Rother Investments, LLC v. TapaTalk, Inc.

Court of Appeals of Texas·Decided December 31, 2024·No. 01-24-00035-CV·Published

Opinion

Opinion issued December 31, 2024

In The

Court of Appeals

For The

First District of Texas

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

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.

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.

[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.

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. op.) (holding that by “proceeding to submission” of summary judgment motion, trial court implicitly denied motion for continuance); Rest. Teams Int’l, Inc. v. MG Sec. Corp., 95 S.W.3d 336, 338 (Tex. App.—Dallas 2002, no pet.) (holding trial court implicitly denied motion for continuance when it held hearing on summary judgment motion and later granted motion).

4 Rother was referring to an email Tapatalk mentioned to explain the background of the case. Tapatalk explained the email was referenced in Rother’s original petition. Rother responded, “I’m just saying if that’s all we’re relying on, that would be what I bring to the Court’s attention would be the evidence requirements under 91a[.]6.”

Subsequent Proceedings

On October 2, 2023, Tapatalk filed a Motion for Award of Attorneys’ Fees and Entry of Final Judgment, attaching to its motion an affidavit to prove up Tapatalk’s attorneys’ fees. The court convened a hearing on the award of attorneys’ fees on October 5, 2023. During the hearing, the parties discussed the efficacy of the attorneys’ fee affidavit attached to Tapatalk’s motion. Following the hearing, the trial court signed an order awarding Tapatalk $4,406.25 in attorneys’ fees and ordering Rother to pay the fees within 30 days.

Free access — add to your briefcase to read the full text and ask questions with AI

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

Rother Investments, LLC v. TapaTalk, Inc. (Rother Investments, LLC v. TapaTalk, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

SSP Partners v. Gladstrong Investments (USA) Corp.
275 S.W.3d 444 (Texas Supreme Court, 2008)
SSP Partners v. Gladstrong Investments (USA) Corp.
169 S.W.3d 27 (Court of Appeals of Texas, 2005)
Bell v. Showa Denko K.K.
899 S.W.2d 749 (Court of Appeals of Texas, 1995)
Restaurant Teams International, Inc. v. MG Securities Corp.
95 S.W.3d 336 (Court of Appeals of Texas, 2002)
Cunningham v. Zurich American Insurance Co.
352 S.W.3d 519 (Court of Appeals of Texas, 2011)
Gaskill v. Vhs San Antonio Partners, LLC
456 S.W.3d 234 (Court of Appeals of Texas, 2014)