Peggy Pierce v. Gregory Stocks, MD

Opinion issued July 30, 2019

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-18-00990-CV
———————————
PEGGY PIERCE, Appellant
V.
GREGORY STOCKS, MD, Appellee

On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2018-56514

MEMORANDUM OPINION

Appellant, Peggy Pierce, appeals the trial court’s order denying her motion to

dismiss filed pursuant to the Texas Citizens Participation Act (“TCPA” or “the
Act”).1 In one issue, Pierce contends that the trial court erred when it denied her

motion to dismiss appellee, Gregory Stock, MD’s, claims for breach of fiduciary

duty and fraud against her because (1) she showed by a preponderance of the

evidence that the TCPA applies to Stocks’s claims and (2) Stocks failed to establish

by clear and specific evidence a prima facie case for each essential element of his

claims. We affirm.

Background

Dr. Stocks, an orthopedic surgeon, practices with Fondren Orthopedic Group,

L.L.P. (“FOG”) and holds an ownership interest in Fondren Orthopedic Group, Ltd.

(“FOLTD”).2 FOG hired Pierce in 1989. Pierce became FOG’s administrator in

1993 and its Chief Operating Officer in 2017. In these roles, she handled the

business affairs of both FOG and FOLTD. Pierce also provided financial advice and

guidance to Stocks for many years.

In 2018, after Pierce refused to provide requested financial information to

several of FOG’s partners, FOG began an investigation into Pierce’s actions during

her tenure. On February 8, 2018, FOG placed Pierce on a leave of absence. FOG

subsequently terminated Pierce’s employment.

1
See TEX. CIV. PRAC. & REM. CODE §§ 27.001–.011.
2
FOG’s partners formed FOLTD to operate Texas Orthopedic Hospital. The hospital
and FOG “work in tandem as a one-stop shop: the Partners provide clinical care and
perform surgery, and the Hospital provides pre- and post-operative care.”
2
 On February 28, 2018, Pierce filed a charge of discrimination with the Texas

Workforce Commission and the Equal Employment Opportunity Commission. On

April 16, 2018, the parties attempted to resolve Pierce’s claims at a pre-suit

mediation but were unsuccessful.

On May 23, 2018, Pierce filed suit against FOG and FOLTD in federal court,

alleging claims of disability, age, and sex discrimination, retaliation, and breach of

contract. On June 21, 2018, FOG and FOLTD answered and asserted counterclaims

against Pierce for breach of fiduciary duty, fraud, conversion, and declaratory

judgment. Stocks is not a party to the federal lawsuit.

On June 21, 2018, Stocks filed suit against Pierce, asserting claims for breach

of fiduciary duty and fraud. On August 27, 2018, Pierce filed a motion to dismiss

Stocks’s lawsuit arguing that his suit was filed in response to, or was related to,

Pierce’s exercise of the right to petition, i.e., her federal lawsuit against FOG, and

that Stocks failed to establish by clear and specific evidence a prima facie case for

each essential element of his claims, thereby entitling Pierce to dismissal of the

claims under the TCPA. To her motion, Pierce attached numerous exhibits,

including her declaration and her husband’s declaration. In his response, Stocks

argued that Pierce’s motion to dismiss should be denied because Pierce failed to

show by a preponderance of the evidence that the TCPA applies to his lawsuit, and

he provided clear and specific evidence of a prima facie case for each essential

3
element of his claims. Stocks also objected to Pierce’s and her husband’s

declarations on the grounds that they violated the mediation privilege, contained

inadmissible hearsay, were speculative, conclusory, and could not be controverted,

and were irrelevant as to whether the TCPA applied to Stocks’s lawsuit.

On October 19, 2018, the trial denied Pierce’s motion to dismiss. In its order,

the trial court also sustained Stocks’s objections to the declarations of Pierce and her

husband and struck them from the record. This interlocutory appeal followed.3

Texas Citizens Participation Act

In one issue, Pierce contends that the trial court erred in denying her motion

to dismiss Stocks’s claims because (1) the claims relate to, or are in response to, her

exercise of the right to petition, and (2) Stocks did not establish by clear and specific

evidence a prima facie case for each essential element of his claims.

A. Applicable Law and Standard of Review

Chapter 27, also known as the Texas Citizens Participation Act, is an

anti-SLAPP statute. See In re Lipsky, 411 S.W.3d 530, 536 n.1 (Tex. App.—Fort

Worth 2013, orig. proceeding). “SLAPP” is an acronym for “Strategic Lawsuits

Against Public Participation.” Id. The purpose of the statute “is to encourage and

3
Pierce has filed a related interlocutory appeal from the trial court’s order denying
her motion to dismiss in Pierce v. Brock, M.D., No. 01-18-00954-CV, which is
currently pending in this Court. The underlying cause is Peggy Pierce v. Gary T.
Brock, M.D. and Gary T. Brock, M.D., P.A., trial court cause number 2018-42395,
in the 157th District Court of Harris County, Texas.
4
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 § 27.002; KTRK

Television, Inc. v. Robinson, 409 S.W.3d 682, 688 (Tex. App.—Houston [1st Dist.]

2013, pet. denied). The TCPA created “an avenue at the early stage of litigation for

dismissing unmeritorious suits that are based on the defendant’s exercise” of certain

constitutional rights. Lipsky, 411 S.W.3d at 539. The Legislature has directed courts

to construe the statute liberally “to effectuate its purpose and intent fully.” TEX. CIV.

PRAC. & REM. CODE § 27.011(b); Robinson, 409 S.W.3d at 688.

Section 27.003 of the TCPA allows a litigant to seek 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.” TEX. CIV. PRAC. REM. CODE

§ 27.003(a). A “‘legal action’ means a lawsuit, cause of action, petition, complaint,

cross-claim, or counterclaim or any other judicial pleading or filing that requests

legal or equitable relief.” Id. § 27.001(6). The TCPA defines “exercise of the right

to petition” as, among other things, “a communication in or pertaining to . . . a

judicial proceeding.” Id. § 27.001(4)(A)(i). “Communication” is further defined as

“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).

5
 The Act imposes the initial burden on the movant to establish 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 . . . the right to petition.” Id. § 27.005(b)(2). We

review de novo the trial court’s determination whether the movant carried this

burden. Robinson, 409 S.W.3d at 688. If the trial court determines that the movant

has met her burden, the burden then shifts to the nonmovant to establish “by clear

and specific evidence a prima facie case for each essential element of the claim in

question.” TEX. CIV. PRAC. REM. CODE § 27.005(c). If the nonmovant satisfies that

requirement, the burden shifts back to the movant to prove each essential element of

any valid defenses by a preponderance of the evidence. See id. § 27.005(d).

The Legislature’s use of “prima facie case” in the second step of the inquiry

implies a minimal factual burden: “[a] prima facie case represents the minimum

quantity of evidence necessary to support a rational inference that the allegation of

fact is true.” Robinson, 409 S.W.3d at 688; Rodriguez v. Printone Color Corp., 982

S.W.2d 69, 72 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). The TCPA

requires that the plaintiff’s proof address and support each “essential element” of

every claim and that the proof constitute “clear and specific evidence.” Robinson,

409 S.W.3d at 688. Because the statute does not define “clear and specific,” we

apply the ordinary meaning of these terms. Id. at 689. “Clear” means

6
“unambiguous,” “sure,” or “free from doubt,” and “specific” means “explicit” or

“relating to a particular named thing.” Id.

When determining whether to dismiss the legal action, the court must consider

“the pleadings and supporting and opposing affidavits stating the facts on which the

liability or defense is based.” TEX. CIV. & PRAC. REM. CODE § 27.006(a). We review

the pleadings and evidence in the light most favorable to the plaintiff. Newspaper

Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 80–81 (Tex.

App.—Houston [1st Dist.] 2013, pet. denied); see also Sloat v. Rathbun, 513 S.W.3d

500, 504 (Tex. App.—Austin 2015, pet. dism’d) (“Importantly here, we also view

the [evidence] in the light most favorable to . . . the nonmovant[.]”). We consider

de novo the legal question of whether the movant has established by a preponderance

of the evidence that the challenged legal action is covered under the Act. Serafine

v. Blunt, 466 S.W.3d 352, 357 (Tex. App.—Austin 2015, no pet.). We also review

de novo a trial court’s determination of whether a nonmovant has presented clear

and specific evidence establishing a prima facie case for each essential element of

the challenged claims. Id. If we determine that Pierce carried her initial burden to

prove that Stocks’s claims are covered by the Act, we must examine the pleadings

and the evidence presented in response to Pierce’s motion to dismiss to determine

whether Stocks marshaled “clear and specific” evidence to support each essential

element of his claims. See Robinson, 409 S.W.3d at 689.

7
 B. Applicability of TCPA to Stocks’s Claims

The TCPA applies to Stocks’s lawsuit if it is (1) a legal action (2) related to

or in response to (3) Pierce’s exercise of the right to petition. The TCPA defines a

legal action as “a lawsuit,” and Pierce’s federal lawsuit is “a communication made

in or pertaining to . . . a judicial proceeding.” TEX. CIV. PRAC. REM. CODE

§§ 27.001(1), (4)(A)(i), (6) (defining “communication as “the making or submitting

of a statement or document”). Therefore, we must determine whether Pierce has

established by a preponderance of the evidence that Stocks’s lawsuit relates to, or is

in response to, her federal lawsuit.

Pierce contends that Stocks’s lawsuit was filed in response to her federal

lawsuit because the evidence shows that Stocks “is the sole owner of one of the

general partners of FOG, and that he is a limited partner of FOLTD, and that both of

these partnerships threatened to cause its individual partners to sue Pierce if she sued

them first.” In their declarations, Pierce and her husband describe alleged retaliatory

statements made during the mediation of her federal lawsuit. Pierce argues that

“[t]he district court did not consider this evidence of the subjective motivation

behind Stocks’s lawsuit, presumably based on the claim that it was prohibited from

doing so because the retaliatory statements were made in a mediation.” Pierce

asserts, however, that the statements qualify as an exception to the mediation

8
privilege and, therefore, are admissible to show that Stocks filed his lawsuit in

response to her federal lawsuit.

Section 154.073 of the Texas Civil Practice and Remedies Code provides, in

relevant part:

Except as provided by Subsections (c), (d), (e), and (f), a
communication relating to the subject matter of any civil or criminal
dispute made by a participant in an alternative dispute resolution
procedure, whether before or after the institution of formal judicial
proceedings, is confidential, is not subject to disclosure, and may not
be used as evidence against the participant in any judicial or
administrative proceeding.

TEX. CIV. PRAC. & REM CODE § 154.073(a). Subsection (c) states that “an oral

communication or written material used in or made a part of an alternative dispute

resolution procedure is admissible or discoverable if it is admissible or discoverable

independent of the procedure.” Id. § 154.073(c). Pierce argues that the subjective

motivation behind the filing of Stocks’s lawsuit is relevant to whether he filed his

suit “in response to” Pierce’s federal lawsuit and, therefore, is discoverable

independent of the mediation procedure. However, Stocks was not at the mediation.

The statements whose relevancy is allegedly established because they reveal his

subjective motivation were not made by him.

Further, “a ‘cloak of confidentiality’ surrounds mediation, and the cloak

should be breached only sparingly.” Allison v. Fire Ins. Exch., 98 S.W.3d 227, 260

(Tex. App.—Austin 2002, pet. granted, judgm’t vacated w.r.m.); see also

9
Hydroscience Techs., Inc. v. Hydroscience, Inc., 401 S.W.3d 783, 795–96 (Tex.

App.—Dallas 2013, pet. denied) (holding mediation privilege barred consideration

of evidence of oral communications made during mediation). “Unless the parties

agree otherwise, all matters, including the conduct and demeanor of the parties and

their counsel during the settlement process, are confidential and may never be

disclosed to anyone, including the appointing court.” TEX. CIV. PRAC. & REM. CODE

§ 154.053(c); see In re Empire Pipeline Corp., 323 S.W.3d 308, 312 (Tex. App.—

Dallas 2010, orig. proceeding) (citing Allison, 98 S.W.3d at 259). Piercing the cloak

of confidentiality around mediation is a heavy burden. In this case, not only are the

alleged statements arguably hearsay, see TEX. R. EVID. 801, they were not made by

Stocks and were made during mediation of Pierce’s federal lawsuit to which Stocks

is not a party. Further, other than making conclusory assertions, Pierce does not

explain why the statements are relevant or otherwise admissible or discoverable

independent of the mediation procedure. The trial court correctly determined that

they were not proper evidence.

Pierce argues that, even if the mediation statements are not considered, the

pleadings alone compel the conclusion that Stocks’s lawsuit is related to her federal

lawsuit because “both lawsuits involve claims arising out of Pierce’s employment

with FOG.” A review of Stocks’s petition and Pierce’s federal lawsuit does not

support this assertion. Stocks’s claims of fraud and breach of fiduciary duty arise

10
from the financial harm that Pierce’s alleged conduct caused Stocks, while Pierce’s

federal suit alleges claims of employment discrimination based on age, sex, and

disability, and retaliation. That Pierce was employed by FOG and later sued FOG

in federal court does not establish that Stocks’s claims are related to Pierce’s federal

lawsuit for purposes of the TCPA.

Pierce also contends that Stocks’s lawsuit was in response to her federal

lawsuit because it was asserted subsequently in time. “There are myriad reasons for

deciding if and when to bring a legal action against a person.” Beving v. Beadles,

563 S.W.3d 399, 408 (Tex. App.—Fort Worth 2018, pet. denied). Merely arguing

post hoc ergo propter hoc will not satisfy the preponderance-of-the-evidence

standard to demonstrate applicability of the TCPA, particularly where, as here, the

claims are premised on conduct that occurred well before Pierce filed her federal

lawsuit. See id. (concluding mere fact that law partners waited until after

comptroller’s affidavit and deposition before naming her as third-party defendant

did not satisfy standard under TCPA to show that third-party claims were in response

to comptroller’s exercise of right to petition); but cf. Cavin v. Abbott, 545 S.W.3d

47, 69 (Tex. App.—Austin 2017, no pet.) (noting plaintiffs’ claims “would also be

in response to [defendants’] exercise of the right of free speech or exercise of the

right to petition in the sense that they reacted to or were asserted subsequently to

appellants’ . . . lawsuits and subpoenas”) (internal quotations omitted).

11
 Viewing the pleadings in the light most favorable to Stocks, we conclude that

Pierce failed to demonstrate by a preponderance of the evidence that Stocks’s lawsuit

relates to, or was in response to, her exercise of the right to petition.4 The trial court

did not err in denying Pierce’s motion to dismiss under the TCPA. See TEX. CIV.

PRAC. & REM. CODE § 27.005(b), (c). Accordingly, we overrule Pierce’s issue.

Conclusion

We affirm the trial court’s order denying Pierce’s motion to dismiss.

Russell Lloyd
Justice

Panel consists of Justices Lloyd, Landau, and Countiss.

4
Having determined that Pierce failed to meet her initial burden to show that the
TCPA applies to Stocks’s claims, we need not address whether Stocks established
a prima facie case for each of the elements of his claims against Pierce.
12