Schimmel v. McGregor

438 S.W.3d 847, 2014 WL 3366822, 2014 Tex. App. LEXIS 7530
CourtCourt of Appeals of Texas
DecidedJuly 10, 2014
DocketNo. 01-13-00721-CV
StatusPublished
Cited by94 cases

This text of 438 S.W.3d 847 (Schimmel v. McGregor) 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
Schimmel v. McGregor, 438 S.W.3d 847, 2014 WL 3366822, 2014 Tex. App. LEXIS 7530 (Tex. Ct. App. 2014).

Opinion

OPINION

EVELYN V. KEYES, Justice.

In this interlocutory appeal, appellees Gary McGregor, Teri McGregor, Kris Hall, Soledad Pineda, Larry Bishop, Cynthia Bishop, George Clark, Deborah Clark, and Carol Severance (collectively, “the BuyOut Owners”), sued Bruce Schimmel, an attorney hired by The Sands of Kahala Beach HOA, Inc. (“SOKB”), the homeowners’ association for the subdivision in which the Buy-Out Owners lived, for tor-tious interference with prospective business relations, specifically, the sale of their respective beachfront properties to the City of Galveston. Schimmel moved to dismiss the Buy-Out Owners’ tortious interference claim pursuant to the Texas Citizens Participation Act (“TCPA”).1 The trial court denied Schimmel’s motion to dismiss. In two issues, Schimmel contends that the trial court erroneously (1) found that Schimmel’s complained-of actions did not involve “matters of public concern” and did not implicate the exercise of his right to petition, right of free speech, or right of association and thus erroneously denied his motion to dismiss; and (2) refused to award Schimmel court costs, reasonable attorney’s fees, and other expenses incurred in defending the action against him.

We reverse and remand for further proceedings.

Background

The Buy-Out Owners all own beachfront property in the Sands of Kahala Beach, a small, gated subdivision located on Galveston Island. In September 2008, Hurricane Ike made landfall in the region and caused extensive property damage to numerous homes, including those of the Buy-Out Owners. Because their homes were allegedly more than fifty percent damaged, the Buy-Out Owners sought to sell their properties to the City of Galveston under a Federal Emergency Management Agency (“FEMA”) program called the Hazard Mitigation Grant Program (“HMGP”). The Texas Department of Public Safety assists in administering this program. The BuyOut Owners and an attorney for the City of Galveston signed agreements in September 2009 concerning the purchase of the respective properties.

SOKB and the remaining owners who owned property in the subdivision but did not wish to sell their property to the City of Galveston (“the Remaining Owners”) opposed the Buy-Out Owners’ plans to sell. Under the HMGP, the properties that the City of Galveston purchased “were to be kept as open space in perpetu[850]*850ity.” This requirement concerned the SOKB, the entity in charge of collecting assessments and fees from the property owners within the subdivision, and the Remaining Owners, who believed that the required public use of the purchased land and the loss of a private roadway and utility easement would cause the value of their properties to drop.

Due to the dispute between the Buy-Out Owners, SOKB, and the Remaining Owners, in October 2009, the City of Galveston added a condition to the purchase of the Buy-Out Owners’ properties: the president of SOKB’s Board of Directors (“the Board”) needed to sign a document releasing the City from paying future homeowners’ dues and other fees and assessments to SOKB once it purchased the properties. In December 2009, SOKB hired Schimmel, an attorney, to represent its interests and those of the Remaining Owners in the dispute with the Buy-Out Owners. SOKB refused to sign the releases and the Board voted to amend SOKB’s by-laws to raise the voting requirement to remove directors from the Board, purportedly on Schimmel’s advice. The Buy-Out Owners subsequently held a special meeting of the Board and elected new directors, including Kris Hall, one of the appellees, as the new President. Hall then signed the releases for the Buy-Out Owners’ properties and delivered them to the City of Galveston.

Schimmel continued to work on behalf of SOKB and the Remaining Owners to convince the City of Galveston not to buy the Buy-Out Owners’ properties until February 1, 2011, when he withdrew from representation. Ultimately, the time period to participate in the HMGP expired without the City of Galveston’s having closed on the purchases of the Buy-Out Owners’ properties.

The Buy-Out Owners, joined by SOKB, sued Schimmel on January 28, 2013, asserting claims for breach of fiduciary duty and equitable fee forfeiture. Neither of those claims is at issue in this interlocutory appeal.

On March 28, 2013, the Buy-Out Owners and SOKB filed their first amended petition. In addition to the breach of fiduciary duty and fee forfeiture claims, the Buy-Out Owners asserted a claim against Schimmel for tortious interference with prospective business relations.2 The BuyOut Owners alleged that a reasonable probability existed that they would have entered into a business relationship with the City of Galveston, that Schimmel intentionally interfered with the relationship, and that Schimmel’s conduct was independently tortious and unlawful “in that Defendant Schimmel made fraudulent statements about these Plaintiffs to third parties and persuaded others to illegally boycott these Plaintiffs.”

The Buy-Out Owners alleged that Schimmel made several misrepresentations that interfered with the purchase of their properties by the City of Galveston. For example, in response to an article in the Houston Chronicle about the potential sale of the properties, Schimmel allegedly wrote to the author of the article and stated that if the City purchased the properties the Remaining Owners would lose their access to a nearby state highway because the private road in the subdivision would be demolished. He also allegedly misrepresented to the author that all of the properties were behind the vegetation line and “repairable for less than 50% of [851]*851their value,” which would preclude them from participation in the HMGP. Schimmel also allegedly made misrepresentations to the Board concerning how the HMGP’s definition of “substantial damage” to the properties was calculated;3 to lot owners in the subdivision that the buyout would not include the opportunity to buy out all of the properties in the subdivision; and to various individuals that he “had no intention of changing any more By-Laws,” that the SOKB had been working with the Buy-Out Owners to settle the dispute, and that developers no longer owned lots in the subdivision, even though they did.

The Buy-Out Owners also alleged that Schimmel had “systematically excluded members from voting [at resident meetings] in order to boycott the Buyout owners,” such as by quickly setting a voting eligibility date to prevent owners who had not paid their annual assessments from voting at meetings and by recommending the elimination of voting by proxy, which would affect the Buy-Out Owners who used their properties as vacation homes but did not live permanently in the subdivision. The Buy-Out Owners further alleged that Schimmel had stated that neither SOKB nor its Board had the power to waive assessments as required by the City of Galveston to purchase the properties, and “[w]ithout releases, the [City] would not close on the properties and [Schimmel] had the [Board] refuse to sign [the] release[s] which was an unreasonable restraint or alienation. Defendant Schim-mel’s position was that the Buy-[0]ut owners would not be allowed to sell to the [City] under any circumstances.” The Buy-Out Owners alleged that they had suffered economic damages consisting of the difference between the proposed buyout values and the market values of their properties.

On May 28, 2013, Schimmel filed a motion to dismiss under the TCPA.

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

Related

Valve Corporation, V. Bucher Law, Pllc Et Ano
Court of Appeals of Washington, 2025
Adrienne C. Bibby v. Ronald Bibby
Court of Appeals of Texas, 2021
in Re Fraudulent Hospital Lien Litigation
Court of Appeals of Texas, 2020

Cite This Page — Counsel Stack

Bluebook (online)
438 S.W.3d 847, 2014 WL 3366822, 2014 Tex. App. LEXIS 7530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schimmel-v-mcgregor-texapp-2014.