ACCEPTED 05-18-00127-CV FIFTH COURT OF APPEALS DALLAS, TEXAS 6/4/2018 1:56 PM LISA MATZ CLERK
NO. 05-18-00127-CV
IN THE COURT OF APPEALS FILED IN FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS 5th COURT OF APPEALS DALLAS, TEXAS 6/4/2018 1:56:02 PM MICHAEL D. LONG AND LISA MATZ SOLAR MOD SYSTEMS, INC., Clerk
Appellants,
vs.
JAMES D. VINCENT, JR. AND RANDALL T. WILSON, Appellees.
On Appeal from the 192nd Judicial District Court, Dallas County, Trial Court Cause No. DC-17-04262
APPELLANTS’ REPLY BRIEF
P. William Stark Kendyl T. Hanks State Bar No. 24046902 State Bar No. 24032273 starkb@gtlaw.com hanksk@gtlaw.com Brennwyn B. Romano GREENBERG TRAURIG, LLP State Bar No. 24099028 300 West 6th Street, Suite 2050 romanob@gtlaw.com Austin, Texas 78701 GREENBERG TRAURIG, LLP Telephone: (512) 320-7200 2200 Ross Avenue, Suite 5200 Facsimile: (512) 320-7210 Dallas, Texas 75201 Telephone: (214) 665-3600 Facsimile: (214) 665-3601
COUNSEL FOR APPELLANTS MICHAEL D. LONG AND SOLAR MOD SYSTEMS, INC. TABLE OF CONTENTS
INTRODUCTION ............................................................................................ 1
ARGUMENT.................................................................................................. 3
I. Appellants Have Met Their Burden of Establishing the TCPA Applies to Appellees’ Claims. ....................................... 3
A. The Authority on Which Appellees Rely on Freedom of Association is Inapplicable. ........................ 3
B. Texas Courts Have Squarely Rejected Appellees’ Argument that the TCPA Applies Only to Speech by “Politically and Socially Active Individuals.” ........... 6
II. The Texas Supreme Court Recently Rejected Appellees’ Argument on the TCPA’s Exemption. .................................... 9
III. Appellees Failed to Produce Clear and Specific Evidence Establishing a Prima Facie Case for Each Essential Element of Their Claims....................................... 15
A. Appellees Do Not Address the Issue of Whether Their Affidavits are Substantively Defective. ............. 15
B. Appellees Have Otherwise Failed to Meet Their Prima Facie Burden. .................................................... 16
CONCLUSION AND PRAYER ......................................................................... 18
CERTIFICATE OF COMPLIANCE ................................................................... 20
CERTIFICATE OF SERVICE .......................................................................... 21
ii INDEX OF AUTHORITIES
State Cases
Adams v. Starside Custom Builders, LLC, No. 16-0786, 2018 WL 1883075 (Tex. Apr. 20, 2018)....................... 1, 7 Backes v. Misko, 486 S.W.3d 7 (Tex. App.—Dallas 2015, pet. denied) ......................... 13 Better Bus. Bureau of Metro. Dallas, Inc. v. BH DFW, Inc., 402 S.W.3d 299 (Tex. App.—Dallas 2013, pet. denied)................ 13, 14 Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 441 S.W.3d 345 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) ................................................................................................. 13 Bradford v. Vento, 48 S.W.3d 749 (Tex. 2001) .................................................................. 17 Castleman v. Internet Money Ltd., No. 07-16-00320-CV, 2017 WL 1449224 (Tex. App.— Amarillo Apr. 19, 2017) ................................................................ 11, 12 Castleman v. Internet Money Ltd., No. 17-0437, 2018 WL 1975039 (Tex. April 27, 2018) ............... passim Collins v. Collins, No. 01-17-00817-CV, 2018 WL 1320841 (Tex. App.— Houston [1st Dist.] Mar. 15, 2018, rule 53.7(f) motion granted) (mem. op.) ............................................................................... 8 Colorado v. Tyco Valves & Controls, L.P., 432 S.W.3d 885 (Tex. 2014) .................................................................. 5 Craig v. Tejas Promotions, LLC, No. 03-16-00611-CV, 2018 WL 2050213 (Tex. App.— Austin May 3, 2018, no pet. h.) ............................................................ 8 Elliot v. S&S Emergency Training Solutions, Inc., No. 05-16-01373-CV; 2017 WL 2118787 (Tex. App.— Dallas May 16, 2017, pet. filed) (mem. op.) ........................................ 17
iii Global Tel*link Corp. v. Securus Techs., Inc., No. 05-16-01224-CV, 2017 WL 3275921 (Tex. App.— Dallas July 31, 2017, pet. dism’d) ................................................ 11, 12 Kerlin v. Arias, 274 S.W.3d 666 (Tex. 2008) (per curiam) ........................................... 15 Kinney v. BCG Attorney Search, Inc., No. 03-12-00579-CV, 2014 WL 1432012 (Tex. App.— Austin Apr. 11, 2014, pet. denied) (mem. op.).............................. 13, 14 LFMC Enterprises, LLC v. Baker, No. 01-17-00558-CV, 2018 WL 1474203 (Tex. App.— Houston [1st Dist.] Mar. 27, 2018, rule 53.7(f) motion granted) ......................................................................................... 3, 4, 5 Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015) (per curiam) ............................................. 3 In re Lipsky, 460 S.W.3d 579 (Tex. 2015) ................................................ 2, 16, 17, 18 Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) ........................................................................................... 13, 14 Paragon Gen. Contractors, Inc. v. Larco Const., Inc., 227 S.W.3d 876 (Tex. App.—Dallas 2007, no pet.) ............................ 15 Redflex Traffic Sys., Inc. v. Watson, No. 02-16-00432-CV, 2017 WL 4413156 (Tex. App.—Fort Worth Oct. 5, 2017, no pet.) (mem. op.) ........................................ 11, 12 Ryland Group, Inc. v. Hood, 924 S.W.2d 120 (Tex. 1996) ................................................................ 15 Youngkin v. Hines, No. 16-0935, 2018 WL 1973661 (Tex. Apr. 27, 2018)........................... 8
State Statutes
TEX. CIV. PRAC. & REM. CODE § 27.001(2) ................................................. 5
iv TEX. CIV. PRAC. & REM. CODE § 27.001(3).............................................. 7, 8 TEX. CIV. PRAC. & REM. CODE § 27.001(7) ................................................. 7 TEX. CIV. PRAC. & REM. CODE § 27.001(7)(A) ............................................. 9 TEX. CIV. PRAC. & REM. CODE § 27.001(7)(B) ............................................. 9 TEX. CIV. PRAC. & REM. CODE § 27.001(7)(C) ......................................... 8, 9 TEX. CIV. PRAC. & REM. CODE § 27.005(b) ............................................. 1, 5 TEX. CIV. PRAC. & REM. CODE § 27.005(c) ...................................... 2, 15, 16 TEX. CIV. PRAC. & REM. CODE § 27.009 .................................................... 18 TEX. CIV. PRAC. & REM. CODE § 27.010(b) ..................................... 1, 10, 14
v INTRODUCTION
Resorting to arguments that the Texas Supreme Court and
numerous courts of appeals have rejected, Appellees urge that the
Texas Citizens Participation Act (“TCPA”) does not apply because this
is a commercial dispute and Appellants are not political activists. As
recently as the last few months, the Texas Supreme Court has squarely
rejected that notion. See, e.g., Adams v. Starside Custom Builders, LLC,
No. 16-0786, 2018 WL 1883075, at *1, *3 (Tex. Apr. 20, 2018). The
alleged communications in this case involve a matter of public
concern—the government and, specifically, Military procurement.
Appellees raise complaints about communications and associations that
“relate” to the Military procurement business. See TEX. CIV. PRAC. &
REM. CODE § 27.005(b). Under the TCPA’s plain language Appellees
assert claims that fall within the TCPA’s protections for free association
and speech.
Appellees’ claim that the TCPA’s commercial speech exemption
applies also fails because Appellees do not allege that any
communication was made to an existing or prospective customer of
Appellants. See id. § 27.010(b). On this issue, on April 27, the Texas Supreme Court resolved a split in the courts of appeals, reversed one of
the primary cases on which Appellees rely, and expressly disapproved of
other court of appeals decisions discussed at length in Appellees’
Response. See Castleman v. Internet Money Ltd., No. 17-0437, 2018 WL
1975039, at *2–3 (Tex. April 27, 2018) (per curiam). Because the Texas
Supreme Court’s Castleman holding rejects the same interpretation of
the TCPA’s exemption provision that Appellees advance in their
Response, their argument fails.
Finally, Appellees have not met their prima facie burden under
the TCPA of providing clear and specific evidence for each element of
their claims. TEX. CIV. PRAC. & REM. CODE § 27.005(c); see also In re
Lipsky, 460 S.W.3d 579, 590 (Tex. 2015). Appellees continue to offer
summary allegations supported by no details or evidence other than
their own conclusory allegations. This is insufficient under the TCPA.
The Court should reverse the trial court’s order denying
Appellants’ motion to dismiss under the TCPA, and remand for
appropriate proceedings.
2 ARGUMENT
I. APPELLANTS HAVE MET THEIR BURDEN OF ESTABLISHING THE TCPA APPLIES TO APPELLEES’ CLAIMS.
A. The Authority on Which Appellees Rely on Freedom of Association is Inapplicable.
Rather than responding to the authorities cited by Appellants
regarding the right of association (see Appellants’ Brief at 19–21),
Appellees argue the TCPA does not apply because their “claims relate to
statements made prior to Appellants’ right to associate with others
about potential business dealings.” Response at 4; see also id. at 7–10.
Citing LFMC Enterprises, Appellees argue in particular their “claims
did not occur at the time Appellants associated with another to go into
business.” Response at 9; see LFMC Enterprises, LLC v. Baker, No. 01-
17-00558-CV, 2018 WL 1474203, *2–3 (Tex. App.—Houston [1st Dist.]
Mar. 27, 2018, rule 53.7(f) motion granted).
The TCPA has no such requirement, nor does LFMC Enterprises
hold that there is. See Lippincott v. Whisenhunt, 462 S.W.3d 507, 509
(Tex. 2015) (per curiam) (in deciding whether the TCPA applies, courts
look to its plain statutory text). The LFMC Enterprises case (a “lawsuit
over a bar fight”) does not stand for the proposition that statements and
3 associations must be contemporaneous with the events giving rise to the
claims. See 2018 WL 1474203, at *1. The Court of Appeals made no
temporal distinction about the association or communications.
Instead, the TCPA did not apply because the defendants were not
asserting their own right of association—but that of their patrons—
which “was fatal to their motion.” LFMC Enterprises, LLC, 2018 WL
1474203, at *1. “The appellants suggest that the nightclub operating on
their premises facilitates the exercise of the right of association by bar
patrons, and even their agents and employees, but they provided no
evidence that their own associational rights, as defined by the statute,
were implicated by the nuisance claims.” Id. (emphasis added).
If the defendants had been asserting their own right of
association, the result might have been different. The Court’s analysis
did not turn on timing, but instead implicitly acknowledged the
communications did not need to be contemporaneous at all. See id. at *4
(“[T]he appellants in this appeal do not allege or provide evidence to
suggest that the nuisance claim was based on, related to, or in response
to their past or future communications with others at the nightclub.”)
(emphasis added).
4 LFMC Enterprises is inapposite because Appellants assert their
own rights of association—both in the form of not associating with
Appellants and choosing to communicate and associate with another
company. See Appellants’ Brief at 19–21. A legal action implicates a
movant’s right of “association” when it relates to a “communication
between individuals who join together to collectively express, promote,
pursue, or defend common interests.” TEX. CIV. PRAC. & REM. CODE
§ 27.001(2). The TCPA broadly applies to any claim that is “based on,
relates to, or is in response to the party’s exercise” of the right to
associate. Id. § 27.005(b). “Relates to” ordinarily means “having a
connection with or reference to” and is a broad term that should be
construed expansively. See Colorado v. Tyco Valves & Controls, L.P.,
432 S.W.3d 885, 890 (Tex. 2014).
The communications Appellees focus on clearly “relate to” the
exercise of Appellants’ right of association. They claim, for example,
that Long “guaranteed Wilson that when the [Military] contract was
awarded Wilson would be the manufacturer.” (CR 69; see also CR 26–
28, 30, 53, 64.) These alleged communications concern Appellants’ right
of association in the procurement and supply of a government Military
5 contract for the national defense, and qualify as “related to” the “right
of association” under the TCPA’s plain language. Therefore, the TCPA
applies because Appellees’ claims target Appellants’ rights of
association as defined in the statute.
B. Texas Courts Have Squarely Rejected Appellees’ Argument that the TCPA Applies Only to Speech by “Politically and Socially Active Individuals.”
With regard to speech, Appellees abandon their argument that the
TCPA distinguishes between public and private speech and now argue
that the communications in question “are not matters of public concern”
because the “statements are misrepresentations about a commercial
business venture.” Response at 12. They urge that the TCPA should
apply only in cases involving “politically and socially active individuals”
and not in a case “about a commercial transaction related to a
government contract.” Response at 13. As described in Appellants’ Brief,
Texas courts have repeatedly and squarely rejected this argument. See
Appellants’ Brief at 10, 17–18, 21–24. Appellants do not respond to
these arguments and authorities.
Like the right of association, the TCPA’s definition of the exercise
of the right of free speech is broad and not limited to constitutional
6 concepts of free speech. “The TCPA casts a wide net” that “is not fully
coextensive with the constitutional free-speech right protected by the
First Amendment.” Adams, 2018 WL 1883075, at *1, *3.
Instead, under the TCPA’s plain language, a legal action impinges
on a movant’s right of free speech when it relates to “communication[s]
made in connection with a matter of public concern,” which expressly
includes, e.g., “an issue related to … economic, or community well-being;
… the government; [or] a good, product, or service in the marketplace.”
TEX. CIV. PRAC. & REM. CODE §§ 27.001(3), (7). The TCPA’s plain
language confirms that the speech in question need not be actually
about these specific issues but only “related to” them.
It is undisputed that Appellees’ claims hinge on alleged
communications regarding the business of manufacturing and
procurement of products for the government, i.e., the United States
Military for use in Kuwait. The crux of Appellees’ damage claim is that
they were entitled to the profits of a Military contract for products to be
used in the national defense. See Adams, 2018 WL 1883075, at *4
(finding plaintiff’s claimed business damages to be “an admission” that
the statements pertain to services in the marketplace for the purposes
7 of TCPA application). Facially, these are matters of public concern to
which the TCPA applies. See TEX. CIV. PRAC. & REM. CODE
§ 27.001(7)(C); see also Appellants’ Brief at 23–24 (citing authorities).
Ignoring the TCPA’s plain language, Appellees focus on notions of
political and social activism and traditional First Amendment
protections. But the Texas Supreme Court has clearly held that the
TCPA applies more broadly. “It does not follow from the fact that the
TCPA professes to safeguard the exercise of certain First Amendment
rights that it should only apply to constitutionally guaranteed
activities.” Youngkin v. Hines, No. 16-0935, 2018 WL 1973661, at *4
(Tex. Apr. 27, 2018). “Whatever might be connoted by a reference to
‘free speech’ in other contexts, for purposes of the TCPA the ‘exercise of
the right of free speech’ is defined as ‘a communication made in
connection with a matter of public concern.’” Collins v. Collins, No. 01-
17-00817-CV, 2018 WL 1320841, at *3 (Tex. App.—Houston [1st Dist.]
Mar. 15, 2018, rule 53.7(f) motion granted) (mem. op.) (quoting TEX.
CIV. PRAC. & REM. CODE § 27.001(3)); see also Craig v. Tejas Promotions,
LLC, No. 03-16-00611-CV, 2018 WL 2050213, at *5 (Tex. App.—Austin
May 3, 2018, no pet. h.) (“[T]he Texas Supreme Court’s TCPA
8 precedents instruct[] that we apply a ‘plain-meaning’ construction of the
Act’s broad terms that … operates largely independently of and extends
considerably beyond the constitutional ‘right of association,’ ‘speech,’ or
‘petition’ that might otherwise have informed the meaning of those
terms.”). Appellees’ request that this Court limit the TCPA’s scope to
traditional constitutional notions is therefore unsupportable under
controlling Texas law.
The communications Appellees allege facially relate to matters of
public concern—including safety, economic and community well-being,
and the government—and Appellees’ claims fall within the protections
of the TCPA as exercises of Appellants’ rights of free speech. See TEX.
CIV. PRAC. & REM. CODE § 27.001(7)(A), (B), (C).
II. THE TEXAS SUPREME COURT RECENTLY REJECTED APPELLEES’ ARGUMENT ON THE TCPA’S EXEMPTION.
The TCPA exempts a limited class of cases from its scope,
including “a legal action brought against a person primarily engaged in
the business of selling or leasing goods or services, if the statement or
conduct arises out of the sale or lease of goods, services, or … a
commercial transaction in which the intended audience is an actual or
9 potential buyer or customer.” TEX. CIV. PRAC. & REM. CODE § 27.010(b).
Based on the undisputed facts and the Texas Supreme Court’s recent
decision in Castleman, Appellees have not met their burden of showing
the TCPA’s exemption applies because Appellees do not allege the
intended audience of any communication was an “actual or potential
buyer or customer” of Appellants. Id.; see also Castleman, 2018 WL
1975039, at *5.
Appellees argue that their claims are exempt from the TCPA
because the parties were “contemplating a commercial transaction
between them when Appellants made statements related to Appellees’
claims.” Response at 5–6 (emphasis added); see also id. at 13–18.
Appellees’ argument hinges on the position that the TCPA’s exemption
does not require the statements be made to an actual or potential
customer of the defendant—because Appellants were neither. Instead,
the communications were among potential business partners
contemplating coming together for the purpose of selling products to the
United States Military.
Appellees rely on a line of cases that the Texas Supreme Court
rejected in April when it resolved a split in the Texas courts of appeals.
10 See Response at 14–16 & n.2 (arguing this Court should reject the “four-
prong test for ‘commercial speech’”). In particular, Appellees rely on the
holdings of three cases that the Texas Supreme Court has now
expressly rejected. Id. at 13–18 (discussing Redflex Traffic Sys., Inc. v.
Watson, No. 02-16-00432-CV, 2017 WL 4413156 (Tex. App.—Fort Worth
Oct. 5, 2017, no pet.) (mem. op.); Global Tel*link Corp. v. Securus
Techs., Inc., No. 05-16-01224-CV, 2017 WL 3275921 (Tex. App.—Dallas
July 31, 2017, pet. dism’d); Castleman v. Internet Money Ltd., No. 07-16-
00320-CV, 2017 WL 1449224 (Tex. App.—Amarillo Apr. 19, 2017),
review granted, judgment rev’d, No. 17-0437, 2018 WL 1975039 (Tex.
Apr. 27, 2018)).
In Castleman, the Texas Supreme Court squarely rejected
Appellees’ argument when it clarified the scope of the commercial
speech exemption and applied the same four-part test on which
Appellants rely, and which Appellees ask this Court to eschew.1 See
Castleman, 2018 WL 1975039, at *2–3 (acknowledging and resolving
1 The Supreme Court’s opinion in Castleman was issued on April 27, 2018, four days before Appellees filed their Response.
11 split in favor of four-prong test). The Supreme Court confirmed that the
TCPA exemption applies
when (1) the defendant was primarily engaged in the business of selling or leasing goods [or services], (2) the defendant made the statement or engaged in the conduct on which the claim is based in the defendant’s capacity as a seller or lessor of those goods or services, (3) the statement or conduct at issue arose out of a commercial transaction involving the kind of goods or services the defendant provides, and (4) the intended audience of the statement or conduct were actual or potential customers of the defendant for the kind of goods or services the defendant provides.
Id. at *3 (emphasis added); compare with Response at 14–15 & n.2. As
a result, the previous split among the courts of appeals is resolved and
it is settled Texas law “that ‘the intended audience’ of the statement or
conduct must be actual or potential customers of the defendant.”
Castleman, 2018 WL 1975039, at *5 (emphasis added).
In reaching this holding, the Supreme Court disapproved of the
same three cases on which Appellees heavily rely in their Response.
Compare id. at *3 n.3 (citing Global Tel*Link, Redflex, and the Amarillo
Court of Appeals’ decision in Castleman as among the cases taking the
approach that the Supreme Court rejected in its opinion), with
12 Response at 13–18 (discussing and asking this Court to apply the same
three cases).
Instead, the Supreme Court approved the cases on which
Appellants rely in their opening brief, adopting the requirement that a
communication be made to the defendant’s actual or potential customer
in order for the TCPA exemption to apply. Compare Castleman, 2018
WL 1975039, at *2 & nn.1–2 (citing, among other cases, Backes v.
Misko, 486 S.W.3d 7, 21 (Tex. App.—Dallas 2015, pet. denied); Kinney
v. BCG Attorney Search, Inc., No. 03-12-00579-CV, 2014 WL 1432012,
at *6 (Tex. App.—Austin, Apr. 11, 2014, pet. denied) (mem. op.); Better
Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 441 S.W.3d
345, 354 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); Newspaper
Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 89–
90 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); Better Bus.
Bureau of Metro. Dall., Inc. v. BH DFW, Inc., 402 S.W.3d 299, 309 (Tex.
App.—Dallas 2013, pet. denied)), with Appellants’ Brief at 25–28 (citing
same cases).
As detailed in Appellants’ Brief, it is undisputed that the alleged
statements were not made to any actual or potential buyer or customer
13 of Appellants but, instead, between Appellants and Appellees.
Therefore, the Texas Supreme Court’s decision in Castleman controls.
Because Appellees do not allege or present any evidence that the
statements in question were made to Appellants’ buyers or customers,
the TCPA’s exemption does not apply.
Finally, Appellees have failed to meet their burden of showing the
other three prongs of the TCPA exemption apply. See, e.g., BH DFW,
Inc., 402 S.W.3d at 309. Appellees cite no evidence and make no
argument to support the applicability of the TCPA exemption to the
specific facts of this case. Appellees offer no evidence that either Long or
Solar Mod is “primarily engaged” in the business of selling or leasing
goods or services. See TEX. CIV. PRAC. & REM. CODE § 27.010(b). They
also do not argue that any statement arose from the sale of “goods or
services.” See id. Other than generally claiming this case involves
“commercial speech,” Appellees do not show that the “intended
audience” of Appellants’ alleged statements was “an actual or potential
buyer or customer” of anyone. See id. Appellees have thus not carried
their burden of showing any TCPA exemption applies. See Kinney, 2014
WL 1432012, at *6–7; Newspaper Holdings, 416 S.W.3d at 88–89.
14 III. APPELLEES FAILED TO PRODUCE CLEAR AND SPECIFIC EVIDENCE ESTABLISHING A PRIMA FACIE CASE FOR EACH ESSENTIAL ELEMENT OF THEIR CLAIMS.
A. Appellees Do Not Address the Issue of Whether Their Affidavits are Substantively Defective.
Claiming they have made a prima facie case, Appellees’ Response
recites conclusory factual allegations from their own affidavits. As
discussed in Appellants’ brief, these affidavits are substantively
defective and incompetent evidence. See Appellants’ Brief at 29–31; see
also, e.g., Kerlin v. Arias, 274 S.W.3d 666, 668 (Tex. 2008) (per curiam)
(affidavit showing no basis for personal knowledge is legally
insufficient); Paragon Gen. Contractors, Inc. v. Larco Const., Inc., 227
S.W.3d 876, 883–84 (Tex. App.—Dallas 2007, no pet.) (“Conclusory
affidavits do not raise fact issues.”) (citing Ryland Group, Inc. v. Hood,
924 S.W.2d 120, 122 (Tex. 1996)).
Appellees do not respond to this issue raised in Appellants’ brief,
which is alone sufficient to find Appellees did not satisfy their prima
facie burden under the TCPA. See TEX. CIV. PRAC. & REM. CODE
§ 27.005(c).
15 B. Appellees Have Otherwise Failed to Meet Their Prima Facie Burden.
Appellees recite the same general and conclusory factual
allegations in their Response that they advanced in the trial court. See
Appellants’ Brief at 31–55. These allegations do not show clear and
specific evidence to support each element of their fraud and negligent
misrepresentation claims. See TEX. CIV. PRAC. & REM. CODE § 27.005(c);
see also In re Lipsky, 460 S.W.3d at 590.
Appellees do not allege any misrepresentations attributable to
Solar Mod. Instead, Appellees generally allege that Long and Solar Mod
are alter egos, attempting in a single sentence to attribute alleged
statements by Long to the entity. See Response at 20 (“Appellants Long
and Solar Mod are either a joint enterprise, or else Solar Mod is an alter
ego of Long.”). As in the trial court, Appellees offer no law or details to
support this conclusory allegation. Because this does not satisfy the
TCPA’s standard, Appellees’ fraud and negligent misrepresentation
claims against Solar Mod fail.
The remainder of Appellees’ Response does nothing more than
recite the basic allegations made in the trial court without responding
16 to the various deficiencies raised in Appellants’ Brief. Compare
Appellants’ Brief at 31–55, with Response at 19–25. They do not
address the alleged statements’ materiality. They do not respond to
Appellants’ argument and legal authorities requiring a duty to disclose
before the omission of information is actionable as fraud. See Bradford
v. Vento, 48 S.W.3d 749, 755–56 (Tex. 2001). They do not address the
lack of evidence regarding intent to induce reliance, as required to
sustain a fraud claim. Nor do they articulate a reason why, in this arm’s
length transaction, any reliance by Appellees was justifiable. The
failure of any one of these elements forecloses Appellees’ claims.
Finally, Appellees’ damages argument is wholly deficient under
the TCPA’s clear-and-specific standard, as applied by the Texas
Supreme Court. Compare Appellants’ Brief at 43–47, 54–55, with
Response at 22, 24–25. “[G]eneral averments of direct economic losses
and lost profits, without more, [do not] satisfy the minimum
requirements of the TCPA.” In re Lipsky, 460 S.W.3d at 593; see also
Elliot v. S&S Emergency Training Solutions, Inc., No. 05-16-01373-CV;
2017 WL 2118787, at *6 (Tex. App.—Dallas May 16, 2017, pet. filed)
(mem. op.). Appellees have done nothing more than offer general
17 averments, which under Lipsky is insufficient to satisfy the TCPA. See
Appellants’ Brief at 43–47 (detailing the wide variety of information
absent from Appellees’ conclusory allegation they suffered damages,
including any information about assets, sales, revenues, expenses, or
other information from which alleged lost profits could be evaluated).
Appellees have failed to meet their prima facie burden under the
TCPA for the reasons above and those detailed in Appellants’ Brief.
CONCLUSION AND PRAYER
For the foregoing reasons, Appellants respectfully request that the
Court reverse the trial court order denying their TCPA Motion to
Dismiss, render judgment dismissing Appellees’ common law fraud and
negligent misrepresentation claims with prejudice, and remand to the
trial court for determination of attorney’s fees and sanctions under
Section 27.009 and for further proceedings on Appellants’ pending
claims against Appellees.
18 Respectfully submitted,
GREENBERG TRAURIG, LLP
By: Kendyl T. Hanks State Bar No. 24032273 hanksk@gtlaw.com 300 West 6th Street, Suite 2050 Austin, Texas 78701 Telephone: (512) 320-7200 Facsimile: (512) 320-7210
P. William Stark State Bar No. 24046902 starkb@gtlaw.com Brennwyn B. Romano State Bar No. 24099028 romanob@gtlaw.com 2200 Ross Avenue, Suite 5200 Dallas, Texas 75201 Telephone: (214) 665-3600 Facsimile: (214) 665-3601
Counsel for Appellants Michael D. Long and Solar Mod Systems, Inc.
19 CERTIFICATE OF COMPLIANCE
In compliance with Texas Rule of Appellate Procedure 9.4(i), I hereby certify that the foregoing document is a computer-generated document containing 3,424 words. The undersigned relied upon the word count feature of her word processing program to determine the word count.
Kendyl T. Hanks
20 CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on counsel of record by using the Court’s e-filing system on June 4, 2018, addressed as follows:
W.D. Masterson wdm@kilgorelaw.com Theodore C. Anderson tca@kilgorelaw.com 3109 Carlisle Dallas, Texas 75204 Telephone: (214) 969-9099 Facsimile: (214) 953-0133
Counsel for Appellees James D. Vincent, Jr. and Randall T. Wilson