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Brown Sims, P.C. v. L.W. Matteson, Inc.

Court of Appeals of Texas, Fourth District, San Antonio

September 30, 2019

BROWN SIMS, P.C. and Nelson D. Skyler, Appellants
v.
L.W. MATTESON, INC., AGCS Marine Insurance Company, and New York Marine and General Insurance Company, Appellees

          From the 381st Judicial District Court, Starr County, Texas Trial Court No. DC-18-55 Honorable Jose Luis Garza, Judge Presiding

          Sitting: Rebeca C. Martinez, Justice Irene Rios, Justice Liza A. Rodriguez, Justice

          OPINION

          Liza A. Rodriguez, Justice.

         At issue in this appeal is whether the TCPA, Texas's anti-SLAPP statute, applies to a malpractice suit brought by a former client against its attorneys. In considering the plain language of the TCPA and precedent by the Texas Supreme Court, we conclude (1) the TCPA does apply to the malpractice suit at issue in this case and (2) the former client established a prima facie case for its malpractice claim. Thus, we affirm in part the trial court's order denying the motion to dismiss pursuant to the TCPA. However, because the former client nonsuited other claims before the hearing on the motion to dismiss, we agree the trial court should have awarded reasonable attorney's fees and sanctions with respect to those nonsuited claims. Accordingly, we reverse the trial court's order in part.

         Background

         When L.W. Matteson, Inc. ("Matteson"), a dredging contractor, was sued in March 2012 by its former employee Jose Flores, it hired attorney Nelson D. Skyler and the law firm Brown Sims, P.C. ("Brown Sims") to represent it. Flores had filed a maritime personal injury suit in Starr County, Texas, pursuant to the Jones Act, as codified in 46 U.S.C. § 30104. Flores alleged that Matteson was negligent by failing to furnish him with a reasonably safe place to work and by failing to provide a seaworthy vessel. Flores alleged that in late July 2010, he was working on a dredging vessel owned by Matteson when he believed he was bitten by a spider. Flores received medical treatment for his swollen hand and returned to work in mid-August. He continued working for Matteson until the dredging vessel completed its contract in November. On March 8, 2013, after being diagnosed with liver cancer, Flores passed away. His estate substituted in as plaintiff. In December 2015, the case proceeded to trial, and a jury found Flores's estate was entitled to $41.104 million in damages. Flores's son then filed his own lawsuit against Matteson. Matteson settled both lawsuits for $10 million.

         On January 25, 2018, Matteson, along with AGCS Marine Insurance Co. ("AGCS Marine") and New York Marine and General Insurance Co. ("NY Marine"), the insurance companies that provided Matteson with excess coverage, filed the underlying legal malpractice suit against Skyler and the law firm Brown Sims. On appeal, Matteson, AGCS Marine and NY Marine point to two specific alleged breaches of the standard of care by Skyler and Brown Sims: (1) the failure to raise the federal limitation-of-liability statute by either pleading it as an affirmative defense or by filing a limitation-of-liability action in federal court; and (2) the failure to file a special appearance based on lack of personal jurisdiction. Two-and-a-half months later, Skyler and Brown Sims filed a motion to dismiss pursuant to the TCPA, arguing that the claims brought against them implicated their right to petition and their right to free speech. Matteson, AGCS Marine, and NY Marine responded by arguing that the TCPA did not apply; in the alternative, they produced evidence to support their prima facie case of legal malpractice. After the trial court denied the motion to dismiss, Skyler and Brown Sims filed this interlocutory appeal.

         Motion to Dismiss Under the Texas Citizens Participation Act

         The TCPA's stated purpose 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." Tex. Civ. Prac. & Rem. Code Ann. § 27.002.[1] In an aim to fulfill this purpose, the TCPA provides 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" unless the plaintiff establishes "by clear and specific evidence a prima facie case for each essential element of the claim in question." Id. §§ 27.003(a), 27.005(c).

         A party moving for dismissal under the TCPA has the initial burden of showing by a preponderance of the evidence that the legal action "is based on, relates to, or is in response to the party's exercise of: (1) the right of free speech; (2) the right to petition; or (3) the right of association." Tex. Civ. Prac. & Rem. Code Ann. § 27.005(b); see S & S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 847 (Tex. 2018). If the movant makes this showing, the burden shifts to the respondent. See S & S, 564 S.W.3d at 847. The respondent's claims against the movant will be dismissed unless the respondent can "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 S & S, 564 S.W.3d at 847. The supreme court has explained that "a prima facie case is the 'minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true.'" S & S, 564 S.W.3d at 847 (quoting In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015)). "A finding that [the respondent] has met his TCPA burden does not establish that his allegations are true." West v. Quintanilla, 573 S.W.3d 237, 243 n.9 (Tex. 2019).

         If the respondent satisfies his burden, then the burden shifts back to the movant to establish "by a preponderance of the evidence each essential element of a valid defense" to the respondent's claim. Tex. Civ. Prac. & Rem. Code Ann. § 27.005(d). If, on the other hand, the respondent does not satisfy his TCPA burden, then the trial court must dismiss the legal action. Id.

         In determining whether the respondent has met its burden, the trial court does not hear live testimony; the TCPA directs courts to "consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based." Tex. Civ. Prac. & Rem. Code Ann. § 27.006(a). The supreme court has "recently observed that the pleadings are 'the best and all-sufficient evidence of the nature of the action.'" West, 573 S.W.3d at 242 n.8 (quoting Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017)).

         An appellate court reviews issues regarding interpretation of the TCPA de novo. S & S, 564 S.W.3d at 847.

         A. Does the TCPA apply?

         The parties dispute whether the TCPA applies in this case. Matteson, AGCS Marine, and NY Marine argue the TCPA does not apply to their claims because (1) no court has ever held it applies to legal malpractice claims; and (2) they are not suing Skyler and Brown Sims for any "communication" made; instead they argue that they are suing Skyler and Brown Sims "for what [they] did not do, " i.e. failing to raise the federal limitation-of-liability statute in the answer or file a motion challenging personal jurisdiction. In contrast, Skyler and Brown Sims contend that "when an attorney is sued for choices made when speaking and petitioning on behalf of a client in court, the TCPA applies."

         Under the plain language of the TCPA, "[i]f a legal action 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, that party may file a motion to dismiss the legal action." Tex. Civ. Prac. & Rem. Code Ann. § 27.003(a). Thus, for the TCPA to apply to this case, the claim brought against Skyler and Brown Sims need only relate to their exercise of the right to petition or the right of free speech. See id. "[E]xercise of the right to petition" is defined as "a communication in or pertaining to . . . a judicial proceeding." Id. § 27.001(4)(A)(i) (emphasis added). "[E]xercise of the right of free speech" is defined as "a communication made in connection with a matter of public concern." Id. § 27.001(3) (emphasis added). "Communication" is defined broadly as including "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). Applying these definitions, in connection with the exercise of the right to petition, the TCPA applies to the malpractice claim brought against Skyler and Brown Sims if it merely relates to a communication by Skyler and Brown Sims in or pertaining to a judicial proceeding. Regarding the exercise of the right of free speech, the TCPA applies to the malpractice claim brought against Skyler and Brown Sims if it merely relates to a communication made by Skyler and Brown Sims in connection with a matter of public concern.

         Matteson, AGCS Marine, and NY Marine have alleged that Skyler and Brown Sims committed legal malpractice by failing to include an affirmative defense in the answer they filed on behalf of Matteson in the Flores case. The answer filed by Skyler and Brown Sims on behalf of Matteson is most certainly a communication in a judicial proceeding. See id. § 27.001(4)(A)(i). While Matteson, AGCS Marine, and NY Marine argue their malpractice suit is based on a failure to make a communication (i.e. failing to include the federal limitation-of-liability affirmative defense in the answer) and not based on an actual communication, we conclude they are parsing hairs. Matteson, AGCS Marine, and NY Marine have alleged that Skyler and Brown Sims filed a defective communication-the answer-by failing to include a specific affirmative defense. That the answer did not include this specific affirmative defense does not mean that Skyler and Brown Sims have not been sued for making a communication in a judicial proceeding. The basis of the allegations against them relate to their alleged defective communication. See id. We therefore conclude the TCPA applies to the malpractice claim brought against Skyler and Brown Sims because the claim relates to the exercise of the right to petition.[2]

         B. Is there an exemption for legal malpractice cases?

         Matteson, AGCS Marine, and NY Marine argue that the TCPA does not apply to legal malpractice actions, emphasizing that no court has made such a holding. Last year, however, the Texas Supreme Court in Youngkin v. Hines, 546 S.W.3d 675, 678 (Tex. 2018), did discuss the applicability of the TCPA in the context of a nonclient suing an attorney based, in part, on statements made in open court by the attorney on behalf of his clients. In considering whether the attorney was entitled to dismissal of the claims under the TCPA, the supreme court emphasized that in determining the applicability of the TCPA, a court's objective "is to determine and give effect to the Legislature's intent" by considering the "statute's words according to their plain and common meaning, unless a contrary intention is apparent from the context, or unless such a construction leads to absurd results." Id. at 680 (citations omitted).

         The lawyer in Youngkin argued the TCPA applied to the tort claims brought by the nonclient because those claims stemmed from the lawyer's recitation of a Rule 11 agreement in open court-that is, he argued the claims related to his exercise of the right to petition. See id. In response, the nonclient argued the TCPA did not apply because "an attorney speaking for a client in a courtroom is not exercising any personal First Amendment rights at all." Id. In analyzing whether the TCPA applied to the nonclient's claims, the supreme court "substitute[ed] the statutory definitions for the defined terms" and concluded "the TCPA applies to a legal action against a party that is based on, related to, or in response to the party's making or submitting of a statement or document in or ...


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