Rother Investments, LLC v. TapaTalk, Inc.

CourtCourt of Appeals of Texas
DecidedDecember 31, 2024
Docket01-24-00035-CV
StatusPublished

This text of Rother Investments, LLC v. TapaTalk, Inc. (Rother Investments, LLC v. TapaTalk, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rother Investments, LLC v. TapaTalk, Inc., (Tex. Ct. App. 2024).

Opinion

Opinion issued December 31, 2024

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-24-00035-CV ——————————— ROTHER INVESTMENTS, LLC, Appellant V. TAPATALK, INC., Appellee

On Appeal from the 207th District Court Hays County, Texas1 Trial Court Case No. 23-0988

1 Pursuant to its docket equalization authority, the Supreme Court of Texas transferred this appeal from the Third Court of Appeals to this Court. See TEX. GOV’T CODE § 73.001 (authorizing transfer of cases); TEX. R. APP. P. 41.3 (“In cases transferred by the Supreme Court from one court of appeals to another, the court of appeals to which the case is transferred must decide the case in accordance with the precedent of the transferor court ....”). MEMORANDUM OPINION

Appellant Rother Investments, Inc. sued Appellee Tapatalk, Inc. for fraud

alleging Tapatalk devalued its interest in a note purchase agreement. Tapatalk

moved to dismiss Rother’s common law fraud claim under Texas Rule of Civil

Procedure 91a claiming the action was baseless in both law and fact. The trial

court granted the motion and dismissed Rother’s claim with prejudice. The trial

court separately signed an order awarding Tapatalk $4,406.25 in attorneys’ fees

and $3,250 in sanctions for Rother’s failure to pay the award of fees.

In two issues, Rother argues (1) the trial court erred in granting Tapatalk’s

Rule 91a motion because Rother was not given the required 14 days’ notice of the

hearing on the motion, and (2) given the inadequate notice, the trial court also

erred in awarding attorneys’ fees and sanctions to Tapatalk.

Because we conclude that Rother had more than 14 days’ notice of the Rule

91a motion, agreed to the scheduled hearing date, and otherwise did not establish

harm, we affirm.

Background

The underlying dispute stems from a lawsuit brought by Rother against

Tapatalk for common law fraud in connection with the purported sale of

intellectual property. According to Tapatalk, it is a “tech startup” and Rother was

2 an investor. Rother alleged that Tapatalk had “defrauded [Rother] in 2023 by

taking an action that devalued [Rother’s] interest in a note purchase agreement.”

On August 2, 2023, Tapatalk moved to dismiss Rother’s claim under Texas

Rule of Civil Procedure 91a arguing that its common law fraud was “baseless both

in law and in fact” because Rother could not establish reliance and the note

purchase agreement about which it complained had been canceled. The certificate

of service in the Rule 91a Motion indicates that Tapatalk served Rother with the

motion on August 2, 2023.

Tapatalk explains, and Rother does not dispute, that counsel for both parties

conferred late in August 2023, and agreed they would set the hearing date for the

Rule 91a Motion on September 14, 2023. Based on the parties’ discussions,

Tapatalk filed a motion to set a hearing for its Rule 91a Motion on September 5

requesting that the motion be heard on September 14, 2023. Tapatalk’s motion

states, “The undersigned has conferred with counsel for Plaintiff Rother

Investments Inc. and has been advised counsel has availability for a hearing on

September 14th.” The certificate of conference states that counsel for Tapatalk

“contacted Brian Buster, counsel for Plaintiff, and he is unopposed to the filing of

this Motion.” The certificate of service also indicates that Tapatalk served Rother

with its motion to set hearing on September 5, 2023.

3 On September 5, 2023, the court coordinator signed the notice setting the

hearing on Tapatalk’s Rule 91a Motion on September 14, 2023—the date agreed to

by the parties. Rother did not file a response to the Rule 91a Motion or nonsuit its

claim prior to the hearing date.

The Rule 91a Hearing

On September 14, 2023, the trial court held a hearing on Tapatalk’s Rule 91a

Motion. Before addressing the merits of the motion, Rother’s counsel objected to

the hearing arguing it had received only 9 days’ notice of the hearing rather than

the required 14 days:

[Rother]: We do object to this proceeding right now because notice of hearing—at least the way that I interpret notice of hearing to be given—was signed by the Court that this hearing would occur today, that was signed 9-5.

Under Texas Rule of Civil Procedure 91a 6, there is to be at least 14-days notice of hearing on the motion to dismiss; it has been nine days and so therefore I don’t think notice has been properly given.2

The Court: Do you have any case law that shows that your notice of hearing only begins running at the time that the order is set for the hearing?

2 Later in the hearing, Rother objected to Tapatalk’s request for attorneys’ fees, arguing Tapatalk’s attorneys’ fee affidavit did not satisfy the requirements enumerated in Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). Rother does not reurge the objection on appeal.

4 [Rother]: Not at this time, Judge. I’d be happy to file a supplemental brief on that, should the Court request it; however, I am going on the plain, ambiguous [sic] language of the Code itself.

The Court: Okay. Well, it is your procedural issue and I’m just asking if you have anything to show me. Because, from what I understand is, outside of those 14 days—both of your assistants, who happen to share the same name; is that right? “Christina,” from your company—

[Tapatalk]: Yes.

The Court: —“Christina” from your company, and they agreed to the September 14th day, is that correct?

[Rother]: They agreed to a setting during the week of September 11th, yes.

The Court: Okay. And that tells me that you did have notice. And the notice, short of anything telling me that the only thing that is the defining factor of when there is notice, is an order setting the hearing. Seems to me that there’s been the opportunity for the—Rother to have prepared for this, particularly when they chose this date.

Rother’s counsel continued:

I don’t believe that there is any way to waive around the other rule requirements. Similar to the way that you seek a summary judgment, you give 21-days notice, you’ve got to file the notice of hearing, and you’ve got to make sure that your setting is outside of that window. So that’s my argument.

5 Rother did not move for a continuance, explain why it had not filed a response to

the Rule 91a Motion, or indicate how it had been harmed by the purported lack of

timely notice.

The trial court implicitly overruled Rother’s objection, stating, “Okay. So

now let’s proceed with the Tapatalk Motion to Dismiss.”3 Tapatalk discussed the

background of the lawsuit and argued for dismissal under Rule 91a. In response,

Rother made only a cursory response to the merits of the motion stating:

Judge, my response would be that 91a[.]6 also requires that the 91a motion be based on the pleadings, not on extrinsic evidence. So that would be my response there.4

He further stated, “I don’t think that their pleadings, on their face, meet their

burden to carry a 91a motion, Judge.” At the conclusion of the hearing, the trial

court orally granted Tapatalk’s Rule 91a Motion and indicated it would set a

hearing for attorneys’ fees at a future date.

3 See Stauder v. Nichols, No. 01-08-00773-CV, 2010 WL 2306385, at *5 (Tex. App.—Houston [1st Dist.] June 10, 2010, no pet.) (mem.

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Rother Investments, LLC v. TapaTalk, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/rother-investments-llc-v-tapatalk-inc-texapp-2024.