Robert Dunbar v. RubyAnne Designs, LLC

• Court: Court of Appeals of Texas
• Decided: August 31, 2020
• Docket: 08-19-00251-CV
• Status: Published

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

§ ROBERT DUNBAR, No. 08-19-00251-CV § Appellant, Appeal from the v. § County Court at Law No. 1 RUBYANNE DESIGNS, LLC, § of Travis County, Texas Appellee. § (TC# C-1-CV-18-011712) §

MEMORANDUM OPINION

This is an appeal from the dismissal of a case pursuant to a now-superseded version of the

Texas Citizens Participation Act. Appellant Robert Dunbar filed suit against Appellee RubyAnne

Designs, LLC, alleging breach of a contract to design and obtain re-zoning approval for a garage

apartment. RubyAnne Designs moved to dismiss, arguing that allegations that it failed to obtain

approval for a building permit and failed to complete the re-zoning process invoked the TCPA’s broad protections against claims based on, relating to, or in response to a party’s exercise of the

right to petition. The trial court granted the motion and dismissed the case.1

Viewing the pleadings and evidence in the light most favorable to the non-movant, we

conclude that Dunbar’s legal action is based on allegations relating to alleged failures by

RubyAnne Designs to perform its contractual obligations, not its actions in petitioning for a

building permit or a zoning change. Accordingly, we reverse the judgment and remand for further

proceedings.

Background

Robert Dunbar owns residential properties in Austin. He engaged RubyAnne Designs, LLC

to design a two-story structure with a ground-level one-bedroom apartment, separate ground-level

office, and an upstairs one-bedroom apartment. The parties also contracted for RubyAnne Designs

to have the property re-zoned to permit construction at Dunbar’s property on Avenue F. They later

entered into another agreement for design of another apartment at Dunbar’s property on Avenue D.

Dunbar paid RubyAnne Designs all agreed amounts with respect to the Avenue F project, and a

deposit for Avenue D.

RubyAnne Designs subsequently proposed changing the Avenue F design by replacing a

kitchen with a laundry room, in order to secure approval from the City of Austin, and with the

intention of eventually building the kitchen as originally planned. Dunbar disapproved, stating that

he wanted the project “done properly, with everything above board.” He requested that the designs

for both apartments be provided to him, but he never received final designs for Avenue F, and

1 This case was transferred from the Third Court of Appeals pursuant to the docket equalization efforts of the Supreme Court of Texas. See TEX. GOV’T CODE ANN. § 73.001. We follow the precedents of the Third Court to the extent they might conflict with the precedents of this Court. TEX. R. APP. P. 41.3.

2 nothing for Avenue D. Dunbar eventually declared that RubyAnne Designs had breached the

agreements and demanded return of his money.

Dunbar later filed this lawsuit. He alleged breach of contract because the designs for the

Avenue F property did not comply with the residential building code, the building permit was not

approved before he terminated the contract, and the permit that eventually was approved was based

on a design expressly disapproved by him. Dunbar also alleged that RubyAnne Designs breached

the Avenue D contract by failing to provide any promised work product. Based on what happened

with the Avenue F property, Dunbar alleged that RubyAnne Designs had proved to be unable to

perform its contractual obligations with respect to Avenue D. In addition to the contract claims, he

alleged claims for promissory estoppel and for money had and received.

RubyAnne Designs moved to dismiss the lawsuit pursuant to then-applicable provisions of

the Texas Citizens Participation Act (i.e. before amendments enacted by the 86th Legislature took

effect on September 1, 2019). It specifically invoked the TCPA’s application to a legal action that

is “based on, relates to, or is in response to a party’s exercise of the . . . right to petition . . . .”2

RubyAnne Designs argued that Dunbar’s claims were subject to dismissal because they “either

‘relate to’ or are ‘in response to’ RubyAnne’s petitioning the City of Austin for a building permit

and for a change in zoning.”

In the trial court, Dunbar argued that the TCPA did not apply. While conceding the

threshold application of the TCPA generally, the reason he gave for opposing the motion to dismiss

2 Citizens Participation Act, 82nd Leg., R.S., ch. 341, § 2, sec. 27.003(a), 2011 Tex. Gen. Laws 961, 962 (amended 2019) (current version at TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a)); see also TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(4) (defining “Exercise of the right to petition” for purposes of the TCPA). As amended in 2019, the phrase “relates to” has been deleted from this provision. Act of May 17, 2019, 86th Leg., R.S., ch. 378, § 2, 2019 Tex. Gen. Laws 684, 685 (current version at TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a)).

3 was the application of the statute’s commercial-speech exemption.3 Dunbar further argued that to

the extent the TCPA was found to apply, he could establish “by clear and specific evidence a prima

facie case for each essential element of the claim[s] in question.”4 In its reply, RubyAnne Designs

not only noted the concession about the application of the TCPA, it also argued that Dunbar failed

to establish a prima facie case by clear and specific evidence.

The trial court granted the motion to dismiss. A final judgment was entered dismissing

Dunbar’s claim with prejudice, and this appeal ensued.

Analysis

Dunbar raises three issues in his appeal challenging the dismissal of his claim. First, he

argues that RubyAnne Designs failed to carry its burden of proving that its exercise of the right to

petition triggered the application of the TCPA. Second, he argues that the TCPA does not apply

by operation of its commercial-speech exemption. Finally, he argues that the trial court erred to

the extent it concluded that he failed to establish, by clear and specific evidence, a prima facie case

for each essential element of his contract claim—and that the court abused its discretion by

refusing to consider his evidence in this regard. Because the first issue is dispositive of this appeal,

we focus our analysis on it.

Under the applicable version of the TCPA, a motion to dismiss must show that the non-

movant’s “legal action” is “based on, relates to, or is in response to a party’s exercise of the right

3 Citizens Participation Act, 82nd Leg., R.S., ch. 341, § 2, sec. 27.010(b), 2011 Tex. Gen. Laws 961, 964 (amended 2019) (current version at TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(a)(2)). 4 TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c) (“The court may not dismiss a legal action under this section if the party bringing the legal action establishes by clear and specific evidence a prima facie case for each essential element of the claim in question.”).

4 of free speech, the right to petition, or the right of association.”5 RubyAnne Designs moved to

dismiss this lawsuit as based on, related to, or filed in response to its exercise of the right to petition

by filing Dunbar’s application for a building permit and by seeking to have property re-zoned on

his behalf. Dunbar argues that the TCPA cannot apply in this circumstance. We review de novo a

trial court’s ruling on a TCPA motion to dismiss.6

I. Error preservation

Based on Dunbar’s written and oral concessions in the trial court that, at least at the

threshold, the TCPA applies to his suit, RubyAnne Designs argues that this issue has not been

preserved for appeal.

In Adams v. Starside Custom Builders, LLC—a TCPA appeal—the Supreme Court of

Texas cautioned against applying rules of error preservation “so strictly as to unduly restrain

appellate courts from reaching the merits of a case.”7 The issue in Adams concerned whether

allegedly defamatory statements related to a “matter of public concern” so as to be subject to the

TCPA.8 The court of appeals had confined its analysis to whether the defendant’s statements

related to the nonmovant plaintiff’s services in the marketplace, explaining that an appellate

argument that the statements related to community well-being had not been argued in briefs or

5 Citizens Participation Act, 82nd Leg., R.S., ch. 341, § 2, sec. 27.005(b), 2011 Tex. Gen. Laws 961, 963 (amended 2019) (current version at TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b)). 6 Serafine v. Blunt, 466 S.W.3d 352, 357 (Tex. App.—Austin 2015, no pet.). 7 547 S.W.3d 890, 896 (Tex. 2018). 8 See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(3) (defining, for purposes of the TCPA, the “[e]xercise of the right of free speech” as “a communication made in connection with a matter of public concern”); id. § 27.001(7) (defining “[m]atter of public concern” for purposes of the TCPA).

5 during a hearing on the motion to dismiss.9 The Supreme Court disagreed with the intermediate

appellate court’s characterization of the record, noting that the community and environmental well-

being were “expressly mentioned” during the hearing.10

RubyAnne Designs contends that this case is distinguishable from Adams because Dunbar

expressly conceded in his response to the motion to dismiss that “RubyAnne has satisfied the initial

step of the burden-shifting procedure: part of the underlying facts of this lawsuit involve its

petitioning the government. Dunbar’s claim ‘relates to’ RubyAnne’s exercise of its right to

petition. The Act is therefore implicated . . . .” RubyAnne Designs relies upon recent cases in

which courts of appeals have found Adams to be inapplicable due to the appellant’s failure to

properly raise the issue in question in the trial court.11

While Dunbar did make statements in the trial court that purported to concede the threshold

applicability of the TCPA, he also made other conflicting statements that challenged that notion.

For example, at the hearing on the motion to dismiss, Dunbar’s trial counsel stated:

The purpose of the TCPA, as we’ve gone over, is both to safeguard the constitutional rights concerning government participation and balance that with right to file meritorious lawsuits.

RubyAnne’s statements and conduct here are not about its constitutional rights. They’re about RubyAnne’s duty to perform under the contract that both parties concede exists.

9 Adams v. Starside Custom Builders, LLC, 545 S.W.3d 572, 578 n.4 (Tex. App.—Dallas 2016), rev’d, 547 S.W.3d 890 (Tex. 2018). 10 Adams, 547 S.W.3d at 896 & n.2. 11 See Rossa v. Mahaffey, 594 S.W.3d 618, 625–26 (Tex. App.—Eastland 2019, no pet.) (distinguishing Adams and holding issue was not raised in trial court and therefore was not preserved for review); Staff Care, Inc. v. Eskridge Enterprises, LLC, No. 05-18-00732-CV, 2019 WL 2121116, at *3 n.2 (Tex. App.—Dallas May 15, 2019, no pet.) (mem. op.) (distinguishing Adams as inapplicable when issue raised for the first time on appeal was not argued in motion to dismiss or during hearing on motion).

6 That being the case, I don’t think this is the sort of lawsuit that the TCPA intended to address. I don’t think the TCPA applies to this. . . .

Although in the trial court Dunbar primarily advanced the argument that the TCPA did not apply

because of the commercial-speech exemption, it is also plain that he raised the issue of whether

the case is one to which the TCPA applies.12 As clarified by the Supreme Court in Adams, he was

not required at trial or on appeal to rely on precisely the same case law or statutory subpart that we

might now find persuasive.13 Further, the Court emphasized that “the unique language of the TCPA

directs courts to decide its applicability based on a holistic review of the pleadings,”14 that appellate

review of the TCPA’s applicability is de novo, and that it had not previously “cabined” its TCPA

analysis to “the precise legal arguments or record references” made in the trial court about whether

the TCPA applies.15

RubyAnne Designs also suggests that Dunbar’s statements in the trial court qualify as a

judicial admission. The doctrine of judicial admissions relates to factual assertions, not legal

questions that ultimately must be decided by the court.16 “The elements required for a judicial

admission are: (1) a statement made during the course of a judicial proceeding; (2) that is contrary

12 See Adams, 547 S.W.3d at 896-97. 13 See id. at 896. 14 See id. at 897 (quoting provision of Citizens Participation Act, 82nd Leg., R.S., ch. 341, § 2, sec. 27.006(a), 2011 Tex. Gen. Laws 961, 963 (amended 2019) (current version at TEX. CIV. PRAC. & REM. CODE ANN. § 27.006(a)), for proposition that under the prior language of the statute, “when considering a TCPA motion to dismiss, the court ‘shall consider the pleadings and supporting and opposing affidavits’”). 15 See id. at 897. 16 See, e.g., Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 767 (Tex. 1983) (“Assertions of fact, not pled in the alternative, in the live pleadings of a party are regarded as formal judicial admissions.”); In re Dillard Dep’t Stores, Inc., 181 S.W.3d 370, 376 (Tex. App.—El Paso 2005, orig. proceeding) (“A judicial admission is a formal waiver of proof that dispenses with the production of evidence on an issue and bars the admitting party from disputing it.”), subsequent mandamus proceeding, 186 S.W.3d 514 (Tex. 2006).

7 to an essential fact or defense asserted by the person making the admission; (3) that is deliberate,

clear, and unequivocal; (4) that, if given conclusive effect, would be consistent with public policy;

and (5) that is not destructive of the opposing party’s theory of recovery.”17 “[S]tatements made

by a party or his counsel in the course of judicial proceedings which are not based on personal

knowledge or are made by mistake or based upon a mistaken belief of the facts are not considered

judicial admissions.”18 We conclude that Dunbar’s legal arguments in the trial court did not relate

to any essential fact and therefore were not binding judicial admissions that now preclude his legal

arguments on appeal.

We reject the various arguments that a challenge to the applicability of the TCPA has been

waived. Dunbar challenged the applicability of the TCPA in the trial court, arguing that his claims

are based on the failure of RubyAnne Designs to perform under the contract, not its exercise of

constitutional rights, and we will now consider that argument for its substantive merit.

II. Legal action relating to exercise of the right to petition

The interpretation of the TCPA—and the legal question of whether the movant established

by a preponderance of the evidence that the challenged legal action is covered by it—are both

reviewed de novo.19 In conducting our review, we view the pleadings, affidavits, or other evidence

in the light most favorable to the nonmovant.20

17 In re Dillard Dep’t Stores, 181 S.W.3d at 376 (citing Lee v. Lee, 43 S.W.3d 636, 641 (Tex. App.—Fort Worth 2001, no pet.)). 18 Id. (citing DeWoody v. Rippley, 951 S.W.2d 935, 946 (Tex. App.—Fort Worth 1997, writ dism’d by agr.)). 19 See Wendt v. Weinman & Associates, P.C., 595 S.W.3d 926, 928 (Tex. App.—Austin 2020, no pet.); Serafine, 466 S.W.3d at 357. 20 See Sloat v. Rathbun, 513 S.W.3d 500, 504 (Tex. App.—Austin 2015, pet. dism’d).

8 Dunbar contends that the TCPA “objectively does not apply to this lawsuit.” In the trial

court RubyAnne Designs invoked numerous facets of the statutory definition of the “[e]xercise of

the right to petition,”21 including communication in or pertaining to “a proceeding before an entity

that requires by rule that public notice be given before proceedings of that entity,” “a proceeding

of the governing body of any political subdivision of this state,” or “a public meeting dealing with

a public purpose, including statements and discussions at the meeting or other matters of public

concern occurring at the meeting,” as well as “a communication in connection with an issue under

consideration or review by a legislative, executive, judicial, or other governmental body or in

another governmental or official proceeding” or “any other communication that falls within the

protection of the right to petition government under the Constitution of the United States or the

constitution of this state.”22

In response, Dunbar argues on appeal that it is “not clear” that the application for a building

permit qualifies as a “proceeding” of the governing body of the City of Austin, an “issue” under

consideration by the City, or a “petition” meriting constitutional protection. As RubyAnne Designs

bore the burden of demonstrating the applicability of the TCPA in the trial court,23 Dunbar further

contends that the motion to dismiss should not have been granted because his contract claim was

distinct from and not based on, related to, or a response to the building permit application. As he

puts the argument, even if RubyAnne Designs had not “petitioned” the City at all, his contract

claims would be exactly the same.

21 See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(4). 22 See id. § 27.001(4)(A)(v), (A)(vii), (A)(ix), (B), (E). 23 See Serafine, 466 S.W.3d at 359.

9 Having relied primarily on its waiver-based arguments, RubyAnne Designs offers little in

the way of a substantive defense of the trial court’s conclusion that the TCPA applied to Dunbar’s

claim and justified a dismissal of the case in its entirety. And it did not respond at all to the

argument that even to the extent the TCPA includes within its scope potential dismissal of claims

relating to a wide range of protected “petition” activity, arguably including the act of filing a

building-permit application, that does not justify dismissing the case to the extent petition activity

was not the factual basis for the legal action.

The resolution of this issue requires us to determine what the factual bases for Dunbar’s

claims are, based on the pleadings and evidence viewed in the light most favorable to him; and the

extent to which these factual bases, as a matter of law, are protected expression within the TCPA’s

definitions.24 Implicit in this analysis is that we do not blindly accept attempts by RubyAnne

Designs to characterize Dunbar’s claims as implicating protected expression.25 To the contrary,

we view the pleadings in the light most favorable to Dunbar, favoring a conclusion that his claims

are not predicated on protected expression.26

Viewed in the light most favorable to Dunbar, his legal action was factually premised upon

allegations that he entered into contracts with RubyAnne Designs to design improvements to two

properties in compliance with the residential building code, and to have the Avenue F lot re-zoned.

Dunbar alleged that he terminated the contracts in response to material breaches by RubyAnne

Designs, which included failing to provide final plans for Avenue F and nothing for Avenue D,

24 See Sloat, 513 S.W.3d at 504. 25 See id. 26 See id.

10 failing to design the Avenue F project in conformity with his instructions or the building code

standards, and failing to obtain the Avenue F building permit. He also alleged that after terminating

the contracts, he learned that the Avenue F lot had not been re-zoned. The promissory estoppel

claim alleges that Dunbar relied to his detriment on promises by RubyAnne Designs to provide

the designs and get the Avenue F property re-zoned. Finally, the money-had-and-received claim

alleges that RubyAnne Designs holds money that “in equity and good conscience belongs to

Dunbar.”

In support of its motion to dismiss, RubyAnne Designs alleged that Dunbar’s claims either

related to or were in response to its actions petitioning the City for a building permit and for a

change in zoning. But as described above, Dunbar’s claims do not implicate any actions

undertaken by RubyAnne to petition the City. The petition alleges failures with respect to the

design, failure to obtain a permit and a zoning change as promised, and a failure to deliver plans.

Nothing in Dunbar’s petition purported to base a legal claim on any factual allegation relating to

actions taken by RubyAnne Designs to present applications for a building permit or a zoning

change. As noted by Dunbar, these claims would be the same regardless of whether or how

RubyAnne Designs petitioned the City.27 As such, the TCPA does not apply to Dunbar’s claims,

which are factually premised on allegations relating to the performance of obligations under two

contracts, and the trial court erred by concluding otherwise. Having so concluded, we need not

27 Even if we were persuaded that Dunbar’s claims fairly came within the broad scope of the TCPA’s protection for exercising the right to petition, that only would justify dismissing the legal action in part, to the extent it related or responded to protected conduct, but not to the extent the legal action is based on non-protected activity. See, e.g., Beving v. Beadles, 563 S.W.3d 399, 409 (Tex. App.—Fort Worth 2018, pet. denied) (citing Walker v. Hartman, 516 S.W.3d 71, 81 (Tex. App.—Beaumont 2017, pet. denied)); see also Weller v. MonoCoque Diversified Interests, LLC, No. 03-19-00127-CV, 2020 WL 3582885, at *4 (Tex. App.—Austin July 1, 2020, no pet. h.) (mem. op.).

11 address Dunbar’s remaining issues concerning the application of the commercial-speech

exemption and whether he made a prima facie showing sufficient to avert dismissal.28

Conclusion

Reviewing the grounds for TCPA dismissal de novo, and reviewing the pleadings and

evidence in a light favorable to the nonmovant, we conclude the challenged legal action did not

relate to and was not a response to the movant’s exercise of the right to petition. Accordingly, the

trial court erred by dismissing Dunbar’s legal action. We reverse the judgment and remand the

case for further proceedings.

MICHAEL MASSENGALE, Visiting Justice August 31, 2020

Before Alley, C.J., and Rodriguez, J., and Massengale, V.J. Massengale, V.J., sitting by assignment

28 See TEX. R. APP. P. 47.1.