Llanelly Enterprises LTD v. Harry a Bouknight, Jr.

Opinion

Opinion issued March 18, 2021.

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-19-00505-CV ——————————— LLANELLY ENTERPRISES LTD., Appellant V. HARRY A. BOUKNIGHT, JR., Appellee

On Appeal from the 295th District Court Harris County, Texas Trial Court Case No. 2019-09066

MEMORANDUM OPINION

This case involves the pre-2019 version of the Texas Citizens Participation

Act (“TCPA”).1 In this interlocutory appeal, appellant, Llanelly Enterprises Ltd.

1 The TCPA’s recent amendments became effective September 1, 2019. See Act of May 17, 2019, 86th Leg., R.S., ch. 378, §§ 1–12 (codified at TEX. CIV. PRAC. & REM. CODE §§ 27.001–.010). Because this lawsuit was filed on February 5, 2019, it (“Llanelly”), challenges the trial court’s denial of its motion to dismiss under the

TCPA the claim for declaratory judgment filed by appellee, Harry A. Bouknight, Jr.2

Because we conclude that the TCPA does not apply to Bouknight’s claim, we affirm.

BACKGROUND

In December 2012, Chris Wilmot contracted to purchase real property located

at 5339 Tilbury Drive, Houston, Texas (“the Property”). At that time, Wilmot,

through his wholly owned company, paid $100,000.00 under the purchase

agreement. However, on January 30, 2013, the purchase contract was amended to

name Llanelly as the buyer, and, on February 8, 2013, a deed was executed

identifying Llanelly as the owner. Wilmot has lived in the house without paying rent

since the time of the sale.

In November 2012, before the sale of the Property, Bouknight and Wilmot

went to trial in the 295th District Court on an unrelated matter. In June 2013, after

the sale of the Property, the court entered a judgment in Bouknight’s favor against

Wilmot for $1,337,500.00.

is governed by the pre-amendment version of the TCPA, and our citations refer to that version. 2 See TEX. CIV. PRAC. & REM. CODE §§ 27.008, 51.014(a)(12).

2 In December 2018, Bouknight, attempting to collect on his judgment against

Wilmot, filed an Application for Turnover seeking, in part, turnover of the Property,

arguing that Wilmot, not Llanelly, actually owns the Property. After several hearings

on Bouknight’s Application for Turnover, the trial court granted the application in

part, appointing a receiver for the limited purpose of receiving and holding an

instrument that released any rights and interest Wilmot has in the Property. Wilmot

was permitted to remain living on the Property until the court determined whether

Wilmot or Llanelly owned the Property.

In February 2019, Bouknight filed the underlying claim for declaratory relief

against Llanelly. Bouknight sought judicial review of the deed to the Property and a

determination of Wilmot’s and Llanelly’s interests in the Property in order to

establish whether the Property could be subject to Bouknight’s requested turnover

relief requested against Wilmot. Specifically, Bouknight’s First Amended Request

for Declaratory Judgment stated that it was “intended to resolve uncertainty over the

legal rights and effect, if any, of a ‘sham’ deed and lease to purchase agreement for

a residence occupied by judgment debtor [Wilmot], located at 5339 Tilbury Dr.

Houston, Texas[.]” Bouknight’s petition further alleged that, “[i]n apparent support

of Wilmot’s scheme to conceal his interest in the Property, Wilmot’s longtime friend

3 and benefactor Chief Tunde Afolbi3 signed a Statutory Durable Power of Attorney

authorizing Wilmot ‘to act as its Agent for the purchase of [the Property]’ and to ‘act

for me in any lawful way with respect to the following Real Estate transaction[.]”

The petition further asserted that “Wilmot intended to purchase the Property in his

own name, but fearful of a likely adverse judgment [in the suit between Wilmot and

Bouknight] concocted a scheme to conceal his ownership interest by insisting that

the name ‘Llanelly Enterprises, Limited’ be placed on the deed.” Bouknight’s

petition requested that the “[c]ourt recognize Wilmot’s ownership interest (and the

absence of Llanelly’s rights) in the Property, issue findings setting forth the nature

and extent of that interest, and order it to be sold in satisfaction of the underlying

judgment.”

In response to Bouknight’s request for a declaratory judgment, Llanelly filed

a Motion to Dismiss under the TCPA. Llanelly’s Motion to Dismiss alleged that

Wilmot was merely Llanelly’s tenant, albeit a non-paying tenant in default, and that

Wilmot had no interest in the Property. Llanelly further argued that Bouknight’s

request for a declaratory judgment should be dismissed under the TCPA because

“Bouknight’s allegations challenge[d] Llanelly’s right to associate with Wilmot to

pursue and accomplish Llanelly’s purchase of (the Property).”

3 The exact relationship between Chief Tunde Afolbi and Llanelly is not specified in Bouknight’s petition. 4 The trial court denied Llanelly’s Motion to Dismiss, finding, among other

things, that the TCPA did not apply. Llanelly now brings this interlocutory appeal.

PROPRIETY OF DISMISSAL UNDER TCPA

In four issues, Llanelly contends that (1) “[d]ismissal is required because

subject-matter jurisdiction is lacking”; (2) “[t]he trial court erred in concluding that

the TCPA does not apply”; (3) “[t]he trial court erred in concluding that Bouknight

met his burden to prove a prima facie case of each essential element of his legal

actions and that Llanelly failed to prove any defense”; and (4) the trial court erred in

making “several additional Findings of Fact.”

Standard of Review

We review de novo the denial of a TCPA motion to dismiss. Better Bus.

Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 353 (Tex.

App.—Houston [1st Dist.] 2013, pet. denied). In making this determination, the

court views the pleadings and evidence in the light most favorable to the nonmovant.

Schimmel v. McGregor, 438 S.W.3d 847, 855–56 (Tex. App.—Houston [1st Dist.]

2014, pet. denied). Whether the TCPA applies is an issue of statutory interpretation

that we also review de novo. Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018).

Applicable Law

The TCPA “is a bulwark against retaliatory lawsuits meant to intimidate or

silence citizens on matters of public concern.” Dallas Morning News, Inc. v. Hall,

5 579 S.W.3d 370, 376 (Tex. 2019). It is intended “to identify and summarily dispose

of lawsuits designed only to chill First Amendment rights, not to dismiss meritorious

lawsuits.” In re Lipsky, 460 S.W.3d 584, 589 (Tex. 2015).

A party invoking the TCPA’s protections by filing a motion to dismiss must

show by a preponderance of the evidence that the TCPA applies. See TEX. CIV. PRAC.

& REM. CODE § 27.003; see also id. § 27.005(b). The applicable version of the TCPA

mandates the dismissal of a “legal action” that is “based on, relates to, or is in

response to the [moving] party’s exercise of (1) the right of free speech; (2) the right

to petition; or (3) the right of association.” Id. § 27.005(b); In re Lipsky, 460 S.W.3d

at 586–87.

Once the movant shows that the TCPA applies, the burden shifts to the

nonmovant to establish “by clear and specific evidence a prima facie case for each

essential element” of its claim. TEX. CIV. PRAC. & REM. CODE § 27.005(c). The

nonmovant can avoid this burden-shifting requirement by demonstrating that one of

the TCPA’s exceptions applies. See id. § 27.010(b).

Lack of Standing

Llanelly contends that the trial court should have dismissed the case “for two

independent reasons.” First, he argues that “the trial court lacked subject-matter

jurisdiction because Bouknight does not have standing to assert rights he claims a

different person—Wilmot—owns.” Second, he contends that “this case should have

6 been dismissed under the pre-amendment version of the TCPA, which is applicable

here[.]” However, we have jurisdiction in this interlocutory appeal to consider only

the second ground Llanelly urges.

A lack of subject-matter jurisdiction may be raised by a plea to the jurisdiction

or a motion for summary judgment. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547,

555, n.39 (Tex. 2000). Appellant has cited no authority to show that it may be raised

in a TCPA Motion to Dismiss. And, although appellant filed a Plea to the Jurisdiction

in the trial court, he did not obtain a ruling on it, and it is not before this Court on

interlocutory appeal.

Even though the trial court’s Findings of Fact and Conclusions of Law

mention the issue of jurisdiction, we may not consider such an ancillary ruling in

this interlocutory appeal. See Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881, 891

(Tex. App.—Houston [1st Dist.] 2015, no pet.) (“We conclude that the denial of a

motion to dismiss does not provide an avenue of interlocutory appeal to all other

ancillary rulings contained within the same written ‘interlocutory order.’”).

Accordingly, we do not address Llanelly’s claim that the trial court lacked

subject-matter jurisdiction.

Exercise of Right of Association

Llanelly contends that Bouknight’s claims are based on the exercise of its right

of association. When this suit was filed, the TCPA defined the “exercise of the right

7 of association” as “a communication between individuals who join together to

collectively express, promote, pursue, or defend common interests.” TEX. CIV. PRAC.

& REM. CODE § 27.001(2). A “communication” is defined as “making or submitting

of a statement or document in any form or medium, including oral, visual, written,

audiovisual, or electronic.” Id. § 27.001(1)

Llanelly contends that “Bouknight’s petition is “rife with allegations that

Llanelly and Wilmot joined together collectively to pursue their common interest in

Llanelly’s purchase of the House and its lease to Wilmot.” Llanelly points to

Bouknight’s petition, which: (1) asks the court to hold accountable Wilmot and all

those who act in concert with him; (2) asks the court to infer that Wilmot was jointly

controlling Llanelly’s funds; (3) alleges that Llanelly jointly schemed with Wilmot

to conceal Wilmot’s assets; and (4) references Wilmot’s association with Llanelly

as Llanelly’s agent in purchasing Llanelly’s house.

Llanelly also points to the following communications “clearly expressing

[Llanelly and Wilmot’s] common interest,” including: (1) the Statutory Durable

Power of Attorney that permitted Wilmot to act as Llanelly’s agent in purchasing

the Property for Llanelly; (2) the amendments of the New Home Contract, pursuant

to which Llanelly was named as the buyer who would close on the purchase of the

Property; (3) the closing documents and funds transfers by which Llanelly purchased

8 the Property; and (4) a Lease to Purchase Agreement, in which Llanelly and Wilmot

expressed their common interest in Llanelly renting the Property to Wilmot.

Llanelly contends that the TCPA “protects the right of private associations

without a public purpose.” Thus, his right to associate with Wilmot was implicated

by the TCPA because of the “common interest” in their relationship to the Property

at issue in the case.

However, in Gaskamp v. WSP USA, Inc., 596 S.W.3d 457, 476 (Tex. App.—

Houston [1st Dist.] 2020, pet. dism’d) (en banc), this Court concluded that “with

respect to the pre-amendment version of the TCPA, the proper definition of

‘common’ in the phrase ‘common interests’ [as used in “exercise of the right of

association”] is ‘of or relating to a community at large: public.’” 596 S.W.3d at 476.

In Gaskamp, the plaintiff alleged that former employees had jointly formed a new

business venture, misappropriated trade secrets, and conspired to commit related

torts to enrich themselves. See id. Because the Gaskamp allegations “involved

misappropriating . . . trade secrets and conspiring to commit related torts,

benefit[ing] only the five alleged tortfeasors,” and the nonmovant’s pleading did not

allege any “public or community interests,” the Court held that the movants did not

meet their burden of showing, by a preponderance of the evidence, that the

nonmovant’s suit was based on, related to, or was in response to the movants’

exercise of the right of association. Id.

9 The same is true here. The relationship between Llanelly and Wilmot—

whether landlord/tenant, principal/agent, or other—is purely private in nature and is

not of concern to anyone beyond those parties. No “public or community interest”

is alleged, but instead only private interests that benefit the private parties involved

in the relationship. See id.

As such, we conclude that Llanelly did not meet its burden of showing by a

preponderance of the evidence that Bouknight’s claim is based on, related to, or in

response to Llanelly’s “exercise of the right of association” under the TCPA. See

TEX. CIV. PRAC. & REM. CODE § 27.001(2). Accordingly, we overrule Llanelly’s

issue claiming that the trial court erred in concluding that the TCPA did not apply.

Other Issues

In two remaining issues, Llanelly contends that (1) “[t]he trial court erred in

concluding that Bouknight met his burden to prove a prima facie case of each

essential element of his legal actions and that Llanelly failed to prove any defense”;

and (2) the trial court erred in making “several additional Findings of Fact.”

Regarding the first issue, given our conclusion that the TCPA does not apply

to Bouknight’s lawsuit, we need not address Llanelly’s issue challenging whether

Bouknight failed to meet his burden to prove a prima facie case. See, e.g., Sullivan

v. Tex. Ethics Comm’n, 551 S.W.3d 848, 856 n.6 (Tex. App.—Austin 2018, pet.

denied) (“Because we hold that the TCPA does not apply, we do not reach the second

10 step in the TCPA analysis of whether [the nonmovant] met its burden to prove a

prima facie case.”); see also TEX. R. APP. P. 47.1.

Similarly, Llanelly’s issue about erroneous Findings of Fact goes to whether

Bouknight’s evidence is sufficient to prove a prima facia case of each essential

element of his legal action. Because we have held that the TCPA does not apply,

whether the trial court’s evidentiary findings were correctly decided is irrelevant

because those findings go to an issue that we do not reach, i.e., whether Bouknight

proved a prima facie case. Thus, we need not review the sufficiency of the evidence

to support the challenged fact findings. See id.

We overrule Llanelly’s remaining issues.

CONCLUSION

We affirm the trial court’s interlocutory order denying Llanelly’s Motion to

Dismiss under the TCPA.

Sherry Radack Chief Justice

Panel consists of Chief Justice Radack and Justices Goodman and Farris.