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Walker v. Pegasus Eventing, LLC

Court of Appeals of Texas, Fifth District, Dallas

January 7, 2020

ERIN WALKER, Appellant/Cross-Appellee

          On Appeal from the 422nd Judicial District Court Kaufman County, Texas Trial Court Cause No. 100256-422

          Before Justices Pedersen, III, Reichek, and Carlyle



         This appeal is from an interlocutory order granting in part and denying in part a motion to dismiss filed pursuant to the Texas Citizens Participation Act (TCPA). See Tex. Civ. Prac. & Rem. Code Ann. §§ 27.001-.011.[1] Appellant/cross-appellee Erin Walker, the movant below, contends that the district court should have granted her motion in its entirety. Cross-appellants/appellees Pegasus Eventing, LLC (Pegasus), Ellen Doughty-Hume, and Alistair Hume, [2]the non-movants, assert Walker forfeited her motion, and, alternatively, the court properly denied the motion in part on its merits. We hold the hearing on Walker's motion was untimely, which resulted in a forfeiture of the motion. Accordingly, we affirm in part and reverse and remand in part, as explained below.


         Appellees Doughty-Hume and Alistair Hume own appellee Pegasus, which provides eventing training[3] and horse boarding. Doughty-Hume was certified by the United States Eventing Association (USEA) as an instructor pursuant to the Instructor Certification Program (ICP).

         In April 2016, Walker sought out Doughty-Hume for eventing training. Over the next sixteen months, Doughty-Hume trained Walker and boarded her horses. Walker claims that, unbeknownst to her at the time, Doughty-Hume's training methods caused horses to over-face[4]and to suffer avoidable injuries. Moreover, Doughty-Hume allegedly (i) pushed Walker to perform jumps above her competition level and skill; and (ii) placed a horse that she believed to be sick in the barn near Walker's horses. In addition, while lunging a horse named Beau, Doughty-Hume became frustrated and allegedly used the whip to move Beau forward. Beau grew anxious and stood up on his hind legs. This caused him to lose his balance, fall backwards, and hit is head forcibly on the ground, thereby suffering a fatal injury.

         Walker obtained additional lessons from other instructors and came to the conclusion that Doughty-Hume's training was dangerous to riders and horses. By August 2017, Walker fired Doughty-Hume as her instructor and moved her horses from appellees' barn.

         That same year, the USEA investigated Doughty-Hume after it received complaints regarding her teaching methods and her purported mistreatment of horses. The USEA reached an agreement with Doughty-Hume that she could maintain her certification if, going forward, she would (i) "instruct and ride without use of excessive force"; (ii) "[p]rovide humane care for all horses boarded"; (iii) "[a]void over-facing horses and/or riders, especially when jumping"; and (iv) "[m]ount children and amateur adults on horses appropriate to riders' experience, disposition, [and] skills - i.e. on horses who are not too young, not too green, [and] sufficiently compliant."

         Thereafter, Walker and another of Doughty-Hume's clients each made an additional complaint to the USEA regarding Doughty-Hume. In connection with the investigation of these complaints, Walker provided a statement to the USEA. Following its investigation, the USEA revoked Doughty-Hume's certification based on its determination that "a greater than preponderance of pertinent and credible evidence support[ed] the complaints."

         Appellees sued Walker and three other clients of Doughty-Hume-Stephanie Clifford, Glendon Crain, and Kelsey Silvey. Appellees asserted five causes of action against all defendants: business disparagement, tortious interference with existing contracts, tortious interference with prospective business relations, intentional infliction of emotional distress, and civil conspiracy. Appellees also asserted a defamation claim against Clifford, Crain, and Silvey. The foregoing claims were premised on defendants' purported campaign to harm appellees through disparaging statements and allegedly false accusations of illegal conduct.

         Pertinent to this appeal, Clifford was served with process on September 22, 2018. On September 24, Walker filed a motion to dismiss appellees' claims pursuant to the TCPA. See Civ. Prac. & Rem. § 27.003. The certificate of service on Walker's motion reflects that the motion was served that day on Christine Renne, who was counsel for appellees, and on Rothwell Pool, who was counsel for Crain. Walker did not serve Clifford with the motion.

         Three weeks later, on October 15, Clifford filed an original answer pro se. Clifford's answer contained a "c/o" designation beneath her name that listed the address of Michael Avenatti, an out-of-state attorney. However, Avenatti did not sign the answer.

         Walker's motion was set for hearing on November 13, 2018. See id. § 27.004(a) (requiring that hearing on motion to dismiss be set no later than sixtieth day after date of service of motion, subject to enumerated exceptions). Prior to the hearing date, appellees filed a motion for discovery and for continuance of the hearing. Compare id. § 27.003(c) (providing that all discovery is suspended during the pendency of a motion to dismiss) with id. § 27.006(b) ("On a motion by a party . . . and on a showing of good cause, the court may allow specified and limited discovery relevant to the motion.").

         Appellees' motion was set for hearing on November 1, but this hearing never occurred. Instead, on November 1, the parties signed and filed a Rule 11 agreement with the court. See Tex. R. Civ. P. 11. The agreement provided that appellees would cancel the hearing on their motion for discovery, and the parties would allow limited discovery relevant to Walker's motion to dismiss. In addition, Walker agreed to cancel the hearing on her motion and to request that the hearing instead be conducted in December 2018. See Civ. Prac. & Rem. § 27.004(a) (permitting extension of deadline for conducting hearing on TCPA dismissal motion, upon agreement of parties, subject to requirement that such hearing may not occur more than ninety days after service of motion). Moreover, the parties agreed that the hearing on Walker's motion would not "be set later than the statutorily mandated time frame, which is up to 120 days (January 22, 2019) after service of the . . . Motion." See id. §§ 27.004(c), 27.006(b) (permitting extension of deadline for conducting hearing on TCPA dismissal motion, if court allows discovery, subject to requirement that such hearing may not occur more than 120 days after service of motion). On November 16, the parties signed a second Rule 11 agreement that set forth deadlines for responding to each other's discovery requests. This agreement contemplated that discovery would be completed by December 7, 2018.[5]

         Pursuant to the November 1 agreement, Walker's motion to dismiss was set for hearing on December 18, 2018. On the day before the hearing, the parties filed several documents with the court, including, by Walker, a reply brief in support of her motion, and, by appellees, a sur-reply brief and a first amended petition. Among other new allegations, appellees' amended petition accused Walker and the other defendants of making false statements about appellees "and their alleged treatment of working students, some of whom were minors."

         At the beginning of the December 18 hearing on Walker's motion to dismiss, the district court asked whether Clifford had been served with the motion or with notice of the hearing. Walker's counsel responded he had not served Clifford with the motion, and he served the notice of hearing only on Avenatti. Both Crain's and appellees' counsel concurred that, for the hearing to proceed, Clifford needed to be served with the motion. See Tex. R. Civ. P. 21(b) (providing that notice of hearing must be served on all parties not less than three days before time specified for hearing). Walker's counsel argued to the contrary and also urged that the TCPA mandated that the hearing on the motion to dismiss occur within 120 days of service of the motion, i.e., by January 22, 2019.[6] The court reset the hearing for January 11 and instructed counsel to serve Clifford with notice of the hearing and all documents related to Walker's pending motion.

         Also at the December 18 hearing, appellees' counsel, Renne, stated that Walker had produced over 2, 000 pages of text messages to appellees. Renne asked, "[i]f I find additional information, may I still submit that as well as some affidavits?" She also asked for an opportunity to more thoroughly review and respond to Walker's reply brief. Based on these requests, the court stated, "I'm going to give you a date where you'll have an opportunity to digest the briefs and materials provided." The court gave counsel until January 4 to supplement the record with any additional materials that they wished to submit in support of, or in opposition to, Walker's motion to dismiss.

         Following the December 18 hearing, Walker served Clifford with the motion to dismiss and the notice of the reset hearing. In addition, Walker supplemented her document production to appellees. On January 4, appellees again amended their petition, this time to assert for the first time a defamation claim against Walker based on the documents that she had produced in her supplemental production. Appellees also filed a supplemental brief that urged the upcoming January 11 hearing was untimely because it was not held within ninety days after Walker served her motion on appellees, i.e., by December 24, 2018. See id. § 27.004(a). Appellees asserted that the only permissible basis for holding the hearing beyond the ninety-day deadline-to allow for discovery, see id. §§ 27.004(c), 27.006(b)-did not apply here. Appellees renewed their objection at the January 11 hearing. The court overruled the objection, stating, "I set this matter for hearing within the 60 day period. I recessed the hearing to cure a defect in service, and I'm reconvening the hearing today." The court also stated that it "want[ed] the record to be closed effective at the beginning of this hearing because otherwise I'll never have a stopping point . . . to make a ruling."

         A little over a month later, on February 8, the court denied Walker's motion to dismiss as to appellees' business disparagement claim and granted the motion as to appellees' remaining claims, except for appellees' defamation claim, which the court's order did not reference. The court based its order on appellees' original petition, which was their live pleading as of the date of Walker's motion to dismiss. This petition did not allege a defamation claim against Walker, but the parties agree that they tried appellees' defamation claim by consent for purposes of Walker's motion to dismiss. Accordingly, Walker asserts that the court's order should have included a ruling on the defamation claim.

         On February 12, 2019, Walker filed a motion for mandatory attorney's fees and sanctions. See id. § 27.009. The court held a hearing on this motion ten days later. At the hearing, appellees made another objection as an alternative to their prior objection that the January 11 hearing was untimely. Specifically, assuming that the hearing on Walker's motion to dismiss occurred on December 18, appellees urged that the motion was overruled by operation of law thirty days later, on January 18, 2019. See id. §§ 27.005(a), 27.008(a). According to appellees, this ruling by operation of law rendered the February 22 hearing moot. The court overruled appellees' objection, stating, "[t]he hearing actually took place in January. . . . [T]here had been a defect in service on one of the parties to the lawsuit, and I recessed that matter to reconvene in January after service on Ms. [Clifford]."

         On February 27, 2019, the court granted Walker's motion for attorney's fees and sanctions, and it amended this order on March 1. See id. § 27.009. Both the original and amended orders awarded Walker $30, 000 in reasonable and necessary attorney's fees and an additional $1, 000 as a sanction against appellees. Walker appealed the court's February 8 order, see id. § 51.014(a)(12) (permitting appeal of interlocutory order that denies motion to dismiss under Civil Practice and Remedies Code section 27.003), and appellees cross-appealed the February 8 and March 1 orders, see Pickens v. Cordia, 433 S.W.3d 179, 181-82, 187-88 (Tex. App.-Dallas 2014, no pet.) (in movant's appeal from order denying movant's TCPA ...

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