In re Indusoft, Inc.

         ORIGINAL PROCEEDING FROM TRAVIS COUNTY

          Before Justices Puryear, Pemberton, and Field Filed: January 10, 2017

          MEMORANDUM OPINION

          Scott K. Field, Justice

         This original proceeding arises from litigation between relators InduSoft, Inc., Ernest T. Roland, and Marcia R. Gadbois (collectively InduSoft) and real parties in interest Marcos V. Taccolini and Tatsoft, LLC (collectively Taccolini). In response to Taccolini's Seventh Amended Petition, InduSoft filed a plea in abatement in the trial court, which the court denied. InduSoft then filed a petition for writ of mandamus in this Court, contending that the trial court abused its discretion in denying the plea because abatement was mandated by the Defamation Mitigation Act. See Tex. Civ. Prac. & Rem. Code § 73.062. Because we conclude that the Defamation Mitigation Act does not apply to the allegations in Taccolini's Seventh Amended Petition, we will deny InduSoft's petition for writ of mandamus.

         BACKGROUND

         InduSoft is a software company co-founded by Roland and Taccolini. Roland's daughter Gadbois later joined InduSoft, and Roland, Gadbois, and Taccolini became equal owners. Taccolini's relationship with the two other partners soured, and litigation followed in several courts.

         In February 2009, the parties signed a Settlement Agreement. Section 8 of the Settlement Agreement, entitled "Future Cooperation" and referred to by the parties as the "Cooperation Clause, " includes the following provision:

Both parties agree that they will engage in no conduct which is either intended to or could reasonably "be expected to harm the other's business pursuits" or the other's professional reputation; however legitimate competition within the terms specified in Section 12 herein is explicitly permitted and is not considered to "be expected to harm the other's business pursuits[."]

         Taccolini later founded a new software company, Tatsoft. Tatsoft's main software product competed with InduSoft's product.

         Taccolini filed this suit against InduSoft in June 2014, ^[1] alleging, among other things, that InduSoft violated the Cooperation Clause by engaging "in a pattern of harassment, defamation, and business disparagement aimed at Taccolini and Tatsoft." In addition to a breach-of-contract claim, Taccolini also asserted causes of action for business disparagement, defamation, and tortious interference. In his Third Amended Petition, Taccolini nonsuited his claims for business disparagement, defamation, and tortious interference, but he continued to allege that InduSoft breached the Settlement Agreement's Cooperation Clause. In his Seventh Amended Petition, Taccolini brought a breach-of-contract claim against all defendants, a tortious-interference-with-contract claim against Schneider Electric and Invensys, a conspiracy claim against all defendants, and a fraud and fraudulent-inducement claim against InduSoft.

         After Taccolini filed the Seventh Amended Petition, InduSoft filed its plea in abatement. In its plea, InduSoft contended that Taccolini's Seventh Amended Petition added "new disparagement allegations to the case." According to InduSoft, these new allegations are subject to Texas's Defamation Mitigation Act (the Act). See generally Tex. Civ. Prac. & Rem. Code §§ 73.051-.062. The Act "applies to a claim for relief, however characterized, from damages arising out of harm to personal reputation caused by the false content of a publication." Id. § 73.054(a). Moreover, the Act applies not only to written publications, but also to oral ones. Id. § 73.054(b). However, the Act applies "only to information published on or after the effective date of th[e] Act, " which was June 14, 2013. See Act of May 22, 2013, 83d Leg., R.S., ch. 950, § 3, 2013 Tex. Gen. Laws 2344, 2347.

         Under the Act, "[a] person may maintain an action for defamation only if: (1) the person has made a timely and sufficient request for a correction, clarification, or retraction from the defendant; or (2) the defendant has made a correction, clarification, or retraction." Tex. Civ. Prac. & Rem. Code § 73.055(a). In addition, "[i]f not later than the 90th day after receiving knowledge of the publication, the person does not request a correction, clarification, or retraction, the person may not recover exemplary damages." Id. § 73.055(c). Finally, the statute provides that "[a] person against whom a suit is pending who does not receive a written request for a correction, clarification, or retraction, as required by Section 73.055, may file a plea in abatement not later than the 30th day after the date the person files an original answer in the court in which the suit is pending." Id. § 73.062(a).

         Taccolini responded that the Act does not apply to breach-of-contract claims but only to tort claims. Taccolini also argued that InduSoft's plea in abatement was untimely. According to Taccolini, to the extent that the Act applies to his claims, the Third Amended Petition "triggered" the Act's "30-day requirement, " and, because InduSoft did not file a plea in abatement within 30 days ...