Opinion issued July 10, 2014

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-13-00721-CV

———————————

BRUCE I. SCHIMMEL, Appellant

V.

GARY MCGREGOR, TERI MCGREGOR, KRIS HALL, SOLEDAD 

PINEDA, LARRY BISHOP, CYNTHIA BISHOP, GEORGE CLARK, 

DEBORAH CLARK, AND CAROL SEVERANCE, Appellees

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Case No. 2013-05146

O P I N I O N

In this interlocutory appeal, appellees Gary McGregor, Teri McGregor, Kris 

Hall, Soledad Pineda, Larry Bishop, Cynthia Bishop, George Clark, Deborah 
2

Clark, and Carol Severance (collectively, “the Buy-Out Owners”), sued Bruce 

Schimmel, an attorney hired by The Sands of Kahala Beach HOA, Inc. (“SOKB”), 

the homeowners’ association for the subdivision in which the Buy-Out Owners 

lived, for tortious interference with prospective business relations, specifically, the 

sale of their respective beachfront properties to the City of Galveston. Schimmel 

moved to dismiss the Buy-Out Owners’ tortious interference claim pursuant to the 

Texas Citizens Participation Act (“TCPA”).1

 The trial court denied Schimmel’s 

motion to dismiss. In two issues, Schimmel contends that the trial court 

erroneously (1) found that Schimmel’s complained-of actions did not involve 

“matters of public concern” and did not implicate the exercise of his right to 

petition, right of free speech, or right of association and thus erroneously denied 

his motion to dismiss; and (2) refused to award Schimmel court costs, reasonable 

attorney’s fees, and other expenses incurred in defending the action against him.

We reverse and remand for further proceedings.

Background

The Buy-Out Owners all own beachfront property in the Sands of Kahala 

Beach, a small, gated subdivision located on Galveston Island. In September 2008, 

Hurricane Ike made landfall in the region and caused extensive property damage to 

numerous homes, including those of the Buy-Out Owners. Because their homes 

 1 See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–.011 (Vernon Supp. 2013).
3

were allegedly more than fifty percent damaged, the Buy-Out Owners sought to 

sell their properties to the City of Galveston under a Federal Emergency 

Management Agency (“FEMA”) program called the Hazard Mitigation Grant 

Program (“HMGP”). The Texas Department of Public Safety assists in 

administering this program. The Buy-Out Owners and an attorney for the City of 

Galveston signed agreements in September 2009 concerning the purchase of the

respective properties.

SOKB and the remaining owners who owned property in the subdivision but 

did not wish to sell their property to the City of Galveston (“the Remaining 

Owners”) opposed the Buy-Out Owners’ plans to sell. Under the HMGP, the 

properties that the City of Galveston purchased “were to be kept as open space in 

perpetuity.” This requirement concerned the SOKB, the entity in charge of 

collecting assessments and fees from the property owners within the subdivision, 

and the Remaining Owners, who believed that the required public use of the 

purchased land and the loss of a private roadway and utility easement would cause 

the value of their properties to drop.

Due to the dispute between the Buy-Out Owners, SOKB, and the Remaining 

Owners, in October 2009, the City of Galveston added a condition to the purchase 

of the Buy-Out Owners’ properties: the president of SOKB’s Board of Directors 

(“the Board”) needed to sign a document releasing the City from paying future 
4

homeowners’ dues and other fees and assessments to SOKB once it purchased the 

properties. In December 2009, SOKB hired Schimmel, an attorney, to represent its 

interests and those of the Remaining Owners in the dispute with the Buy-Out 

Owners. SOKB refused to sign the releases and the Board voted to amend 

SOKB’s by-laws to raise the voting requirement to remove directors from the 

Board, purportedly on Schimmel’s advice. The Buy-Out Owners subsequently 

held a special meeting of the Board and elected new directors, including Kris Hall, 

one of the appellees, as the new President. Hall then signed the releases for the 

Buy-Out Owners’ properties and delivered them to the City of Galveston.

Schimmel continued to work on behalf of SOKB and the Remaining Owners 

to convince the City of Galveston not to buy the Buy-Out Owners’ properties until 

February 1, 2011, when he withdrew from representation. Ultimately, the time 

period to participate in the HMGP expired without the City of Galveston’s having 

closed on the purchases of the Buy-Out Owners’ properties.

The Buy-Out Owners, joined by SOKB, sued Schimmel on January 28, 

2013, asserting claims for breach of fiduciary duty and equitable fee forfeiture. 

Neither of those claims is at issue in this interlocutory appeal.

On March 28, 2013, the Buy-Out Owners and SOKB filed their first 

amended petition. In addition to the breach of fiduciary duty and fee forfeiture 

claims, the Buy-Out Owners asserted a claim against Schimmel for tortious 
5

interference with prospective business relations.2 The Buy-Out Owners alleged 

that a reasonable probability existed that they would have entered into a business 

relationship with the City of Galveston, that Schimmel intentionally interfered with 

the relationship, and that Schimmel’s conduct was independently tortious and 

unlawful “in that Defendant Schimmel made fraudulent statements about these 

Plaintiffs to third parties and persuaded others to illegally boycott these Plaintiffs.”

The Buy-Out Owners alleged that Schimmel made several 

misrepresentations that interfered with the purchase of their properties by the City 

of Galveston. For example, in response to an article in the Houston Chronicle 

about the potential sale of the properties, Schimmel allegedly wrote to the author 

of the article and stated that if the City purchased the properties the Remaining 

Owners would lose their access to a nearby state highway because the private road 

in the subdivision would be demolished. He also allegedly misrepresented to the 

author that all of the properties were behind the vegetation line and “repairable for 

less than 50% of their value,” which would preclude them from participation in the 

HMGP. Schimmel also allegedly made misrepresentations to the Board 

concerning how the HMGP’s definition of “substantial damage” to the properties 

 2 SOKB did not join the homeowners in asserting this claim against Schimmel, and 

SOKB is not a party to this appeal, which concerns only the Buy-Out Owners’ 

tortious interference claim.
6

was calculated;3 to lot owners in the subdivision that the buyout would not include 

the opportunity to buy out all of the properties in the subdivision; and to various 

individuals that he “had no intention of changing any more By-Laws,” that the 

SOKB had been working with the Buy-Out Owners to settle the dispute, and that 

developers no longer owned lots in the subdivision, even though they did.

The Buy-Out Owners also alleged that Schimmel had “systematically 

excluded members from voting [at resident meetings] in order to boycott the Buyout owners,” such as by quickly setting a voting eligibility date to prevent owners 

who had not paid their annual assessments from voting at meetings and by 

recommending the elimination of voting by proxy, which would affect the BuyOut Owners who used their properties as vacation homes but did not live 

permanently in the subdivision. The Buy-Out Owners further alleged that 

Schimmel had stated that neither SOKB nor its Board had the power to waive 

assessments as required by the City of Galveston to purchase the properties, and 

“[w]ithout releases, the [City] would not close on the properties and [Schimmel] 

had the [Board] refuse to sign [the] release[s] which was an unreasonable restraint 

 3 The Buy-Out Owners alleged that Schimmel told the Board that “the definition of 

Substantial Damage is damages that total at least 50% of the pre-event fair value 

of the property,” but he allegedly knew that the fair market value of the property 

was based on the local appraisal district’s value for the structure, which did not 

include the value of the land. According to the Buy-Out Owners, “This is a 

significant distinction which the BOD later misrepresented to FEMA when they 

alleged false damage estimates.”
7

or alienation. Defendant Schimmel’s position was that the Buy-[O]ut owners 

would not be allowed to sell to the [City] under any circumstances.” The Buy-Out 

Owners alleged that they had suffered economic damages consisting of the 

difference between the proposed buy-out values and the market values of their 

properties.

On May 28, 2013, Schimmel filed a motion to dismiss under the TCPA. In 

this motion, Schimmel stated that the Buy-Out Owners served him with their first 

amended petition on March 28, 2013, and that this motion to dismiss addressed 

only the tortious interference claim raised for the first time in that amended 

petition.

Schimmel stated that he advised the Board and the Remaining Owners that 

he thought the issue concerning the value of the repairs to the Buy-Out Owners’ 

properties, which was relevant to their eligibility to participate in the HMGP, was 

“a matter between [the Buy-Out Owners] and governmental agencies” and should 

not be pursued by SOKB, “but that if any lot owner wanted to pursue that issue on 

his or her own, it would aid [SOKB] by distracting [the Buy-Out Owners].” 

Schimmel argued that the TCPA protected these statements because they involved 

his right of association and right to petition regarding a matter of public concern. 

He argued that his statements to the Houston Chronicle reporter were “a 

‘communication’ which is ‘an exercise of the right of free speech’ and related to an 
8

exercise of the right of petition” and were made “in connection with a matter of 

public concern” because the statements related to the expenditure of government 

money and “interference with the community of the Subdivision and economic 

concerns.” He asserted that those statements were also “reasonably likely to 

encourage consideration or review of an issue by” an executive or other 

governmental body or were “reasonably likely to enlist public participation in an 

effort to effect consideration of an issue by” an executive or other governmental 

body. With respect to his alleged statements to the Board, Schimmel argued that 

those statements were “an exercise of the right of association” and thus were 

entitled to protection under the TCPA.

Schimmel also argued that he was entitled to mandatory court costs, 

reasonable attorney’s fees, and other expenses incurred in defending the claim 

pursuant to Civil Practice and Remedies Code section 27.009(a). Schimmel 

attached an affidavit setting out the amount of attorney’s fees he had incurred in 

defending against the Buy-Out Owners’ claims. This affidavit set out the billing 

rate, the date tasks were performed, the hours spent, and a description of the tasks 

completed.

Schimmel attached numerous exhibits to his motion to dismiss. One of 

these exhibits was an order of dismissal in a suit filed by the Buy-Out Owners in 

the Southern District of Texas against the City of Galveston and several 
9

Department of Public Safety officials involved in the administration of the HMGP. 

The Buy-Out Owners had raised claims under the Fourteenth Amendment and 

Section 1983,4 arguing that the City of Galveston’s failure to close on the purchase 

of their properties deprived them of funds under the HMGP without due process of 

law. The district court granted the defendants’ motion to dismiss pursuant to 

Federal Rule of Civil Procedure 12(b)(1) and, in its order, noted that state agencies 

involved with administering the HMGP have “wide discretion in administering the 

program.” The court stated, “Nothing in the regulations [governing the HMGP] 

dictates that qualified property owners are entitled to participate in the program or 

limits the State’s discretion in determining a property owner’s qualifications for the 

program or reviewing those qualifications at any time in the process.” The court 

concluded that the Buy-Out Owners “have no entitlement to HMGP funds or a 

property right to such funds” and ultimately dismissed their suit.

In response to Schimmel’s motion to dismiss, the Buy-Out Owners argued 

that their claim fell within a statutory exemption to the TCPA because Schimmel 

was engaged in the business of selling his legal services, he was paid to render 

legal services by SOKB and the Remaining Owners, and his conduct at issue in the 

suit occurred while he was rendering legal services. The Buy-Out Owners also 

argued that Schimmel had not timely filed his motion to dismiss because the TCPA 

 4 See 42 U.S.C. § 1983 (2006) (providing civil cause of action for deprivation of 

rights).
10

required such motions to be filed not later than the sixtieth day after service of the

legal action and Schimmel filed his motion to dismiss on the sixty-first day after 

the homeowners served him with their amended petition.

The Buy-Out Owners further stated,

The individual Plaintiffs[’] claims are not based on, related to, or in 

response to a right of Schimmel to voice free speech, have a right of 

association or a right to petition. It is totally about his tortious 

interference with Plaintiffs’ prospective business and contractual 

relations which caused the individual Plaintiffs money damages. 

Plaintiffs’ claims are based upon the independent torts of fraud, 

misrepresentations and illegal boycott.

They further argued, “Schimmel’s conduct is at issue here, not anyone’s free 

speech, right to associate, or to file a lawsuit.” The Buy-Out Owners also 

challenged the affidavits that Schimmel had submitted with his motion to dismiss 

on the ground that Schimmel stated that he is “personally acquainted with the facts 

stated herein, except where I state that I am testifying on information and belief, in 

which case I am testifying based on information and my belief thereof.” The BuyOut Owners argued that these affidavits did not constitute competent evidence 

because “personal acquaintance” is not “personal knowledge.” The homeowners 

also challenged Schimmel’s attorney’s fees affidavit on the ground that it did not 

meet the requirements for establishing reasonable and necessary attorney’s fees as 

set out by the Texas Supreme Court in El Apple I, Ltd. v. Olivas.
11

The Buy-Out Owners attached their own affidavits to their response and 

argued that these affidavits established a prima facie case for tortious interference 

with prospective business relations.5

 The affidavits were substantively identical. 

The affidavits set out numerous representations allegedly made by Schimmel that, 

according to the Buy-Out Owners, caused the City of Galveston to fail to purchase 

their properties. As an example, Kris Hall, one of the Buy-Out Owners, averred:

But for Schimmel’s misrepresentations and conduct there is a 

reasonable probability that all of our buy-out contracts would have 

closed. . . . Schimmel’s independent misrepresentations and boycott, 

set out above, prevented our agreements from closing and the 

purchase of our property by the [City]. Schimmel’s acts, set out 

above, were done with a conscious desire to prevent our sales and 

purchases from occurring. I, as well as the other Buy-Out Owners, 

have suffered actual damages as a result of this interference of 

Schimmel. We have incurred thousands of dollars in legal fees and 

have lost the difference between the buy-out values that we were to be 

paid and the lesser amounts that our properties now are valued at. 

There was a reasonable probability that I, as well as the rest of the 

Buy-Out Owners, would have entered into a business relationship and 

closed our contracts with the [City].

The Buy-Out Owners did not attach affidavits from attorneys with the City of 

Galveston or from personnel with the Department of Public Safety, which assisted 

in administering the HMGP, nor did they attach any other evidence from persons 

 5 Although the Buy-Out Owners pleaded a claim for tortious interference with 

prospective relations, the Buy-Out Owners admit in their affidavits submitted in 

opposition to Schimmel’s motion to dismiss that they had signed contracts with 

the City of Galveston to purchase the properties for specified amounts.
12

involved with the City’s decision not to close on the purchase of the Buy-Out 

Owners’ properties.

Schimmel filed a reply and asserted that he had timely filed his motion to 

dismiss. He argued that although the Buy-Out Owners filed their amended petition 

with the trial court on March 28, 2013, the Buy-Out Owners did not serve him with 

a copy of the petition. He did not see a copy of the petition until April 1, when a 

legal assistant to his attorney in the case downloaded the petition from the ProDoc 

eFiling service. In the alternative, Schimmel moved the trial court to allow late 

filing of the motion to dismiss, as is permitted by the TCPA. Schimmel also 

argued that the Buy-Out Owners’ supporting affidavits were conclusory and not 

supported by evidence that a reasonable probability existed that their buy-out 

contracts with the City of Galveston would have closed but for Schimmel’s 

allegedly tortious actions. He further argued that the Buy-Out Owners did not 

provide “any evidence that any act of Schimmel’s caused the [Texas Department 

of Public Safety] to order the City not to close the alleged contracts.”

After an oral hearing, the trial court issued an order denying Schimmel’s 

motion to dismiss. The order stated:

The parties announced on the record their stipulation that the 

Motion relates only to the Plaintiffs’ cause of action for damages 

resulting from an alleged tortious interference with a prospective 

relationship between Plaintiffs and the City of Galveston. . . .

The Court finds that the Motion was timely filed.
13

The Court finds that the docket conditions in the court 

prevented the scheduling of the hearing on the Motion within 30 days 

following the date of its filing.

The Court finds that the Plaintiffs’ tortious interference claim 

does not affect Schimmel’s right to participate in government.

The Court finds that Schimmel’s actions alleged as the basis of 

the tortious interference claim concerned matters disputed between 

individual parties, and the statements alleged as a basis of the claim 

were not made in connection with a matter of public concern.

The Court finds that Schimmel’s actions alleged as the basis of 

the tortious interference claim were not a part of Schimmel’s exercise 

of the right of association defined in TEX. CIV. PRACT. & REM. CODE

§27.001(2).

The Court finds that Schimmel’s actions alleged as the basis of 

the tortious interference claim do not concern Schimmel’s right to 

petition defined in TEX. CIV. PRACT. & REM. CODE §27.001(4).

The Court finds that the tortious interference claim was not 

brought to deter or prevent Schimmel’s exercise of his constitutional 

rights, for an improper purpose, for harassment, to cause unnecessary 

delay, or to increase litigation costs.

The trial court did not award attorney’s fees or costs to either party. This 

interlocutory appeal followed.

Texas Citizens Participation Act

In his first issue, Schimmel contends that the trial court erroneously 

determined that his communications that are the basis of the Buy-Out Owners’ 

tortious interference claim did not involve “matters of public concern” and did not 

implicate his “exercise of the right to petition,” “exercise of the right of free 

speech,” or “exercise of the right of association.”
14

A. Standard of Review and Applicable Law

In enacting the TCPA, the Legislature stated that the purpose of the statute 

“is to encourage and safeguard the constitutional rights of persons to petition, 

speak freely, associate freely, and otherwise participate in government to the 

maximum extent permitted by law and, at the same time, protect the rights of a 

person to file meritorious lawsuits for demonstrable injury.” TEX. CIV. PRAC. &

REM. CODE ANN. § 27.002 (Vernon Supp. 2013); KTRK Television, Inc. v. 

Robinson, 409 S.W.3d 682, 688 (Tex. App.—Houston [1st Dist.] 2013, pet. 

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

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

certain constitutional rights. In re Lipsky, 411 S.W.3d 530, 539 (Tex. App.—Fort 

Worth 2013, orig. proceeding). The Legislature has directed courts to construe 

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

REM. CODE ANN. § 27.011(b) (Vernon Supp. 2013); Robinson, 409 S.W.3d at 688.

Under the TCPA, if a party files a legal action that is “based on, relates to, or 

is in response to” the defendant’s exercise of the right of free speech, right to 

petition, or right of association, the defendant may file a motion to dismiss the 

action. TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a) (Vernon Supp. 2013). 

The TCPA statutorily defines “exercise of the right of association,” “exercise of 

the right of free speech,” and “exercise of the right to petition.” See id.
15

§ 27.001(2)–(4) (Vernon Supp. 2013). The TCPA defines “exercise of the right of 

association” as “a communication between individuals who join together to 

collectively express, promote, pursue, or defend common interests.” Id.

§ 27.001(2). “Communication” is further defined as “the making or submitting of 

a statement or document in any form or medium, including oral, visual, written, 

audiovisual, or electronic.” Id. § 27.001(1). The TCPA defines “exercise of the 

right of free speech” as “a communication made in connection with a matter of 

public concern.” Id. § 27.001(3). “Matter of public concern” includes issues 

relating to health or safety; environmental, economic, or community well-being; 

the government; a public official or public figure; or a good, product, or service in 

the marketplace. Id. § 27.001(7). The statutory definition of “exercise of the right 

to petition” includes, among other things, “a communication in connection with an 

issue under consideration or review by a legislative, executive, judicial, or other 

governmental body or in another governmental or official proceeding.” Id.

§ 27.001(4)(B).

A party filing a motion to dismiss under the TCPA must file the motion “not 

later than the 60th day after the date of service of the legal action.” Id.

§ 27.003(b). The trial court may extend the time to file a motion to dismiss upon 

a showing of good cause. Id.
16

When deciding whether to grant a motion to dismiss a lawsuit pursuit to the 

TCPA, the trial court must “consider the pleadings and supporting and opposing 

affidavits stating the facts on which the liability or defense is based.” Id. 

§ 27.006(a) (Vernon Supp. 2013); Robinson, 409 S.W.3d at 688. The court must 

determine, after a hearing, whether the moving defendant has demonstrated by a 

preponderance of the evidence that the legal action is “based on, relates to, or is in 

response to the party’s exercise of the right of free speech, the right to petition, or 

the right of association.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b) 

(Vernon Supp. 2013); Robinson, 409 S.W.3d at 688. We review de novo the trial 

court’s determination whether the defendant carried this burden. Robinson, 409 

S.W.3d at 688.

If the trial court determines that the defendant has met his burden, the 

burden then shifts to the plaintiff to establish “by clear and specific evidence a 

prima facie case for each essential element of the claim in question.” TEX. CIV.

PRAC. & REM. CODE ANN. § 27.005(c); Robinson, 409 S.W.3d at 688. The 

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

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

evidence necessary to support a rational inference that the allegation of fact is 

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

S.W.2d 69, 72 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). The statute 
17

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

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

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

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

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

“relating to a particular named thing.” Id. We review the pleadings and evidence 

in the light most favorable to the plaintiffs. Newspaper Holdings, Inc. v. Crazy 

Hotel Assisted Living, Ltd., 416 S.W.3d 71, 80–81 (Tex. App.—Houston [1st 

Dist.] 2013, pet. denied) Accordingly, here, if we determine that Schimmel 

carried his initial burden of proof, we must examine the pleadings and the 

evidence presented in response to Schimmel’s motion to dismiss to determine 

whether the Buy-Out Owners marshaled “clear and specific” evidence to support 

each element of their tortious interference claim. See Robinson, 409 S.W.3d at 

689.

B. Applicability of TCPA to the Buy-Out Owners’ Claim

1. Timeliness of Motion to Dismiss

The Buy-Out Owners argue that this Court should affirm the trial court’s 

ruling denying Schimmel’s motion to dismiss on the basis that he did not timely 

file the motion.
18

Section 27.003(b) provides that a party filing a motion to dismiss must file 

the motion “not later than the 60th day after the date of service of the legal action.” 

TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(b). The statute further provides, 

however, that the trial court may extend the time to file a motion to dismiss “on a 

showing of good cause.” Id.; see also Newspaper Holdings, 416 S.W.3d at 79 

(“The TCPA sets strict deadlines for filing, hearing, and ruling on a motion to 

dismiss. Absent a showing of good cause, the defendant must move to dismiss 

pursuant to the TCPA ‘not later than the 60th day after the date of service of the 

legal action.’”).

Here, the Buy-Out Owners’ first amended petition, which was the first 

pleading in which the Buy-Out Owners raised the tortious interference claim 

against Schimmel, bears a file-stamped date of March 28, 2013. Schimmel filed 

his motion to dismiss on May 28, 2013, sixty-one days later. In his initial motion 

to dismiss, Schimmel stated, “On March 28, 2013, Plaintiffs served Schimmel with 

their Plaintiffs’ Amended Petition, in which, for the first time, Natural Plaintiffs 

added a separate cause of action against Schimmel alleging tortious interference 

with prospective relations.”

In response to the motion to dismiss, the Buy-Out Ownerts argued that the 

motion was untimely because Schimmel filed his motion on the sixty-first day after 

he had been served with the action and he could not demonstrate that good cause 
19

existed for his late filing. In reply, Schimmel asserted that his motion was not 

untimely because, although he received notice that the first amended petition had 

been filed on March 28, 2013, the Buy-Out Owners did not serve him with a copy 

of the petition on that date. Instead, he did not receive a copy of the petition until 

April 1, 2013, when his counsel’s legal assistant downloaded the amended petition 

from the ProDoc eFiling service. In the alternative, Schimmel sought leave of 

court to allow the late filing of his motion.

In the order ruling on the motion to dismiss, the trial court explicitly stated, 

“The Court finds that the Motion was timely filed.” We conclude that, although 

Schimmel filed his motion to dismiss one day late, in making a statement 

concerning the timeliness of the motion, the trial court implicitly ruled that if 

Schimmel technically filed the motion late he had good cause for the late filing. 

We therefore decline to dismiss this suit on the ground that Schimmel did not 

timely file his motion to dismiss.

2. Applicability of Services Exclusion

The Buy-Out Owners also argue that the TCPA does not apply to this case 

because this case falls under the statutory exemption for commercial speech found 

in section 27.010(b).

Section 27.010(b) states:

[The TCPA] does not apply to a legal action brought against a person 

primarily engaged in the business of selling or leasing goods or 
20

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.

TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(b) (Vernon Supp. 2013). The party 

asserting the exemption bears the burden of proving its applicability. See 

Newspaper Holdings, 416 S.W.3d at 89; see also Pena v. Perel, 417 S.W.3d 552, 

555 (Tex. App.—El Paso 2013, no pet.) (“The burden of proving the applicability 

of an exemption under Section 27.010 is on the party asserting it.”).

The Buy-Out Owners argue that their tortious interference claim falls within 

this exemption because (1) Schimmel was primarily engaged in the business of 

selling his legal services; (2) the Buy-Out Owners’ cause of action arose from 

Schimmel’s conduct consisting of representations of fact about Schimmel’s 

services; (3) Schimmel’s conduct occurred in the course of delivering his legal 

services; and (4) the intended audience of his conduct was a potential buyer, the 

City of Galveston. We disagree that Schimmel’s conduct falls within this 

exemption.

The El Paso Court of Appeals addressed a similar situation in Pena. In that 

case, Pena, who had been indicted on two counts of intoxicated manslaughter and 

two counts of failure to stop and render aid, hired Dolph Quijano to represent him. 

Pena, 417 S.W.3d at 553. A jury ultimately convicted Pena, assessed punishment 

at confinement in the Texas Department of Criminal Justice, and imposed a total of 
21

$30,000 in fines. Id. at 553–54. Pena and his wife then began running 

advertisements that were critical of Quijano. Id. at 554. Quijano hired Bobby 

Perel to represent him, and Perel sent letters to local newspapers and to the Texas 

Board of Pardons and Paroles to inform it of Pena’s conduct. Id. One of Perel’s

letters to the Board of Pardons and Paroles informed it that he believed Pena had 

not taken responsibility for his underlying criminal actions and that Pena was 

responsible for “vicious ads” attacking Quijano, and he requested that the Board 

consider this information when making decisions about Pena’s parole. Id. Pena 

filed suit against Quijano and Perel, asserting, among other things, that they had 

conspired to slander and defame him by sending the letter to the Board. Id. The 

trial court granted Perel’s motion to dismiss pursuant to the TCPA. Id.

On appeal, Pena argued that the trial court erred in dismissing his claims 

because his claims fell within the “commercial speech” exemption to the TCPA. 

Id. at 555. The El Paso Court of Appeals noted that Pena’s suit was based on the 

letter that Perel had sent to the Board. Id. The court reasoned, “The letter does not 

arise out of the sale or lease of goods, services, or an insurance product or a 

commercial transaction. Further, the Board of Pardons and Parole is not an actual 

or potential buyer or customer of any goods or services sold by Perel.” Id. The 

court held that Pena failed to establish the applicability of the exemption. Id.
22

Here, Schimmel allegedly made statements that, according to the Buy-Out 

Owners, induced the City of Galveston to back out of its agreements to purchase 

the Buy-Out Owners’ properties. When Schimmel made the statements at issue, he 

was undisputedly working as an attorney for SOKB and the Remaining Owners. 

The ultimate intended audience for his statements, however, was the City of 

Galveston. Schimmel did not represent the City of Galveston, nor was the City a 

“potential buyer or customer” of Schimmel’s legal services. See TEX. CIV. PRAC.

& REM. CODE ANN. § 27.010(b). We therefore conclude, as the El Paso Court of 

Appeals did in Pena, that the Buy-Out Owners have failed to establish the 

applicability of the “commercial speech” exemption. See id.; see also Pena, 417 

S.W.3d at 555; Newspaper Holdings, 416 S.W.3d at 89 (“With respect to the 

newspaper, it is undisputed that NHI was in the business of reporting community 

events, but the Hotel’s complained-of statements do not arise out of the lease or 

sale of the goods or services that NHI sells—newspapers.”).

3. Whether the Buy-Out Owners’ Claim Falls Under the TCPA

The Buy-Out Owners complain about numerous actions and statements 

allegedly made by Schimmel during the course of his representation of SOKB and 

the Remaining Owners. All of these statements, whether they were made to a 

journalist at the Houston Chronicle, attorneys with the City of Galveston, or 

members of the Board, concerned or were related to the City’s plan to purchase the 
23

Buy-Out Owners’ properties and were made to further Schimmel’s clients’ interest 

in ensuring that should the purchase of the properties go forward SOKB would 

receive compensation for the loss of future assessments on the purchased 

properties.

The TCPA defines “exercise of the right to petition” as including “a 

communication in connection with an issue under consideration or review by a 

legislative, executive, judicial, or other governmental body . . . .” TEX. CIV. PRAC.

& REM. CODE ANN. § 27.001(4)(B). The statute defines “exercise of the right of 

free speech” as “a communication made in connection with a matter of public 

concern.” Id. § 27.001(3). And a “matter of public concern” is further defined as 

“an issue related to health or safety; environmental, economic, or community wellbeing; the government; a public official or public figure; or a good, product, or 

service in the marketplace.” Id. § 27.001(7). None of these statutory definitions 

includes a requirement that the communications be made to a particular individual 

or entity, such as a governmental body, to constitute protected conduct.

SOKB and the Remaining Owners retained Schimmel to represent their 

interests during the dispute concerning the buy-out of the Buy-Out Owners’ 

properties. All of Schimmel’s challenged statements, regardless of to whom the 

statements were made, related to this dispute and were made “in connection with 

an issue under consideration or review” by the City of Galveston and the Texas 
24

Department of Public Safety, both of which are governmental bodies. See id.

§ 27.001(4)(B) (defining “exercise of the right to petition”). The Buy-Out 

Owners’ action for tortious interference with prospective business relations is 

therefore “based on, relates to, or is in response to” Schimmel’s exercise of the 

right to petition on behalf of his clients. See id. § 27.003(a) (providing that 

defendant may move to dismiss legal action that is based on, relates to, or is in 

response to exercise of right to petition).

Moreover, the Buy-Out Owners’ claim implicates not just Schimmel’s 

exercise of the right to petition on behalf of his clients but also Schimmel’s 

exercise of his right to freedom of speech on behalf of his clients. See id.

§ 27.001(3) (defining “exercise of the right of free speech” as “a communication 

made in connection with a matter of public concern”); id. § 27.001(7) (defining 

“matter of public concern”). Contrary to the trial court’s determination, in its order 

denying Schimmel’s motion to dismiss, that the dispute at issue “concerned 

matters disputed between individual parties” and thus “were not made in 

connection with a matter of public concern,” Schimmel’s statements all related to 

and were made in connection with the purchase by the City of Galveston, a 

governmental entity, of five properties in a small subdivision, the purchase of 

which would allegedly damage the values of the neighboring properties and would 

damage the future revenue stream of SOKB, the homeowners’ association, by 
25

denying it the ability to collect future assessments on the bought-out properties. In 

addition to relating to the government, the dispute at issue also relates to 

“economic or community well-being,” all of which are issues included in the 

statutory definition of “matter of public concern” under the TCPA. See id.

§ 27.001(7).

In arguing that their claim is not based on, does not relate to, and is not in 

response to Schimmel’s exercise of constitutionally protected rights, the Buy-Out 

Owners focus on the fact that their claims “are based upon the independent torts of 

fraud, misrepresentations and illegal boycott,” which do not implicate 

constitutional protections. That argument, however, is relevant to the second step 

of the inquiry—whether the Buy-Out Owners have demonstrated a prima facie 

case for relief on every essential element of their tortious interference claim. See 

In re Lipsky, 411 S.W.3d at 543 (“But chapter 27 dictates that we should review 

evidence concerning whether [the defendants’] statements were defamatory and 

thus actionable in the second part of our review, in which [the plaintiff] has the 

burden of establishing ‘by clear and specific evidence a prima facie case for each 

essential element of the claim in question.’”).

The Buy-Out Owners also argue that Schimmel’s affidavits supporting his 

motion to dismiss are incompetent and inadmissible because they state that he is 

“personally acquainted with facts stated therein,” instead of stating that they are 
26

based on personal knowledge, and that some portions state that Schimmel is 

testifying based on information and belief. We first note that, in making a 

determination on a motion to dismiss, the trial court is not limited to considering 

only supporting and opposing affidavits, but the court “shall consider the 

pleadings” as well. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.006(a). Thus, 

even if Schimmel’s affidavits do not constitute competent and admissible evidence, 

his motion to dismiss does not necessarily fail. Secondly, we agree with Schimmel 

that there is no meaningful distinction between “personal knowledge” and 

“personal acquaintance,” and to hold otherwise is to impose an unduly restrictive 

reading on the personal knowledge requirement for affidavits. See WEBSTER’S 

NEW COLLEGIATE DICTIONARY 8 (1956) (defining “acquaintance” as “[p]ersonal 

knowledge (of a person or thing) which results from becoming acquainted”). We 

therefore conclude that Schimmel’s affidavits are competent and admissible to 

support his motion to dismiss.

We hold that Schimmel met his initial burden to show, by a preponderance 

of the evidence, that the Buy-Out Owners’ claim is based on, relates to, or is in 

response to his exercise of the right to petition and his exercise of the right of free 

speech. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b)(1)–(2).
27

4. Buy-Out Owners’ Prima Facie Case

Because we have held that Schimmel’s statements forming the basis of the 

Buy-Out Owners’ tortious interference claim constitute protected conduct under 

the TCPA, we must now determine whether the Buy-Out Owners met their burden 

to establish, by clear and specific evidence, a prima facie case for every essential 

element of their tortious interference claim. See id. § 27.005(c). To prevail on a 

claim for tortious interference with prospective business relations, the plaintiffs 

must establish that (1) a reasonable probability existed that the plaintiffs would 

have entered into a business relationship with a third party; (2) the defendant either 

acted with a conscious desire to prevent the relationship from occurring or knew 

the interference was certain or substantially certain to occur as a result of the 

conduct; (3) the defendant’s conduct was independently tortious or unlawful; 

(4) the interference proximately caused the plaintiffs injury; and (5) the plaintiffs 

suffered actual damage or loss as a result. See Coinmach Corp. v. Aspenwood 

Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013); Wal-Mart Stores, Inc. v. 

Sturges, 52 S.W.3d 711, 726 (Tex. 2001) (holding that plaintiff must establish that 

defendant’s conduct was independently tortious or wrongful, meaning that 

defendant’s conduct “would be actionable under a recognized tort”). “Conduct 

that is merely ‘sharp’ or unfair is not actionable and cannot be the basis for an 
28

action for tortious interference with prospective relations . . . .” Sturges, 52 

S.W.3d at 726.

One of the essential elements for which the Buy-Out Owners had to 

establish a prima facie case is causation, that is, whether Schimmel’s interference 

proximately caused their injury, which, in this case, is the City of Galveston’s 

failure to close on the purchase of their properties. See Coinmach Corp., 417 

S.W.3d at 923 (listing causation as element of tortious interference with 

prospective relations claim). As evidence to support their contention that they are 

entitled to relief on their tortious interference claim, the Buy-Out Owners 

presented to the trial court identical affidavits from each property owner as well as 

copies of several e-mails between Schimmel and members of the Board. They did 

not present any affidavits or other admissible evidence from any individual at the 

City of Galveston, the city attorney’s office, the Texas Department of Public 

Safety, which allegedly informed the City to put a hold on the transactions while 

officials conducted a new “substantial damage determination” of the Buy-Out 

Owners’ properties, or any other official or agency with decision-making authority 

concerning the City’s purchase of the properties. Instead, the only evidence of this 

element that the Buy-Out Owners produced is the statements in their identical 

affidavits that “[b]ut for Schimmel’s misrepresentations and conduct there is a 

reasonable probability that all of our buy-out contracts would have closed,” that 
29

“Schimmel’s independent misrepresentations and boycott, set out above, prevented 

our agreements from closing and the purchase of our properties by the [City],” and 

that “Schimmel’s action and conduct, set out above, caused me and the other BuyOut Owners money losses . . . that would not have occurred, but for [Schimmel’s] 

conduct.”

We agree with Schimmel that the Buy-Out Owners presented only their 

conclusory statements, unsupported by any facts, that Schimmel’s actions caused 

the City of Galveston to fail to close on the purchases. Evidence of Schimmel’s 

conduct, by itself, is not evidence that, with respect to communications made to 

other individuals and entities, that conduct caused the City not to purchase the 

Buy-Out Owners’ properties. The fact that Schimmel’s alleged conduct occurred 

roughly contemporaneously with the City of Galveston’s and the Department of 

Public Safety’s consideration of whether to move forward with the purchases does 

not establish that Schimmel’s conduct caused the governmental agencies to act as 

they did.

Furthermore, in October 2009, the City of Galveston required the Buy-Out 

Owners to obtain a release from future assessments, signed by SOKB, as a 

condition for the purchases to close, two months before SOKB and the Remaining 

Owners hired Schimmel to represent their interests. The Buy-Out Owners contend 

that Schimmel tortiously interfered with their prospective contracts with the City of 
30

Galveston because he urged the Board not to sign the required releases, and, as a 

result of the Board’s refusal to sign the releases, the City did not proceed with the 

purchases. Ultimately, however, one of the appellees, Kris Hall, signed the 

releases on behalf of SOKB once he became president of the Board, but the City of 

Galveston did not close on the purchases. 

Additionally, in the federal suit between the Buy-Out Owners and the City 

of Galveston and several Department of Public Safety employees the district court 

ruled that governmental entities have “wide discretion” in administering the 

HMGP and that nothing in the regulations governing the HMGP “dictates that 

qualified property owners are entitled to participate in the program or limits the 

State’s discretion in determining a property owner’s qualifications for the program 

or reviewing those qualifications at any time in the process.” The court thus 

concluded that the Buy-Out Owners had no “entitlement to HMGP funds or a 

property right to such funds.” Thus, a court has already determined during the 

litigation arising out of this dispute that the City of Galveston and the Department

of Public Safety acted within their discretionary authority when they declined to 

close on the purchase of the Buy-Out Owners’ properties.

As the Texas Supreme Court has held, “merely inducing a contract obligor 

to do what it has a right to do is not actionable interference.” ACS Investors, Inc. v. 

McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997); Newspaper Holdings, 416 S.W.3d 
31

at 87. Even if Schimmel induced the City of Galveston and the Department of 

Public Safety not to close on the purchase of the Buy-Out Owners’ properties, as 

the Buy-Out Owners allege, the Buy-Out Owners would have no cause of action 

against him for inducing the City or the Department to do that which they had a 

right to do—not to purchase the Buy-Out Owners’ houses.

We also note that, in this regard, the Buy-Out Owners have made no 

argument, with citation to authority, that SOKB and the Board were legally 

required or obligated to sign the releases that the City of Galveston required to 

close on the purchases, and they have produced no evidence on such a point. The 

Buy-Out Owners have thus presented no evidence that Schimmel induced the 

Board to take an action that it was not legally authorized to take. This is, therefore, 

not a situation in which Schimmel, as a corporate agent, induced the corporation, 

SOKB, to breach a contractual obligation. See, e.g., Holloway v. Skinner, 898 

S.W.2d 793, 796 (Tex. 1995) (noting that “a party cannot tortiously interfere with 

its own contract” and holding that even when corporate agent induces corporation 

to breach contractual obligation, agent will not be held liable for tortious 

interference with corporation’s contract unless plaintiff can demonstrate that agent 

“acted in a fashion so contrary to the corporation’s best interests that his actions 

could only have been motivated by personal interests”).
32

We conclude that the Buy-Out Owners’ supporting evidence does not 

establish, by clear and specific evidence, a prima facie case on the essential 

element of causation. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c) (“The 

court may not dismiss a legal action under this section if the party bringing the 

legal action establishes by clear and specific evidence a prima facie case for each 

essential element of the claim in question.”) (emphasis added); Coinmach Corp., 

417 S.W.3d at 923 (stating that interference as proximate cause of plaintiff’s injury 

is essential element of tortious interference with prospective relations claim).

We therefore hold that because Schimmel established by a preponderance of 

the evidence that the Buy-Out Owners’ tortious interference claim is based on, 

relates to, or is in response to his exercise of his right to petition on behalf of his 

clients and his right of free speech and because the Buy-Out Owners failed to 

establish a prima facie case on every essential element of their tortious interference 

claim, the trial court erroneously denied Schimmel’s motion to dismiss under the 

TCPA. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b), (c).

We sustain Schimmel’s first issue.

Award of Costs and Attorney’s Fees

In his second issue, Schimmel contends that because the trial court 

erroneously denied his motion to dismiss it also erroneously failed to award him 
33

mandatory costs, reasonable attorney’s fees, and expenses incurred in defending 

against the claim, as required by the TCPA.

Section 27.009(a)(1) provides that if the court orders dismissal of a legal 

action pursuant to the TCPA, the court “shall award to the moving party court 

costs, reasonable attorney’s fees, and other expenses incurred in defending against 

the legal action as justice and equity may require.” TEX. CIV. PRAC. & REM. CODE 

ANN. § 27.009(a)(1) (Vernon Supp. 2013). When an appellate court determines 

that the trial court erroneously denied a defendant’s motion to dismiss under the 

TCPA, the appropriate disposition of the case is to reverse the trial court’s denial 

of the motion and remand for the trial court to conduct further proceedings 

pursuant to section 27.009(a) and to order dismissal of the suit. See Newspaper 

Holdings, 416 S.W.3d at 90.

The Buy-Out Owners contend that, even if the trial court erroneously denied 

Schimmel’s motion to dismiss, remand is not appropriate in this case because 

Schimmel’s affidavit on attorney’s fees was “incompetent evidence of 

reasonableness and necessity” under the Texas Supreme Court’s decision in El 

Apple I, Ltd. v. Olivas.

Olivas involved a claim for sex discrimination and retaliation pursuant to the 

Texas Commission on Human Rights Act, under which courts calculate attorney’s 

fees using the lodestar method, or the number of hours worked multiplied by 
34

prevailing hourly rates. See 370 S.W.3d 757, 758–59 (Tex. 2012). The court 

explained that the lodestar method of calculating attorney’s fees involves two 

steps: (1) the court first determines the reasonable number of hours spent by 

counsel in the case and a reasonable hourly rate for such work; and (2) the court 

then multiples the number of such hours by the applicable rate, which yields the 

lodestar, which may then be adjusted up or down to reach a reasonable fee for the 

case. Id. at 760. The court held that a party seeking attorney’s fees when the 

lodestar method is used “bears the burden of documenting the hours expended on 

the litigation and the value of those hours.” Id. at 761.

Unlike the attorneys in Olivas, who presented only their aggregate number 

of hours spent on the case and their respective billing rates without further 

indicating how they spent their time, Schimmel’s attorney’s fees affidavits stated 

the date on which work was performed, the number of hours spent, the particular 

tasks involved, and the applicable billing rate. See id. at 763 (“[P]roof [of 

attorney’s fees] should include the basic facts underlying the lodestar, which are: 

(1) the nature of the work, (2) who performed the services and their rate, 

(3) approximately when the services were performed, and (4) the number of hours 

worked.”); see also City of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013) 

(“In El Apple, we said that a lodestar calculation requires certain basic proof, 

including itemizing specific tasks, the time required for those tasks, and the rate 
35

charged by the person performing the work.”). We therefore do not agree with the 

homeowners that Schimmel’s attorney’s fees affidavits are insufficient under 

Olivas.

Finally, even if Schimmel’s attorney’s fees evidence presented with his 

motion to dismiss were insufficient to establish the reasonableness and necessity of 

the fee amount, because Schimmel is statutorily entitled to an award of attorney’s 

fees, the appropriate disposition of this case would be to remand the attorney’s fees 

issue back to the trial court for further proceedings. See Alphonso v. Deshotel, 417 

S.W.3d 194, 202 (Tex. App.—El Paso 2013, no pet.) (“[G]iven that Appellees are 

entitled to attorney’s fees and costs under the [TCPA] because the trial court 

granted their motion to dismiss and we have upheld that ruling on appeal, the 

proper disposition in this case is to reverse the award of attorney’s fees and costs 

[which was not supported by an affidavit admitted into evidence] and remand that 

issue back to the trial court for a new trial.”); see also Uhl v. Uhl, 524 S.W.2d 534, 

538 (Tex. Civ. App.—Fort Worth 1975, no writ) (“When a [party] is clearly 

entitled to attorney’s fees in some amount but where there had been no proof in the 

trial court of the amount there may be severance of that issue with remand to the 

trial court for a new trial on that issue.”).

We hold that because Schimmel has established his entitlement to dismissal 

under the TCPA, he is entitled to “court costs, reasonable attorney’s fees, and other 
36

expenses incurred in defending against the legal action as justice and equity may 

require.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.009(a)(1); see also Newspaper 

Holdings, 416 S.W.3d at 90 (“We therefore reverse the trial court’s denial of the 

defendants’ motions to dismiss, and we remand the case to the trial court for 

further proceedings as required by the statute and to order dismissal of the suit.”).

We sustain Schimmel’s second issue.

Conclusion

We reverse the trial court’s order denying Schimmel’s motion to dismiss and 

remand the case to the trial court for further proceedings relating to Schimmel’s 

attorney’s fees, costs, and expenses and to order dismissal of the suit.

Evelyn V. Keyes

Justice 

Panel consists of Justices Keyes, Bland, and Brown.