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Long Canyon Phase II and III Homeowners Association, Inc. v. Cashion

Court of Appeals of Texas, Third District, Austin

March 3, 2017

Long Canyon Phase II and III Homeowners Association, Inc., Appellant
v.
Chris Cashion and Lisa Cashion, Appellees

         FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY NO. C-1-CV-15-001016, HONORABLE ERIC SHEPPERD, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Pemberton and Field.

          OPINION

          Jeff Rose, Chief Justice.

         Long Canyon Phase II and III Homeowners Association, Inc. ("the HOA") appeals from an interlocutory order denying its motion to dismiss a suit by Chris and Lisa Cashion. The parties have for several years disputed whether the Cashions' alleged landscaping activities in a drainage easement violate the HOA's rules. After the HOA sent the Cashions a notice of intent to sue for non-compliance with those HOA rules, the Cashions sued the HOA[1] claiming damages from harassment, negligence, and severe emotional distress, as well as seeking injunctive and declaratory relief. The HOA moved to dismiss the Cashions' suit under the Texas Citizens' Participation Act (TCPA), arguing that the Cashions' suit infringed on the HOA's exercise of its rights to associate and to petition the government, as defined in the Act.[2] The district court denied the HOA's motion. We will reverse the trial court's order in part, render judgment dismissing certain of the Cashions' claims, and affirm the remainder of the order.

         Background

         The Cashions are homeowners whose property is subject to covenants that mandate membership in the HOA and restrict landscaping activities in a drainage easement that runs across part of the Cashions' property. The Cashions recite a history of conflict dating to 2009 when the HOA refused to return their construction deposit on grounds that they had improperly cut trees in the easement. The Cashions assert that they sued the HOA and recovered the deposit.

         The current dispute flared when the HOA sent the Cashions a letter dated December 18, 2014, asserting that the Cashions had unlawfully damaged the drainage easement. In the letter, the HOA board, through counsel, threatened to fine the Cashions, file suit, and seek damages.

         The Cashions replied by letter dated December 23, 2014, then filed this suit in the county court at law in February 2015. In their original petition, the Cashions complain that the HOA, acting in bad faith, "intentionally communicated through authorizing its attorney to write in a coarse and offensive manner, a letter addressed to the Cashions and by such action, [the HOA] and the Board intentionally annoyed and alarmed the Cashions on Christmas Eve."[3] The Cashions complain that the letter contained false and unsupported allegations regarding their conduct in the easement from July 2013 to December 2014. The Cashions also complain that the HOA breached its duty to supervise its representatives by allowing them to harass the Cashions over matters outside their power. They allege that the HOA monitored visitors, watched yardworkers, made their presence known, trespassed, and took pictures of the Cashions' property without consent. The Cashions complain that the HOA "acted with intent to cause emotional distress to the Cashions, " which emotional distress "was severe."

         The Cashions assert that the HOA filed suit in district court against them on April 1, 2015, they filed a plea in abatement in that suit, and the HOA then filed this motion to dismiss under the TCPA. The trial court denied the HOA's motion to dismiss without stating a basis. The HOA appeals this denial.

         TCPA Dismissal Procedure

         "The purpose of the [Citizens Participation Act] is to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury."[4] To that end, the TCPA provides a mechanism for dismissal of a "legal action" that is "based on, relates to, or is in response to a party's exercise of the right of free speech, right to petition, or right of association, "[5] as defined in the Act, and for which "the party bringing the legal action [cannot] establish[] by clear and specific evidence a prima facie case for each essential element of the claim in question."[6] Texas courts' brief history in applying the broadly worded TCPA has not limited application of the Act's protections to weighty issues of great public concern. The dismissal mechanism of the statute has been applied in cases for fraud and barratry, [7] a suit for contamination of a water well, [8] a dispute between neighbors over a fence, [9] defamation claims arising from an employment dispute, [10] a snarl of competing claims arising from discussions among horse breeders on social media, [11] and a host of other types of claims.

         A party moving to dismiss under the TCPA must "show[] by a preponderance of the evidence that the [nonmovant's] legal action is based on, relates to, or is in response to the [movant]'s exercise of (1) the right of free speech; (2) the right to petition; or (3) the right of association."[12] "Exercise of the right of free speech" is defined in the TCPA as "a communication made in connection with a matter of public concern."[13] "Exercise of the right to petition" is defined, in part, as "a communication in or pertaining to . . . a judicial proceeding" and as "any other communication that falls within the protection of the right to petition government under the Constitution of the United States or the constitution of this state."[14] Finally, "exercise of the right of association" is defined as "a communication between individuals who join together to collectively express, promote, pursue, or defend common interests, "[15] with "communication" being separately defined as "the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic."[16]

         To avoid dismissal under a TCPA motion to dismiss, the nonmovant must "establish[] by clear and specific evidence a prima facie case for each essential element of the claim in question."[17] But even where a prima facie case has been made, the trial court "shall dismiss a legal action against the moving party if the moving party establishes by a preponderance of the evidence each essential element of a valid defense to the nomovant's claim."[18] In a section titled "Evidence, " the TCPA instructs, "In determining whether a legal action should be dismissed . . ., the court shall consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based."[19] We review de novo whether each party carried its assigned burden.[20]

         Discussion

         The HOA's sole issue on appeal is that the trial court erred in denying the HOA's TCPA motion to dismiss. The HOA contends specifically that the Cashions' claims improperly infringe on the HOA's "exercise of the right to petition" because those claims are based on the HOA's letter giving notice of its intent to sue. The HOA also asserts that the Cashions' claims improperly infringe on its "exercise of the right of association" because the HOA's presuit notice was an exercise of the HOA's right to express, promote, pursue, and defend its common interest of preserving and protecting the drainage easements created by the neighborhood covenants.

         Scope of the appeal

         During the dismissal hearing, the HOA expressly withdrew the portion of its motion that challenged the Cashions' declaratory-judgment claims. Accordingly, the HOA's potential bases for reversal here are limited to the Cashions' remaining claims seeking monetary and injunctive relief, which are unquestionably "legal actions" potentially subject to dismissal under the TCPA.[21]The HOA's motion sought dismissal of these "legal actions" on the ground that each was predicated factually on the "presuit notice" or "HOA" letter dated December 18, 2014, and that this letter was TCPA-protected expression. In the letter, the HOA board, through counsel, threatens to fine the Cashions $8, 000 and sue them for $10, 000 in damages, plus attorney's fees, and to place a lien on their property to secure payment of the judgment, based on alleged violations of deed restrictions that limited the Cashions' use or maintenance of a portion of their property that was burdened by a drainage easement. The HOA raised no other communication or expression on its part as the basis for its motion, and this narrow focus has important corresponding implications for the scope of relief the HOA can obtain on appeal.

         The HOA's motion sought dismissal of the Cashions' monetary and injunctive claims in their entirety under the premise that the claims complained solely of the December 18 letter. A review of the evidence-viewed in the light most favorable to the Cashions, as required by the governing standard of review-reveals that the factual bases for the Cashion's claims are much broader than this. Although the Cashions do complain about the letter in their live petition (terming it a "coarse and offensive" missive calculated to "alarm[], " "caus[e] emotional distress, " and even ruin their Christmas holidays), they present it as a component of a larger "pattern of harassment" and "bad faith" or "ultra vires" conduct by the HOA board and "some of the [HOA] members." This conduct, the Cashions alleged, has included "constantly monitor[ing] visitors of the Cashions, watch[ing] whenever someone comes to work in the [Cashions'] yard, and "mak[ing] their presence known, " as well as "trespass[ing] on the Cashions' property and tak[ing] pictures [there] without their consent."

         In addition to the Cashions' pleadings, the trial court had other evidence before it that provided further background and context regarding the nature of the parties' dispute and the alleged "harassment" by the HOA, including correspondence between the parties and an affidavit from Chris Cashion.[22] Viewed in the light most favorable to the Cashions, this proof reflects that the Cashions and the HOA had previously litigated the same issues regarding their use of the drainage easement in 2009 after the HOA had refused to return a $10, 000 deposit, ostensibly to sanction the Cashions for deed-restriction violations, and that the Cashions had prevailed, recovering both their deposit and attorney's fees. In the interim, the Cashions maintained, the HOA had inconsistently and arbitrarily advised the Cashions that certain activities were permitted in the easement (e.g., planting grass or removing arborist-certified dead trees) only to blindside them later with complaints about these same acts, and had similarly singled them out for disparate treatment compared to other residents who had been permitted even more intensive uses of the drainage easements on their respective properties. The Cashions further complained that following the HOA's December 18 letter, the association had refused to explain or elaborate precisely why or how any conduct by them, including conduct that HOA representatives had permitted, amounted to violations of the deed restrictions in the HOA's view. This collective body of evidence, in turn, tended to elaborate upon and support a central theme of the Cashions in their lawsuit-that in "harassing" the Cashions, the HOA's actors has acted out of personal animus or spite rather than in any good-faith belief that the Cashions had actually committed any of the deed-restriction violations of which they were accused, or at least in any good-faith belief that the alleged violations would survive the preclusive effect of the 2009 judgment.

         While the HOA disputes both the factual and legal merit of the Cashions' allegations, what matters initially is that the Cashions complain of a much broader course of conduct by the HOA than merely sending the December 18 letter. And as for those factual bases beyond the December 18 letter, the HOA did not preserve any ground for dismissal in their motion.[23] Accordingly, we hold that the HOA has preserved a TCPA challenge to the Cashions' monetary and injunctive claims only to the limited extent those claims are factually predicated on the December 18 letter. Therefore, even though the letter is, as we conclude below, a TCPA-protected expression, we will affirm the trial court's denial of the TCPA motion to dismiss as to the HOA's other complained-of conduct.

         The HOA met its initial burden

         Regarding the Cashions' complaints that arise from the December 18 HOA letter, the parties join issue on appeal only over whether the December 18 letter was the HOA's "exercise of the right to petition" or "exercise of the right of association."[24] The HOA argues that the Property Code's requirement that it send notice before filing suit[25] means that its December 18 presuit letter is "a communication . . . pertaining to" "a judicial proceeding, " and therefore falls within the protections afforded to the right to petition the government.[26] We disagree. The ordinary meaning of the phrase "judicial proceeding"-versus, e.g., "future, " "potential, " or "threatened" judicial proceeding-is an actual, pending judicial proceeding.[27] The December 18 letter, although undoubtedly a "communication, "[28] was a presuit demand letter. As such, it did not pertain to "a judicial proceeding" so as to be the "exercise of the right to petition" under the TCPA definition.[29]

         Nevertheless, the December 18 letter is an exercise of the HOA's right to petition under the TCPA because it falls under subsection (E) of the TCPA's definition of the "exercise of the right to petition, " which is "any other communication that falls within the protection of the right to petition government under the Constitution of the United States or the constitution of this state."[30]Subsection (E) reflects legislative intent that the definition be consistent with and incorporate the nature and scope of the "right to petition" that had been established in constitutional jurisprudence.[31]The established understanding under First Amendment jurisprudence, both now and at the time of the TCPA's enactment, was that presuit demand letters generally fall within the "right to petition, "[32]although there is a federal circuit court case holding otherwise in the view that the petition right embraces only communications made to or toward government and not those between private parties.[33] While the majority rule indeed appears to be founded on a policy-laden notion of courts providing "breathing space" for the underlying right as opposed to specific support in constitutional text, [34] we must presume that the Legislature intended this view of the protection's scope to control nonetheless.[35]

         The Cashions argue that the HOA's underlying allegation of deed-restriction violations (the subject of the litigation being threatened) were meritless and made in bad faith. This is arguably an assertion that the HOA's underlying suit would constitute "sham petitioning"-that which is "objectively baseless" and seeks to harm a rival directly through the governmental process itself rather than the result ostensibly sought-a category of speech that falls outside First Amendment protection.[36] However, even assuming without deciding that the sham-petitioning exception applies, while the Cashion's evidence might support an implied finding that the HOA acted with the motives characteristic of sham litigation, their evidence falls short of proof that the allegations were "objectively baseless, " which requires that "no reasonable litigant could realistically expect success on the merits."[37] Consequently, the trial court could only conclude on this record that the December 18 letter sufficed as the "exercise of the right to petition" and, in turn, that the HOA had met its initial burden of showing by a preponderance of the evidence that the Cashions' claims are in part based on, relate to, or are in response to the HOA's exercise of its right to petition.[38] In their response to the motion to dismiss, the Cashions noted: "Plaintiffs filed this suit in response to the continued pattern of harassment by the HOA and the Board that is partly represented by the Letter."[39] (Emphasis added.)

         Because the December 18 letter qualifies as an "exercise of the right to petition, " we need not address the HOA's additional argument that the letter qualifies as the HOA's "exercise of the right of association."[40]

         Prima facie case

         The HOA having met its initial burden-i.e., showing that the Cashions' claims arising from the December 18 HOA letter are based on, related to, or in response to the HOA's exercise of protected rights-the burden shifted to the Cashions to establish by clear and specific evidence a prima facie case for each essential element of their claims.[41] A prima facie case "refers to evidence sufficient as a matter of law to establish a given fact if it is not rebutted or contradicted."[42] "It is the 'minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true.'"[43] Conclusory statements[44] and bare, baseless opinions are not probative and accordingly do not establish a prima facie case.[45]

         The Cashions assert that they stated claims for harassment, negligence, and intentional infliction of emotional distress with regard to the December 18 HOA letter. They requested injunctive relief preventing future similar actions by the HOA. They also requested a declaratory judgment that the HOA's actions in fining them for errant landscaping were beyond its authority, as well as a declaration that their actions in landscaping their backyard have not violated applicable restrictions, but as discussed above, the HOA expressly withdrew that portion of its motion to dismiss relating to the Cashions' declaratory-judgment claims.

         The Cashions rely on Chris Cashion's affidavit, the declarations underlying the formation of the HOA, and the HOA's articles of incorporation and related amendments as the evidence to substantiate their claims. In his affidavit, Chris Cashion swore that the HOA refused in 2009 to return their construction deposit on grounds that they had violated the HOA's declaration by landscaping in the easement, forcing the Cashions to sue (successfully) to recover the deposit. Chris Cashion also swears that the HOA sought in 2013 to fine them for cutting a dead tree in the drainage easement. He further avers that board members commented about their landscaping, that they received the HOA's presuit letter on Christmas Eve, causing distress and mental anguish, that they have not disturbed or removed vegetation from the easement other than the dead tree, and that they have not been given notice that they have violated any rule or regulation other than the alleged attempted fine in 2013.

         The Cashions did not, in their response at trial or in their brief on appeal, set out the elements of their causes of action or apply the evidence to each element. While a criminal offense of harassment exists, [46] the Cashions have not established that a civil cause of action for harassment exists and that evidence of the HOA's conduct makes a prima facie case on all of the elements of that cause.

         The Cashions further claim intentional infliction of emotional distress, which requires proof that: (1) the defendant acted intentionally or recklessly; (2) the defendant's conduct was extreme and outrageous; (3) the defendant's actions caused the plaintiff emotional distress; and (4) the resulting emotional distress was severe.[47] To be considered extreme and outrageous, the conduct must "go beyond all possible bounds of decency and [] be regarded as atrocious and utterly intolerable in a civilized community. . . . Liability does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities."[48] Emotional distress includes embarrassment, fright, horror, grief, shame, humiliation, and worry, and severe emotional distress is so severe that no reasonable person could be expected to endure it.[49] Mere worry, anxiety, vexation, embarrassment, or anger are not enough and there must be a high degree of mental pain and distress, [50] but evidence of a physical manifestation is not required.[51] The Bruce court found the following combination of evidence legally sufficient to show severe emotional distress: the victims had crying spells, emotional outbursts, nausea, stomach disorders, headaches, difficulty in sleeping and eating, stress, anxiety, depression, and fear that caused them to be prescribed medication and be diagnosed as suffering from post-traumatic stress disorder.[52] The Cashions' assertions that they suffered "stress and emotional distress, " that they were "annoyed and alarmed" by receiving the December 18 letter, and that the "emotional distress suffered by the Cashions was severe" were not clear and specific evidence of emotional distress that approached the severity described in Bruce.[53]

         Evidence is similarly lacking concerning the Cashions' negligence claims. The elements of a negligence cause of action are the existence of a legal duty, a breach of that duty, and damages proximately caused by the breach.[54] The Cashions assert that the HOA has

a duty to supervise all officers, agents and employees of [the HOA] and to see that their duties are being properly p[er]formed. [The HOA] breached that duty by allowing individual Board members to harass the Cashions over matters that are not permitted under the Declaration, [rules, and bylaws]. The negligence of [the HOA] proximately caused injury to the Cashions.

         The Cashions do not specify in their petition or brief the damages caused by the alleged negligence, much less supply clear and specific evidence of those damages. Because the Cashions have failed to put forth a prima facie case on their claims arising from the December 18 HOA letter, we conclude that the trial court erred by denying the HOA's motion to dismiss the Cashions' claims for harassment, intentional infliction of emotional distress, and negligence. We render judgment dismissing those claims.

         The Cashions also seek injunctive relief to keep the HOA from harassing them, causing emotional distress, and acting outside its permissible enforcement authority. To obtain a permanent injunction an applicant must demonstrate (1) a wrongful act, (2) imminent harm, (3) irreparable injury, and (4) no adequate remedy at law.[55] The Cashions have provided evidence they claim shows the HOA acting outside the bounds of its authority threatening fines and continued improper limitation of the Cashions' activities. The Cashions did not, however, provide evidence of an irreparable injury or the absence of an adequate remedy at law, and thus did not establish a prima facie case for injunctive relief. We conclude that the trial court erred by denying the motion to dismiss the request for injunctive relief.[56]

         CONCLUSION

         We reverse that part of the trial court's order denying the HOA's motion to dismiss the Cashions' claims for harassment, intentional infliction of emotional distress, negligence, and injunctive relief that are predicated factually on the December 18 letter, and we render judgment dismissing those same claims. The remainder of the order is affirmed, and the case is ...


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