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Quintanilla v. West

Court of Appeals of Texas, Fourth District, San Antonio

January 15, 2020

Oscar Leo QUINTANILLA, Appellant
v.
Andrew Bradford WEST, Appellee

          From the 131st Judicial District Court, Bexar County, Texas Trial Court No. 2016-CI-06259 Honorable David A. Canales, Judge Presiding

          Sitting: Rebeca C. Martinez, Justice Luz Elena D. Chapa, Justice Liza A. Rodriguez, Justice

          MEMORANDUM OPINION

          REBECA C. MARTINEZ, JUSTICE

         AFFIRMED AND REMANDED

         This case concerns a debt secured by mineral interests. Andrew Bradford West claims that after he fully satisfied his debt to Oscar Leo Quintanilla, Quintanilla filed documents in the real property records asserting fraudulent liens on the mineral interests. West sued Quintanilla for slander of title and fraudulent liens, and Quintanilla moved to dismiss West's claims under the Texas Citizens Participation Act ("TCPA").[1] The trial court denied Quintanilla's motion. On appeal, we reversed the trial court's order and concluded that, although the TCPA applied to West's claims, West failed to establish a prima facie case for the falsity of Quintanilla's liens. The Texas Supreme Court disagreed, reversed our judgment, and remanded the cause for us to consider whether West has established a prima facie case for the other elements of his claims and whether Quintanilla has established his defenses by a preponderance of the evidence. On remand, Quintanilla only challenges the causation and special damages elements of West's slander-of-title claim.[2] We hold that West has established a prima facie case for these required elements, and, accordingly, we affirm the trial court's order.

         Background[3]

         West and Quintanilla are former business partners. In early 2014, Quintanilla and West entered into a trading agreement (the "2014 Trading Agreement"). Under this agreement, Quintanilla provided $5 million in capital into an account that West used for trading. Quintanilla and West agreed to share equally in any profits or losses stemming from the trading account. To cover his share of the losses, West executed a promissory note for an amount up to $5 million and a security agreement pledging all of West's personal assets, including certain mineral interests, as collateral for the promissory note. Pursuant to the promissory note and security agreement, Quintanilla could perfect his security interest in the assets pledged by West. By late 2014, the total losses from the trading account exceeded $14 million, and, under the 2014 Trading Agreement, West was liable for half that amount (approximately $7 million).

         In January 2016, the business relationship between Quintanilla and West terminated, and Quintanilla demanded that West pay the total $7 million debt owed to him under the 2014 Trading Agreement. Quintanilla filed a financing statement and memorandum in the real property records of McMullen County, thereby perfecting his security interest in the assets West pledged under the 2014 Trading Agreement. West contends that he satisfied his debt to Quintanilla through two additional agreements, which we discussed in detail in our previous opinion. See Quintanilla, 534 S.W.3d 34 at 38-42; see also West, 573 S.W.3d at 239-42. West also claims that he was in the process of selling certain mineral interests, but the sale was terminated by the buyer because of West's inability to convey clear title to the mineral interests after Quintanilla filed in the property records.

         West filed suit against Quintanilla for slander of title and fraudulent liens. West claimed Quintanilla knowingly and intentionally slandered West's title to the mineral interests by filing fraudulent and false lien documents when Quintanilla knew that West had already fully satisfied his debt to him. Quintanilla filed a motion to dismiss West's slander-of-title and fraudulent-lien claims under the TCPA. After a hearing, the trial court denied Quintanilla's motion, finding: (1) the TCPA applied to West's slander-of-title and fraudulent-lien claims; (2) West established a prima facie case on those claims by clear and specific evidence; and (3) Quintanilla failed to establish his defenses by a preponderance of the evidence. See Tex. Civ. Prac. & Rem. Code Ann. § 27.005 (establishing basis for dismissal of a legal action under the TCPA).

         On appeal, Quintanilla argued West could not establish a prima facie case on his slander-of-title and fraudulent-lien claims. We agreed, holding that the parol evidence rule prevented West from establishing a prima facie case for the falsity of Quintanilla's liens. Quintanilla, 534 S.W.3d at 50. We did not reach the other elements of West's claims. See id. The Texas Supreme Court reversed our judgment and held that West had satisfied his burden in establishing a prima facie case for the falsity of Quintanilla's liens. West, 573 S.W.3d at 249. The supreme court remanded the case for us to address the issues we did not reach in our prior opinion. The only issue that remains is whether West established a prima facie case for the causation and special damages elements of his slander-of-title claim.

         Texas Citizens Participation Act

         The TCPA "protects citizens who petition or speak on matters of public concern from retaliatory lawsuits that seek to intimidate or silence them." In re Lipsky, 460 S.W.3d 579, 587 (Tex. 2015) (orig. proceeding). The TCPA was implemented 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.

         In furtherance of its purpose, the TCPA provides a special procedure for the expedited dismissal of a legal action that implicates a party's First Amendment rights. In re Lipsky, 460 S.W.3d at 586. If the legal action is based on or in response to the exercise of a party's First Amendment rights, that party may move to dismiss the legal action. Tex. Civ. Prac. & Rem. Code Ann. § 27.003. A three-step burden shifting mechanism is triggered by the filing of a motion to dismiss under the TCPA. Quintanilla, 534 S.W.3d at 42 (citing In re Lipsky, 460 S.W.3d at 586-87). The movant bears the initial burden to show by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the movant's exercise of the right of free speech, the right of association, or the right to petition. Tex. Civ. Prac. & Rem. Code Ann. § 27.005(b). If the movant meets its initial burden, the burden shifts to the nonmovant to establish by clear and specific evidence a prima facie case for each essential element of his claim. Id. § 27.005(c). If the nonmovant fails to meet its burden, the trial court must dismiss the legal action. See id. If the nonmovant satisfies its burden, the trial court must nevertheless dismiss the legal action if the movant establishes each essential element of a valid defense to the nonmovant's claim by a preponderance of the evidence. Id. § 27.005(d).

         In determining whether the nonmovant's claim should be dismissed, the court may consider the pleadings and any supporting and opposing affidavits stating the facts on which the claim or defense is based. Id. § 27.006(a). On appeal, the trial court's ruling on a motion to dismiss under the TCPA is reviewed de novo, and the pleadings and evidence are viewed in the light most favorable to the nonmovant. Maldonado ...


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