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Chandni, Inc. v. Patel

Court of Appeals of Texas, Eighth District, El Paso

December 13, 2019

CHANDNI, INC., A Texas Corporation; HARSHAD PATEL, An Individual;SUNIL PATEL, An Individual; MANISH VANMALI, An Individual, Appellants,
v.
DHARMESH PATEL, Appellee.

          Appeal from the 34th District Court of El Paso County, Texas (TC# 2014DCV0778)

          Before Rodriguez, J., Palafox, J., and McClure, Senior Judge

          OPINION

          YVONNE T. RODRIGUEZ, JUSTICE

         This case involves an interlocutory appeal from the trial court's denial of Appellants' motion to dismiss under the Texas Citizens Participation Act (TCPA). In four issues, Appellants contend: (1) the trial court erred in denying their timely-filed motion to dismiss because Appellee's claims for theft, fraud, conspiracy, and statutory fraud are based on, relate to, or are in response to Appellants' exercise of their right of free speech or association and thus fell within the scope of the TCPA; (2) Appellee failed to establish by clear and specific evidence a prima facie case on each essential element of his claims; (3) Appellee's shareholder inspection claim was based on, related to, or was made in response to Appellants' exercise of the right to petition because the complained-of communications were made during or pertained to a judicial proceeding; and (4)

          Appellants are entitled to costs, attorney's fees, and expenses.[1] We affirm.

         BACKGROUND

         This appeal arises out of a shareholder derivative suit brought by Dharmesh Patel against the managers and directors of Chandni, Inc., a corporation that owns and manages a Motel 6 in El Paso, Texas. The facts are mostly procedural. Dharmesh filed his original petition on March 10, 2014, asserting claims for fraud and conversion, among other causes. He amended his petition three times. In his Second Amended Petition, filed on February 15, 2017, he included causes of action for fraud against several of the managers and directors individually, including Harshad Patel, Sunil Patel, and Manish Vanmali. He also asserted claims for conversion and aiding and abetting against all defendants, except for Chandni, individually and derivatively. In his Third Amended Petition, filed on November 13, 2017, he again asserted causes of action for fraud against Harshad, Sunil, and Manish individually, and he again brought his conversion and aiding and abetting claims against all defendants except Chandni individually and derivatively. His fourth and final amended petition was filed on March 12, 2018, asserting causes of action for fraud and statutory fraud against Harshad, Sunil, and Manish individually, as well as conversion, theft, aiding and abetting, and conspiracy claims against all defendants except Chandni individually and derivatively, and a new claim for shareholder inspection. Nearly two months later, on May 7, 2018, Appellants filed a motion to dismiss under the Texas Citizens Participation Act (TCPA), asserting that the claims for fraud, statutory fraud, theft, conspiracy, and shareholder inspection were made in response to their exercise of their rights to freedom of speech, association, and petition. The trial court denied the motion and set a hearing for the purpose of assessing fees, costs, expenses, and sanctions against Appellants as required under the TCPA. Appellants then filed this interlocutory appeal.

         DISCUSSION

         Timeliness Under the TCPA

         In their first issue, Appellants contend the trial court erred in denying their timely-filed motions to dismiss under the TCPA. Appellee contends that their motions to dismiss his fraud, statutory fraud, theft, and conspiracy claims were untimely because those claims had already been raised in previous petitions and therefore the 60-day deadline for filing for dismissal under the TCPA had already passed. Because further analysis of the issue is unnecessary if the motions were untimely, we address timeliness first.[2]

         Standard of Review

         We review a trial court's ruling on a motion to dismiss de novo. MVS International Corporation v. International Advertising Solutions, LLC, 545 S.W.3d 180, 190 (Tex.App.- El Paso 2017, no pet.).

         Applicable Law

         The Texas Citizen's Participation Act (TCPA) authorizes a party to file a motion to dismiss if the claim against him relates to his exercising his right of free speech, petition, or association. Tex.Civ.Prac.&Rem.Code Ann. § 27.003. A defendant wanting to take advantage of the statute must file a motion to dismiss within 60 days after the date of service of the "legal action" he seeks to have dismissed. Tex.Civ.Prac.&Rem.Code Ann. § 27.003(b).

         The Legislature has defined "legal action" in the context of the TCPA to mean "a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal, declaratory, or equitable relief." Tex.Civ.Prac.&Rem.Code Ann. § 27.001(6). Thus, an amended petition asserting new claims based upon new factual allegations will reset a TCPA deadline as to the new legal action. Jordan v. Hall, 510 S.W.3d 194, 198 (Tex.App.-Houston [1st Dist.] 2016, no pet.). But an amended petition, by itself, does not reset the 60-day clock if it adds no new claims and relies upon the same factual allegations underlying the original petition. Id. Additional factual details in a subsequent petition also do not reset the TCPA clock if the essential factual allegations as to the claim were present in the prior petition. In re Estate of Check, 438 S.W.3d 829, 837 (Tex.App.-San Antonio 2014, no pet.)(acknowledging that to hold otherwise would negate the early dismissal envisioned by the statute); see also Paulsen v. Yarrell, 455 S.W.3d 192, 198 (Tex.App.-Houston [1st Dist.] 2014, no pet.)(plaintiff filed suit over an allegedly defamatory fax, then in subsequent petition added an additional claim for defamation regarding information on the cover letter of the defamatory fax; court held that despite plaintiff's attempt to divide his defamation claims into two, the amended petition relied on the same essential factual allegations as the original petition), superseded by ...


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