive. Under sections a preponderance of the evidence each essential element of 27.005(a) and 27.008(a), the court need only "rule" within 30 a valid defense to the nonmovant's claim." See Act of May days of the hearing. See id §§ 27.005(a), .008(a). Although 24, 2013, 83d Leg., R.S., H.B. 2935, § 2 (codified at Tex. Civ. Prac. & Rem.Code § 27.005(d)). Thus, as amended,

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section 27.005 requires a nonrnovant to overcome a movant's apply the res judicata principles of that state." Highland affirmative defenses to avoid dismissal. See id However, Crusader Offshore Partners, L.P. v. Motient Corp., 281 even prior to the addition of section 27.005(d), the plain S.W.3d 237, 242 (Tex.App.-Dallas 2009, pet. denied) (citing language of section 27 .006 required the court to consider "the Purcell v. Bellinger, 940 S. W.2d 599, 601 (Tex.1997)). pleadings and supporting and opposing affidavits stating the Under California Jaw, res judicata applies if "(1) the facts on which the liability or defense is based." See Tex. Civ. decision in the prior proceeding is final and on the Prac. & Rem.Code § 27 .006(a) (emphasis added); Marks, 319 merits; (2) the present proceeding is on the same cause S.W.3d at 663. Therefore, without reaching the question of of action as the prior proceeding; and (3) the parties in whether new subsection (d) applies to this case, we conclude the present proceeding or parties in privity with them that under either version of the statute, the result is the same were parties to the prior proceeding." Villacres v. ABM and BCG is required to overcome any affirmative defenses Indus. Inc., 189 Cal.App.4th 562, 117 Cal.Rptr.3d 398, 410 Kinney established. See Tex. Civ. Prac. & Rem.Code § (Cal.Ct.App.2010). The issue of res judicata is a question of 27.006(a); Act of May 24, 2013, 83d Leg., R.S., H.B. 2935, law. See Cornette v. Department of Transp., 26 Cal.4th 63, § 2; Tex.R.App. P. 47.1. Therefore, while neither section 109 Cal.Rptr.2d 1, 26 P.3d 332, 341 (Cal.2001) (" 'While 27 .006( a) nor new subsection (d) changes the fact that Kinney all [the res judicata] issues may have factual predicates, had the burden of proof on his affirmative defense of res they are peculiarly legal determinations.' " (quoting and judicata, see Commint Tech. Servs., Inc. v. Quickel, 314 distinguishing Windsor Square Homeowners Assn. v. Citation S.W.3d 646, 651 (Tex.App.-Houston [14th Dist.] 2010, no Homes, 54 Cal.App.4th 547, 62 Cal.Rptr.2d 818, 825 pet.), under either section 27.006(a) or new section 27.005(d), (Cal.Ct.App.1997))). it was proper, under the plain language of either version of the statute, for the trial court to consider the pleadings Kinney argues that all three elements of res judicata are met and evidence relevant to res judicata in ruling on Kinney's in this case. While BCG does not dispute that the California motion to dismiss. 9 See Navellier v. Sletten, 106 Cal.A pp.4th order is final or that there is privity between the plaintiffs in 763, 131 Cal.Rptr.2d 201, 205 (Cal.Ct.App.2003) (applying the California action and the plaintiffs here, it does contend language in California anti-SLAPP statute identical to that that the California court's determination was not on the merits in section 27.006(a) and concluding that "[i]n deciding the and that the two proceedings do not involve the same causes question of potential merit, the trial court considers the of action. Concerning whether the California order was a pleadings and evidentiary submissions of both the plaintiff determination on the merits, BCG argues that the California court based its decision on procedural grounds only and its and the defendant"). IO statements that the plaintiffs had not established a probability of prevailing on the merits and that Kinney's statements were 9 In addition, construing the TCPA to preclude a privileged were mere dicta. As we have already noted, we trial court's consideration of affinnative defenses in do not agree with BCG's reading of the California court's determining motions to dismiss under section 27.003 ruling. Citing section 47 of the California Civil code, see would contravene the statute's purpose-to protect free Cal.Civ.Proc.Code § 47(c), the California court order stated: speech by enabling the early dismissal of meritless lawsuits that threaten that right. See Tex. Civ. Prac. & In addition to being time barred, Rem.Code§ 27.003; Direct Commercial Funding, lnc. plaintiffs have not provided sufficient v. Beacon Hill Estates, LLC, No. 14-12-00896--CV, evidence to establish a probability of 2013 Tex.App. LEXIS 1898, at *2, 2013 WL 407029 prevailing on the merits. Defendants (Tex.App.-Houston [14th Dist.] Jan. 24, 2013, order). have presented evidence that there 10 We also observe that BCG could have requested was already a good deal of on- limited discovery relevant to the motion and Kinney's line discussion regarding plaintiffs' affirmative defenses. See Tex. Civ. Prac. & Rem.Code§ businesses when defendant Kinney 27.006(b). posted his remarks, which were *9 We next consider whether Kinney met his burden based on his first hand knowledge. of proof by establishing the elements of the affirmative Kinney's statements of opinion are defense of res judicata. "To determine the preclusive privileged communications amount effect of a judgment of another state's court, Texas courts [sic] interested parties. CC47(c).

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the scope of the prior action, related to the subject matter, and Considering this language, we conclude that the California relevant to the issues, so that it could have been raised, the court's holding was based on the alternative grounds of judgment is conclusive on it. Countrywide Fin. Corp., 214 limitations and privilege. The privilege under section 47 Cal.App.4th at 1529, 154 Cal.Rptr.3d 873 (citing Villacres, is "an 'absolute' privilege, and it bars all tort causes of l I 7 Cal.Rptr.3d at 409). "The fact that different forms of action except a claim of malicious prosecution." Flatley v. relief are sought in the two lawsuits is irrelevant, for if the Mauro, 39 Cal.4th 299, 46 Cal.Rptr.3d 606, 139 P.3d 2, rule were otherwise, 'litigation finally would end only when 16 (Cal.2006). Further, dismissal under the California anti- a party ran out of counsel whose knowledge and imagination SLAPP statute is essentially equivalent to dismissal on the could conceive of different theories of relief based upon the merits on summary judgment. See Navellier, 131 Cal.Rptr.2d same factual background.' " Villacres, 117 Cal.Rptr.3d at at 205; cf Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788, 409 (quoting Interinsurance Exchange of the Auto. Club v. 108 Cal.Rptr.3d 806, 230 P.3d 342, 345 (Cal.2010) (for res Superior Court, 209 Cal.App.3d 177, 257 Cal.Rptr. 37, 39 judicata purposes, dismissal with prejudice is equivalent of (Cal.Ct.App.1989) (internal quotations and italics omitted)). final judgment on merits); Federal Home Loan Bank of San "A party cannot by negligence or design withhold issues Francisco v. Countrywide Fin. Corp., 214 Cal.App.4th 1520, and litigate them in consecutive actions." Aerojet-General 1528, 154 Cal.Rptr.3d 873 (Cal.Ct.App.2013) (dismissal with Corp. v. American Excess Ins. Co., 117 Cal.Rptr.2d 427, prejudice is determinative of issues). Therefore, we conclude 436 (Cal.Ct.App.2002). Res judicata should bar a claim if that the California court's order was an adjudication on the with diligence it could have been brought earlier. Allied Fire merits. 11 Protection v. Diede Constr., Inc., 127 Cal.App.4th 150, 25 Cal.Rptr.3d 195, 200 (Cal.Ct.App.2005). 11 Although the California dismissal on the merits was as to Legal Authority only, and not to BCG, BCG admits that We conclude that BCG could have raised the claims asserted it is an affiliate of Legal Authority and does not dispute in this case in the California action. Both the libel-based that it is in privity with Legal Authority. Therefore, for claims and the claims based on disclosure of confidential purposes of res judicata, the California order on the information arise from the same factual background- merits as to Legal Authority was also a determination on Kinney's single internet post-and the current claims are the merits as to BCG, and BCG is bound by the order. See within the scope of the California action, related to the Arias v. Superior Court, 46 Cal.4th 969, 95 Cal.Rptr.3d subject matter and relevant to the issues. See Countrywide 588, 209 P.3d 923, 932 (Cal.2009); Villacres v. ABM Fin. Corp., 214 Cal.App.4th at 1529, 154 Cal.Rptr.3d 873; Indus. Inc., 189 Cal.App.4th 562, 117 Cal.Rptr.3d 398, Villacres, 117 Cal.Rptr.3d at 409. The only reason BCG 410, 422 (Cal.Ct.App.2010). offers for not asserting the contract and fiduciary duty claims *10 Regarding whether the two proceedings involve the in the California action is that it had not "discovered" the same causes of action, BCG argues that in the California employment contract. However, the alleged contract was action, it asserted only libel, unfair competition, and one BCG prepared, presented to Kinney, and subsequently intentional interference with prospective economic relations located in its files. BCG had knowledge of the contract and, claims-which were based on Kinney's false and defamatory with diligence, could have asserted the claims based on it statements-not the claims for breach of contract and in the prior action. See Diede Constr., 25 Cal.Rptr.3d at breach of fiduciary duty-which are based on Kinney's 200. Similarly, BCG's claim in this case for violations of the true statements disclosing confidential information-or the Lanham Act is based on the same alleged false statements statutory claims under the Lanham Act that it asserts in upon which the libel-related claims in the California action this case. However, California law is settled that " 'a prior were founded, it could have been asserted in the California final judgment on the merits not only settles issues that case, and BCG may not withhold issues and litigate them were actually litigated but also every issue that might have later. See Countrywide Fin. Corp., 214 Cal.App.4th at been raised and litigated in the first action.' " Countrywide 1529, 154 Cal.Rptr.3d 873; Aerqjet-General Corp., 117 Fin. Corp., 214 Cal.App.4th at 1529, 154 Cal.Rptr.3d 873 Cal.Rptr.2d at 436. We therefore hold that BCG's claims are (quoting Mattson v. City of Costa Mesa, 106 Cal.App.3d barred by res judicata and sustain Kinney's first issue. 441, 164 Cal.Rptr. 913, 916 (Cal.Ct.App.1980)); see Bullock v. Philip Morris USA, Inc., 198 Cal.App.4th 543, 131 Cal.Rptr.3d 382, 393 (Cal.Ct.App.2011). Ifa matter is within Sanctions

WestlawNexr@ 2014 Thomson Reuters. No claim to original U.S. Government Works. 8 Kinney v. BCG Attorney Search, Inc., Not Reported in S.W.3d (2014) 38 IER Cases 170, 42 Media L. Rep. 1812

*11 Because we conclude that BCG's claims are barred by bringing similar actions in the future. See Tex. Civ. Prac. & res judicata, we need not reach the remainder of the parties' Rem.Code § 27.009(a)(2). It does not expressly require the issues, with the exception of BCG's challenge to the trial trial court to explain how it reached its determination. Cf id. court's award of sanctions under section 27.009 of the TCPA. § 10.005 (in imposing sanction under chapter 10, court shall See Tex.R.App. P. 47.1. Section 27.009(a)(2) provides that describe the sanctionable conduct and explain the basis for if the court orders dismissal, it "shall award to the moving the sanction); Tex.R. Civ. P. l3 (good cause must be stated party ... sanctions against the party who brought the legal in sanction order). action as the court determines sufficient to deter the party ... from bringing similar actions." Tex. Civ. Prac. & Rem.Code § *12 As we have already discussed, the record shows 27 .009(a)(2). In its third issue on cross-appeal, BCG contends that BCG asserted claims that could have been asserted that the sanctions amount was excessive and the trial court in the California suit. See Counflywide Fin. Corp., 214 abused its discretion because it awarded the amount of Cal.App.4th at 1529, 154 Cal.Rptr.3d 873; Villacres, 117 $75,000 without any guidance from a determination ofactual Cal.Rptr.3d at 409. While the sanction imposed was large, litigation costs and without providing a sufficient explanation "the amount [of the sanction] alone does not render the for how it determined that amount. order unjust." Wal-Mart Stores v. Davis, 979 S.W.2d 30, 47 (Tex. App .-Austin 1998, pet. denied). The record also shows We generally review a trial court's award of sanctions for a culmination of multiple actions, including an attempted an abuse of discretion. See American Flood Research, Inc. arbitration, concerning claims for the same harm asserted v. Jones, 192 S.W.3d 581, 583 (Tex.2006) (per curiam). under various legal theories and that one of the prior actions A trial court abuses its discretion if its ruling is arbitrary, resulted in an award of attorney's fees against BCG in the unreasonable, or without reference to any guiding rules and amount of $45,000. See Boe/ken, 108 Cal.Rptr.3d 806, 230 principles. K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 P.3d at 348; Villacres, 117 Cal.Rptr.3d at 409. Given the (Tex.2000) (per curiam). In determining whether the trial history of the litigation, the trial court could have reasonably court abused its discretion, we must decide whether the determined that a lesser sanction would not have served sanctions were appropriate or just under a two-part inquiry. the purpose of deterrence. See Stromberger v. Turley Law American Flood Research, 192 S.W.3d at 583. The appellate Firm, 315 S.W.3d 921, 924 (Tex.App.-Dallas 2010, no pet.) court must ensure that (1) there is a direct nexus between (sanction awarded based on party's conduct over two-year the improper conduct and the sanction imposed, id.; Low period). In light of the trial court's findings and the record v. Henry, 221 S.W.3d 609, 614 (Tex.2007), and (2) less before us, as well as the broad discretion afforded the trial severe sanctions would not have been sufficient to promote court by section 27.009, we conclude that the sanction has a compliance, American Flood Research, 192 S.W.3d at 583. direct relationship to BCG's sanctionable conduct and that the We do not rely only on the trial court's findings but must trial court did not abuse its discretion in determining that a independently review the entire record to determine if the trial lesser sanction would have been insufficient to deter further court abused its discretion. Id. actions by BCG. See Tex. Civ. Prac. & Rem.Code§ 27.009(a) (2); American Flood Research, 192 S.W.3d at 583. Because the order reflects that the trial court ordered sanctions pursuant to the TCP A, we review the order under the In arguing that the trial court abused its discretion because it language of section 27.009. See Tex. Civ. & Prac. Rem.Code awarded sanctions without reference to the actual litigation § 27.009(a)(2); Low, 221 S.W.3d at 614 (reviewing order costs, BCG relies on Low, in which the supreme court held in light of chapter 10 of Civil Practices and Remedies that a determination of the amount of a penalty under chapter Code because trial court's written order specifically ordered 10 of the Civil Practices and Remedies Code "should ... sanction pursuant to penalty provision of chapter 10); cf begin with an acknowledgment of the costs and fees incurred American Flood Research, 192 S.W.3d at 583-84 (where because of the sanctionable conduct[, which] provides a order imposing sanctions neither referred to nor tracked any monetary guidepost of the impact of the conduct on the language of specific rule, analysis governed by language of party seeking sanctions and the burdens on the court system." any rule cited in motion). Section 27.009(a)(2) requires the See 221 S.W.3d at 621. Although no court has addressed trial court to award sanctions if it dismisses a claim pursuant a sanctions award under the TCP A, because both chapter to section 27.003 and gives the trial court broad discretion to 10 and the TCP A allow for sanctions to deter future determine what amount is sufficient to deter the party from sanctionable conduct, see Tex. Civ. Prac. & Rem.Code §§

V\lestlawNexr@ 2014 Thomson Reuters. No claim to original US Government Works. 9 Kinney v. BCG Attorney Search, Inc., Not Reported in S.W.3d (2014) 38 IER Cases 170, 42 Media L. Rep. 1812 ------

10.004(b), 27.009(a)(2), we assume without deciding that conclude that the trial court abused its discretion in awarding $75,000 in sanctions against BCG. We overrule BCG's third this guideline may reasonably apply to sanctions under the issue on cross-appeal. TCPA. However, the trial court expressly considered the prior litigation, and the record reflects that the California court awarded Kinney $45,000 in attorney's fees in that action. On the record before us, we conclude that there was CONCLUSION sufficient evidence of the economic impact to Kinney of the sanctionable conduct of BCG over the course of litigation *13 Having concluded that we have jurisdiction over this in two states to serve as a "guidepost" for the amount of appeal and cross-appeal, that BCG's claims are barred by res the sanction. See Low, 221 S.W.3d at 621. Further, although judicata, and that the trial court did not abuse its discretion in unlike chapter 10 and rule 13, section 27.009 does not awarding sanctions in the amount of $75,000 against BCG, require the trial court to state the reasons for the sanction we reverse the trial court's order denying Kinney's motion to amount, the order nevertheless expressly recited the trial dismiss as to BCG's breach of contract and breach of fiduciary court's consideration of the prior litigation, which resulted duty claims and render judgment dismissing those claims. We in an award of attorney's fees against BCG, in deciding that affirm the trial court's order in all other respects. a sanction of $75,000 was necessary to deter BCG from bringing similar actions in the future. Cf Low, 221 S.W.3d at Parallel Citations 620 (absence of explanation of how court determined amount when sanction is especially severe is inadequate). In light of 38 IER Cases 170, 42 Media L. Rep. 1812 the statutory language and the record before us, we cannot

End of Document © 2014 Thomson Reuters. No claim to original U.S. Government Works.

VVestlawNexr@ 2014 Thomson Reuters. No claim to U.S Government Works. 10 CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § ~ § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendant. § 269TH JUDICIAL DISTRICT COURT

FINAL JUDGMENT

On July 16, 2013, the First Court of Appeals entered judgment in the original

interlocutory appeal of this cause in favor of the Defendant The Better Business Bureau of

Metropolitan Houston, Inc. ("Houston BBB") finding reversible error in the trial court's order

dated October 3, 2012. On February 14, 2014, the Texas Supreme Court denied Plaintiffs John

Moore Services, Inc. and John Moore Renovation, LLC's (collectively "Plaintiffs" or "John

Moore") petition for review. On April 4, 2014, the First Court of Appeals issued its mandate that

this case should be dismissed and certified its judgment to this Court for observance.

On July 21, 2014, the Houston BBB remaining claim for attorney's fees was tried to a

jury. Plaintiffs appeared by their representative and by their attorneys of record and announced

ready for trial. The Houston BBB appeared by its representative and by its attorneys of record

announced ready for trial. A jury consisting of twelve qualified jurors were duly empaneled, and

the jury reached a verdict on July 22, 2014.

The Charge of the Court, Questions, Answers, and the Verdict Certificate are

incorporated herein for all purposes. Consistent with the jury's findings, the Court renders

judgment for the Houston BBB and against Plaintiffs for the following amounts:

1 3821737 (i) $106,369.28 for representation in the trial court before and during Houston BBB's

original interlocutory appeal, plus post-judgment interest thereon, at the statutory

rate of 5% per annum until paid;

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

5% per annum until paid;

(iii) $37,982.08 for representation in the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

5% per annum until paid.

Having considered the foregoing, the Defendant's Motion for Entry of Final Judgment,

including attachments, the Plaintiffs' response, including attachments, if any, Defendant's reply,

if any, the admissible evidence, the arguments of counsel, the pleadings on file, the evidence

presented at trial, the jury's verdict, and the judgment of the First Court of Appeals, the Court is

of the opinion that the Motion should be GRANTED in its entirety and that Final Judgment be

entered. It is therefore,

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. 's Motion for Entry of Final Judgment and for Award of Court

Costs, Expenses, and Sanctions against Plaintiffs is hereby GRANTED in its entirety. It is

further;

2 3821737 ORDERED, ADJUDGED AND DECREED that Plaintiffs claims are DISMISSED IN

THEIR ENTIRETY WITH PREJUDICE, and that Plaintiffs TAKE NOTHING on their claims.

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. have and recover from Plaintiffs, whom shall be jointly and

severally liable for such amounts, as a reasonable fee for the necessary services of Houston

BBB's attorneys in defending against John Moore's legal action:

(i) $106,369.28 for representation in the trial court before and during Houston

BBB's original interlocutory appeal, plus post-judgment interest thereon, at the

statutory rate of 5% per annum until paid;

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

(iii) $37,982.08 for representation in the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

5% per annum until paid,

for a total of $250,001.44, plus post-judgment interest thereon, at the statutory rate of 5% per

annum until paid, and which, based on the evidence admitted and considered in this cause, the

Court finds to be just and equitable. It is further,

3 3821737 ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. have and recover from Plaintiffs, whom shall be jointly and

severally liable for such amount, $6,237.77, plus post-judgment interest thereon, at the statutory

rate of 5% per annum until paid, for the expenses incurred by the Houston BBB in defending

against this legal action, an amount which, based on the evidence admitted and considered in this

cause, the Court FINDS to be just and equitable. It is further,

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. recover from Plaintiffs, whom shall be jointly and severally for

such amounts, $415,000.00, plus post-judgment interest thereon, at the statutory rate of 5% per

annum until paid, as sanctions under Texas Civil Practice and Remedies Code § 27.009(a)(2).

The Court finds that Plaintiffs brought this lawsuit to deter or prevent Defendant from exercising

its right of free speech, that Plaintiffs have brought a subsequent lawsuit (Cause No. 2013-

76215) for the same improper purpose. The Court takes judicial notice of all of the papers filed

and proceedings in connection with Cause No. 2013-76215. In consideration of the above,

including the award to Defendant of attorney's fees in this lawsuit, and all of the evidence

admitted and considered in this cause, the Court finds a sanction against Plaintiffs under Section

27.009(a)(2) in the amount of $415,000 is directly related to Plaintiffs' improper conduct and to

be appropriate, sufficient, and necessary to deter Plaintiffs from bringing similar actions

described by Chapter 27 of the Texas Civil Practice and Remedies Code, and that lesser

sanctions would be insufficient. It is further,

ORDERED, ADJUDGED AND DECREED that all costs of court expended or incurred

in this cause are hereby taxed against Plaintiffs, whom shall be jointly and severally liable for

4 3821737 such amount, plus post-judgment interest thereon, at the statutory rate of 5% per annum until

paid.

The Court orders execution to issue for this judgment.

THIS IS A FINAL JUDGMENT. ALL RELIEF NOT EXPRESSLY GRANTED

HEREIN IS DENIED.

SIGNED this _ _ day of _ _ _ _ _ _, 2014.

JUDGE PRESIDING

APPROVED AS TO FORM:

By: Isl Jeffrey R. Elkin Jeffrey R. Elkin, SBN 06522180 M. Harris Stamey, SBN 24060650 1000 Main Street, 36th Floor Houston, Texas 77002-6336 Telephone: (713) 226-6617 Telecopier: (713) 226-6217 je lkin@porterhedges.com mstamey@porterhedges.com

ATTORNEYS FOR DEFENDANT

5 3821737 Exhibit K 8/7/2014 2:15:38 PM Chris Daniel - District Clerk Harris County Envelope No. 2082603 By: GAYLE FULLER

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs § § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendants § 269th JUDICIAL DISTRICT

CAUSE NO. 2013-76215

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs § v. § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC.; THE § HARRIS COUNTY, TEXAS BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON § EDUCATION FOUNDATION; § DAN PARSONS; CHRIS CHURCH § CHURCH ENTERPRISES, INC. § A/K/A CHURCH SERVICES; GARY § MILLESON; RONALD N. MCMILLAN § D’ARTAGNAN BEBEL; MARK GOLDIE § CHARLIE HOLLIS; AND STEVEN § LUFBURROW § Defendants § 269th JUDICIAL DISTRICT

PLAINTIFFS’ MOTION TO CONSOLIDATE Certified Document Number 61880272 Page 1 of 18

AND RESPONSE TO DEFENDANT’S MOTION FOR ENTRY OF JUDGMENT AND FOR AWARD OF COURT COSTS, EXPENSES, AND SANCTIONS AND PLAINTIFFS’ MOTION TO DISREGARD THE FINDINGS OF THE JURY IN PART

Defendants’ motion for entry judgment is a transparent attempt to make an end run

around John Moore’s claims in Cause No. 2013-76215 (the “second lawsuit”). After

preventing John Moore from amending its complaint in Cause No. 2012-35162 (the “first lawsuit”) to join new claims suggested by the documents produced in discovery, the

Houston BBB now seeks to rush to judgment in the hope that a final decision rendered in

the first lawsuit will defeat John Moore’s meritorious claims in the second lawsuit. It

would have been preferable and efficient to bring the claims in a single suit, and they

should not be resolved piecemeal to the potential detriment of John Moore. In the

interests of fairness and efficiency, the claims in Cause No. 2013-76215 should be

consolidated into Cause No. 2012-35162 and decided one time on their merits.

At the very least, the attorneys’ fees judgment (whether interlocutory or final)

should not be rendered in the amount requested by Defendants. The evidence is legally

insufficient to support the amount of fees awarded by the jury under the authority

governing the recovery of attorneys fees. In the alternative, the Court should reduce the

attorneys’ fees in the interests of justice and equity. Finally, no sanctions are appropriate

in this case.

The two lawsuits should be consolidated into one, and if an interlocutory judgment

on attorneys’ fees is rendered, it should be for a reduced amount. And sanctions should Certified Document Number 61880272 Page 2 of 18

not be awarded by any means.

I. THE SECOND LAWSUIT (CAUSE NO. 2013-76215) SHOULD BE CONSOLIDATED WITH THE FIRST LAWSUIT (CAUSE NO. 2012-35162).

The court of appeals’ mandate in the first lawsuit does not require this Court to

render a final judgment of dismissal. It only requires the Court to conduct “further

proceedings” that are consistent with its opinion. Ex. A (Mandate). As the claims made

2 in the second lawsuit were not addressed in any respect by the court of appeals, they may

be pursued in the first lawsuit without coming into conflict with the court of appeals

opinion, judgment or mandate. Consolidating the two Causes and hearing John Moore’s

unadjudicated claims is not inconsistent with this mandate.

A. The Court May Consolidate Matters with Common Questions of Fact or Law.

Under the Texas Rules of Civil Procedure, the Court has the authority to

consolidate these two matters.

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delays.

TEX. R. CIV. P. 174(a); see also HARRIS CTY. LOC. R. 3.2.3 (motion to consolidate is to

be heard in the lower-numbered case). While the Court has discretion under this rule, it

is not unbounded. In re Ethyl Corp., 975 S.W.2d 606, 610 (Tex. 1998). The Court must

exercise its discretion “within limits created by the circumstances of the particular case.”

Id. While it is obvious that these limits restrain a Court’s discretion to order

consolidation, they apply equally to limit the Court’s discretion to refuse consolidation. Certified Document Number 61880272 Page 3 of 18

The claims in two causes share common issues of fact and law when “they all

relate to substantially the same subject matter.” Owens-Corning Fiberglas Corp. v.

Martin, 942 S.W.2d 712, 716 (Tex. App.—Dallas 1997, no writ). In Martin, the claims

by eighteen different plaintiffs were consolidated for trial because they all alleged their

harm was caused by the same product, were given the same (ineffectual) warning, were

3 represented by the same lawyers, and were subject to the same law. Id. The harm to

each plaintiff was different. Id. The court of appeals held that the claims were properly

consolidated. Id. at 720.

The purpose of the consolidation rule is to “further convenience, to avoid

prejudice, and to promote the ends of justice.” In re Ethyl Corp., 975 S.W.2d at 610.

Indeed, consolidation must be ordered when failure to do so would result in injustice.

See id. (“the paramount objective of preventing injustice obtains whether the question is

one of separate trials or of consolidation”). It may not be ordered when consolidation

would cause confusion or prejudice and render the jury unable to find the facts based on

the evidence. In re Van Waters & Rogers, Inc., 145 S.W.3d 203, 207 (Tex. 2004). The

Houston BBB cannot simply rely on dissimilarities between the cases, it must show that a

consolidation “will materially affect the fairness of a trial.” Id.at 208. No confusion or

prejudice will result from this consolidation, but an injustice will result in this case if

consolidation is not ordered.

B. The Common Questions of Fact in These Cases Make Consolidation Permissible; the Injustice to John Moore Makes It Mandatory.

Both of these cases involve the same events; the same conduct by the Houston Certified Document Number 61880272 Page 4 of 18

BBB and its agents; the same harm to John Moore. There are obvious and ubiquitous

questions of fact in common. Consolidation is proper.

1. The two cases involve common questions of fact.

The Houston Court of Appeals considered a somewhat similar case twenty years

ago. Lone Star Ford v. McCormick, 838 S.W.2d 734 (Tex. App.—Houston [1st Dist.]

4 1992, writ denied). In that case two employees sued their employer for breach of their

employment contracts and tortious interference. Id. at 737. Thus, the claims involved

two separate legal breaches, but they were based on the same course of conduct by the

employer that was directed toward the two employees. Id. Therefore, the trial court

consolidated their claims and rendered judgment after a jury trial. Id. The defendant

challenged the consolidation. The appellate court looked at the two plaintiffs’ claims to

determine whether they concerned “the same or substantially the same transaction,

occurrence, subject matter, or question.” Id at 738. As they did, the court of appeals

upheld the order consolidating the two causes.

First the Houston BBB has judicially admitted that Cause No. 2013-76215

concerns the same transaction, occurrence, subject matter, or question.

Despite John Moore’s pleading to the contrary (Petition at ¶ 18), this lawsuit is nothing more than a continuation of the First Legal Action. . . . John Moore has merely taken the same set of background facts and circumstances that were adjudicated in the First Legal Action and tried to recast them into different, non-defamation causes of action.

John Moore cannot avoid the application of Chapter 27 of the Court of Appeals’ decision by simply filing a separate lawsuit that does nothing more than try to recast the same background events and circumstances Certified Document Number 61880272 Page 5 of 18

into different causes of action than those asserted in [the] First Legal Action.

Ex. B at 9, 15 (Motion to Dismiss, Cause No. 2013-76215) (emphasis added). An

assertion of fact in a live pleading that is not pleaded in the alternative and that is

deliberate, clear, and unequivocal is a formal judicial admission. Holy Cross Church of

God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001); Houston First Am. Sav. v.

5 Musick, 650 S.W.2d 764, 767 (Tex. 1983). The effect of a judicial admission is

conclusive. Mendoza v. Fidelity & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694

(Tex. 1980). The Houston BBB is barred from disputing that the two cases involve the

same transactions, occurrences, and subject matter. Id. Therefore, consolidation is

proper.

Second, even without the judicial admission, there are ample examples that the

two cases share common questions of fact. Compare Ex. C at 2-10 (Original Petition,

Cause No. 2012-35162) with Ex. D at 5-14, 15-23 (First Amended Original Petition,

Cause No. 2013-76215). For example, in both cases, John Moore’s claims are based on

the damages suffered when the defendants’ conduct (1) caused it to lose business

beginning no later than April 2012, resulting in lost sales of almost $7 million; (2) caused

it to expend $47,000 to alter the graphics on its fleet of service trucks; and (3) caused it to

prematurely lose the benefit of a $1.1 million investment in custom graphics on those

service trucks. See Resp. to Mot. to Dismiss at 53 (Cause No. 2013-76215). Thus, the

two causes involve the same damages.

Furthermore, in both cases, John Moore alleges that the defendants concerted Certified Document Number 61880272 Page 6 of 18

conduct was intended to harm John Moore for the benefit of other Houston BBB

members. This harmful conduct included:

 the cancelation of Houston BBB programs that benefited John Moore such

as the advertising cooperative;

 an attack on John Moore’s independent advertising campaigns;

6  manipulation of the Houston BBB business rating system to give John

Moore an artificially low rating;

 the orchestration of votes on the Membership Committee and the Board of

Directors to force John Moore to resign from the Houston BBB;

 a campaign to prevent John Moore from becoming a member of any other

Better Business Bureau; and

 bringing an unmeritorious trademark infringement lawsuit against John

Moore in federal court.

See Response to Motion to Dismiss at 2-10 (Cause No. 2013-76215); see Ex. C at 2-10;

Ex. D at 5-14, 15-23.

2. An injustice would be done if the cases are not consolidated.

When this Court denied the Houston BBB’s motion to dismiss, it recognized that

John Moore’s claims in the second lawsuit are viable, i.e., they meet the evidentiary test

set out in Chapter 27 of the Civil Practice and Remedies Code. The Houston BBB seeks

to avoid liability on these viable claims by asserting legally suspect res judicata or

collateral estoppel arguments following an entry of judgment in the first lawsuit. See Ex. Certified Document Number 61880272 Page 7 of 18

B at 9, 15. At the very least, these arguments will cause John Moore to incur unnecessary

expense and delay the resolution of those claims. At worst, these claims will prevent

John Moore from asserting meritorious claims concerning a very real injury.

As the Court will recall, John Moore did not desire to multiply litigation by filing

a second suit. After discovery had begun in the first lawsuit, John Moore became aware

of new claims that it had not asserted in its original petition. It attempted to amend its 7 pleadings to add the claims for restraint of trade, breach of contract, and deceptive trade

practices. But the Houston BBB objected and argued that a later-enacted statute applied

retroactively to stay all proceedings in the lawsuit. The Court struck the amended

petition.

Because limitations had not yet run, John Moore preserved these new claims by

filing a second lawsuit, Cause No. 2013-76215. These claims should not be barred by a

resolution of the first lawsuit, but there are no certainties in this world. John Moore’s

position is that a final judgment in the first lawsuit will not bar its claims in the second

suit (1) because no judgment existed at the time the claims were asserted that would

prevent them from being filed, see Citizens Ins. v. Daccach, 217 S.W.3d 430, 449 (Tex.

2007); (2) because of the stay asserted by the Houston BBB, the claims could not be

joined in that case, see Finger v. Southern Refrigeration Servs., 881 S.W.2d 890, 895-96

(Tex. App.—Houston [1st Dist.] 1994, writ denied); and (3) because a decision in one

part of a lawsuit that was divided into separate parts has no res judicata or collateral

estoppel effect on the other part. See Van Dyke v. Boswell, O’Toole, Davis & Pickering,

697 S.W.2d 381, 384 (Tex. 1985). Thus, John Moore does not believe that res judicata Certified Document Number 61880272 Page 8 of 18

would apply.

However, nothing will prevent the Houston BBB from asserting the defense if the

cases are kept separate and a final judgment is rendered in the first lawsuit. John Moore

will, at the very least, be required to defend itself against the argument that its claims are

precluded. At worst, if John Moore were to lose the argument, then its meritorious

claims in the second lawsuit will never be determined on their merits. Even without the

8 effects of res judicata, a separate judgment in the first lawsuit will ultimately result in

two separate appeals, increasing the cost to both parties, the burden to the courts, and the

inefficiency of the process. Any of these situations would cause an injustice to John

Moore and prejudice it in the pursuit of its claims.

On the other hand, the need to contest the issue of res judicata at all would be

eliminated by consolidating the two cases, thereby avoiding prejudice to any party. This

would also result in a single appeal, further increasing efficiency. Once consolidated, any

judgment on the amount of attorneys’ fees would be interlocutory and could not have res

judicata effect on John Moore’s claims made in the second suit, and all of these matters

could be appealed at one time.

John Moore’s claims in Cause No. 2013-76215 share a common nucleus of fact

with the claims in Cause No. 2012-35162. Therefore, consolidation is within the

discretion of this Court. The Houston BBB’s naked attempt to bar John Moore’s claims

in the second lawsuit (which this Court has determined to be supported by sufficient

evidence under Chapter 27) would cause an injustice by preventing John Moore from a

resolution of its claims on the merits. The Court should order a consolidation. Certified Document Number 61880272 Page 9 of 18

II. IF AN INTERLOCUTORY JUDGMENT IS RENDERED TODAY, IT SHOULD BE FOR A REDUCED AMOUNT.

Should the Court consolidate the two actions as argued above, a judgment on the

attorneys’ fees issue would be premature and unnecessary. However, should the Court

elect to sign an interlocutory judgment on the attorneys’ fees issue, the judgment should

be for far less than the amount found by the jury.

9 A. There Is No Legally Sufficient Evidence to Support the Full Amount of the Jury’s Award.

The Anti-SLAPP statute mandates the award of “reasonable” attorneys’ fees in an

amount that satisfies “justice and equity.” TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1).

Texas jurisprudence has always considered reasonableness and necessity together. See,

e.g., El Apple I, Ltd. v. Oivas, 370 S.W.3d 757, 762-63 (Tex. 2012) (considering

necessity of the fees as a component of reasonableness). Therefore, the Houston BBB

must establish that the fees it is requesting are both reasonable and necessary.

For the Court to conduct a meaningful review, the Houston BBB “must provide

sufficient details of the work performed.” Id. at 764. This includes, “at a minimum,

documentation of the services performed, who performed them and at what hourly rate,

when they were performed, and how much time the work required.” Id.

The El Apple requirements have been elaborated upon to require “evidence of the

time spent on specific tasks.” Long v. Griffin, __ S.W.3d __, 2014 WL 1643271, at *3

(Tex. April 25, 2014). When a party uses bulk billing, it is impossible to determine

whether the time spent on a specific task was reasonable and necessary. For example, the

second entry in the Houston BBB’s invoices illustrate the problem: Certified Document Number 61880272 Page 10 of 18

Continue detailed review and analysis of Original Petition; research current Anti-SLAPP litigation information; receive and review correspondence from L. Hood requesting removal of all references to John Moore from BBB web-site.

Ex. F at p.1. This time entry indicates that 2.2 hours were spent on these issues, but there

is no way to determine how that time is broken down. Did the timekeeper spend 2.0

hours reviewing correspondence and the balance on the petition and research? Was the

10 bulk of the time spent on research? There is no way to know. Therefore, there is no way

to determine if the time was well-spent or wasted.

Similarly, when a party over-redacts the time entries, the result is gibberish that

does not guide the fact-finder. The first entry on the second page of Invoice # 400271 is

an example of this problem:

Telephone conference with [BLANK] regarding [BLANK] motions to dismiss; revise [BLANK] in support of motion to dismiss, revise motion; communications to and from Ms. Christensen regarding [BLANK].

Ex. F at p.7. This entry actually combines the bulk billing problem with the redaction

problem. There is no way to determine what the telephone conference was regarding,

what was revised, or what the communications with Ms. Christensen related to. How can

a factfinder determine whether these tasks were reasonable and necessary without

knowing what they are? They cannot.

Houston BBB’s evidence is inadequate and does not meet the El Apple

requirements to the extent it uses bulk billing and does not satisfy the Long v. Griffin

standard to the extent it does not specify the particular tasks. Block billing and heavy

redactions do not permit the fact finder even to break the hours spent down into general Certified Document Number 61880272 Page 11 of 18

categories such as discovery, research, pleadings, witnesses, etc. Even if this kind of

general breakdown were possible, it is inadequate under Supreme Court precedent. See

El Apple, 370 S.W.3d at 763 (holding that such categorization “provides none of the

specificity needed for the trial court to make a meaningful lodestar determination.”).

The billing invoices provided by Houston BBB in support of its award for

attorneys’ fees include hundreds of time entries. Ex. F. As indicated by the examples

11 above, not all of the entries identify the time spent on a specific task as required by the

Texas Supreme Court because they contain block billing and/or redactions that obscure

the nature of the work performed. Of the hundreds of time entries, only 158 avoid

combining multiple tasks and actions into a single time entry (i.e., block billing) or avoid

redactions that obscure one or more of the tasks that are described. Ex. E (Affidavit of

Amelia Irving). To the extent block billing and heavy redactions make it impossible to

determine whether the time was well-spent or wasted, the entries are legally insufficient

Attached to this response is a copy of Defendants Exhibit 3 with all of the legally

insufficient time entries struck through. Ex. F. These entries are legally insufficient

evidence, and the fact finder could not rely on them to make a finding as to the

reasonable and necessary attorney’s fees. El Apple I, Ltd., 370 S.W.3d at 762-63; Long,

2014 WL 1643271, at *3. Therefore, there should be no attorneys’ fees awarded for

these amounts. The remaining entries satisfy the El Apple and Long standards and are

arguably legally sufficient to support an award.

The total dollar amount of the entries that are not fatally defective is $72,413.50. Certified Document Number 61880272 Page 12 of 18

Ex. G. Because the invoices as a whole are insufficient to support a finding that all of the

fees included therein are reasonable and necessary, the award of attorneys’ fees should be

reduced to a maximum of $72,413.50.

12 B. The Attorneys’ Fees Should Be Reduced in the Interest of Justice and Equity.

When Moore filed its initial lawsuit on June 18, 2012, the Anti-SLAPP statute had

been on the books for one year. See TEX. CIV. PRAC. & REM. CODE § 27.001 (effective

June 17, 2011). In determining the appropriate causes of action to assert in the lawsuit,

John Moore understandably concluded that the statute did not apply to its claims because

this case involved a business relationship, and the statute explicitly stated that its purpose

was related to “participation in government.” TEX. CIV. PRAC. & REM. CODE § 27.002.

The statute, with its protection of participation in government, appeared to apply in the

governmental context where citizens required protection from illegal suppression of such

rights by the filing of strategic lawsuits, not to a commercial dispute in which John

Moore is able to show a real injury arising out of the Houston BBB’s conduct.

Virtually none of the questions raised by the statute had been definitively

addressed by the courts at that time. There was simply no authority. Plaintiffs, such as

John Moore, were blindsided by the broad scope of actions and activities found to be

protected under the statute as the case law developed. Indeed, John Moore’s suit and the

related appeal was a test case decided during this developmental phase of the law. Certified Document Number 61880272 Page 13 of 18

As noted, John Moore conscientiously identified the causes of action which were

appropriate given the underlying dispute. The suit appeared to be one involving purely

commercial interests which was specifically exempted from the application of the statute.

TEX. CIV. PRAC. & REM. CODE § 27.010(b). When John Moore filed its lawsuit, it was

impossible to envision the tortuous path that this case would ultimately take, much of it

13 caused by the Houston BBB’s intransigence and unwillingness to take responsibility for

the economic harm that its actions were causing for John Moore.

Given the newness of the statute, the unaddressed issues present at the time Moore

filed its lawsuit, and the expansion of the activity covered under the statute as the case

law progressed, Moore requests that the Court reduce the attorneys’ fees in the interest of

justice and equity. Moore requests that the award of attorneys’ fees be reduced to a

maximum of $72,413.50 in the interest of justice and equity.

C. Sanctions Are Not Appropriate Here.

Under the Anti-SLAPP statute, the trial court has discretion to determine what

amount is sufficient to deter the party from bringing similar actions in the future. TEX.

CIV. PRAC. & REM. CODE § 27.009(a)(2). John Moore, however, has not engaged in any

course of action which needs to be deterred under the statute. The Houston BBB

primarily relies on Kinney v. BCG Attorney Search, Inc. to support its contention that

sanctions are appropriate in this matter. 2014 WL 1432012 at *12 (Tex. App.—Austin,

April 11, 2014, pet. filed). The Houston BBB’s reliance is misplaced because John

Moore has not engaged in the types of activity which were at issue in Kinney. John Certified Document Number 61880272 Page 14 of 18

Moore has not brought a second lawsuit that violates the Anti-SLAPP statute. Id. at *2.

John Moore has not brought a second lawsuit that asserts non-viable claims. Id. at *2.

John Moore has no history of continually bringing actions which assert nonviable

claims for conduct protected by the Anti-SLAPP statute. See Stromberger v. Turley Law

Firm, 315 S.W.3d 921, 924 (Tex. App.—Dallas 2010, no pet.) (finding that sanctions

were appropriate based on a continued course of conduct over a two-year period). The

14 initial lawsuit filed by John Moore arguably asserted viable causes of action, particularly

in light of the undeveloped state of the Anti-SLAPP statute. It was not John Moore’s

intention to bring multiple lawsuits. John Moore would have not filed a second suit were

it not for The Houston BBB’s actions.

Following the First Court of Appeals’ decision, John Moore filed an amended

petition in the first lawsuit which asserted causes of actions suggested by evidence

gathered during discovery. On The Houston BBB’s motion, the court struck the amended

petition. Thus, The Houston BBB’s actions forced Moore to assert these causes of action

in a separate suit. It is self-serving for the Houston BBB to now complain that John

Moore is a vexatious litigant, having forced John Moore into this position. In any event,

this Court has recognized that the causes of action asserted in the second lawsuit are

viable by virtue of its denial of The Houston BBB’s Motion to Dismiss in that lawsuit.

Sanctions are also inappropriate for all of the reasons expressed in the previous

section requesting a reduction in the amount of attorneys’ fees in the interests of justice

and equity.

As noted above, the trial court has broad discretion to determine what amount is Certified Document Number 61880272 Page 15 of 18

sufficient to deter the party from bringing similar actions. TEX. CIV. PRAC. & REM. CODE

§ 27.009(a)(2). John Moore’s conduct does not approach the type of activity where

sanctions might be appropriate. The facts demonstrate that deterrence should not be a

concern in John Moore’s case, and that sanctions are unnecessary.

15 D. There Is No Legally Sufficient Evidence to Support an Award of Expenses and the Houston BBB Waived the Issue by Failing to Obtain a Finding from the Jury.

The Houston BBB did not request and did not obtain a finding as to the amount of

“other expenses” incurred in this matter. TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1)

(allowing recovery of “other expenses”). When a party has the burden of proof on an

issue, the party must submit a requested instruction to preserve the right to seek a

recovery on the issue. W.O. Bankston Nissan, Inc. v. Walters¸ 754 S.W.2d 127, 128

(Tex. 1988). The Houston BBB has the burden of proof to establish the amount of “other

expenses” to be recovered under section 27.009(a)(1). Therefore, the Houston BBB has

waived the determination of this issue. Id.

Even if the Houston BBB has not waived the question of the proper amount of

“other expenses” to be awarded, it failed to present legally sufficient evidence in support

of a finding. A successful party is only entitled to taxable costs. TEX. R. CIV. P. 151.

First, it has not yet been determined whether the Houston BBB will be completely

successful in this litigation such that it would be entitled to an award of costs because

John Moore has claims remaining against the Houston BBB. Certified Document Number 61880272 Page 16 of 18

Second, it cannot be determined from the Houston BBB’s evidence whether the

costs and expenses it seeks are taxable. The only evidence of expenses is the Schedule

admitted as Defendants’ Exhibit 4. The Schedule lists the date, invoice number, and

amount of various expenses and costs, but nothing indicates that the costs and expenses

are taxable costs or expenses. TEX. CIV. PRAC. & REM. CODE § 37.007. Therefore, there

is legally insufficient evidence to support an award of expenses.

16 PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs, John Moore Services, Inc.

and John Moore Renovation, LLC respectfully request that this Court consolidate Cause

No. 2013-76215 with this Cause and set the remaining claims in the consolidated cases

for a jury trial after an appropriate discovery period. Furthermore, Plaintiffs request that

this Court, if it renders a judgment (whether interlocutory or final) for attorneys fees,

expenses, and costs, disregard the findings of the jury and award fees only in a reduced

amount (to a maximum of $72,413.50); deny or defer the question of costs and expenses;

and deny the request for sanctions entirely. Plaintiffs also request all such other and

further relief to which they may be justly entitled at law or in equity.

By: /s/ Lori Hood Lori Hood Texas Bar No. 09943430 Brian P. Johnson Texas Bar No. 10685700 Tamara Madden Texas Bar No. 00783720 Certified Document Number 61880272 Page 17 of 18

919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (713) 222-2226 (facsimile) lhood@johnsontrent.com bjohnson@johnsontrent.com tmadden@johnsontrent.com

17 CERTIFICATE OF CONFERENCE

On this, the 7th day of August, 2014, the undersigned contacted Harris Stamey, counsel for the Better Business Bureau of Metropolitan Houston and was informed that the Defendant opposed this motion.

I hereby certify that a true and correct copy of the foregoing instrument has been served upon all counsel of record pursuant to Rule 21 and Rule 21(a) of the TEXAS RULES OF CIVIL PROCEDURE on this 7th day of August, 2014.

Jeffrey R. Elkin Via ECF M. Harris Stamey Porter Hedges, LLP 1000 Main Street, 36th Floor Houston, Texas 77002

/s/ Lori Hood LORI HOOD Certified Document Number 61880272 Page 18 of 18

346439.1-08052014

18 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 61880272 Total Pages: 18

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit L 8/7/2014 2:15:38 PM Chris Daniel - District Clerk Harris County Envelope No: 2082603 By: FULLER, LESLIE G

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs § § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendants § 269th JUDICIAL DISTRICT

Please take note that a hearing is to be held on Friday, August 8, 2014 at 11:00

a.m. in the above-styled case in open court before the 269th Judicial District Court on the

13th Floor of the Harris County Civil Courthouse to consider Defendants’ Motion to

Consolidate and Motion to Disregard the Findings of the Jury in Part.

By: /s/ Lori Hood Lori Hood Texas Bar No. 09943430 Brian P. Johnson Texas Bar No. 10685700 Tamara Madden Certified Document Number: 61880303 - Page 1 of 2

Texas Bar No. 00783720 919 Milam Street, Suite 1700 Houston, Texas 77002 (713) 222-2323 (713) 222-2226 (facsimile) lhood@johnsontrent.com bjohnson@johnsontrent.com tmadden@johnsontrent.com CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing instrument has been served upon all counsel of record pursuant to Rule 21 and Rule 21(a) of the TEXAS RULES OF CIVIL PROCEDURE on this 7th day of August, 2014.

Jeffrey R. Elkin Via ECF M. Harris Stamey Porter Hedges, LLP 1000 Main Street, 36th Floor Houston, Texas 77002

/s/ Lori Hood LORI HOOD 346927.1-08072014 Certified Document Number: 61880303 - Page 2 of 2 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 61880303 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com Exhibit M ·" FILED 3n/2014 4:44:32 PM Chrts Daniel • District Cieri( Chrl• Donia! Harris County Dl11trlot Clork Envelope No: 662518 By: FULLER, LESLIE G AUG 08 2014 Tlme:;_....,..-:-=-=~~­ l'f1rr11 County, T1xaa +?'7 ~Y.~.~-----~D~•~pu~ty:'!"'"""----~ CAUSE NO. 2013-76215 )l A . JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § v. § § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC.; THE § BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON § EDUCATION FOUNDATION; DAN § HARRIS COUNTY, TEXAS PARSONS; CHRIS CHURCH; CHURCH § ENTERPRISES, INC. A/KJA CHURCH § SERVICES; GARY MILLESON; § RONALDN.MCMILLAN; § D'ARTAGNAN HEBEL; MARK GOLDIE; § CHARLIE HOLLIS; and STEVEN § LUFBURROW § Defendants. . § 269TR JUDICIAL DISTRICT COURT

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

On this day came on to be considered Defendants 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, Mark Goldie, Charlie Hollis, and Steven Lufburrow's Motion to Dismiss the above-

referenced case in its entirety ("Motion")~e Court, having reviewed the Motion, any response

and reply thereto, the evidence presented, the pleadings on file, the arguments of counsel, ana.Jllie.----:---......

applicable law, finds the Motion well taken and should be GRANTED in its entire ltis "°'~.h tl '\-{µ,. ~~h~.~ therefore, ~~ CertifiedDocumentNumber:61943380-Page1of7

ORDERED that, pursuant to Section 27.003 of the Texas Civil Practice and Remedies

Code, all claims and causes of action brought by Plaintiffs John Moore Services, Inc. and John

Moore Renovation, LLC are hereby DISMISSED with prejudice against refiling. It is further, Remedies Code, the Defendants 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, Mark Goldie, Charlie

Hollis, and Steven Lufburrow shall recover from Plaintiffs John Moore Services, Inc. and John

Moore Renovation, LLC their court costs, reasonable attorneys' fees, and

ORDERED that, pursuant to Section 27 .009(a)(2) of the Texas Civil Practice and

Remedies Code, monetary sanctions are imposed against Plaintiffs John Moore Services, Inc.

and John Moore Renovation, LLC to be paid to Defendants 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, Mark Goldie, Charlie Hollis, and Steven Lufburrow.

n CertifiedDocumentNumber:61943380-Page2of7

SIGNEDtbis~dayofA.s<>.fl; 2014. /T) (. /">

~ 2 3644753 CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § V. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendant. § 269rn JUDICIAL DISTRICT COURT

On July 16, 2013, the First Court of Appeals entered judgment in the original

dated October 3, 2012. On February 14, 2014, the Texas Supreme Court denied Plaintiffs John

Moore Services, Inc. and John Moore Renovation, LLC"s (collectively "Plaintiffs'' or "John

Moore'') petition for review. _?n April 4, 2014, the First Court of Appeals issued its mandat~ ~s ca~lfttf~ and certified its judgment to this Court for observance. On July 21, 2014, the Houston BBB remaining claim for attorney's fees was tried to a

jury. Plaintiffs appeared by their representative and by their attorneys of record and announced

ready for trial. The Houston BBB appeared by its representative and by its attorneys of record

announced ready for trial. A jury consisting of twelve qualified jurors were duly empaneled, and CertifiedDocumentNumber:61943380-Page3of7

The Charge of the Court. Questions, Answers, and the Verdict Certificate are

incorporated herein for all purposes. Consistent with the jury's findings, the Court renders

judgment for the Houston BBB and against Plaintiffs for the following amounts:

~;b,+A 3821737 (i) $106,369.28 for representation in the trial court before and during Houston BBB· s

original interlocutory appeal, plus post-judgment interest thereon, at the statutory

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

(iii) $37,982.08 for representation in the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

Having considered the foregoing, the Defendant's Motion for Entry of Final Judgment,

including attachments. the Plaintiffs' response, including attachments, if any, Defendant's reply,

if any, the admissible evidence, the arguments of counsel, the pleadings on file, the evidence

presented at trial, the jury·s verdict, and the judgment of the First Court of Appeals, the Court is

of the opinion that the Motion should be GRANTED in ~and that Final Judgment be

entered. It is therefore, ~ CertifiedDocumentNumber:61943380-Page4of7

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc.'s Motion for Entry of Final Judgment and for Award~-u

2 3821737 ORDERED, ADJUDGED AND DECREED that Plaintiffs claims are DISMISSED IN

THEIR ENTIRETY WITH PREJUDICE, and that Plaintiffs TAKE NOTHING on their claims.

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. have and recover from Plaintiffs, whom shall be jointly and

severally liable for such amounts, as a reasonable fee for the necessary services of Houston

BBB's attorneys in defending against John Moore's legal action:

(i) $106,369.28 for representation in the trial court before and during Houston

BBB's original interlocutory appeal, plus post-judgment interest thereon, at the

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

(iii) $37 ,982.08 for representation m the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory CertifiedDocumentNumber:61943380-Page5of7

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

for a total of $250,001.44, plus post-judgment interest thereon, at the statutory rate of 5% per

annum until paid, and which, based on the evidence admitted and considered in this cause, the

3 3821737 '· ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. have and recover from Plain · fs, whom shall be jointly and

ate~ annum until

against this legal acf , an amount whi , ased on the evidence a itted and considered in this

cause, the Court FINDS to be just and equitable. It is further,

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

annum until paid, as sanctions under Texas Civil Practice and Remedies Code § 27.009(a)(2).

The Court finds that Plaintiffs brought this lawsuit to deter or pre nt Defendan from exercising

its right o ree speech

filed

and proceedings in connection with Cause No. 2013-76215. In consideration of the above,

including the award to Defendant of attomey·s fees in this lawsuit, and all of the evidence

admitted and considered in this cause, the ~~anction against Plaintiffs under Section ~ 27.009(a)(2) in the amount of~ectly rel~~duct an])o be appropriate, sufficient, and necessary to deter Plaintiffs from bringing similar actions CertifiedDocumentNumber:61943380-Page6of7

described by Chapter 27 of the Texas Civil Practice and Remedies Code, and that lesser

ORDERED, ADJUDGED AND DECREED that all costs of court expended or incurred

in this cause are hereby taxed against Plaintiffs, wh~I be jointly and severally liable for

4 3821737 such amount, plus post-judgment interest thereon, at the statutory rate of 5% per annum until

SIGN ED this ~a y of .L-~:,.>:4-=:__..<.........,-.:

By: Isl Jeffrey R. Elkin Jeffrey R. Elkin, SBN 06522180 M. Harris Stamey, SBN 24060650 I000 Main Street, 36th Floor Houston, Texas 77002-6336 Telephone: (713) 226-6617 Telecopier: (713) 226-6217 jelkin@porterhedges.com mstamey@porterhedges.com

ATTORNEYS FOR DEFENDANT CertifiedDocumentNumber:61943380-Page7of7

5 3821737 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 20, 2015

Certified Document Number: 61943380 Total Pages: 7

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com

Exhibit N 7 CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC, § § Plaintiffs, § § v. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC., § § Defendant. § 269 th JUDICIAL DISTRICT

After the closing arguments, you will go to the jury room to decide the case, answer the questions that are attached, and reach a verdict You may discuss the case with other jurors only when you are all together In the jury room

Remember my previous InstructlOns Do not discuss the case with anyone else, either in person or by any other means. Do not do any independent Investigation about the case or conduct any research. Do not look up any words in dictionanes or on the Internet. Do not post information about the case on the Internet Do not share any special knowledge or experiences with the other jurors Do not use your phone or any other electronic device during your deliberations for any reason.

Any notes you have taken are for your own personal use. You may take your notes back into the jury room and consult them during deliberatlOns, but do not show or read your notes to your fellow jurors during your delIberations. Your notes are not evidence. Each of you should rely on your independent recollection of the evidence and not be influenced by the fact that another juror has or has not taken notes.

You must leave your notes with the bailiff when you are not deliberating. The bailiff will give your notes to me promptly after collecting them from you. I will make sure your notes are ~~ kept in a safe, secure location and not disclosed to anyone. After you complete your OJ ~ g deliberations, the bailiff will collect your notes. When you are released from jury duty, the ~~~ '" S m bailiff will promptly destroy your notes so that nobody can read what you wrote. g~~ ro~cn oen!!: ~om

~-t;'~ ~Q~ CO.Qz

!~ F I LED Chris Daniel District Clerk

JUL 2 2 2014 .,a Time: ~'5o~ ·---H~a~rr~la~c~o~un~t~.~r--- 1 By.~,.______~~~~_____

108 I. INSTRUCTIONS FOR ANSWERING THE QUESTIONS

1. Do not let bias, prejudice, or sympathy play any part In your decision.

2. Base your answers only on the evidence admitted in court and on the law that is in these instructions and questions Do not consIder or discuss any evidence that was not admitted in the courtroom

3. You are to make up your own minds about the facts. You are the sole judges of the credibility of the witnesses and the weIght to give their testimony. But on matters of law, you must follow all of my Instructions

4. If my instructions use a word in a way that is different from its ordinary meaning, use the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are important. No one should say that any question or answer is not important.

6. Answer "Yes" or "No" to all questions unless you are told otherwise. A "Yes" answer must be based on a preponderance of the evidence unless you are told otherwise. Whenever a question requires an answer other than "Yes" or "No," your answer must be based on a preponderance of the evidence unless you are told otherwise

The term "preponderance of the evidence" means the greater weight of credible evidence presented in this case. If you do not find that a preponderance of the evidence supports a "Yes" answer, then answer "No." A preponderance of the evidence is not measured by the number of witnesses or by the number of documents admitted in evidence. For a fact to be proved by a preponderance of the evidence, you must find that the fact is more likely true than not true

A fact may be established by direct evidence or by circumstantial evidence or both. A fact is established by direct evidence when proved by documentary evidence or by witnesses who saw the act done or heard the words spoken. A fact is established by circumstantial evidence when it may be fairly and reasonably inferred from other facts proved.

7. Do not decide who you think should win before you answer the questions and then just answer the questions to match your decision. Answer each question carefully without considering who will win. Do not discuss or consider the effect your answers will have.

8. Do not answer questions by drawing straws or by any method of chance.

9. Some questions mIght ask you for a dollar amount. Do not agree in advance to decide on a dollar amount by adding up each juror's amount and then figuring the average.

10. Do not trade your answers. For example, do not say, "I WIll answer this question your way if you answer another question my way."

109 11. Unless otherwise instructed, the answers to the questions must be based on the decision of at least 10 of the 12 jurors. The same 10 jurors must agree on every answer. Do not agree to be bound by a vote of anything less than 10 jurors, even if it would be a majority.

As I have Said before, if you do not follow these instructions, you will be guilty of juror misconduct, and I might have to order a new trial and start this process over again. This would waste your time and the parties' money, and would require the taxpayers ofthis county to pay for another trial. If a juror breaks any of these rules, tell that person to stop and report it to me immediately.

As used in this Charge, the following words have the following meanings:

1) "Houston BBB" means The Better Business Bureau of Metropolitan Houston, Inc.

2) "John Moore" means John Moore Services, Inc and John Moore Renovations, LLC.

110 III. QUESTIONS

Question No.1

What is a reasonable fee for the necessary services of Houston BBB' s attorneys in defending against John Moore's legal action, stated in dollars and cents?

You are instructed that the following factors should be considered when determining the amount of attorneys' fees:

a. the time and labor involved, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly;

b. the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

c the fee customarily charged in the locality for similar services;

e. the time limitatIOns Imposed by the client or the circumstances;

f. the nature and length of the professional relationship with the client,

g the experience, reputatIOn and ability of the lawyer or lawyers performing the services; and

h. whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

a. For representation in the trial court before and during Houston BBB's original interlocutory appeal.

Answer: $ {o

Answer: $ cg, I :3 (.,0 . 80

c. For representation at the petition-for-review stage to the Supreme Court of Texas for the original interlocutory appeal.

Answer: $ 37 J 11€>:l- . QS

111 d. For representation in the trial court after the original interlocutory appeal was decided.

Answer: $ ~4, ~ . ~'B

e. For representation after thIS trial in the Court of Appeals.

Answer: $ _ _~¢~ ____ f. For representation after this trial at the petition-for-review stage in the Supreme Court of Texas.

JO Answer: $ - - . . . ! . . . - - - - -

g. For representation after this tnal at the merits-briefing stage in the Supreme Court of Texas.

Answer: $ _----'f4=-_ __

h. For representatIOn after thIS trial through oral argument and the completion of proceedings in the Supreme Court of Texas.

Answer. $ _----'/0=--___

112 IV. INSTRUCTIONS REGARDING THE PRESIDING JUROR

1. When you go into the jury room to answer the questions, the first thing you will need to do is choose a presiding juror

a. have the complete charge read aloud if it will be helpful to your deliberations;

b. preside over your deliberations-meaning to manage the discussions and see that you follow these instructions;

c. give written questions or comments to the bailiff, who will give them to the judge;

Do you understand the dutIes of the presidmgjuror? If you do not, please tell me now.

1. Unless otherwise instructed, you may answer the questions on a vote of 10 jurors. The same 10 jurors must agree on every answer in the charge. This means you may not have one group of 10 jurors agree on one answer and a different group of 10 jurors agree on another answer.

2. If 10 jurors agree on every answer, those 10 Jurors sign the verdict.

3. If 11 jurors agree on every answer, those 11 jurors sign the verdict.

4. If all 12 of you agree on every answer, you are unanimous and only the presiding juror signs the verdict.

5. All jurors should deliberate on every question You may end up with all 12 of you agreeing on some answers, while only 10 or 11 of you agree on other answers. But when you sign the verdict, only those 10 who agree on every answer will sign the verdict.

Do you understand these mstructions? If you do not, please tell me now.

Judge, 269th District Court

113 CERTIFICATE

We, the jury, have answered the foregoing questions as indicated and return our answers into court as our verdict.

I certify that the jury was unanimous m answer to the following questions:

Answer "All" or list question, includmg subparts: A/I

If the answers to some questions were not unanimous, the jurors who agreed to those answers must certify as follows.

5.

6.

7.

8.

9.

10.

11. 7

Exhibit O g6f; CAUSE NO. 2012-35162 5-/ JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF JOHN MOORE RENOVATION, LLC § Plaintiffs, § V. § HARRIS COUNTY, TEXAS § THE BETTER BUSINESS BUREAU OF § METROPOLITAN HOUSTON, INC. § Defendant. § 269 TH JUDICIAL DISTRICT COURT

On July 16, 2013, the First Court of Appeals entered judgment in the original

dated October 3, 2012. On February 14,2014, the Texas Supreme Court denied Plaintiffs John

Moore Services, Inc. and John Moore Renovation, LLC's (collectively "Plaintiffs" or "John

Moore") petition for review. On April 4, 2014, the First Court of Appeals issued its mandat~ dh'is ca~nd certified its judgment to this Court for observance. On July 21, 2014, the Houston BBB remaining claim for attorney's fees was tried to a

jury. Plaintiffs appeared by their representative and by their attorneys of record and announced

ready for trial. The Houston BBB appeared by its representative and by its attorneys of record

announced ready for trial. A jury consisting of twelve qualified jurors were duly empaneled, and

The Charge of the Court, Questions, Answers, and the Verdict Certificate are

incorporated herein for all purposes. Consistent with the jury's findings, the Court renders

judgment for the Houston BBB and against Plaintiffs for the following amounts:

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115 (i) $106,369.28 for representation in the trial court before and during Houston BBB's

original interlocutory appeal, plus post-judgment interest thereon, at the statutory

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

(iii) $37,982.08 for representation In the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

Having considered the foregoing, the Defendant's Motion for Entry of Final Judgment,

including attachments, the Plaintiffs' response, including attachments, if any, Defendant's reply,

if any, the admissible evidence, the arguments of counsel, the pleadings on file, the evidence

presented at trial, the jury's verdict, and the judgment of the First Court of Appeals, the Court is

of the opinion that the Motion should be GRANTED in &@'t®and that Final Judgment be

entered. It is therefore, ~ ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc.'s Motion for Entry of Final Judgment and for Award

Costs, Expenses, and Sanctions against Plaintiffs is hereby GRANTED in 1 -~~~

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116 ORDERED, ADJUDGED AND DECREED that Plaintiffs claims are DISMISSED IN

THEIR ENTIRETY WITH PREJUDICE, and that Plaintiffs TAKE NOTHING on their claims.

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

of Metropolitan Houston, Inc. have and recover from Plaintiffs, whom shall be jointly and

severally liable for such amounts, as a reasonable fee for the necessary services of Houston

BBB's attorneys in defending against John Moore's legal action:

(i) $106,369.28 for representation in the trial court before and during Houston

BBB's original interlocutory appeal, plus post-judgment interest thereon, at the

(ii) $81,360.80 for representation in the Court of Appeals for the original

interlocutory appeal, plus post-judgment interest thereon, at the statutory rate of

(iii) $37,982.08 for representation In the petition-for-review stage to the Supreme

Court of Texas for the original interlocutory appeal, plus post-judgment interest

thereon, at the statutory rate of 5% per annum until paid; and

(iv) $24,289.28 for representation in the trial court after the original interlocutory

appeal was decided, plus post-judgment interest thereon, at the statutory rate of

for a total of $250,001.44, plus post-judgment interest thereon, at the statutory rate of 5% per

annum until paid, and which, based on the evidence admitted and considered in this cause, the

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117 ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

utory

itted and considered in this

cause, the Court FINDS to be just and equitable. It is further,

ORDERED, ADJUDGED AND DECREED that Defendant The Better Business Bureau

annum until paid, as sanctions under Texas Civil Practice and Remedies Code § 27.009(a)(2).

The Court finds that Plaintiffs brought this lawsuit to deter or pre nt Defendan from exercising

and proceedings in connection with Cause No. 2013-76215. In consideration of the above,

including the award to Defendant of attorney's fees in this lawsuit, and all of the evidence

admitted and considered in this cause, ~~~anction against Plaintiffs under Section

27.009(a)(2) in the amount of~et;t1Y ~a ~~duct an{ho be appropriate, sufficient, and necessary to deter Plaintiffs from bringing similar actions

described by Chapter 27 of the Texas Civil Practice and Remedies Code, and that lesser

ORDERED, ADJUDGED AND DECREED that all costs of court expended or incurred

in this cause are hereby taxed against Plaintiffs, who6"'~~:l be jointly and severally liable for

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118 such amount, plus post-judgment interest thereon, at the statutory rate of 5% per annum until

SIGNED this ~ay of~-=~=-....'---::o""-":'

By: lsi Jeffrey R. Elkin Jeffrey R. Elkin, SBN 06522180 M. Harris Stamey, SBN 24060650 1000 Main Street, 36th Floor Houston, Texas 77002-6336 Telephone: (713) 226-6617 Telecopier: (713) 226-6217 jelkinUVporterhedges.com mstameyUVporterhed ges.com

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