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O'Hern v. Mughrabi

Court of Appeals of Texas, Fourteenth District

May 21, 2019

JOHN L. O'HERN, TINA DOOLEY, ANTIONETTE D. GREEN, AND LESLIE PERRYMAN, Appellants
v.
KHALED MUGHRABI, Appellee

          On Appeal from the 152nd District Court Harris County, Texas Trial Court Cause No. 2017-77498

          Panel consists of Justices Christopher, Jewell, and Hassan.

          OPINION

          KEVIN JEWELL, JUSTICE

         Appellants John O'Hern, Tina Dooley, Antionette D. Green, and Leslie Perryman appeal the denial of their motion to dismiss under the Texas Citizens Protection Act ("TCPA").[1] Appellants are four former volunteer members of a condominium association's five-member board of directors. Appellee Khaled Mughrabi, the fifth board member, sued appellants following the board's decision to levy a $5.9 million special assessment to replace all of the condominium building's external windows. Mughrabi's claims have included breach of fiduciary duty and requests for injunctive, declaratory, and monetary relief, though at the time of the challenged ruling his only live claim was for breach of fiduciary duty. The trial court denied appellants' TCPA motion to dismiss by operation of law.

         On appeal, appellants contend that the trial court erred because (1) Mughrabi failed to present prima facie evidence supporting his claims, and (2) appellants established an affirmative defense. Mughrabi, in addition to responding on the merits, asserts that the appeal is moot because a new association board of directors cancelled the special assessment while the case was pending in the trial court.

         Addressing Mughrabi's jurisdictional arguments first, we agree with him that this case is moot as to the portion of Mughrabi's claim that is based on alleged damages resulting from the now-cancelled special assessment. We therefore grant Mughrabi's motion to dismiss the appeal in part and deny it in part. As to the portion of Mughrabi's claim that as pleaded invokes a live controversy, we conclude that appellants were entitled to have that portion of Mughrabi's claim dismissed under the TCPA. Accordingly, we dismiss the appeal in part, reverse the judgment in part, and remand the case to the trial court with instructions to determine appropriate attorney's fees and sanctions.

         Background

         The building at the intersection of 2520 Robinhood and Kirby in Houston is a 17-story, 78-unit condominium. The condominium is governed by the 2520 Robinhood at Kirby Condominium Association (the "Association"), organized under the Texas Nonprofit Corporation Act. See Tex. Bus. Org. Code ch. 22. The Association is managed by a five-member board of directors (the "Board"). During the relevant times, appellants and Mughrabi owned units in the building and served on the Board.

         Appellants contend that some of the building's exterior windows began leaking a few years after the building was completed. The Board hired a consultant, Apollo Better Building Consultants, to investigate the cause. Apollo concluded that the majority of the building's windows were defective and recommended either replacing or refurbishing them. The Board approved a "pilot program," which entailed replacing the windows in three units. Two of the three units selected for the pilot program were owned by two appellants-John O'Hern, who served on the Board, and Tina Dooley, whose husband served on the Board at that time. The third person who participated in the program was not on the Board and is not a party to this case.

         The Board ultimately approved a global repair project, which entailed replacing all exterior windows and applying a waterproofing coating to the building's façade. Although a Board member, Mughrabi did not participate in that vote. One month later, the Board approved a $5.9 million special assessment to pay for the repair project. Appellants voted in favor of, and Mughrabi voted against, the special assessment. Pursuant to the condominium declaration, a special assessment is charged against all owners in proportion to their respective interests.

         Mughrabi filed suit against appellants, asserting various causes of action and seeking several forms of relief.[2] First, Mughrabi alleged that appellants breached a fiduciary duty. According to Mughrabi, the condominium's governing declaration requires a vote by all owners for special assessments relating to the alteration or improvement of any element of the property, and that appellants passed the assessment without such a vote in violation of their fiduciary duty. Second, Mughrabi sought a declaratory judgment that the special assessment was invalid and unenforceable. Finally, he sought a temporary restraining order and temporary and permanent injunctive relief, as well as damages.

         A few weeks later, several relevant events transpired all on the same day. First, Mughrabi non-suited his claims against appellants. Second, after Mughrabi filed his notice of non-suit, appellants filed a TCPA motion to dismiss Mughrabi's claims, contending that Mughrabi's lawsuit was based on, related to, or in response to the exercise of their right to associate. Appellants argued that Mughrabi could not present prima facie evidence on each element of his claims, and that appellants were immune from liability in any event as volunteers in a charitable organization.[3]Third, later that evening, the Board held a special meeting during which the owners voted to replace appellants as Board members. Promptly upon their installation, the new Board members, joined by Mughrabi, voted to cancel the special assessment.

         Though Mughrabi had non-suited his claims-and now argues that the special assessment's cancellation mooted them-Mughrabi filed an amended petition, reasserting his fiduciary duty claim against appellants. As discussed more below, in his amended petition Mughrabi expanded the factual bases for his fiduciary duty claim and the forms of relief sought.

         The trial court held a hearing on appellants' motion to dismiss but did not rule by written order so the motion was denied by operation of law.[4] Appellants bring this interlocutory appeal.[5]

         Motion to Dismiss

         Because Mughrabi seeks damages at least in an amount based on a special assessment the new Board has now cancelled, we must first decide whether this appeal, including appellants' request for TCPA fees and sanctions, is moot, as Mughrabi argues in his motion to dismiss. See State ex rel. Best v. Harper, 562 S.W.3d 1, 6-7 (Tex. 2018).

         A case becomes moot when a justiciable controversy between the parties ceases to exist or when the parties cease to have a legally cognizable interest in the outcome. See Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001). Mootness occurs when events make it impossible for the court to grant the relief requested or otherwise affect the parties' rights or interests. See Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex. 2012). When a case becomes moot, the court loses jurisdiction and cannot hear the case, because any decision would constitute an advisory opinion that is "outside the jurisdiction conferred by Texas Constitution article II, section 1." Matthews v. Kountze Indep. Sch. Dist., 484 S.W.3d 416, 418 (Tex. 2016). But a case "is not rendered moot simply because some of the issues become moot during the appellate process." In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding). If only some claims or issues become moot, the case remains "live" as to the claims or issues that are not moot. See id. We analyze mootness based on the claims pleaded. See id. (although part of case became moot, court determined that a "live controversy" still existed, based on claims pleaded in petition); Albert Lee Giddens, APLC v. Cuevas, No. 14-16-00772-CV, 2017 WL 4159263, at *5 (Tex. App.-Houston [14th Dist.] Sept. 19, 2017, no pet.) (mem. op.) (analyzing jurisdictional issue of mootness by construing pleadings); City of Houston v. Swinerton Builders, Inc., 233 S.W.3d 4, 8-9 (Tex. App.-Houston [1st Dist.] 2007, no pet.) (examining pleadings to determine mootness of interlocutory appeal).

         The Supreme Court of Texas recently recognized that, in some cases, "a claim for attorney's fees 'breathes life' into a suit that has become moot in all other respects." Best, 562 S.W.3d at 7. Whether an attorney's-fees claim breathes life into an otherwise moot appeal depends first on whether the claimant seeks fees under a statute that authorizes fees only for a prevailing party or, alternatively, under a statute that permits fees based on equitable principles regardless of who prevails. Id. When the party seeks attorney's fees under a prevailing-party statute, such as the TCPA, the determination whether the attorney's-fees claim is moot depends on whether the TCPA movant prevailed before the underlying substantive claim became moot. Id. If the movant does not prevail before the substantive claim becomes moot, then that party's claim for attorney's fees is also moot because the party can never prevail and thus can never be entitled to attorney's fees. Id. at 7-8.

         In Best, the State joined in a petition to remove Harper from his elected position; in response, Harper filed a motion to dismiss under the TCPA. Id. at 5. Harper established his right to dismissal on appeal, which occurred before his failed re-election bid ultimately rendered the State's removal petition moot. Id. at 6. Because Harper prevailed on his TCPA motion to dismiss before the underlying substantive claim became moot, the court held that his related attorney's-fees claim "breathe[d] life" into the otherwise moot appeal, and the court therefore addressed the ...


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