Court of Appeals of Texas, Third District, Austin
Branigan Mulcahy, Cielo Property Group, LLC, Appellant//Cross-Appellant
Cielo Property Group, LLC, Branigan Mulcahy, Appellee//Cross-Appellee
THE 53RD DISTRICT COURT OF TRAVIS COUNTY NO.
D-1-GN-18-007425, THE HONORABLE CATHERINE MAUZY, JUDGE
Chief Justice Rose, Justices Triana and Smith
interlocutory appeal, appellant-cross-appellee Branigan
Mulcahy and appellee-cross-appellant Cielo Property Group,
LLC, challenge an order denying a motion to dismiss under the
Texas Citizens Participation Act (TCPA), Tex. Civ. Prac.
& Rem. Code § 27.005. We will affirm the district
2014, Mulcahy began working jointly for G&A Partners and
Cielo-which G&A refers to as one of its
"clients"-as vice president of property
acquisitions pursuant to an employment agreement executed by
Mulcahy and G&A. As part of Mulcahy's compensation
package, G&A and Cielo granted Mulcahy an interest in
several properties under development through a series of LLC
membership agreements. Cielo, on behalf of itself and
G&A, terminated Mulcahy's employment in 2018, citing
alleged "failure to perform, insubordination, and
abrasiveness" as reasons for the termination. It then
revoked Mulcahy's interest in the properties.
subsequently obtained employment with an Austin-based group
specializing in upscale hotel operations. At some point,
Cielo learned that Mulcahy possessed a computer hard drive
associated with his work on its behalf. Cielo demanded return
of the hard drive, which Cielo alleges contains trade secrets
and other confidential information. Mulcahy refused to return
the hard drive, arguing that it contains sensitive personal
information. He further averred that he had not accessed any
trade secrets or other confidential company information to
the extent any such information is saved to that drive. The
drive is now in Mulcahy's counsel's possession under
an order from this Court. See Mulcahy v. Cielo Prop.
Grp., No. 03-19-00117-CV, 2019 WL 2384150, at *1 (Tex.
App.-Austin June 6, 2019, order).
sued Cielo and others for breach of contract, unjust
enrichment, and employment discrimination, seeking to recover
unpaid compensation and the property interests he had
acquired in certain developments. Cielo responded with a
general denial and a motion to compel arbitration, arguing
that all Mulcahy's claims are subject to the arbitration
clause in Mulcahy's employment agreement with G&A
Partners. This Court reversed the district court's order
denying the motion to compel and remanded the cause with
instructions for the district court to send the claims to
arbitration. See generally Cielo Prop. Grp. v.
Mulcahy, No. 03-18-00587-CV, 2019 WL 3023312 (Tex.
App.-Austin, July 11, 2019, no pet.) (mem. op.).
separate cause of action in district court, Cielo sued
Mulcahy for breach of contract, breach of fiduciary duty, and
trade secret misappropriation, alleging that Mulcahy withheld
the hard drive in violation of the terms of his employment
agreement with G&A and in breach of his fiduciary
obligation to Cielo. Cielo further alleged that Mulcahy might
disclose confidential corporate information, including trade
secrets. In its prayer for relief, Cielo sought to enjoin
Mulcahy from maintaining possession of the hard drive and
from disclosing any of its contents. Cielo also asked for
disgorgement of any profits gained from use of the hard drive
and for recovery of attorneys' fees and costs.
answered with a general denial and a motion to dismiss under
the TCPA, arguing that all claims arise from his exercise of
the right to free speech and the right to petition the
government. See Tex. Civ. Prac. & Rem. Code
§ 27.005 (requiring dismissal of claims arising from,
related to, or in response to the exercise of certain
constitutional rights). Neither party sought discovery on the
motion. See id. §§ 27.003(c) (staying all
discovery upon filing of motion to dismiss), .006(b)
(allowing limited discovery on merits of motion upon
party's request and showing of good cause). The district
court denied the motion to dismiss and Mulcahy timely
perfected this appeal. See id. § 51.014(12)
(allowing accelerated interlocutory appeal from denial of
TCPA motion to dismiss); Tex.R.App.P. 28.1 (governing
accelerated appeals). Cielo timely perfected cross-appeal,
arguing that the district court abused its discretion in
denying Cielo's request for attorneys' fees and
contends the district court erred by denying the motion to
dismiss, raising alternative arguments that: (1) the TCPA
applies to Cielo's claims; (2) Cielo cannot make out a
prima facie case for the elements of its claims; and (3)
Cielo's claims do not fall into any statutory exception.
He further argues that he would have been entitled to a
mandatory award of attorneys' fees and costs if the court
had correctly disposed of his motion. See Tex. Civ.
Prac. & Rem. Code § 27.010(b). Cielo responds that
even if the statute applies to its claims-a point it does not
concede-it can make out a prima facie case for each element
of the claims. See id. § 27.009(a)(1). Cielo
does not contend that any exception applies.
TCPA allows a party to move for dismissal of any "legal
action that is based on, related to, or in response to [that]
party's exercise of the right of free speech, right to
petition, or right of association." See id.
§ 27.003. Its purpose is to "encourage and
safeguard the constitutional rights of persons to petition,
speak freely, associate freely, and otherwise participate in
government," while still "protect[ing] the rights
of a person to file meritorious lawsuits for demonstrable
injury." See id. § 27.002. "To
effectuate the statute's purpose, the Legislature has
provided a two-step procedure to expedite the dismissal of
claims brought to intimidate or to silence a defendant's
exercise of these First Amendment rights."
ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895,
898 (Tex. 2017) (citing Tex. Civ. Prac. & Rem. Code
§ 27.003) (per curiam). "Under the first step, a
movant seeking to prevail on a motion to dismiss under the
TCPA has the burden to 'show[ ] by a preponderance of the
evidence that the [non-movant'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.'"
Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865,
872 (Tex. App.-Austin 2018, pet. filed) (quoting Tex. Civ.
Prac. & Rem. Code § 27.005(b)). In the second step,
if the court "determines that the movant has met his
burden to show that the TCPA applies, the burden shifts to
the non[-]movant to establish 'by clear and specific
evidence a prima facie case for each essential element of the
claim in question.'" Id. at 872-73 (quoting
Tex. Civ. Prac. & Rem. Code § 27.005(c)). We review
the disposition of a TCPA motion to dismiss under a de novo
standard of review. Serafine v. Blunt, 466 S.W.3d,
352, 357 (Tex. App-Austin 2015, no pet.).
dispute requires us to determine whether the "exercise
of the right to free speech" includes the allegations
underlying Cielo's claims such that the district court
erred in failing to dismiss the claims. "In determining
whether a legal action should be dismissed under this
chapter, the court shall consider the pleadings and
supporting and opposing affidavits stating the facts on which
the liability or defense is based." See Tex.
Civ. Prac. & Rem. Code § 27.006. Here, the evidence
of record includes: G&A's formal offer of employment
to Mulcahy, the employment agreement executed by G&A and
Mulcahy, G&A's alternate dispute resolution
agreement, an image of the website of Mulcahy's
subsequent employer, and two demand letters sent to that
employer requesting that the employer assist in the return of
the disputed hard drive. Mulcahy also filed a declaration
describing his employment with Cielo, and Cielo principal
Robert W. Dillard, III, filed a declaration explaining the
importance of the "proprietary business
information" that might be stored on the hard drive.
assuming all this evidence is properly considered when
disposing of a TCPA motion to dismiss, see id., that
evidence does not satisfy Mulcahy's statutory burden to
show that these claims arise from or relate to the exercise
of his right to free speech, see Grant, 556 S.W.3d
at 872. The "exercise of the right of free speech"
includes any "communication made in connection with a
matter of public concern." Tex. Civ. Prac. & Rem.
Code § 27.001(7). "'Communication' includes
the making or submitting of a statement or document in any
form or medium, including oral, visual, written, audiovisual,
or electronic." Id. § 27.001(1).
"'Matters of public concern' include issues
related to "community well-being," or "goods
products or services in the market." Id. §
27.001(3). Here, the complained-of conduct is not any oral
statement or written or digital document. Instead, Cielo
complains that Mulcahy is wrongfully maintaining possession
of a hard drive and the data saved on that hard drive in
violation of his employment contract and his alleged
fiduciary duties to his former employer. See
Plaintiff's Verified Original Petition for Temporary and
Permanent Injunctive Relief at ¶ 22
("Mulcahy's continued ...