Ian Ghrist Ghrist Law Firm, PLLC Shawn Coker Neighborhood Partner, Inc. Blue Moon Realty Group, LLC And Wizard Funding, LLC v. MBH Real Estate LLC, AFI Loan Servicing, LLC, Anson Financial, Inc., J. Michael Ferguson, P.C.

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ACCEPTED 02-17-00411-CV SECOND COURT OF APPEALS FORT WORTH, TEXAS 12/13/2017 9:53 AM DEBRA SPISAK CLERK No. 02-17-00411-CV SECOND COURT OF APPEALS FILED IN 2nd COURT OF APPEALS FORT WORTH, TEXAS FORT WORTH, TEXAS 12/13/2017 9:53:57 AM DEBRA SPISAK GHRIST LAW FIRM PLLC, ET. AL., Clerk Appellants V. J. MICHAEL FERGUSON PC, ET. AL., Appellees FROM THE 236TH DISTRICT COURT TARRANT COUNTY, TEXAS CAUSE NO. 236-295012-17 BRIEF OF APPELLANTS Ian Ghrist State Bar No. 24073449 ian@ghristlaw.com Ghrist Law Firm 2735 Villa Creek Drive, Suite 250A Farmer’s Branch, Texas 75234 Ph. (817) 778-4136 Fax (817) 900-2863 ATTORNEY FOR APPELANTS ORAL ARGUMENT NOT REQUESTED IDENTITY OF PARTIES AND COUNSEL Appellants Counsel for Appellants Ghrist Law Firm PLLC Ian Ghrist Ian Ghrist Ghrist Law Firm PLLC Blue Moon Realty Group LLC State Bar No. 24073449 Wizard Funding LLC ian@ghristlaw.com Neighborhood Partner, Inc. 2735 Villa Creek Drive, Suite 250A Shawn Coker Farmer’s Branch, Texas 75234 Phone (817) 778-4136 Fax (817) 900-2863 Appellees Counsel for Appellees J. Michael Ferguson P.C. J. Michael Ferguson MBH Real Estate LLC 62 Main St., Suite 310 AFI Loan Servicing LLC Colleyville, Texas 76034 Anson Financial Inc. Tel. (817) 267-1008 Fax (817) 485-1117 mike@jmichaelferguson.com Attorney for Plaintiffs BRIEF OF APPELLANTS Page 2 of 82 TABLE OF CONTENTS GLOSSARY OF DEFINED TERMS ......................................................................10 IDENTITY OF PARTIES........................................................................................11 ABBREVIATIONS AND RECORD REFERENCES ............................................12 STATEMENT OF THE CASE ................................................................................13 STATEMENT REGARDING ORAL ARGUMENT .............................................14 ISSUES PRESENTED .............................................................................................15 STATEMENT OF FACTS ......................................................................................16 SUMMARY OF ARGUMENT ...............................................................................27 STANDARD OF REVIEW .....................................................................................35 ARGUMENT ...........................................................................................................36 I. OPERATION OF THE TCPA EXPLAINED ...................................................39 II. MOVANT’S BURDEN ESTABLISHED AS TO THE RIGHT TO PETITION IN CAUSE NO. 017-287611-16 ...........................................................41 III. MOVANT’S BURDEN ESTABLISHED AS TO THE RIGHT OF ASSOCIATION BECAUSE THE DEFENDANTS COMMUNICATED WITH EACH OTHER FOR THE PURPOSE OF FACILITATING THE SALE OF ELMER HERNANDEZ’S HOUSE IN A WAY THAT PROTECTED THE INTERESTS OF ALL PARTIES ............................................................................42 IV. MOVANT’S BURDEN ESTABLISHED AS TO FREE SPEECH BECAUSE TITLE TO THE PURSELLEY PROPERTY IS A MATTER OF PUBLIC CONCERN, ALONG WITH ALLEGATIONS THAT AN ATTORNEY MISAPPROPRIATED FUNDS, AND THE COMMUNICATIONS RELATED TO THE PROVISION OF A TITLE INSURANCE POLICY BY SENDERA TITLE, WHICH IS A PRODUCT IN THE MARKETPLACE ..............................43 V. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE CONVERSION CLAIM BECAUSE THE DEPOSIT OF MORTGAGE PAYOFF FUNDS INTO THE COURT’S REGISTRY WAS NOT WRONGFUL AND THE FUNDS WERE PROMPTLY RETURNED UPON REQUEST. .........45 BRIEF OF APPELLANTS Page 3 of 82 VI. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE CONSPIRACY CLAIM BECAUSE THE PLAINTIFFS DID NOT PROVE AN UNDERLYING TORT OR SHOW ANY INJURY. ........................................47 VII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE BREACH OF FIDUCIARY DUTY CLAIM BECAUSE THERE ARE NO DAMAGES AND THE DEFENDANTS DID NOT OWE FIDUCIARY DUTIES TO THE PLAINTIFFS. ...........................................................................................48 VIII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE DECEPTIVE TRADE PRACTICES CLAIM BECAUSE, AMONG OTHER THINGS, THE PLAINTIFFS WERE NOT SEEKING OR ACQUIRING GOODS OR SERVICES FROM THE DEFENDANTS ........................................................49 IX. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE FRAUDULENT LIEN STATUTE BECAUSE THERE IS NO EVIDENCE OF INTENT TO CAUSE INJURY, ACTUAL INJURY, OR EVEN THAT THE DOCUMENTS WERE WRONGFUL IN ANY WAY. ..........................................50 X. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE NEGLIGENCE AND GROSS NEGLIGENCE CLAIMS BECAUSE THE PLAINTIFFS HAD NO DAMAGES, CANNOT SHOW WRONGFULNESS IN THE DEFENDANTS’ ACTIONS, AND THE PLAINTIFFS’ HAD UNCLEAN HANDS. ...................................................................................................................53 XI. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE LIBEL CLAIM BECAUSE FERGUSON WAS SUED FOR MISAPPROPRIATION OF FUNDS, WHICH MEANS THAT THE STATEMENT THAT HE HAD BEEN SUED FOR SUCH WAS NOT FALSE, REGARLESS OF THE PENDING AND UNKNOWN OUTCOME OF SUCH LAWSUIT. ...............................................................................................................54 XII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE DECLARATORY JUDGMENT CLAIM BECAUSE THE PLAINTIFF FAILED TO EXPLAIN WHAT KIND OF DECLARATORY RELIEF IS BEING REQUESTED ..........................................................................................................56 XIII. ABSOLUTE DEFENSES PROVEN—PRIMARILY THE JUDICIAL PRIVILEDGE ..........................................................................................................56 BRIEF OF APPELLANTS Page 4 of 82 XIV. QUALIFIED PRIVILEGES PROVEN—MOST IMPORTANTLY, THE STATEMENTS MADE AFFECTED THE INTERESTS OF THE PUBLISHER AND COMMON INTERESTS OF THE PARTIES ...............................................60 XV. THE DEFENDANTS ALSO SHOWED TRUTH OR SUBSTANTIAL TRUTH, LACK OF REQUISITE FAULT, AND FAIR COMMENT AS DEFENSES TO LIBEL OR AS NEGATING THE ELEMENTS OF LIBEL. ......62 XVI. THE TRIAL COURT ERRED BY SUSTAINING OBJECTIONS OR SPECIAL EXCEPTIONS TO THE MOTION ON THE GROUNDS THAT THE MOTION DID NOT SPECIFY WHICH CAUSES OF ACTION THE MOTION WAS FILED ON BECAUSE THE CAUSES OF ACTION DO NOT NEED TO ARISE FROM THE TCPA STATEMENTS, BUT RATHER ONLY NEED TO BE EITHER “BASED ON, RELATED TO, OR IN RESPONSE TO” THE TCPA STATEMENTS ........................................................................................................66 a. THE TRIAL COURT’S OPINION THAT TCPA MOTIONS ARE LIMITED TO LIBEL OR DEFAMATION IS INCORRECT AS A MATTER OF LAW AND CLEARLY DID NOT RENDER THE MOTION FRIVILOUS .............................67 XVII. THE TRIAL COURT’S OPINION THAT TCPA MOTIONS ARE LIMITED TO LIBEL OR DEFAMATION IS INCORRECT AS A MATTER OF LAW AND CLEARLY DID NOT RENDER THE MOTION FRIVILOUS .........68 XVIII. THE PLAINTIFFS’ CAUSES OF ACTION CLEARLY DID NOT FALL UNDER ANY TCPA STATUTORY EXEMPTIONS, MOST SPECIFICALLY, THE ACTIONS COULD NOT FALL UNDER THE COMMERCIAL SPEECH EXEMPTION BECAUSE GHRIST DID NOT MAKE THE STATEMENTS FOR THE PURPOSE OF SELLING GOODS OR ERVICES TO FERGUSON OR HIS COMPANIES, THE PLAINTIFFS. ..............................69 XIX. WHEN THE TRIAL COURT’S ORDER READ THAT “PLAINTIFFS OBJECTIONS TO DEFENDANTS MOTION TO DISMISS ARE SUSTAINED,” THAT LANGUAGE WAS NOT INTENDED TO SUSTAIN EACH OF PLAINTIFFS’ EXTREMELY VOLUMINOUS EVIDENTIARY OBJECTIONS FILED ON THE DAY OF THE HEARING, NOT DISCUSSED AT THE HEARING, AND THAT DEFENDANT HAD NO OPPORTUNITY TO REVIEW PRIOR TO THE HEARING OR RESPOND TO ...................................................71 XX. EVEN IF ANY OF PLAINTIFFS’ EVIDENTIARY OBJECTIONS HAD A BASIS, DEFENDANTS’ SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO CURE DEFECTS, PARTICULARLY WHEN THE BRIEF OF APPELLANTS Page 5 of 82 OBJECTIONS WERE FILED ON THE DAY OF THE HEARING, WERE NOT DISCUSSED AT THE HEARING, AND DEFENDANTS HAD NO OPPORTUNITY TO REVIEW THE OBJECTIONS PRIOR TO THE HEARING DUE TO THEIR TARDY FILING .........................................................................75 XXI. PRAYER .....................................................................................................77 INDEX TO APPENDIX TO BRIEF OF APPELLANTS .......................................82 BRIEF OF APPELLANTS Page 6 of 82 INDEX OF AUTHORITIES Cases Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ........................................................................................................48 Allen v. Albin, 97 S.W.3d 655 (Tex. App.--Waco 2002, no pet.) ..................... 71, 72 Am. Homeowner Pres. Fund, LP v. Pirkle, 475 S.W.3d 507 (Tex. App.—Fort Worth 2015) ................................................................................................... 30, 44 Anderson v. Limestone Cty., No. 10-07-00174-CV, 2008 Tex. App. LEXIS 5041 (App.—Waco July 2, 2008) ........................................................................... 71, 72 Avery Pharms, Inc. v. Haynes & Boone, LLP, 2009 Tex. App. LEXIS 769 (Tex. App.—Fort Worth 2009, no. pet.) ........................................................................48 Avila v. Larrea, 394 S.W.3d 646 (Tex. App.—Dallas 2012, pet. denied) ....... 31, 45 Bell v. Lee, 49 S.W.3d 8 (Tex. App.—San Antonio 2001) ........................ 33, 57, 58 Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015) ...................................34 Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922 (Tex. 1979) ................... 47, 48 Choctaw Props., L.L.C. v. Aledo I.S.D., 127 S.W.3d 235 (Tex. App.—Waco 2003) ...............................................................................................................................75 Cotten v. Weatherford Bancshares, Inc., 187 S.W.3d 687 (Tex.App.-Fort Worth 2006, pet. denied) ..................................................................................................47 D Magazine Partners, L.P. v. Rosenthal, 529 S.W.3d 429 (Tex. 2017) .................78 Deaver v. Desai, 483 S.W.3d 668 (Tex. App.—Houston [14th Dist.] 2015)... 31, 45 Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.— Austin 2017).................................................................................................. passim ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017)... 29, 32, 43, 66 Fisher v. Detroit Free Press, Inc., 158 Mich. App. 409, 404 N.W.2d 765 (1987) .55 Gaither v. Davis, 582 S.W.2d 913 (Tex. Civ. App.—Fort Worth 1979) ......... 33, 58 Gower v. Univ. Behavioral Health of Denton, No. 02-16-00245-CV, 2017 Tex. App. LEXIS 6746 (App.—Fort Worth July 20, 2017) .........................................75 Hous. Oilers v. Harris Cty., 960 F. Supp. 1202 (S.D. Tex. 1997) ................... 34, 55 Jenevein v. Friedman, 114 S.W.3d 743 (Tex. App.—Dallas 2003) ................. 33, 58 Law Office of David E. Williams, II, P.C. v. Fort Worth Tex. Magazine Venture, LP, No. 02-10-00373-CV, 2011 Tex. App. LEXIS 5157 (Tex. App.—Fort Worth July 7, 2011, no pet.) (mem. op.) ..........................................................................71 BRIEF OF APPELLANTS Page 7 of 82 Lawyers Title Co. v. J.G. Cooper Dev., Inc., 424 S.W.3d 713 (Tex. App.—Dallas 2014, pet. denied) ........................................................................................... 45, 46 Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015). ........................................40 McCrann v. Klaneckey, 667 S.W.2d 924 (Tex. App.—Corpus Christi 1984) ........49 Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S. Ct. 2695 (1990) . 55, 56, 57, 62 Moldovan v. Polito, No. 05-15-01052-CV, 2016 Tex. App. LEXIS 8283 (App.— Dallas Aug. 2, 2016) ...................................................................................... 70, 71 Neely v. Wilson, 418 S.W.3d 52 (Tex. 2013)........................................ 55, 62, 63, 65 Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71 (Tex. App.—Houston [1st Dist.] 2013) ......................................................... 69, 70 Neyland v. Thompson, No. 03-13-00643-CV, 2015 Tex. App. LEXIS 3337 (App.—Austin Apr. 7, 2015) ......................................................................... 31, 45 Nw. Mall, Inc. v. Lubri-Lon Int'l, Inc., 681 S.W.2d 797 (Tex. App.—Houston [14th Dist.] 1984) ...........................................................................................................53 Opperman v. Opperman, No. 07-12-00033-CV, 2013 Tex. App. LEXIS 14867 (App.—Amarillo Dec. 9, 2013) ............................................................................71 Reagan v. Guardian Life Ins. Co., 140 Tex. 105, 166 S.W.2d 909 (1942) .............58 Rehak Creative Servs. v. Witt, 404 S.W.3d 716 (Tex. App.—Houston [14th Dist.] 2013) ............................................................................................................. passim Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881 (Tex. App.—Houston [1st Dist.] 2015) .....................................................................................................................78 Serafine v. Blunt, 466 S.W.3d 352 (Tex. App.—Austin 2015) .................. 28, 41, 42 Shaw v. Norwest Bank Tex., N.A., NUMBER 13-99-602-CV, 2001 Tex. App. LEXIS 4177 (App.—Corpus Christi June 21, 2001) ...........................................75 Shell Oil Co. v. Writt, 464 S.W.3d 650 (Tex. 2015) ................................................57 Sw. Bell Tel. Co. v. Dixon, 575 S.W.2d 596 (Tex. Civ. App.—San Antonio 1978) ........................................................................................................................ 34, 61 Tilton v. Marshall, 925 S.W.2d 672 (Tex.1996)......................................................47 United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146 (Tex. 1994) .................46 Wells Fargo Bank Nw., N.A. v. RPK Capital SVI, L.L.C., 360 S.W.2d 444 (Tex. 1971) .....................................................................................................................45 Statutes Tex. Bus. & Com. Code § 17.45 ..............................................................................49 Tex. Civ. Prac. & Rem. Code § 12.002 ...................................................................51 Tex. Civ. Prac. & Rem. Code § 27.001 ...................................................... 36, 39, 40 Tex. Civ. Prac. & Rem. Code § 27.003 ...................................................... 16, 17, 27 BRIEF OF APPELLANTS Page 8 of 82 Tex. Civ. Prac. & Rem. Code § 27.010 ...................................................................69 Tex. Civ. Prac. & Rem. Code § 27.005 ............................................................ 39, 40 Tex. Civ. Prac. & Rem.Code § 73.002 ....................................................................65 Tex. Gov't Code § 51.901 ........................................................................................51 Rules Tex. R. Civ. P. 166a .................................................................................................75 Treatises 333 Dorsaneo, Texas Litigation Guide § 333.42 (2017) .........................................40 7-101 Dorsaneo, Texas Litigation Guide § 101.05 (2017) ......................................75 Restatement (Second) of Torts § 585 (1977) ................................................... passim BRIEF OF APPELLANTS Page 9 of 82 GLOSSARY OF DEFINED TERMS Texas Citizens Participation Act (“TCPA”) Statements that a legal action is based on, relates to, or is in response to that implicate the right of free speech, the right to petition, or the right of association as defined by the TCPA (“TCPA Statements”) J. Michael Ferguson or J. Michael Ferguson P.C. (“Ferguson”) MBH Real Estate LLC (“MBH Real Estate”) MBH Real Estate LLC and property recovered from Cause Nos. 236-269254-13 and 236-248435-10 (The “MBH Portfolio”) AFI Loan Servicing LLC or Anson Financial Inc. (“Anson”) Neighborhood Partner Inc. (“NPI”) Blue Moon Realty Group LLC (“BMRG”) Wizard Funding LLC (“Wizard”) 2420 Purselley Ave, Fort Worth, TX 76112 (The “Subject Property” or the “Purselley Property”) J. Michael Ferguson (“Ferguson”) Deceptive Trade Practices Act (“DTPA”) Shawn Coker; Neighborhood Partner, Inc.; Blue Moon Realty Group LLC, and Wizard Funding LLC are sometimes referred to herein as (“Coker et. al.”) BRIEF OF APPELLANTS Page 10 of 82 IDENTITY OF PARTIES Ghrist Law Firm PLLC (Ian Ghrist’s law firm) J. Michael Ferguson PC (J. Michael Ferguson’s law firm) Anson Financial, Inc. (J. Michael Ferguson’s wholly-owned mortgage company) AFI Loan Servicing LLC (J. Michael Ferguson’s wholly-owned loan servicing company) MBH Real Estate LLC (A company that Ghrist claims an interest in that Ferguson formed to hold Coker et. al.’s assets recovered from Cause Nos. 236-269254-13 and 236-248435-10 both in Tarrant County, Texas) Metro Buys Homes LLC (A company owned by David Boles, who is currently in federal prison for running a ponzi-type scheme involving owner-financed houses. This company was in a receivership, Ian Ghrist was the receiver, and Coker et. al. were the creditors. Ferguson was Coker’s lawyer, but Ferguson has been trying to take Coker’s assets.) Elmer Hernandez (J. Michael Ferguson sold the Purselley Property to Mr. Hernandez and his wife.) Sendera Title (Sendera Title company handled the sale of Elmer Hernandez’s house to a buyer who acquired a title insurance policy after the mortgage payoff funds were deposited into the court’s registry in Cause No. 017-287611-16, 17th District Court, Tarrant County, Texas). Elizabeth Espino, Kathy Montes, and Lucy Olivas are employees of Sendera Title that were sued individually for no discernable reason. Shawn Coker, Neighborhood Partner Inc., Blue Moon Realty Group LLC, and Wizard Funding LLC were Attorney Ferguson’s clients in Cause Nos. 236- 269254-13 and 236-248435-10 wherein the Purselley Property was acquired by Coker et. al. due to Ghrist’s legal work in recovery of assets. BRIEF OF APPELLANTS Page 11 of 82 ABBREVIATIONS AND RECORD REFERENCES [Vol.#]CR[page#] Clerk’s Record [Vol.#] RR [Page#] Reporter’s Record Appx. [Tab#] Appellants’ Appendix App. Br. [page#] Appellants’ Brief BRIEF OF APPELLANTS Page 12 of 82 STATEMENT OF THE CASE This is an appeal from a motion to dismiss filed pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code. The motion was filed on 10/16/2017. The motion was heard 11/13/2017. An order denying the motion was signed 11/14/2017. BRIEF OF APPELLANTS Page 13 of 82 STATEMENT REGARDING ORAL ARGUMENT Appellants do not request oral argument. BRIEF OF APPELLANTS Page 14 of 82 ISSUES PRESENTED 1. Should any of Plaintiffs’ claims have been dismissed pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code? 2. Were any of the Plaintiffs’ actions exempt from Chapter 27? 3. Did Defendants’ meet their initial burden of showing that the action was based on, relates to, or is in response to the party’s exercise of the right of free speech, the right to petition, or the right of association? 4. Did Plaintiffs’ establish by clear and specific evidence a prima facie case for each essential element of their claims? 5. Did Defendants’ establish any affirmative defenses by a preponderance of the evidence? 6. Was Plaintiffs’ motion to dismiss under Chapter 27 filed solely with intent to delay or frivolous? 7. When the trial court’s order read that “Plaintiffs’ Objections to Defendants’ Motion to Dismiss are sustained” was that meant to sustain Defendants’ extremely voluminous evidentiary objections filed on the day of the hearing and not discussed at the hearing, or not? 8. If the portion of the trial court’s order reading “Plaintiffs’ Objections to Defendants’ Motion to Dismiss are sustained” could be interpreted as sustaining the extremely voluminous evidentiary objections filed the morning of the hearing and not discussed at the hearing, then should any of those objections have been sustained? BRIEF OF APPELLANTS Page 15 of 82 STATEMENT OF FACTS The Libel Claim Ian Ghrist wrote a letter to Elmer Hernandez dated February 6th, 2017.1 In the letter, Ghrist described the allegations made in Cause No. 017-287611-16, including allegations that Ferguson misappropriated funds, discussed the lis pendens on file in such case, including the effect of the lis pendens on the sale of Mr. Hernandez’s house, and suggested that the payoff funds on the mortgage be deposited to the Court’s registry rather than paid to Ferguson.2 Ferguson filed the case at bar against Ghrist alleging that the letter constituted libel per se.3 The letter, however, was based on, related to, or was in response to Ghrist’s exercise of the right to petition in Cause No. 017-287611-16 and free speech.4 The Myriad Other Claims Ferguson also sued Sendera Title Company (the title company that handled the closing of the sale of Elmer Hernandez’s house) for violation of the fraudulent lien statute, conversion, conspiracy, breach of fiduciary duty, deceptive trade 1 2 CR 678. 2 Id. 3 1 CR 15-16. 4 Tex. Civ. Prac. & Rem. Code § 27.003(a). BRIEF OF APPELLANTS Page 16 of 82 practices, negligence, and gross negligence.5 Ferguson also sued three employees of Sendera Title Company for violation of the fraudulent lien statute, conversion, and conspiracy.6 Ferguson also sued Shawn Coker, Neighborhood Partner Inc. (“NPI”), Blue Moon Realty Group LLC (“BMRG”), and Wizard Funding LLC (“Wizard”) for violation of the fraudulent lien statute, conversion, and conspiracy.7 The conspiracy claims are based on, relate to, or are in response to exercise of the right of association.8 The remaining claims are based on, relate to, or are in response to exercise of free speech, the right to petition, and the right of association.9 All claims relate to the sale of Elmer Hernandez’s house and statements made in connection therewith. Background Ferguson and Ghrist are attorneys who used to work together with Shawn Coker, NPI, BMRG, and Wizard as clients.10 Ferguson and Ghrist recovered forty- one (41) mortgages on behalf of Coker, NPI, BMRG, and Wizard from David Boles and Metro Buys Homes LLC et. al. in two lawsuits, Cause Nos. 236- 5 2 CR 529. 6 Id. 7 Id. 8 Tex. Civ. Prac. & Rem. Code § 27.003(a). 9 Id. 10 1 CR 44-50, 395-400. BRIEF OF APPELLANTS Page 17 of 82 269254-13 and 236-248435-10 both in Tarrant County, Texas.11 In a contingency fee agreement, Coker et. al. were to receive 60% of the mortgages or properties, while Ferguson would receive 26.66% and Ghrist would receive 13.33%.12 When the mortgages were acquired, Attorney Ferguson and his wholly-owned companies, AFI Loan Servicing LLC and Anson Financial Inc. (collectively “Anson”), serviced the loans, collecting payments from the borrowers.13 After Attorney Ferguson made inconsistent underpayments to Coker, failed to pay Ghrist, provided improper accounting, and refused to allow a neutral, independent third-party to take over handling of the money, Coker et. al. threatened Attorney Ferguson with suit to compel turnover of the mortgages and funds that Attorney Ferguson was wrongfully withholding from his client and Ghrist.14 Coker and Ferguson then entered into a settlement agreement whereby Ferguson purchased Coker’s stake in the mortgages.15 Coker tried to include Ghrist in the settlement as Ghrist was demanding payment of Ferguson and had joined in the demand for a neutral third party to handle the funds, but Ferguson refused to 11 1 CR 30. 12 1 CR 47-50, 53-55, 115-16, 324-26. 13 1 CR 49, 117, 395-99. 14 1 CR 47-50, 117, 181, 324, 326, 330-31, 335, 397-399. 15 1 CR 46, 168, 171-72; 2 CR 640. BRIEF OF APPELLANTS Page 18 of 82 include Ghrist in settlement talks, let alone the settlement itself, thus, causing the dispute being litigated in Cause No. 017-287611-16.16 In Cause No. 017-287611-16, Ghrist et. al. v. Ferguson et. al., 17th Dist. Ct., Tarrant County, TX, Ferguson and Ghrist are litigating whether Ghrist acquired a 13.33% interest in MBH Real Estate LLC and property recovered from Cause Nos. 236-269254-13 and 236-248435-10 (The “MBH Portfolio”) and whether Ferguson and Ghrist were engaged in a joint venture related to the foregoing or whether the relationship was merely contractual, among other things.17 Ferguson has acknowledged in writing that Ghrist did acquire an interest in the MBH Portfolio.18 Accordingly, Ghrist will likely prevail on claims of both equitable and legal title.19 Regardless, that dispute is being litigated in a different court and should not be re- litigated here. The gist of Ferguson’s lawsuit in the case at bar appears to be that, despite Ferguson having agreed in writing to Ghrist’s 13.33% ownership stake in MBH Real Estate LLC and property recovered from Cause Nos. 236-269254-13 and 236- 16 1 CR 181, 186-192. 17 1 CR 124-25; 2 CR 822-23 (the written agreement between Ferguson and Ghrist), 1 CR 53-55, 324-26, 395-99, 406. 18 1 CR 124-25; 2 CR 822-23 (the written agreement between Ferguson and Ghrist). 19 1 CR 53-55, 124-25, 127-165, 336, 409; 2 CR 822-23 (the written agreement between Ferguson and Ghrist); 1 CR 145, 147, 203 (other documents created or propounded by Ferguson that acknowledge Ghrist’s 13.33% ownership stake). BRIEF OF APPELLANTS Page 19 of 82 248435-10,20 Ghrist did not acquire the interest that Ferguson agreed to, and consequently, Ghrist’s actions in dealing with the lis pendens were wrongful and that Coker, Wizard, BMRG, NPI, Sendera Title, and Sendera Title’s employees should all be additionally responsible.21 This is essentially a dispute between two attorneys about a joint venture between them and involving third-parties like Sendera Title and Coker et. al. was completely inappropriate and puerile. The Conveyance of the Purselley Property Elmer Hernandez was a borrower on a mortgage acquired by Ferguson/Ghrist on behalf of Coker et. al. from David Boles et. al.22 Elmer Hernandez initiated a sale of 2420 Purselley Ave, Fort Worth, TX 761124 (The “Subject Property” or the “Purselley Property”) with Sendera Title Company.23 Sendera Title Company found the lis pendens filed by Ghrist in Cause No. 017- 287611-16 and contacted Ghrist about releasing the lis pendens.24 Ghrist agreed to release the lis pendens and lien upon deposit of the mortgage payoff funds into the 20 1 CR 124-25; 2 CR 822-23 (the written agreement between Ferguson and Ghrist); 1 CR 145, 147, 203 (other documents created or propounded by Ferguson that acknowledge Ghrist’s 13.33% ownership stake). 21 1 CR 11, 15, 20, 25. 22 2 CR 680-91; 1 CR 133-34, 306-08; 1 CR 370-71 (Ghrist’s affidavit explaining what happened). 23 1 CR 373-91. 24 Id. BRIEF OF APPELLANTS Page 20 of 82 registry of the court in Cause No. 017-287611-16.25 Ghrist sent a letter to Elmer Hernandez about the foregoing.26 Sendera Title also asked Coker et. al. to sign a release of judgment.27 Coker et. al. signed the release of judgment.28 Ferguson alleges that the statements made by the various Defendants in connection with the foregoing were wrongful, that the lien releases signed by Coker and Ghrist were wrongful, and that Ferguson suffered injury29 because the payoff funds went temporarily into the court’s registry on 2/14/201730 only to be released to Ferguson a few weeks later on 4/12/2017.31 Accordingly, even if Ferguson can prove up some cause of action, which he cannot, he received all of the money that he complains of, thus, leaving all Defendants to baffle at why this suit was filed. Regarding the release of judgment signed by Coker et. al., the judgment was taken May 15th, 2013;32 the judgment was extinguished and void on Feb. 20th, 2015 as to the Purselley Property when the property was awarded to the judgment creditor by turnover order.33 Coker et. al. acknowledged the foregoing on Feb. 9th, 25 Id. 26 2 CR 678. 27 1 CR 373. 28 2 CR 672-73. 29 1 CR 11, 15, 20, 25. 30 2 CR 850. 31 2 CR 845-46, 852; 1 CR 370, ¶ 15 (Ghrist’s affidavit stating that the payoff funds were paid to Ferguson). 32 2 CR 695-714. 33 1 CR 133-34. BRIEF OF APPELLANTS Page 21 of 82 2017 in response to Sendera Title’s request so as to avoid liability to Elmer Hernandez for wrongful refusal to acknowledge that the turnover order had extinguished any judgment lien.34 Ferguson’s only reason for complaining of the foregoing could be that he intended to fraudulently allege to Elmer Hernandez that the judgment lien was still valid when it clearly was not. Ferguson’s lawsuit to protect his wrongful intentions here is utterly groundless. The lien was void and released long before Ferguson bought the judgment from Coker, the lien clearly did not encumber Elmer Hernandez’s title, and Coker’s acknowledgement of the foregoing was proper in every respect. Regarding the release of lien signed by Ghrist,35 that was also done to avoid liability to Elmer Hernandez for the benefit of Coker, Ghrist, and Ferguson.36 Elmer Hernandez’s closing on the sale of his house was stalled by the lis pendens on file in Cause No. 017-287611-16.37 No one could reasonably dispute that Mr. Hernandez was entitled to sell his house, but Ghrist alleged that the proceeds from the sale belonged to Ghrist because Ferguson had misappropriated Ghrist’s funds 34 2 CR 672-73; 1 CR 373-91 (emails with Sendera Title); 1 CR 370-71 (Ghrist’s affidavit explaining what happened). 35 2 CR 674-75. 36 1 CR 370-71. 37 1 CR 373-91 (emails with Sendera Title), 2 CR 716, 759, 845. BRIEF OF APPELLANTS Page 22 of 82 by more than the amount of the lien proceeds in connection with the joint venture between Ghrist and Ferguson, among other allegations.38 Ferguson’s Unclean Hands It should be noted that MBH Real Estate LLC was never even the owner of the Purselley Property or Mr. Hernandez’s mortgage. Ferguson conveyed the Purselley Property to Metro Buys Homes LLC by trustee’s foreclosure deed recorded under Instrument No. D215075534 in the Tarrant County, Texas deed records. Ferguson conveniently left this fact out of his response to the TCPA motion. Ferguson filed his response to the motion on the morning of the hearing such that Ghrist did not have time to review the response and add Instrument No. D215075534 to the record prior to the hearing to correct Ferguson’s materially misleading omission of this portion of the chain-of-title on the Purselley Property. Regardless, Ferguson did not and cannot prove that MBH Real Estate LLC ever owned the Purselley Property, which prevents him from proving up any of the myriad claims that he raised in this suit. Because MBH Real Estate LLC never 38 1 CR 53-55, 145, 147, 203, 222-304 (accountant’s report showing funds misappropriated by Ferguson that belong to Ghrist), 397, 409; 2 CR 822-23 (the written agreement between Ferguson and Ghrist). BRIEF OF APPELLANTS Page 23 of 82 owned the Purselley Property, the Plaintiffs lack standing to assert the claims asserted. Ferguson fraudulently seller-financed the property to Elmer Hernandez listing MBH Real Estate LLC as the Grantor, after having previously conveyed the property to Metro Buys Homes LLC. Ferguson, thus, deeded the property to two different Grantees, which is exactly what landed David Boles (the owner of Metro Buys Homes) in federal prison. Ferguson never had authority over Metro Buys Homes LLC (only Ghrist did, as receiver).39 Accordingly, the release of lien that Ghrist signed was properly signed by Ghrist rather than Ferguson, but that is just one example of many mistakes caused by and arising from Ferguson’s inappropriate sale of the property to Elmer Hernandez by an entity that never owned the property to begin with. Fixing Ferguson’s mistakes so as to avoid liability to Elmer Hernandez for Ferguson’s misconduct has been a tremendous burden on Sendera Title, Ghrist, Coker, and especially Mr. Hernandez. 39 2 CR 724, 799-801. BRIEF OF APPELLANTS Page 24 of 82 Timeline February 20th, 2015 Mortgage note and lien on Purselley Property conveyed to Coker et. al. by turnover order.40 April 10th, 2015 J. Michael Ferguson conveys the Purselley Property to Metro Buys Homes LLC by trustee’s foreclosure deed. Ferguson fraudulently conveyed the property here to Metro Buys Homes LLC even though he should have conveyed it to Coker et. al., being the actual noteholder due to the turnover order.41 September 16th, 2015 Ferguson signs a fraudulent special warranty deed on the Purselley Property to Elmer Hernandez on behalf of MBH Real Estate LLC, an entity not in the chain-of-title.42 The Appellants ask for leave to file a certified copy of Instrument Number D215075534 in the Tarrant County, Texas Deed Records so as to cure Ferguson’s material omission from the chain-of-title. The certified instrument is attached hereto as Appx. 2. However, the turnover order is in the record,43 which means that Ferguson cannot carry his burden of proof to show that MBH Real Estate LLC 40 1 CR 133-34. 41 Instrument No. D215075534 filed in the Tarrant County, Texas Real Property Records, Appx. 2. 42 2 CR 683. 43 1 CR 133-34. BRIEF OF APPELLANTS Page 25 of 82 ever acquired title, regardless of whether the Court considers Instrument No. D215075534. BRIEF OF APPELLANTS Page 26 of 82 SUMMARY OF ARGUMENT Movant’s Burden The movant’s burden is to show that 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.”44 The movant’s burden in this case was established as to the right to petition, the right of free speech, and the right of association. The TCPA does not require the movant to present testimony or any evidence as the burden may be carried solely based upon consideration of the pleadings as evidence.45 Movant’s Burden—Right to Petition Ferguson accuses Ghrist of libel because Ghrist wrote a letter to Hernandez stating that Ferguson “is the Defendant in a lawsuit involving misappropriation of funds . . . .”46 Ferguson is the Defendant in Cause No. 017-287611-16 and he has been accused by Ghrist of misappropriating funds in that case.47 Ghrist has shown that this legal action relates to statements made in Cause No. 017-287611-16 and Ghrist’s right to petition therein. 44 Tex. Civ. Prac. & Rem. Code § 27.003 (LexisNexis, Lexis Advance through the 2017 Regular Session and 1st C.S., 85th Legislature). 45 Id. 46 2 CR 678 (Letter Ghrist Wrote to Hernandez); 1 CR 15 (Plaintiff’s Petition in This Case). 47 1 CR 393, 400-02, 404. BRIEF OF APPELLANTS Page 27 of 82 If a lawsuit, like this one, is filed in response to allegations being made in another lawsuit (in this case, being Cause No. 017-287611-16 in the 17th District Court) then the movant has carried the movant’s burden under the TCPA by showing statements made in response to the right of petition.48 Movant’s Burden—Right of Association The right of association has been broadly defined as applying to communications “between individuals who join together to collectively . . . promote, pursue, or defend common interests.”49 In Elite Auto Body LLC v. Autocraft Bodywerks, Inc.,50 when former employees left for a new company, shared information, and the former employer alleged that the information shared was confidential and should not have been shared, then that sharing of information was held to be a communication between individuals who joined together to collectively promote their business interests, thus, satisfying the movant’s TCPA burden on the right of association. In this case, the Defendants shared information 48 Serafine v. Blunt, 466 S.W.3d 352, 360 (Tex. App.—Austin 2015) (when one lawsuit is filed in response to another, the movant’s TCPA burden is established because the movant has shown that the new lawsuit was filed “in response to” the other lawsuit). 49 Id. at 205. 50 Id. BRIEF OF APPELLANTS Page 28 of 82 (emails)51 and made statements (letter to Elmer Hernandez52 and lien releases)53 for the purposes of effectuating the sale of Elmer Hernandez’s house in a way that protected the business interests of all involved in the transaction. Accordingly, the statements related to the right of association as the statements were made in connection with Ghrist, Coker, and Sendera Title’s employees’ attempts to join together to accomplish the sale of Elmer Hernandez’s house in a way that protected the interests of all parties concerned. Movant’s Burden—Free Speech “The TCPA defines ‘exercise of the right of free speech’ as ‘a communication made in connection with a matter of public concern.’ Tex. Civ. Prac. & Rem. Code § 27.001(3) . . . . [A] ‘'[m]atter of public concern' includes an issue related to: (A) health or safety; (B) environmental, economic, or community well-being; (C) the government; (D) a public official or public figure; or (E) a good, product, or service in the marketplace.’ Id. § 27.001(7).”54 In this case, the lis pendens, Coker et. al.’s abstract of judgment, the mortgage lien on the Purselley Property, and the disputed release documents signed by Ghrist and Coker all 51 1 CR 372-91 52 2 CR 678-79. 53 2 CR 672-75. 54 ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898-99 (Tex. 2017). BRIEF OF APPELLANTS Page 29 of 82 related to title to the Purselley Property and to the title insurance policy to be provided by Sendera Title. Accordingly, those statements were made in connection with a matter of public concern, being the title to the Purselley Property and the title insurance policy that Sendera Title put into the marketplace. The Texas legislature enacted a comprehensive statutory recording system for the purpose of putting the public on notice of claims or potential claims affecting real property.55 In this case, the statements in the emails between Ghrist, Coker, and Sendera Title; the statements made in the releases that are purported to be “fraudulent”; and the statements in the letter from Ghrist to Hernandez all relate to title issues that should be recorded publicly, and as such, are a matter of public concern. The statements about title to the Purselley Property made between Ghrist, Coker, and Sendera Title’s employees were related to a “good, product, or service in the marketplace,” specifically the title insurance policy to be provided by Sendera Title to the buyer of Elmer Hernandez’s house. The house itself was also a product in the marketplace and the statements made related to liens on the house and how Sendera Title would clear title to the house before issuing a title policy. 55 Am. Homeowner Pres. Fund, LP v. Pirkle, 475 S.W.3d 507, 519 (Tex. App.—Fort Worth 2015) (discussing the purpose of the public recording system). BRIEF OF APPELLANTS Page 30 of 82 The statements made also related to economic or community well-being. Specifically, the allegation that Attorney Ferguson misappropriated funds is a matter of community and economic well-being. Communications about a lawyer’s handling of cases has been held to be a matter of public concern.56 Statements about the possibility that a property manager has misappropriated funds has been held to be a matter of community and economic well-being.57 Movant’s Burden Met as to More Than Just Libel Claim Ferguson also alleged, and the trial judge apparently agreed, that the TCPA motion was frivilous because the motion failed to state that it was filed solely on the libel claims,58 however, the TCPA has been broadly applied to far more than mere defamation and libel. The TCPA has been applied to conversion, civil conspiracy, misappropriation, breach of contract, and many other causes of action.59 The TCPA inquiry “does not focus on whether . . . conversion and 56 Deaver v. Desai, 483 S.W.3d 668, 673 (Tex. App.—Houston [14th Dist.] 2015); Avila v. Larrea, 394 S.W.3d 646, 655 (Tex. App.—Dallas 2012, pet. denied). 57 Neyland v. Thompson, No. 03-13-00643-CV, 2015 Tex. App. LEXIS 3337, at *8-9 (App.— Austin Apr. 7, 2015). 58 1 RR 16, 27. 59 Rehak Creative Servs. v. Witt, 404 S.W.3d 716, 733 (Tex. App.—Houston [14th Dist.] 2013) (movant’s burden on TCPA motion satisfied as to conversion, civil conspiracy, and misappropriation claims); Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191, 194 (Tex. App.—Austin 2017) (TCPA applied to trade-secret misappropriation, violation of Texas Uniform Trade Secrets Act, unfair competition, breach of fiduciary duty, and civil conspiracy). BRIEF OF APPELLANTS Page 31 of 82 misappropriation claims arise from the assertedly libelous nature of the . . . statements” because “[t]he statute broadly encompasses a ‘cause of action’ that ‘relates to’ free speech.”60 In ExxonMobile Pipelinne Co. v. Coleman, the Texas Supreme Court went so far as to apply the TCPA to internal emails about a “private employment matter” because the statements related to a pipeline that could have caused environmental damage, which made the statements a matter of public concern, despite their private, internal, and employment-related nature.61 Plaintiff’s Lack of Clear and Specific Evidence and Defendants’ Clear Affirmative Defenses The Plaintiffs did not offer clear and specific evidence of how the releases that were signed were fraudulent, how the Plaintiffs even have standing given that the Plaintiffs never had title to the Subject Property, how the Plaintiffs experienced any injuries given that the Plaintiffs ultimately received all of the payoff funds that the Plaintiffs have complained about, or what the Plaintiffs ultimately seek to accomplish by this suit, other than to harass and annoy Ghrist and Coker because the Plaintiffs are very angry that Ghrist sued them in a separate lawsuit alleging that Ferguson misappropriated funds, among other things. 60 Rehak, 404 S.W.3d at 733. (finding “no difficulty” in concluding that the movant’s TCPA burden was established where the conversion and misappropriation causes of action “have a connection” with a communication related to free speech) (emphasis added). 61 ExxonMobil Pipeline Co., 512 S.W.3d at 900. BRIEF OF APPELLANTS Page 32 of 82 Ferguson’s Deceptive Trade Practices Act (“DTPA”) claims are utterly frivolous given that none of the Plaintiffs were seeking or acquiring goods or services from any of the Defendants. The buyer of Elmer Hernandez’s house was seeking a title insurance policy from Sendera Title company. Ghrist, Coker et. al., and Sendera Title were not selling any goods or services to Ferguson or Ferguson’s companies, the Plaintiffs. Ferguson was demanding a payoff on a mortgage from Sendera Title company and was angry that Ghrist’s lis pendens was preventing that from happening. No one was selling any goods or services to Ferguson or his companies, the Plaintiffs, in the transaction whereby Elmer Hernandez sold the Purselley Ave property. Several affirmative defenses are clearly shown by the evidence. First, the judicial privilege62 provides absolute protection from the libel claim because the allegedly libelous statement was merely a statement that Ferguson was sued for misappropriation of funds. Ferguson was, in fact, sued for misappropriation of funds.63 Ghrist also has attorney immunity, which is an unqualified defense even to 62 Jenevein v. Friedman, 114 S.W.3d 743, 747 (Tex. App.—Dallas 2003); Bell v. Lee, 49 S.W.3d 8, 10-11 (Tex. App.—San Antonio 2001); Gaither v. Davis, 582 S.W.2d 913, 913 (Tex. Civ. App.—Fort Worth 1979); Restatement (Second) of Torts § 585 (1977). 63 1 CR 397-411. BRIEF OF APPELLANTS Page 33 of 82 conduct alleged to be fraudulent if the conduct is “within the scope of [the attorney’s] legal representation.”64 Further, the allegedly wrongful release of judgment and release of lien are protected by the qualified privilege that applies to protection of interests of the publisher of the statement.65 Where “offending conduct” is “related to the legitimate interests of the defendant’s own operations” the conduct is privileged.66 In this case, Coker and Ghrist issued the release of judgment and release of lien so as to avoid liability to Elmer Hernandez and to protect Ghrist’s and Coker’s interests. The conduct was, accordingly, privileged from the various tort claims raised in this suit. 64 Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015). 65 Restatement (Second) of Torts §§ 594, 596 (1977); Sw. Bell Tel. Co. v. Dixon, 575 S.W.2d 596, 599 (Tex. Civ. App.—San Antonio 1978) (investigation of reports of employee misconduct privileged, findings of jury to the contrary disregarded because the existence of the privilege is a matter of law for the Court to decide) 66 Hous. Oilers v. Harris Cty., 960 F. Supp. 1202, 1208 (S.D. Tex. 1997). BRIEF OF APPELLANTS Page 34 of 82 STANDARD OF REVIEW A trial court’s ruling on a motion to dismiss under the TCPA is reviewed de novo. Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881, 892 (Tex. App.— Houston [1st Dist.] 2015). A trial court’s ruling on evidentiary objections is reviewed for abuse of discretion. Lewis v. State, No. 02-16-00179-CR, 2017 Tex. App. LEXIS 5794, at *26 (App.—Fort Worth June 22, 2017); Owens-Corning Fiberglas Corp. v. Malone, 916 S.W.2d 551, 557 (Tex. App.—Houston [1st Dist.] 1996) (“appellant must show that the trial court’s ruling was erroneous” and that the error caused improper judgment). Questions of law are subject to de novo review. Taylor v. Lubbock Reg'l MHMR, No. 07-13-00381-CV, 2015 Tex. App. LEXIS 10392, at *4 (App.—Amarillo Oct. 7, 2015). BRIEF OF APPELLANTS Page 35 of 82 ARGUMENT The basis of most claims in this suit is a release of judgment67 signed by Coker and a release of lien signed by Ghrist.68 The TCPA has been applied to any “communication” with communication being defined as “the making, or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic.”69 The lien releases themselves were “documents” that were “submitted” for public recording, thus, making them communications under the TCPA. The TCPA has been applied to statements “without regard to whether” the “statements effected . . . misappropriation or misuse of . . . trade secrets or confidential information, or would be constitutionally unprotected.”70 Accordingly, it matters not whether the lien releases in this case, or other statements, form the basis of the causes of action or whether the statements that the judgment was released or the lien was released constituted constitutionally- 67 2 CR 672-73 (release instrument); 1 CR 11 (Plaintiff’s petition alleging wrongfulness of instrument). 68 2 CR 674-75 (release instrument); 1 CR 11 (Plaintiff’s petition alleging wrongfulness of instrument). 69 Elite Auto Body, 520 S.W.3d at 204. (referencing Tex. Civ. Prac. & Rem. Code § 27.001(1)). 70 Id. BRIEF OF APPELLANTS Page 36 of 82 protected speech or not, at least for purposes of the movant meeting the movant’s initial burden under the TCPA.71 The movant need only show that statements were made, that those statements have some connection to the various causes of action, and that the statements have some relation to free speech, the right to petition, or the right of association, with all of the foregoing being broadly defined to effectuate the purpose of the statute. For example, when Ghrist stated in the release of lien that the lien had been released, that statement had a connection to Ghrist’s claims, under his right of petition, raised in Cause No. 017-287611-16 because Ghrist alleged in such suit that MBH Real Estate LLC was the product of a joint venture between Ghrist and Ferguson, and that Ghrist’s 13.33% interest in MBH Real Estate LLC should be protected from potential liability to Elmer Hernandez by release of the lien on Elmer Hernandez’s house upon payoff of the mortgage. All of the Defendants were engaged in the right of association by joining together in communications for the purpose of selling Elmer Hernandez’s house to 71 Id. at 204-05 (pointing out that whether the speech was constitutionally protected or not was not relevant to the movant’s initial burden, but rather only relevant to the “second part” of the analysis, in which the nonmovant must establish the claim). BRIEF OF APPELLANTS Page 37 of 82 a buyer with a title insurance policy in a way that protected the legal interests of all parties involved. If Coker had not signed the release of judgment, then Coker would have incurred liability to Hernandez. Ghrist similarly would have incurred liability to Hernandez by failing to assist in the release of the lien. Accordingly, whether the conduct was wrongful or not, the conduct was part of an association of persons for the purpose of protecting those person’s interests. Sendera Title company is in the business of insuring title to real property and joined in communications with Ghrist and Coker to further Sendera Title’s business operations. Moreover, there is also a connection to the right of free speech because the nature of the public statutory recording system is such that statements affecting title, like title to the Purselley Property, are matters of public concern. Additionally, statements about an attorney’s misappropriation of funds are a matter of public concern. Finally, statements about the quality or nature of title to real property are related to a product or service in the marketplace, namely, a title insurance policy provided by Sendera Title upon payoff of the mortgage lien on the Purselley Ave property. BRIEF OF APPELLANTS Page 38 of 82 I. OPERATION OF THE TCPA EXPLAINED The basic operation of the TCPA is straightforward: If, as here, a 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,” then the claim is subject to a motion to dismiss that must be granted unless the respondent can establish “by clear and specific evidence a prima facie case for each essential element” of his or her claim. 72 Furthermore, if the movant can establish an affirmative defense by a preponderance of the evidence, the motion must be granted.73 The movant’s burden of showing that some statements have some relation to the right of free speech, right to petition, or the right of association is sometimes referred to as the first prong, step, or stage. The nonmovant’s burden of clear and specific evidence of each cause of action is sometimes referred to as the second prong, step, or stage. The affirmative defenses shown by movant are sometimes referred to as the third prong, step, or stage. Matters of public concern include issues related to “environmental, economic, or community well-being” and “a good, product, or service in the marketplace.”74 72 Tex. Civ. Prac. & Rem. Code Ann. § 27.005(b), (c) (West 2013) (emphasis added). 73 Id. at § 27.005(d). 74 Id. at 27.001(7). BRIEF OF APPELLANTS Page 39 of 82 The Texas Supreme Court has interpreted “matters of public concern” broadly.75 The TCPA defines “exercise of the right of association” broadly to mean “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.”76 Standards for Granting or Denying the Motion to Dismiss Under the TCPA. In general, the court must grant a motion under the TCPA and dismiss the action within the 30-day window if the movant shows by a preponderance of the evidence that the action is based on, relates to, or is in response to the party’s exercise of the right of free speech, the right to petition, or the right of association.77 The claimant may avoid dismissal, however, by establishing through “clear and specific evidence” a prima facie case for each essential element of the claim in question.78 Even if the claimant makes the required showing of clear and specific evidence for each essential element of the claim, the movant may nevertheless obtain dismissal if it establishes by a preponderance of the evidence each essential element of a valid defense to the claim.79 75 Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015). 76 Tex. Civ. Prac. & Rem. Code § 27.001(2). 77 Tex. Civ. Prac. & Rem. Code § 27.005(b). 78 Tex. Civ. Prac. & Rem. Code § 27.005(c); 20-333 Dorsaneo, Texas Litigation Guide § 333.42 (2017). 79 Tex. Civ. Prac. & Rem. Code § 27.005(d). BRIEF OF APPELLANTS Page 40 of 82 II. MOVANT’S BURDEN ESTABLISHED AS TO THE RIGHT TO PETITION IN CAUSE NO. 017-287611-16 Ferguson accuses Ghrist of libel because Ghrist wrote a letter to Hernandez stating that Ferguson “is the Defendant in a lawsuit involving misappropriation of funds . . . .”80 Ferguson is the Defendant in Cause No. 017-287611-16 and he has been accused by Ghrist of misappropriating funds in that case.81 Ghrist has shown that this legal action relates to statements made in Cause No. 017-287611-16 and Ghrist’s right to petition therein. If a lawsuit, like this one, is filed in response to allegations being made in another lawsuit (in this case, being Cause No. 017-287611-16 in the 17th District Court) then the movant has carried the movant’s burden under the TCPA by showing statements made in response to the right of petition.82 80 2 CR 678 (Letter Ghrist Wrote to Hernandez); 1 CR 15 (Plaintiff’s Petition in This Case). 81 1 CR 393, 400-02, 404. 82 Serafine, 466 S.W.3d at 360. (when one lawsuit is filed in response to another, the movant’s TCPA burden is established because the movant has shown that the new lawsuit was filed “in response to” the other lawsuit). BRIEF OF APPELLANTS Page 41 of 82 III. MOVANT’S BURDEN ESTABLISHED AS TO THE RIGHT OF ASSOCIATION BECAUSE THE DEFENDANTS COMMUNICATED WITH EACH OTHER FOR THE PURPOSE OF FACILITATING THE SALE OF ELMER HERNANDEZ’S HOUSE IN A WAY THAT PROTECTED THE INTERESTS OF ALL PARTIES The right of association has been broadly defined as applying to communications “between individuals who join together to collectively . . . promote, pursue, or defend common interests.”83 In Elite Auto Body LLC v. Autocraft Bodywerks, Inc.,84 when former employees left for a new company, shared information, and the former employer alleged that the information shared was confidential and should not have been shared, then that sharing of information was held to be a communication between individuals who joined together to collectively promote their business interests, thus, satisfying the movant’s TCPA burden on the right of association. In this case, the Defendants shared information (emails)85 and made statements (letter to Elmer Hernandez86 and lien releases)87 for the purposes of effectuating the sale of Elmer Hernandez’s house in a way that protected the business interests of all involved in the transaction. Accordingly, the statements related to the right of 83 Id. at 205. 84 Id. 85 1 CR 372-91 86 2 CR 678-79. 87 2 CR 672-75; 1 CR 370-71 (Ghrist’s affidavit explaining what happened). BRIEF OF APPELLANTS Page 42 of 82 association as the statements were made in connection with Ghrist, Coker, and Sendera Title’s employees’ attempts to join together to accomplish the sale of Elmer Hernandez’s house in a way that protected the interests of all parties concerned. IV. MOVANT’S BURDEN ESTABLISHED AS TO FREE SPEECH BECAUSE TITLE TO THE PURSELLEY PROPERTY IS A MATTER OF PUBLIC CONCERN, ALONG WITH ALLEGATIONS THAT AN ATTORNEY MISAPPROPRIATED FUNDS, AND THE COMMUNICATIONS RELATED TO THE PROVISION OF A TITLE INSURANCE POLICY BY SENDERA TITLE, WHICH IS A PRODUCT IN THE MARKETPLACE “The TCPA defines ‘exercise of the right of free speech’ as ‘a communication made in connection with a matter of public concern.’ Tex. Civ. Prac. & Rem. Code § 27.001(3) . . . . [A] ‘'[m]atter of public concern' includes an issue related to: (A) health or safety; (B) environmental, economic, or community well-being; (C) the government; (D) a public official or public figure; or (E) a good, product, or service in the marketplace.’ Id. § 27.001(7).”88 In this case, the lis pendens, Coker et. al.’s abstract of judgment, the mortgage lien on the Purselley Property, and the disputed release documents signed by Ghrist and Coker all related to title to the Purselley Property and to the title insurance policy to be 88 ExxonMobil Pipeline Co., 512 S.W.3d at 898-99. BRIEF OF APPELLANTS Page 43 of 82 provided by Sendera Title. Accordingly, those statements were made in connection with a matter of public concern, being the title to the Purselley Property and the title insurance policy that Sendera Title put into the marketplace. The Texas legislature enacted a comprehensive statutory recording system for the purpose of putting the public on notice of claims or potential claims affecting real property.89 In this case, the statements in the emails between Ghrist, Coker, and Sendera Title; the statements made in the releases that are purported to be “fraudulent”; and the statements in the letter from Ghrist to Hernandez all relate to title issues that should be recorded publicly, and as such, are a matter of public concern. The statements about title to the Purselley Property made between Ghrist, Coker, and Sendera Title’s employees were related to a “good, product, or service in the marketplace,” specifically the title insurance policy to be provided by Sendera Title to the buyer of Elmer Hernandez’s house. The house itself was also a product in the marketplace and the statements made related to liens on the house and how Sendera Title would clear title to the house before issuing a title policy. 89 Am. Homeowner Pres. Fund, LP v. Pirkle, 475 S.W.3d 507, 519 (Tex. App.—Fort Worth 2015) (discussing the purpose of the public recording system). BRIEF OF APPELLANTS Page 44 of 82 The statements made also related to economic or community well-being. Specifically, the allegation that Attorney Ferguson misappropriated funds is a matter of community and economic well-being. Communications about a lawyer’s handling of cases has been held to be a matter of public concern.90 Statements about the possibility that a property manager has misappropriated funds has been held to be a matter of community and economic well-being.91 V. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE CONVERSION CLAIM BECAUSE THE DEPOSIT OF MORTGAGE PAYOFF FUNDS INTO THE COURT’S REGISTRY WAS NOT WRONGFUL AND THE FUNDS WERE PROMPTLY RETURNED UPON REQUEST. Conversion is the “unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner’s rights.”92 To establish a claim for conversion, a plaintiff must prove that: 1. The plaintiff owned or had possession of the property or entitlement to possession; 90 Deaver v. Desai, 483 S.W.3d 668, 673 (Tex. App.—Houston [14th Dist.] 2015); Avila v. Larrea, 394 S.W.3d 646, 655 (Tex. App.—Dallas 2012, pet. denied). 91 Neyland v. Thompson, No. 03-13-00643-CV, 2015 Tex. App. LEXIS 3337, at *8-9 (App.— Austin Apr. 7, 2015). 92 Lawyers Title Co. v. J.G. Cooper Dev., Inc., 424 S.W.3d 713, 718 (Tex. App.—Dallas 2014, pet. denied) (citing Wells Fargo Bank Nw., N.A. v. RPK Capital SVI, L.L.C., 360 S.W.2d 444, 447 (Tex. 1971))). BRIEF OF APPELLANTS Page 45 of 82 2. The defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff’s rights as an owner; 3. The plaintiff demanded return of the property; and 4. The defendant refused to return the property93 The plaintiff also must establish it was injured by the conversion.94 In this case, the payoff funds went temporarily into the court’s registry on 2/14/201795 only to be released to Ferguson a few weeks later on 4/12/2017.96 Accordingly, the Plaintiffs could not have suffered any injury. Moreover, the undisputed evidence shows that when the Plaintiffs demanded payment of the payoff funds, Ghrist signed a release of the lis pendens and an agreed order allowing the Plaintiffs to withdraw the payoff funds from the Court’s registry. Accordingly, regardless of whether the placement of the funds in the Court’s registry was wrongful, the funds were promptly returned upon request,97 thus, negating conversion. Additionally, the placement of the funds into the Court’s registry was not wrongful, but rather proper in all respects. 93 Id. 94 United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147 (Tex. 1994). 95 2 CR 850. 96 2 CR 845-46, 852; 1 CR 370, ¶ 15 (Ghrist’s affidavit stating that the payoff funds were paid to Ferguson). 97 2 CR 845-46, 852; 1 CR 370, ¶ 15 (Ghrist’s affidavit stating that the payoff funds were paid to Ferguson). BRIEF OF APPELLANTS Page 46 of 82 VI. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE CONSPIRACY CLAIM BECAUSE THE PLAINTIFFS DID NOT PROVE AN UNDERLYING TORT OR SHOW ANY INJURY. An actionable civil conspiracy is a combination by “two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means.”98 The essential elements of a civil conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result.”99 A defendant's liability for conspiracy depends on “participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.”100 Recovery for civil conspiracy is not based on the conspiracy but on the underlying tort.101 Once a civil conspiracy is proven, each coconspirator 98 Cotten v. Weatherford Bancshares, Inc., 187 S.W.3d 687, 701 (Tex.App.-Fort Worth 2006, pet. denied). 99 Id. 100 Id.; see also Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex.1979) (“It is not the agreement itself, but an injury to the plaintiff resulting from an act done pursuant to the common purpose that gives rise to the cause of action.”). 101 Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.1996) (orig.proceeding) (op. on reh'g). BRIEF OF APPELLANTS Page 47 of 82 “is responsible for all acts done by any of the conspirators in furtherance of the unlawful combination.”102 In this case, the Plaintiffs received all of the payoff funds,103 and accordingly suffered no injury. Moreover, the Plaintiffs failed to prove up any underlying tort that the conspiracy could be based upon. The Plaintiffs failed to show that the deposit of the payoff funds into the Court’s registry, only to be paid to the Plaintiffs a few weeks later was wrongful in some way. VII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE BREACH OF FIDUCIARY DUTY CLAIM BECAUSE THERE ARE NO DAMAGES AND THE DEFENDANTS DID NOT OWE FIDUCIARY DUTIES TO THE PLAINTIFFS. The elements for the cause of action of breach of fiduciary duty are: 1. Existence of fiduciary duty, 2. Breach of that duty, and 3. Causation and damages.104 In this case, the Plaintiffs did not demonstrate that any of the Defendants owed fiduciary duties to the Plaintiffs, that any duty was breached, or that the Plaintiffs suffered any damages. In fact, the Plaintiffs received the money that they complain 102 Carroll, 592 S.W.2d at 926. 103 2 CR 845-46, 852; 1 CR 370, ¶ 15 (Ghrist’s affidavit stating that the payoff funds were paid to Ferguson). 104 Avery Pharms, Inc. v. Haynes & Boone, LLP, 2009 Tex. App. LEXIS 769, *22 (Tex. App.— Fort Worth 2009, no. pet.) (citing Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.—Houston [1st Dist.] 2003, no pet.). BRIEF OF APPELLANTS Page 48 of 82 of, which makes the Defendants wonder why this suit was filed, other than to harass and annoy Ghrist, Coker, Sendera Title, and Sendera Title’s employees. VIII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE DECEPTIVE TRADE PRACTICES CLAIM BECAUSE, AMONG OTHER THINGS, THE PLAINTIFFS WERE NOT SEEKING OR ACQUIRING GOODS OR SERVICES FROM THE DEFENDANTS In this case the claim is utterly without merit given that the Plaintiffs did not “seek or acquire by purchase or lease, any goods or services.”105 Related to the sale of the house on Purselly Drive, Elmer Hernandez sought to sell the house and the buyer of the house sought to acquire title insurance from Sendera Title Company. The Plaintiffs, however, were not purchasing or leasing any goods or services from Sendera Title Company or any of the Defendants in connection with this transaction. The Plaintiffs sent a payoff quote on a mortgage to the Sendera Title. The Plaintiffs were not buying anything from the Defendants in connection with the sale of the Purselley Property. The Plaintiffs also failed to offer evidence of which portions of the DTPA were violated, how they were violated, or how any injuries were suffered as a result. 105 Tex. Bus. & Com. Code § 17.45 (LexisNexis, Lexis Advance through the 2017 Regular Session and 1st C.S., 85th Legislature); McCrann v. Klaneckey, 667 S.W.2d 924, 926 (Tex. App.—Corpus Christi 1984). BRIEF OF APPELLANTS Page 49 of 82 The DTPA claim is groundless in fact and law. According to Tex. Bus. & Com. Code § 17.50(c), the Defendants should be awarded reasonable and necessary attorney’s fees and court costs. IX. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE FRAUDULENT LIEN STATUTE BECAUSE THERE IS NO EVIDENCE OF INTENT TO CAUSE INJURY, ACTUAL INJURY, OR EVEN THAT THE DOCUMENTS WERE WRONGFUL IN ANY WAY. The statute applies to fraudulent court records or fraudulent liens or claims. Section 51.901 of the Texas Government Code lists liens or claims as being fraudulent where: “(1) the document is a purported judgment or other document purporting to memorialize or evidence an act, an order, a directive, or process of: (A) a purported court or a purported judicial entity not expressly created or established under the constitution or the laws of this state or of the United States; or (B) a purported judicial officer of a purported court or purported judicial entity described by Paragraph (A); (2) the document or instrument purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and: (A) is not a document or instrument provided for by the constitution or laws of this state or of the United States; (B) is not created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the laws of this state, or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person; or (C) is not an equitable, constructive, or other lien imposed by a court with jurisdiction created or established under the constitution or laws of this state or of the United States; or BRIEF OF APPELLANTS Page 50 of 82 (3) the document or instrument purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and the document or instrument is filed by an inmate or on behalf of an inmate.”106 The Plaintiffs offered no evidence of any making, presenting, or use of any document or record with “(1) knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property; (2) intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01, Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and (3) intent to cause another person to suffer: o (A) physical injury; o (B) financial injury; or o (C) mental anguish or emotional distress.”107 No Evidence. The Defendants have no evidence of any of the elements of this claim. Specifically, there is no evidence that any Defendants had knowledge that a document was a fraudulent court record or a fraudulent lien or claim, intent that the document be given the same legal effect as a court record or document of a 106 Tex. Gov't Code § 51.901 (LexisNexis, Lexis Advance through the 2017 Regular Session and 1st C.S., 85th Legislature). 107 See Tex. Civ. Prac. & Rem. Code § 12.002 (LexisNexis, Lexis Advance through the 2017 Regular Session and 1st C.S., 85th Legislature). BRIEF OF APPELLANTS Page 51 of 82 court created by or established under the constitution or laws of this state or other applicable entity, or that there was intent to cause another person to suffer injury. The claims alleged simply fail to meet any requirements of the statute, but particularly the requirement that the claimant have intent that the document be given the legal effect of a court record as there was no such intent to draft a document of a court or other judicial entity and the claims did not purport to be claims established by any Court, but rather just claims being litigated in Court, namely the 17th District Court in Cause No. 017-287611-16. The Plaintiffs further failed to offer any evidence of instruments that meet the statutory definition of fraudulent instruments because the only instruments complained of are instruments describing disputed claims or claims to be resolved in pending litigation. The lis pendens certainly referenced claims that were in dispute, but those claims can hardly be considered “fraudulent” where the legitimacy of the claims depends on the outcome of pending litigation. Also, there can be no intent to cause injury or mental distress where the intent was clearly to protect Ghrist and Coker from liability to Elmer Hernandez. Where the lien release and judgment release were signed for the purpose of avoiding liability to Elmer Hernandez and protecting the interests of Ghrist and Coker, no fraudulent intent can be inferred. Moreover, the releases were proper because the turnover order extinguished the judgment lien long before Ferguson bought BRIEF OF APPELLANTS Page 52 of 82 Coker’s interests in the assets and because Ferguson agreed in writing to Ghrist’s 13.33% stake in MBH Real Estate LLC and must be estopped from asserting otherwise. Additionally, Ferguson’s unclean hands in conveying the property to Elmer Hernandez by MBH Real Estate LLC when Metro Buys Homes LLC was, in fact, the owner must be considered to vitiate any fraud claims and to show that Ferguson and the Plaintiffs lack standing to complain. There are also no damages because the lis pendens was ultimately released and the funds were ultimately disbursed to the Plaintiffs. Accordingly, regardless of the other elements, the Plaintiff cannot show any injury. X. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE NEGLIGENCE AND GROSS NEGLIGENCE CLAIMS BECAUSE THE PLAINTIFFS HAD NO DAMAGES, CANNOT SHOW WRONGFULNESS IN THE DEFENDANTS’ ACTIONS, AND THE PLAINTIFFS’ HAD UNCLEAN HANDS. The elements of negligence are the existence of a duty on the part of one party to another, a breach of that duty, and damages proximately caused by the breach of that duty.108 108 Nw. Mall, Inc. v. Lubri-Lon Int'l, Inc., 681 S.W.2d 797, 802 (Tex. App.—Houston [14th Dist.] 1984). BRIEF OF APPELLANTS Page 53 of 82 In this case, the Plaintiffs failed to show that the Defendants owed them a duty, that the duty was breached, and that any damages were suffered, or proximately caused. The facts in this case, where Ghrist and Coker signed proper releases to accomplish the sale of Elmer Hernandez’s house and the mortgage payoff funds went temporarily into the Court’s registry due to a lis pendens, only to be ultimately paid to the Plaintiffs, just utterly fails to factually establish a claim for negligence. Moreover, Ferguson’s unclean hands in wrongfully conveying property that MBH Real Estate LLC did not own to Elmer Hernandez negates any claims of the Plaintiffs as MBH Real Estate LLC never owned the property to begin with. XI. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE LIBEL CLAIM BECAUSE FERGUSON WAS SUED FOR MISAPPROPRIATION OF FUNDS, WHICH MEANS THAT THE STATEMENT THAT HE HAD BEEN SUED FOR SUCH WAS NOT FALSE, REGARLESS OF THE PENDING AND UNKNOWN OUTCOME OF SUCH LAWSUIT. The libel claim fails due to the substantially true nature of the allegation that Ferguson was sued for misappropriating funds. He was sued for that regardless of whether he prevails in the suit or not. See Section XV of this brief for a full breakdown of the truth defense. BRIEF OF APPELLANTS Page 54 of 82 “Statements that are not verifiable as false cannot form the basis of a defamation claim.”109 An opinion that is “not reasonably capable of defamatory meaning” is not actionable.110 “A defamatory communication may consist of a statement in the form of an opinion, but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion.”111 Moreover, “a statement of opinion relating to matters of public concern which does not contain a provably false factual connotation will receive full constitutional protection.”112 “[T]here are no standards for objective truth of statements of evaluation like ‘inadequate,’ ‘obsolete,’ or ‘unfit.’”113 In this case, the statements made were opinion without defamatory meaning and there was no implication of undisclosed defamatory facts. Moreover, because the statements related to a matter of public concern, mainly claims affecting or potentially affecting the public deed recording system and interests established therein, those statements receive full constitutional protection under the First Amendment.114 109 Neely v. Wilson, 418 S.W.3d 52, 62 (Tex. 2013) (citing Milkovich v. Lorain Journal Co., 497 U.S. 1, 21, 110 S. Ct. 2695, 2707 (1990)). 110 Fisher v. Detroit Free Press, Inc., 158 Mich. App. 409, 414, 404 N.W.2d 765, 768 (1987). 111 Restatement (Second) of Torts § 566 (1977). 112 Milkovich v. Lorain Journal Co., 497 U.S. 1, 3, 110 S. Ct. 2695, 2697 (1990). 113 Hous. Oilers v. Harris Cty., 960 F. Supp. 1202, 1208 (S.D. Tex. 1997). 114 Milkovich, 497 U.S. 1. BRIEF OF APPELLANTS Page 55 of 82 Finally, the allegedly libelous statements are not verifiable as false because the veracity of the statements is currently being litigated in a different court. Accordingly, no libel claim can be based on the statements. XII. THE PLAINTIFF LACKED CLEAR AND SPECIFIC EVIDENCE ON THE DECLARATORY JUDGMENT CLAIM BECAUSE THE PLAINTIFF FAILED TO EXPLAIN WHAT KIND OF DECLARATORY RELIEF IS BEING REQUESTED The Plaintiff has wholly failed to explain what kind of declaratory relief the Plaintiff wants from this Court. Moreover, any declaratory relief that could be litigated is already being litigated in Cause No. 017-287611-16, Ghrist Law Firm et. al. v. J. Michael Ferguson et. al., 17th Judicial District Court, Tarrant County, Texas. XIII. ABSOLUTE DEFENSES PROVEN—PRIMARILY THE JUDICIAL PRIVILEDGE “An attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.”115 “A party to a private litigation or a private prosecutor or defendant 115 Id. at § 586. BRIEF OF APPELLANTS Page 56 of 82 in a criminal prosecution is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of or during the course and as a part of, a judicial proceeding in which he participates, if the matter has some relation to the proceeding.”116 “A witness is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding or as a part of a judicial proceeding in which he is testifying, if it has some relation to the proceeding.”117 Statements “made in the course of a judicial or quasi-judicial proceeding” are absolutely privileged.118 Communications in the due course of a judicial proceeding will not serve as the basis of a civil action for libel or slander, regardless of the negligence or malice with which they are made." James v. Brown, 637 S.W.2d 914, 916 (Tex. 1982). This absolute privilege extends to a communication "preliminary to a proposed judicial proceeding … if it has some relation to the proceeding." Id. at 917 (quoting RESTATEMENT (SECOND) OF TORTS § 588 (1981)). Whether a statement is made in contemplation of a judicial proceeding is a question of law. Thomas v. Bracey, 940 S.W.2d 340, 343 (Tex. App.-San Antonio 1997, no writ). ‘All doubt should be resolved in favor of the communication's relation to the proceeding.’”119 116 Id. at § 587. 117 Id. at § 588. 118 Shell Oil Co. v. Writt, 464 S.W.3d 650, 657 (Tex. 2015). 119 Bell v. Lee, 49 S.W.3d 8, 10-11 (Tex. App.—San Antonio 2001) (emphasis added). BRIEF OF APPELLANTS Page 57 of 82 “We therefore hold that the privilege attaches if the statement has some relationship to a contemplated proceeding, regardless of whether it in fact furthers the representation.” 120 “[C]ommunication in the course of a judicial proceeding is absolutely privileged whether relevant or not.”121 "The matter to which the privilege does not extend must be so palpably wanting in relation to the subject-matter of the controversy that no reasonable man can doubt its irrelevancy and impropriety. In order that matter alleged in a pleading may be privileged, it need not be in every case material to the issues presented by the pleadings. It must, however, be legitimately related thereto, or so pertinent to the subject of the controversy that it may become the subject of inquiry in the course of the trial." Id. (emphasis added) (quoting Taylor v. Iowa Park Gin Co., 199 S.W. 853, 855 (Tex. Civ. App.-Galveston 1917, no writ)). Subsequently, this Court addressed a related issue, holding that the privilege can extend to statements made out of court so long as they bear some relation to the proceeding. Russell v. Clark, 620 S.W.2d 865, 868 (Tex. Civ. App.-Dallas 1981, writ ref'd n.r.e.). We held that "the privilege applies to any statement that bears some relation to an existing or proposed judicial proceeding," adding, "All doubt should be resolved in favor of its relevancy." Russell, 620 S.W.2d at 870.” 122 “[T]he rule of nonliability prevails even though the statement was not relevant, pertinent and material to the issues involved in the case.”123 120 Id. at 11 (emphasis added). 121 Gaither v. Davis, 582 S.W.2d 913, 913 (Tex. Civ. App.—Fort Worth 1979). 122 Jenevein v. Friedman, 114 S.W.3d 743, 747 (Tex. App.—Dallas 2003) (emphasis added). 123 Reagan v. Guardian Life Ins. Co., 140 Tex. 105, 111, 166 S.W.2d 909, 912 (1942). BRIEF OF APPELLANTS Page 58 of 82 In this case, all statements made were absolutely privileged as they certainly had some relationship to a pending proceeding, namely Cause No. 017-287611-16, Ghrist Law Firm et. al. v. J. Michael Ferguson et. al., 17th Judicial District Court, Tarrant County, Texas. The absolute privilege covers all statements by Ghrist, Ghrist Law Firm, Coker, Neighborhood Partner, Inc., and Blue Moon Realty Group, LLC, as all of those parties were either parties to the 17th Ct. suit, attorneys for parties, law firms for the parties, or were witnesses to the suit making statements with some connection to the suit.124 Coker, for example, gave a deposition in the suit and was the client that Ghrist and Ferguson jointly represented in the recovery of all assets in dispute in the underlying causes. The First Amendment protects the right to petition and, in this case, the statements were sufficiently related to the right to petition that the statements are absolutely privileged and cannot give rise to liability. The statements had sufficient connection to pending litigation and the lis pendens in the pending litigation for the privilege to apply. 124 Restatement (Second) of Torts § 588 (1977) (the judicial privilege extends to witnesses). BRIEF OF APPELLANTS Page 59 of 82 XIV. QUALIFIED PRIVILEGES PROVEN—MOST IMPORTANTLY, THE STATEMENTS MADE AFFECTED THE INTERESTS OF THE PUBLISHER AND COMMON INTERESTS OF THE PARTIES “One who publishes defamatory matter concerning another is not liable for the publication if (a) the matter is published upon an occasion that makes it conditionally privileged and (b) the privilege is not abused.” Restatement (Second) of Torts § 593 (1977). “An occasion makes a publication conditionally privileged if the circumstances induce a correct or reasonable belief that (a) there is information that affects a sufficiently important interest of the publisher, and (b) the recipient’s knowledge of the defamatory matter will be of service in the lawful protection of the interest.” Id. at § 594 (emphasis added). “(1) An occasion makes a publication conditionally privileged if the circumstances induce a correct or reasonable belief that (a) there is information that affects a sufficiently important interest of the recipient or a third person, and (b) the recipient is one to whom the publisher is under a legal duty to publish the defamatory matter or is a person to whom its publication is otherwise within the generally accepted standards of decent conduct. (2) In determining whether a publication is within generally accepted standards of decent conduct it is an important factor that (a) the publication is made in response to a request rather than volunteered by the publisher or (b) a family or other relationship exists between the parties.” Id. at § 595. “An occasion makes a publication conditionally privileged if the circumstances lead any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that there is information that another sharing the common interest is entitled to know.” Id. at § 596 (emphasis added). “An occasion makes a publication conditionally privileged if an inferior administrative officer of a state or any of its subdivisions who is not entitled to an absolute privilege makes a defamatory communication required or permitted in the performance of his official duties.” Id. at § 598A. “An occasion makes a publication conditionally privileged if the circumstances induce a correct or reasonable belief that (a) there is information that affects a sufficiently important public interest, and (b) the public interest requires the communication of the defamatory matter to a public officer or a private citizen who is authorized or privileged to take action if the defamatory matter is true.” Id. at § 598. BRIEF OF APPELLANTS Page 60 of 82 Texas Courts have interpreted qualified privileges for the protection of interests broadly.125 Where “offending conduct” is “related to the legitimate interests of the defendant’s own operations” the conduct is privileged.126 In this case, the allegedly defamatory statements were made in relation to the legitimate interests of Ghrist, Coker, and the other Defendants, namely those parties’ interests in the promissory notes secured by the deeds of trust and in facilitating the sale of Elmer Hernandez’s house despite the lis pendens, which should not have affected Mr. Hernandez even though Ferguson wrongfully insists that it should have. In this case, the allegedly defamatory statements were made to Mary Louis Garcia, the Tarrant County Clerk, an administrative officer of a state or its subdivisions for the purpose of informing regarding claims related to a lis pendens with effects on the public deed recording system and interests in promissory notes secured by deeds of trust on real estate in Tarrant County, Texas. The statements were made related to the common interest of Ghrist and Ferguson in the promissory 125 See e.g. Sw. Bell Tel. Co. v. Dixon, 575 S.W.2d 596, 599 (Tex. Civ. App.—San Antonio 1978) (investigation of reports of employee misconduct privileged, findings of jury to the contrary disregarded because the existence of the privilege is a matter of law for the Court to decide). 126 Hous. Oilers v. Harris Cty., 960 F. Supp. 1202, 1208 (S.D. Tex. 1997) (emphasis added). BRIEF OF APPELLANTS Page 61 of 82 notes secured by the deeds of trusts. The statements were made to protect those important interests in those properties. Ultimately, Ghrist and Coker both had a legitimate business interest in avoiding liability to Elmer Hernandez for wrongfully refusing to acknowledge satisfaction of the lien on Elmer Hernandez’s house. Ghrist and Coker are privileged to protect that interest by acknowledging the lack of encumbrance upon Mr. Hernandez’s house when Mr. Hernandez tendered all mortgage payoff funds into the Court’s registry. XV. THE DEFENDANTS ALSO SHOWED TRUTH OR SUBSTANTIAL TRUTH, LACK OF REQUISITE FAULT, AND FAIR COMMENT AS DEFENSES TO LIBEL OR AS NEGATING THE ELEMENTS OF LIBEL. Substantial truth negates a defamation or libel claim. A statement that is not verifiable as false cannot be the basis of a defamation or libel claim.127 “The common law and statutes provide certain defenses and privileges to defamation claims. These include the defense of truth, Tex. Civ. Prac. & Rem. Code § 73.005, which we have interpreted to require defendants to prove the publication was substantially true, Turner v. KTRK Television, Inc., 38 S.W.3d 103, 115 (Tex. 2000). Moreover, statements that are not verifiable as false cannot form the basis of a defamation claim. Milkovich, 497 U.S. at 21-22. Further, the common law has recognized a judicial proceedings privilege since at least 1772 for parties, witnesses, lawyers, judges, and jurors. Additionally, one cannot recover mental anguish damages for 127 Neely v. Wilson, 418 S.W.3d 52, 62 (Tex. 2013) (citing Milkovich v. Lorain Journal Co., 497 U.S. 1, 21, 110 S. Ct. 2695, 2707 (1990)). BRIEF OF APPELLANTS Page 62 of 82 defamation of a deceased individual. Renfro Drug Co. v. Lawson, 138 Tex. 434, 160 S.W.2d 246, 250 (Tex. 1942); see also Restatement (Second) Of Torts § 560 (1977). And a qualified privilege exists under the common law when a statement is made in good faith and the author, recipient, a third person, or one of their family members has an interest that is sufficiently affected by the statement. Diamond Shamrock Ref. & Mktg. Co. v. Mendez, 844 S.W.2d 198, 210 (Tex. 1992) (Hightower, J., concurring).” 128 In this case, the Plaintiff’s Response to Defendant’s No-Evidence Motion for Summary Judgment attached as Exhibit A to the TCPA Motion demonstrates that the statements were true or substantially true. Specifically, Ghrist had an interest in MBH Real Estate LLC and Ferguson held funds belonging to Ghrist without delivering them. Ferguson did not appropriate the funds to Ghrist as he should have. This is true. Even if Ferguson alleges that it is false, the statement is not “verifiable as false,” which means that it cannot support a defamation claim, particularly when the lawsuit that is pending regarding the issue remains pending in another Court. Additionally, Ghrist had a membership interest in MBH Real Estate LLC agreed to in writing by Ferguson.129 Ghrist, Coker, and the entities represented by Ghrist in this case clearly had proprietary or other interests that were sufficiently affected by the 128 Neely v. Wilson, 418 S.W.3d 52, 62 (Tex. 2013) (emphasis added). 129 2 CR 822-23. BRIEF OF APPELLANTS Page 63 of 82 statements to be qualifiedly priviledged. Ghrist had an interest in MBH Real Estate LLC, the property owned by MBH Real Estate LLC, and the joint venture between himself and Ferguson, while Coker and the entities had an interest or former interests in the same subject matter. The statements made were made for the purpose of facilitating the sale of the Purselley property and protecting the interests protected by the pending lis pendens. Those are good faith reasons for the statements and no evidence of malice exists. The statements were privileged because they were made in connection with those interests affected by the statements. Fault Requirement. “One who publishes a false and defamatory communication concerning a private person, or concerning a public official or public figure in relation to a purely private matter not affecting his conduct, fitness or role in his public capacity, is subject to liability, if, but only if, he (a) knows that the statement is false and that it defames the other, (b) acts in reckless disregard of these matters, or (c) acts negligently in failing to ascertain them.”130 In this case, the Plaintiff utterly failed to show any requisite fault on the part of any of the Defendants. The statements made were true, the Defendants knew the statements to be true, the Defendants did not act with reckless disregard or 130 Restatement (Second) of Torts § 580B (1977). BRIEF OF APPELLANTS Page 64 of 82 negligence. Specifically, Ghrist hired Brandon Lim, a professional accountant to evaluate whether Ferguson had not appropriated funds correctly. The accountant determined that Ferguson did not appropriate the funds correctly and withheld funds from Ghrist wrongfully.131 Accordingly, Ghrist performed due diligence in ascertainment of the truth of the claims. Additionally, the statements were true as shown by the evidence, particularly the evidence in the No-Evidence Summary Judgment Response attached as Exhibit A to the TCPA Motion. Fair comment. a broadcast is privileged if it is a “reasonable and fair comment on or criticism of an official act of a public official or other matter of public concern published for general information.”132 In this case, the statements made were reasonable and fair comments published for general information about the public deed recording system and claims that could affect interests under that system. 131 1 CR 222-304. 132 Tex. Civ. Prac. & Rem.Code § 73.002(b)(2). Neely v. Wilson, 418 S.W.3d 52, 70 (Tex. 2013). BRIEF OF APPELLANTS Page 65 of 82 XVI. THE TRIAL COURT ERRED BY SUSTAINING OBJECTIONS OR SPECIAL EXCEPTIONS TO THE MOTION ON THE GROUNDS THAT THE MOTION DID NOT SPECIFY WHICH CAUSES OF ACTION THE MOTION WAS FILED ON BECAUSE THE CAUSES OF ACTION DO NOT NEED TO ARISE FROM THE TCPA STATEMENTS, BUT RATHER ONLY NEED TO BE EITHER “BASED ON, RELATED TO, OR IN RESPONSE TO” THE TCPA STATEMENTS In ExxonMobile Pipelinne Co. v. Coleman, the Texas Supreme Court went so far as to apply the TCPA to internal emails about a “private employment matter” because the statements related to a pipeline that could have caused environmental damage, which made the statements a matter of public concern, despite their private, internal, and employment-related nature.133 The error made by Ferguson and the trial court was in assuming that TCPA Statements must constitute the basis for the causes of action that a TCPA motion is filed on. Statements made pursuant to the TCPA only need to have some connection to the various causes of action, which can include far more than just defamation or libel.134 Breach of contract, conversion, breach of fiduciary duty, 133 ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 900 (Tex. 2017). 134 Rehak Creative Servs. v. Witt, 404 S.W.3d 716, 733 (Tex. App.—Houston [14th Dist.] 2013) (movant’s burden on TCPA motion satisfied as to conversion, civil conspiracy, and misappropriation claims); Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191, 194 (Tex. App.—Austin 2017) (TCPA applied to trade-secret misappropriation, violation of Texas Uniform Trade Secrets Act, unfair competition, breach of fiduciary duty, and civil conspiracy). BRIEF OF APPELLANTS Page 66 of 82 statutory causes of action—all of these can be the basis of a TCPA motion and the movant’s only burden is to show that TCPA Statements were made that have some connection to the causes of action. a. THE TRIAL COURT’S OPINION THAT TCPA MOTIONS ARE LIMITED TO LIBEL OR DEFAMATION IS INCORRECT AS A MATTER OF LAW AND CLEARLY DID NOT RENDER THE MOTION FRIVILOUS Ferguson alleged, and the trial judge apparently agreed, that the TCPA motion was frivilous because the motion failed to state that it was filed solely on the libel claims.135 The TCPA has, however, been broadly applied to far more than mere defamation and libel. The TCPA has been applied to conversion, civil conspiracy, misappropriation, breach of contract, and many other causes of action.136 The TCPA inquiry “does not focus on whether . . . conversion and misappropriation claims arise from the assertedly libelous nature of the . . . statements” because “[t]he statute broadly 135 1 RR 16, 27. 136 Rehak, 404 S.W.3d at 733 (Tex. App.—Houston [14th Dist.] 2013) (movant’s burden on TCPA motion satisfied as to conversion, civil conspiracy, and misappropriation claims); Elite Auto Body LLC, 520 S.W.3d at 194 (Tex. App.—Austin 2017) (TCPA applied to trade-secret misappropriation, violation of Texas Uniform Trade Secrets Act, unfair competition, breach of fiduciary duty, and civil conspiracy). BRIEF OF APPELLANTS Page 67 of 82 encompasses a ‘cause of action’ that ‘relates to’ free speech.”137 Accordingly, the movant’s burden is not to show that (1) the TCPA Statements gave rise to the causes of action, or (2) the statements were made in exercise of protected speech.138 Instead, the movant’s burden is merely to show that statements were made or actions taken that have some connection to free speech, the right of association, or the right to petition and that those statements or actions have some relationship to the causes of action alleged. XVII. THE TRIAL COURT’S OPINION THAT TCPA MOTIONS ARE LIMITED TO LIBEL OR DEFAMATION IS INCORRECT AS A MATTER OF LAW AND CLEARLY DID NOT RENDER THE MOTION FRIVILOUS When Ghrist prevails in the 17th District Court on his claims to a joint venture in MBH Real Estate LLC, then there can no longer be any dispute regarding whether the lien releases or other statements in connection with the closing of the sale of Elmer Hernandez’s house were wrongful. The motion was clearly not frivolous as there were statements made that had a connection to the right to petition, the right of association, and free speech. 137 Id. (finding “no difficulty” in concluding that the movant’s TCPA burden was established where the conversion and misappropriation causes of action “have a connection” with a communication related to free speech) (emphasis added). 138 Elite Auto Body, 520 S.W.3d at 204-05 (pointing out that whether the speech was constitutionally protected or not was not relevant to the movant’s initial burden, but rather only relevant to the “second part” of the analysis, in which the nonmovant must establish the claim) BRIEF OF APPELLANTS Page 68 of 82 XVIII. THE PLAINTIFFS’ CAUSES OF ACTION CLEARLY DID NOT FALL UNDER ANY TCPA STATUTORY EXEMPTIONS, MOST SPECIFICALLY, THE ACTIONS COULD NOT FALL UNDER THE COMMERCIAL SPEECH EXEMPTION BECAUSE GHRIST DID NOT MAKE THE STATEMENTS FOR THE PURPOSE OF SELLING GOODS OR SERVICES TO FERGUSON OR HIS COMPANIES, THE PLAINTIFFS. Under Tex. Civ. Prac. & Rem. Code § 27.010(b), the TCPA exempts from coverage “a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product, insurance services, or a commercial transaction in which the intended audience is an actual or potential buyer or customer.”139 The burden of proving the applicability of this exemption, known as the “commercial speech exemption,” is on the party asserting it.140 This exemption can apply only where a statement was made for the purpose of securing sales of the goods or services of the person making the statement.141 For example, where statements could have been read by potential customers of a newspaper, but the 139 Tex. Civ. Prac. & Rem. Code § 27.010(b) 140 Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 89 (Tex. App.—Houston [1st Dist.] 2013). 141 Id. at 88 BRIEF OF APPELLANTS Page 69 of 82 statements were not directed to the customers for the purpose of selling newspapers, the exemption was inapplicable.142 In this case, Ghrist and Coker were not selling anything to anybody, especially the Plaintiffs, and Sendera Title was selling a title insurance policy to the buyer of Elmer Hernandez’s house, not to the Plaintiffs or the Defendants. Ghrist and Coker et. al. made no statements to the Plaintiffs for the purpose of selling the Plaintiffs any goods or services, and in fact, Ghrist and Coker et. al. would never want the Plaintiffs as customers after the Plaintiffs defrauded them. The Plaintiffs allege that Ghrist and Coker et. al. sell goods and services in general, but wholly failed to demonstrate that Ghrist and Coker et. al. were marketing goods or services to the Plaintiffs in connection with the sale of the Purselley Property. Where statements are made about a dispute between the parties rather than for the purpose of selling goods or services to the Plaintiffs, then the commercial speech exemption does not apply.143 In this case, the emails with Sendera Title, the allegedly wrongful releases, and all other statements were not made for the purpose 142 Id. 143 Moldovan v. Polito, No. 05-15-01052-CV, 2016 Tex. App. LEXIS 8283, at *12 (App.— Dallas Aug. 2, 2016). BRIEF OF APPELLANTS Page 70 of 82 of selling goods or services to the Plaintiffs, but rather to effectuate the sale of Elmer Hernandez’s house. Elmer Hernandez is not a plaintiff herein. XIX. WHEN THE TRIAL COURT’S ORDER READ THAT “PLAINTIFFS OBJECTIONS TO DEFENDANTS MOTION TO DISMISS ARE SUSTAINED,” THAT LANGUAGE WAS NOT INTENDED TO SUSTAIN EACH OF PLAINTIFFS’ EXTREMELY VOLUMINOUS EVIDENTIARY OBJECTIONS FILED ON THE DAY OF THE HEARING, NOT DISCUSSED AT THE HEARING, AND THAT DEFENDANT HAD NO OPPORTUNITY TO REVIEW PRIOR TO THE HEARING OR RESPOND TO The party who fails to obtain a written ruling on each objection waives objection.144 The Fort Worth Court of Appeals has agreed that a written ruling on each objection is required or strongly preferred.145 An order on a motion does not constitute an implicit ruling that either sustains or overrules objections to the evidence.146 Objections to form of evidence are preserved for appellate review only 144 Id. 145 Opperman v. Opperman, No. 07-12-00033-CV, 2013 Tex. App. LEXIS 14867, at *7 (App.— Amarillo Dec. 9, 2013) (We agree with [the Fort Worth Court of Appeals] that the better practice would be for the trial court to disclose, in writing, its ruling on all summary judgment evidence before the time it enters an order granting or denying summary judgment.); Law Office of David E. Williams, II, P.C. v. Fort Worth Tex. Magazine Venture, LP, No. 02-10-00373-CV, 2011 Tex. App. LEXIS 5157, at *7 (Tex. App.—Fort Worth July 7, 2011, no pet.) (mem. op.). 146 Anderson v. Limestone Cty., No. 10-07-00174-CV, 2008 Tex. App. LEXIS 5041, at *4-5 (App.—Waco July 2, 2008) (citing Allen v. Albin, 97 S.W.3d 655, 663 (Tex. App.--Waco 2002, no pet.)). BRIEF OF APPELLANTS Page 71 of 82 if those objections are made and ruled on in the trial court.147 The trial court should disclose, in writing, its rulings on each evidentiary objection.148 In this case, the Plaintiffs failed to obtain a written ruling on each objection. The Plaintiffs filed myriad evidentiary objections on the morning of the hearing, did not discuss any evidentiary objections at the hearing,149 and submitted a proposed order that the trial judge ultimately signed that merely sustained objections, but did not refer to whether the objections to the motion that were raised at the hearing were being sustained,150 or rather, all of the voluminous evidentiary objections that were not presented at the hearing and that the judge could not have had time to review prior to the hearing. The hearing on the TCPA motion to dismiss was held on November 13th, 2017 starting at 11:40 am.151 The hearing had been set for 11:00 am, but Judge Lowe did not arrive until 11:40 am due to dealing with a personal matter. The Plaintiffs’ responses to the motion, being objections, special exceptions, and two separate 147 Id. 148 Allen v. Albin, 97 S.W.3d 655, 663 (Tex. App.—Waco 2002). 149 1 RR passim. 150 1 RR 16 (the only objection discussed at the hearing was the objection to the motion to dismiss having been filed as to more than just the libel claim). 151 1 RR 1, 4. BRIEF OF APPELLANTS Page 72 of 82 response documents, were filed on the morning of the hearing.152 As those documents were filed on the morning of the hearing, Mr. Ghrist, counsel for the Defendants, had no time or opportunity to review the documents prior to the hearing. Even the trial judge could not have possibly had time to review the response to the motion because it was filed the morning of the hearing while the judge was dealing with a personal matter. The documents filed on the day of the hearing contained lengthy, and mostly frivolous, objections to the Defendants’ evidence attached to the motion to dismiss.153 None of these objections were discussed at the hearing except that Ferguson told the trial judge that he had objected to the motion as being frivolous because it was filed on more than just the libel claim.154 The trial judge apparently agreed by signing the order prepared and submitted by Ferguson on the day after the hearing,155 but as explained above,156 the TCPA clearly has coverage far more broad than mere defamation and libel, so a finding that the motion was frivolous 152 2 CR 455 (Plaintiffs Objections to the Motion); 2 CR 484 (Plaintiffs’ Special Exceptions); 2 CR 502 (Plaintiffs’ Response to Additional Briefing); 2 CR 520 (Plaintiffs’ Response to the TCPA Motion). 153 2 CR 455-83. 154 1 RR 16, 27. 155 2 CR 858. 156 Section XVI of this brief. BRIEF OF APPELLANTS Page 73 of 82 because it was not limited to the libel claim was wholly unwarranted by the facts or law. Under the foregoing circumstances, the part of the order stating that “Plaintiffs’ Objections to Defendants’ Motion to Dismiss are sustained” should not be interpreted as sustaining each and every one of Plaintiffs’ extremely voluminous evidentiary objections that neither the Court or Defendants’ counsel could have possibly reviewed before or at the hearing due to the late nature of the filing. In response to the evidentiary objections, the Defendants have submitted responses to each objection under Appendix 3 to this brief. Defendants would ask that all evidentiary objections to Defendants’ evidence be denied. If the trial court’s order could be construed as a blanket sustaining of all of Plaintiffs’ evidentiary objections, then the trial court erred on every evidentiary objection because each and every evidentiary objection raised by the Plaintiffs were groundless.157 157 Appx. 3. BRIEF OF APPELLANTS Page 74 of 82 XX. EVEN IF ANY OF PLAINTIFFS’ EVIDENTIARY OBJECTIONS HAD A BASIS, DEFENDANTS’ SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO CURE DEFECTS, PARTICULARLY WHEN THE OBJECTIONS WERE FILED ON THE DAY OF THE HEARING, WERE NOT DISCUSSED AT THE HEARING, AND DEFENDANTS HAD NO OPPORTUNITY TO REVIEW THE OBJECTIONS PRIOR TO THE HEARING DUE TO THEIR TARDY FILING Where a trial court finds evidentiary deficiencies in pre-trial motions, the party offering the evidence should be given an opportunity to cure if it is possible to do so.158 The trial court should be lenient in granting opportunities to cure so that the party has a fair opportunity to demonstrate that a claim is not frivolous.159 Affording the opportunity to cure evidentiary defects is particularly important where the defect is to form rather than substance.160 The movant should be allowed to amend to cure technical defects.161 The motion should not be denied until the party has an opportunity to cure evidentiary objections by amendment and refuses.162 158 Gower v. Univ. Behavioral Health of Denton, No. 02-16-00245-CV, 2017 Tex. App. LEXIS 6746, at *25 (App.—Fort Worth July 20, 2017). 159 Id. 160 Tex. R. Civ. P. 166a; 7-101 Dorsaneo, Texas Litigation Guide § 101.05 (2017). 161 Shaw v. Norwest Bank Tex., N.A., NUMBER 13-99-602-CV, 2001 Tex. App. LEXIS 4177, at *16-17 (App.—Corpus Christi June 21, 2001). 162 Choctaw Props., L.L.C. v. Aledo I.S.D., 127 S.W.3d 235, 241 (Tex. App.—Waco 2003). BRIEF OF APPELLANTS Page 75 of 82 In this case, the evidentiary objections were filed on the morning of the hearing and were not discussed at the hearing. Moreover, the Plaintiffs submitted certified public records to show that Mr. Ferguson conveyed the Subject Property from MBH Real Estate LLC to Elmer Hernandez, but omitted the foreclosure sale deed signed by Ferguson wherein Ferguson conveyed the Subject Property to Metro Buys Homes LLC, not to MBH Real Estate LLC, which caused the very title issues of which Plaintiffs complain. The Defendants should have had an opportunity to amend and cure any evidentiary defects if the trial court’s order can even be construed as sustaining the Plaintiffs’ evidentiary objections. The Defendants should also be able to show Instrument No. D215075534 in the Tarrant County, Texas deed records, Appx. 2 herein, which is an essential component of the chain-of-title that Ferguson misleadingly omitted from his documents submitted the morning of the TCPA hearing. Regardless, Ferguson had the burden of showing enough of the chain-of- title to establish his claim, and so, he failed to carry that burden by offering any evidence that MBH Real Estate LLC was ever in the chain-of-title to the Subject Property. This is true regardless of whether this Court considers Instrument No. D215075534 in the Tarrant County, Texas deed records, being the foreclosure sale BRIEF OF APPELLANTS Page 76 of 82 deed from Ferguson to Metro Buys Homes LLC because the turnover order163 showing Coker et. al. to be in the chain-of-title, before any conveyance involving MBH Real Estate LLC, is in the record. Mr. Ferguson’s burden is not met regardless, but is particularly not met when the turnover order is in this Court’s record.164 XXI. PRAYER The Defendants ask this Court to reverse the trial court’s order and render judgment dismissing Plaintiffs’ suit with prejudice, awarding attorney’s fees,165 costs, and sanctions to Ghrist’s clients. In the alternative, Defendants ask that this Court reverse the trial court’s order and render judgment dismissing Plaintiffs’ claims against Defendants with prejudice, awarding attorney’s fees,166 costs, and sanctions to the Defendants, and leaving Plaintiffs’ claims against Sendera Title167 and its employees unaffected. In the further alternative, the Defendants ask this Court to dismiss each cause of action that this Court finds should be dismissed, award attorney’s fees,168 costs, and sanctions to appellants, and affirm the trial 163 1 CR 133-34. 164 Id. 165 1 CR 368-70. 166 1 CR 368-70. 167 1 RR 29-30 (the Sendera defendants appeared at the hearing by counsel and orally joined in the motion to dismiss). 168 1 CR 368-70. BRIEF OF APPELLANTS Page 77 of 82 court’s order as to the remaining claims. The trial court should have considered a partial grant of the TCPA motion instead of finding that the motion was frivolous for failure to limit the motion to the libel claim.169 If the motion is partially granted, then attorney’s fees and sanctions should be awarded on the claims that the motion is partially granted on.170 Defendants ask this Court to overrule Plaintiffs’ evidentiary objections. Defendants ask this Court to find that the trial court’s order sustaining objections to the motion itself did not also sustain the Plaintiffs’ voluminous evidentiary objections filed the morning of the hearing and not discussed at the hearing. In the further alternative, Defendants ask that this Court issue an opinion and reverse and remand for further proceedings pursuant to such opinion as necessary. Regardless of what other actions this Court takes, the Defendants ask that this Court find that the motion filed under the TCPA was not frivolous or solely intended to delay and deny any recovery of attorney’s fees to the Plaintiffs’ for 169 Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881, 890 (Tex. App.—Houston [1st Dist.] 2015) (partial grant of TCPA motion as to some claims but not others proper); D Magazine Partners, L.P. v. Rosenthal, 529 S.W.3d 429 (Tex. 2017) (granting TCPA motion as to statutory claims, like DTPA, but denying it as to defamation was proper). 170 D Magazine, 529 S.W.3d at *30 (attorney’s fees must be awarded to the movant when TCPA motion is partially granted as to some claims but not others); Sullivan v. Abraham, 472 S.W.3d 677, 683 (Tex. App.—Amarillo 2014), rev’d on other grounds, 488 S.W.3d 294 (Tex. 2016) (award of some sanctions are mandatory even if movant fails to adequately support claim for attorney’s fees). BRIEF OF APPELLANTS Page 78 of 82 defense of the motion. In the alternative, Defendants ask for a hearing on the attorney’s fees because the fee request was filed on the morning of the hearing on the TCPA motion and Defendants had no opportunity to review or challenge the amount of fee request before the hearing began. With regard to attorney’s fees and sanctions requested by Defendants, the Defendants request $6,550.00 in attorney’s fees on the TCPA motion, $5,000.00 for the appeal, and three times the foregoing as sanctions.171 In the further alternative, Defendants ask the Court to remand to the trial court for further proceedings in connection with this Court’s opinion to be rendered. 171 1 CR 369-70. BRIEF OF APPELLANTS Page 79 of 82 Respectfully submitted, _____/s/ Ian Ghrist__________________ Ian Ghrist State Bar No. 24073449 ian@ghristlaw.com Ghrist Law Firm 2735 Villa Creek Drive, Suite 250A Farmers Branch, Texas Telephone: (817) 778-4136 Fax: (817) 900-2863 ATTORNEY FOR APPELLANTS BRIEF OF APPELLANTS Page 80 of 82 CERTIFICATE OF COMPLIANCE Pursuant to Texas Rules of Appellate Procedure 9.4, I hereby certify that, absent the caption, identity of parties and counsel, statement regarding oral argument, table of contents, index of authorities, statement of the case, statement of issues presented, statement of jurisdiction, statement of procedural history, signature, proof of service, certification, certificate of compliance, and appendices, the computer program used to prepare this document prior to its conversion to portable document format calculates the number of words in the foregoing brief as 14,085. I further certify that this brief complies with the typeface requirements of Texas Rule of Civil Procedure 9.4(e) because this brief has been prepared in a proportionately spaced typeface using “Microsoft Word” in fourteen (14) point “Times New Roman” style font. ____/s/ Ian Ghrist__________________ Ian Ghrist CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing has been served 13th on the following via electronic service upon this the ______ day of December _______________, 2017 to the following counsel of record via electronic filing. J. Michael Ferguson Salvador Espino 62 Main St., Suite 310 1205 N Main St. Colleyville, Texas 76034 Fort Worth, Texas 76164 Tel. (817) 267-1008 Phone (817) 624-3352 Fax (817) 485-1117 Fax (817) 624-6104 sal_fw@yahoo.com mike@jmichaelferguson.com Attorney for Sendera Title and employees Attorney for Plaintiffs ___/s/ Ian Ghrist______________ Ian Ghrist BRIEF OF APPELLANTS Page 81 of 82 No. 02-17-00411-CV SECOND COURT OF APPEALS FORT WORTH, TEXAS GHRIST LAW FIRM ET. AL., Appellants V. J. MICHAEL FERGUSON PC, ET. AL. Appellees FROM THE 236TH DISTRICT COURT TARRANT COUNTY, TEXAS CAUSE NO. 236-295012-17 INDEX TO APPENDIX TO BRIEF OF APPELLANTS 1. Order Appealed From 2. Instrument No. D215075534 in the Tarrant County, Texas Deed Records, being the foreclosure sale deed from J. Michael Ferguson as grantor to Metro Buys Homes LLC as grantee 3. Evidentiary Objection Responses BRIEF OF APPELLANTS Page 82 of 82 236-295012-17 Appx. 1 CAUSE NO. 236-295012-17 MBH REAL ESTA TE, LLC. § IN THE DISTRICT COURT AF! LOAN SERVICING, LLC. § ANSON FINANCIAL, INC. § J. MICHAEL FERGUSON. P.C. § § Plaintiff~ § § 236TH DISTRICT COURT V. § § IAN GHRIST. GHRIST LAW § FIIUvt, PLLC, SHAWN COKER, § NEIGHBORHOOD PARTNER, § INC., BLUE MOON REALTY § GROUP. LLC AND WIZARD § FUNDING. LLC, SILVER STAR § TITLE, LLC OBA SENDERA § TITLE. ELIZABETH ESPINO. § KATHYE. MONTES, and LUCY § OLIVAS § § D~fe ndants § TARRANT COUNTY, TEXAS ORDER DENYING GHRIST DEFENDANTS AND COKER DEFENDANTS MOTION TO DISMISS PURSUANT TO CHAPTER 27 & ORDER SUSTAINING PLAINTIFFS' OBJECTIONS TO DEFENDANTS' MOTION TO DISMISS CAME ON Tl!IS DAY TO BE HEARD, Defendants IAN GHRIST. GHRIST LAW FIRM. PLLC, SHAWN COhER. NEIGHBORHOOD PARTNER, INC., BLUE MOON REALTY GROUP, LLC, WIZARD FUNDING, LLCs' Motion to Dismiss Pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code. This Cou1t, after considering the pleadings, the response, the objections to Defendants• Motion to Dismiss, the competent evidence, the documents. the arguments of counsel and the applicable law is of the opinion that Plaintiffs' objections to Defendants' Motion to Dismiss should he sustained and that Defendants' Motion to Dismiss should be denied. ··:g E-r,1AILED ~ \ l'!::,Cy\ ~,.,,,"i. ~"'-=> \ \. ,., • l""'J ~ II Page 856 It is therefore ORDERED that Plaintiffs' Objections to Defendants' Motion to Dismiss are sustained. It is titrther ORDERED that Defendants IAN GHRIST, GHRIST LAW FIRM, PLLC, SHA\VN COKER. NEIGHBORHOOD PARTNER, INC .. BLUE 1-.100N REALTY GROUP, LLC, WIZARD FUNDING, LLCs' Motion to Dismiss Pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code is denied. This Court finds: I. THE GHRIST DEFENDANTS and THE COKER DEFENDANTS have no standing to assert a SLAPP Motion on behalf of Sendera Title and its employees. 2. Portions of Defendants· Motion to Dismiss were based upon claims ,vhich have not been brought against the Defendants, and are therefore denied; 3. A Motion to Dismiss pursuant to Chapter 27 does not apply to Declaratory Judgment Actions to determine the rights. status. or other legal relations in relation to the property or to determine the validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status. or other legal rdations thereunder as expressly authorized by Chapter 3 7 of the Tex.Civ.Prac.Rem.Code; 4. Defendants have not met their initial burden of proof to show that the action is based on, relates to, or is in response to a party's exercise of the right of free speech, the right of petition. or the right of association: 5. Even if Defendants could show that the actions brought by Plaintiffs are based on, relates to. or is in response to a party's exercise of the right of free speech, the right of petition. or the right of association, the actions are exempt from Chapter 27: 2[Pagc 857 6. Further, even if Defendants could show that the actions brought by Plaintiffs based on, relates to, or is in response to a patty's exercise of the right of free speech, the right of petition. or the right of association, Plaintiffs have produced clear and specific evidence which establishes a prima facie case for each essential element of Plaintiffs' claims such that the Defendants' Motion must be dismissed; and 7. Defendants cannot establish a valid defense to Plaintiffs' claims: and 8. Defendants' motion to dismiss filed under this chapter is frivolous or solely intended to delay. By separate Order, the Comt has ordered the parties to mediate this case. This Court is withholding its ruling on Plaintiffs' requests for an award of court costs and reasonable attorney's fees for responding to the Motion to Dismiss to give the parties time to n1ediate this case. Jn tlie e, c1.t thnt the pttz tics do nut Icsol \'C their disputes at 1nccliatisn, th is C--0nrt ,rill issue ilP Or~ ar on its rwli11.::- 011 PLtintirfs' 1cqacsts fut costs ~nttl 1c.1so1u1blc atto111c..4 •.1 k!es b..e Bcccn1be1 1.:, lQ17. It is further ORDERED that the automatic abatement of discovery pursuant to 27.003 of Tex.Civ.Prac.Rem. Code is removed. It is further ORDERED that the parties shall confer and submit an agreed scheduling order to this court within the next 3"=>days. Signed on this the J!f_ day of November 2017. 3IPagc 858 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 Appx. 2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 A True and Correct Copy of Original Record Filed in Tarrant County, TEXAS Tarrant County Clerk Verify Certification at https://tcrecordsonline.com Verify Key:y8ru6dh2 Appx. 3 Cause No. 236-295012-17 MBH REAL ESTATE LLC, § IN THE DISTRICT COURT AFI LOAN SERVICING, LLC, § ANSON FINANCIAL, INC., § J. MICHAEL FERGUSON, P.C. § Plaintiffs § § V. § 236TH JUDICIAL DISTRICT § IAN GHRIST, GHRIST LAW FIRM, PLLC, § SHAWN COKER, NEIGHBORHOOD PARTNER, § INC., BLUE MOON REALTY GROUP, LLC, § WIZARD FUNDING, LLC, SILVER STAR TITLE § , LLC DBA SENDERA TITLE, ELIZABETH § ESPINO, KATHY E. MONTES, AND LUCY § OLIVAS § Defendants § TARRANT COUNTY, TEXAS DEFENDANTS’ REQUEST TO OVERRULE PLAINTIFFS’ VOLUMINOUS EVIDENTIARY OBJECTIONS Plaintiffs’ made the following evidentiary objections, which should be overruled: Page 1 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Moreover, the best evidence rule was inapplicable as the affidavit did not try to prove the contents of documents and the documents themselves were offered. Page 2 of 29 Page 3 of 29 Page 4 of 29 Page 5 of 29 Page 6 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Moreover, the best evidence rule was inapplicable as the affidavit did not try to prove the contents of documents and the documents themselves were offered. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. RESPONSE: This exhibit was relevant to show the course of dealing between Ghrist and Ferguson, which helps explain the proper interpretation of the written separation agreement. Page 7 of 29 RESPONSE: The statement was authenticated by Ghrist’s affidavit, also attached to the motion, was relevant to show the parties’ course of dealing, and was a proved-up business record. Page 8 of 29 Page 9 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Moreover, the best evidence rule was inapplicable as the affidavit did not try to prove the contents of documents and the documents themselves were offered. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. RESPONSE: Ferguson has alleged that Ghrist did not work on the recovery of all of the property that is the subject of the case and should not be paid for all of it. This exhibit proves that the disputed property was part of Ghrist’s work as Ghrist drafted and filed the turnover motion and order, which resulted in the recovery of that property. Page 10 of 29 Page 11 of 29 Page 12 of 29 Page 13 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Moreover, the best evidence rule was inapplicable as the affidavit did not try to prove the contents of documents and the documents themselves were offered. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. Page 14 of 29 Page 15 of 29 Page 16 of 29 Page 17 of 29 Page 18 of 29 Page 19 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Moreover, the best evidence rule was inapplicable as the affidavit did not try to prove the contents of documents and the documents themselves were offered. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. Several objections raised here are not even evidentiary objections at all and are frivolous and intended to delay and annoy. Page 20 of 29 Page 21 of 29 RESPONSE: A lay witness can testify as to the value of his own property. Accordingly, it is irrelevant whether Ghrist qualifies as an expert. Ghrist does, however, in fact qualify as an expert. RESPONSE: Ferguson swore to these facts. Amending the pleadings does not mean that he did not previously make those statements under oath. The statements were relevant. RESPONSE: How can Ferguson argue that his own pleading is not relevant? Why plead what was pled if it was not relevant? Page 22 of 29 Page 23 of 29 Page 24 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. Several objections raised here are not even evidentiary objections at all and are frivolous and intended to delay and annoy. Page 25 of 29 Page 26 of 29 Page 27 of 29 RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, authenticated, and not hearsay. Also, the interested witness rule only applies to plaintiff’s traditional summary judgment motions that are based solely on the affidavit of an interested witness—obviously inapplicable here. Several objections raised here are not even evidentiary objections at all and are frivolous and intended to delay and annoy. RESPONSE: These objections go to weight and credibility of the evidence, not admissibility, and the evidence was competent, relevant, authenticated, and not hearsay. Page 28 of 29 Respectfully submitted, Ghrist Law Firm PLLC ___/s/ Ian Ghrist____________________ By: Ian Ghrist SBOT No. 24073449 2735 Villa Creek Drive, Suite 250A Farmers Branch, Texas 75234 Phone (817) 778-4136 Fax (817) 900-2863 ian@ghristlaw.com Attorney for Ian Ghrist; Ghrist Law Firm, PLLC; Shawn Coker; Neighborhood Partner, Inc.; Blue Moon Realty Group, LLC; and Wizard Funding, LLC Page 29 of 29