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Rio Grande H2O Guardian v. Robert Muller Family Partnership Ltd.

Court of Appeals of Texas, Fourth District, San Antonio

January 29, 2014

RIO GRANDE H2O GUARDIAN and Albert F. Muller, Jr., Appellants
v.
ROBERT MULLER FAMILY PARTNERSHIP LTD, d/b/a Robert Muller LTD and Muller's Rosetta Stone, LLC, Appellees

From the 111th Judicial District Court, Webb County, Texas Trial Court No. 2013CVQ001860D2 Honorable Monica Z. Notzon, Judge Presiding

Sitting: Catherine Stone, Chief Justice Karen Angelini, Justice Patricia O. Alvarez, Justice

MEMORANDUM OPINION

Catherine Stone, Chief Justice

This is an accelerated interlocutory appeal of the trial court's order denying a motion to dismiss under the Texas Citizens Participation Act which is an anti-SLAPP (Strategic Lawsuits Against Public Participation) law. Appellants, Rio Grande H2O Guardian and Albert F. Muller, Jr., contend the trial court erred in denying their motion because: (1) their actions in filing the underlying lawsuit are protected by the Act; and (2) the appellees, Robert Muller Family Partnership Ltd. d/b/a Robert Muller, Ltd. and Muller's Rosetta Stone, LLC, failed to establish a prima facie case to support their counterclaims and third-party claims by clear and specific evidence. We agree with appellants.

Background[1]

By state law, all zoning ordinances adopted by the City of Laredo must be in accordance with the Comprehensive Plan the City adopted in 1991. City of Laredo v. Rio Grande H2O Guardian, 2011 WL 3122205, at *1 (cited hereinafter as Rio Grande H2O Guardian I). In 2009, Rio Grande H2O Guardian, a non-profit corporation, "filed a declaratory judgment action against the City challenging the legality of [two] new zoning ordinances as violative of the City's Comprehensive Plan."[2] Id. The City filed a plea to the jurisdiction asserting that Rio Grande H2O Guardian lacked standing to bring the suit, its claims were not ripe for consideration, and its claims were moot. Id. at *2. The trial court denied the City's plea, and the City filed an interlocutory appeal challenging the ruling in this court. Id. This court affirmed the trial court's order. Id. at *11.

Almost a year and a half after this court issued its opinion, the appellees, Robert Muller Family Partnership Ltd. d/b/a Robert Muller, Ltd. and Muller's Rosetta Stone, LLC, filed counterclaims against Rio Grande H2O Guardian and third-party claims against Albert F. Muller, Jr., alleging claims for tortious interference with an existing contract, tortious interference with prospective business relations, aiding and abetting, and civil conspiracy. The appellees also alleged that the corporate form of Rio Grande H2O Guardian should be disregarded based on an alter ego theory. The basis for the appellees' claims against Rio Grande H2O Guardian was that its lawsuit opposing the zoning ordinances was ultra vires because it was beyond the purposes for which Rio Grande H2O Guardian was formed as stated in its Certificate of Formation and was "not germane to the organization's purpose." With regard to Albert F. Muller, Jr., the petition alleges, "Rio Grande H2O Guardian, by and through Albert F. Muller, Jr., continue [sic] to attempt to challenge and oppose the zoning ordinances at issue."

Rio Grande H2O Guardian and Albert F. Muller, Jr. filed a motion to dismiss under the Act to which the appellees filed a response and supplemental response. After a hearing, the trial court denied the motion, and this appeal was filed challenging that ruling.

Overview of the Act and Standard of Review

Among other purposes, the Act is designed to "encourage and safeguard the constitutional rights of persons to petition … and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury." Tex. Civ. Prac. & Rem. Code Ann. § 27.002 (West Supp. 2013). The Act is to "be construed liberally to effectuate its purpose and intent fully." Id. at § 27.011(b).

In order to promote these purposes, the Act "creates an avenue at the early stage of litigation for dismissing unmeritorious suits that are based on the defendant's exercise of the rights of free speech, petition, or association" as the Act defines those rights. In re Lipsky, 411 S.W.3d 530, 539 (Tex. App.—Fort Worth 2013, orig. proceeding [mand. pending]) (citing Tex. Civ. Prac. & Rem. Code Ann. § 27.003(a) (West Supp. 2013)). In this regard, the Act contains "a burden-shifting mechanism" in seeking and defending against a dismissal. See Rehak Creative Servs., Inc. v. Witt, 404 S.W.3d 716, 723 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). The moving party must show by a preponderance of the evidence that the legal action it seeks to dismiss is "based on, relates to, or is in response to the party's exercise of" the right of free speech, petition, or association. Tex. Civ. Prac. & Rem. Code Ann. § 27.005(b) (West Supp. 2013); see also In re Lipsky, 411 S.W.3d at 539; Rehak, 404 S.W.3d at 723. If the moving party meets this burden, the burden shifts to the party bringing the legal action to establish "by clear and specific evidence a prima facie case for each essential element of the claim in question." Tex. Civ. Prac. & Rem. Code Ann. § 27.005(c); see also In re Lipsky, 411 S.W.3d at 539; Rehak, 404 S.W.3d at 723-24.

We agree with the Houston court that we review both steps in this analysis under a de novo standard of review. See Rehak, 404 S.W.3d at 724-27. Under the second step, the Act "does not define what sort of evidence satisfies the 'clear and specific' qualitative standard, but it expresses that in determining the propriety of dismissal, courts may consider 'the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based.'" In re Lipsky, 411 S.W.3d at 539 (quoting Tex. Civ. Prac. & Rem. Code Ann. § 27.006 (a) (West Supp. 2013)). "'Clear and specific evidence' has been described as evidence that is 'unaided by presumptions, inferences, on intendments.'" Rehak, 404 S.W.3d at 726 (quoting McDonald v. Clemens, 464 S.W.2d 450, 456 (Tex. App.—Tyler 1971, no writ)). "'Prima facie evidence is evidence that, until its effect is overcome by other evidence, will suffice as proof of a fact in issue.'" Id. (quoting Duncan v. Butterowe, Inc., 474 S.W.2d 619, 621 (Tex. Civ. App.—Houston [14th Dist.] 1971, no writ)). "'In other words, a prima facie case is one that will entitle a party to recover if no evidence to the contrary is offered by the opposite party.'" Id. (quoting Duncan, 474 S.W.2d at 621). Therefore, in analyzing the second step, "we determine de novo whether the record contains a minimum quantum of clear and specific evidence that, unaided by inferences, would establish each essential element of the claim in question if no contrary evidence is offered." Id. at 727.

Exercise of Right to Petition

Focusing on the first step in our analysis, the crux of the claims by the appellees clearly relates to the filing of the underlying lawsuit. The "exercise of the right to petition" includes a "communication in or pertaining to a judicial proceeding" and "a communication that is reasonably likely to encourage consideration or review of an issue by a legislative, executive, judicial or other governmental body or in another governmental or official proceeding." Tex. Civ. Prac. & Rem. Code Ann. ยง 27.001(4) (West Supp. 2013). In this case, the lawsuit was filed to encourage the trial court to consider whether ...


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