Opinion on rehearing issued October 24, 2013.

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-12-00581-CV

———————————

NEWSPAPER HOLDINGS, INC., INTEGRACARE OF TEXAS, LLC, 

AND CHARLOTTE PATTERSON, Appellants

V.

CRAZY HOTEL ASSISTED LIVING, LTD., CRAZY HOTEL ASSISTED 

LIVING, GP, LLC, LEISURE LIFE SENIOR APARTMENT HOUSING II, 

LTD., AND CHARLES V. MILLER, JR., Appellees

On Appeal from the 234th District Court

Harris County, Texas

Trial Court Case No. 2011-74615

O P I N I O N

This defamation case arises from a series of articles published in the Mineral 

Wells Index (the Index), a newspaper owned by Newspaper Holdings, Inc. (NHI). 
2

The articles reported regulatory compliance problems and official investigations 

into the Crazy Water Retirement Hotel, a local Mineral Wells assisted living 

facility, and examined the conduct of Charles Miller, president of the Hotel’s 

corporate owner.1 Charlotte Patterson, the Chief Compliance Officer of 

IntegraCare, a home health and hospice agency, was a source for some of the 

information contained in some of the articles. She contacted the newspaper after 

she learned that Miller had attempted to bar the Hotel’s residents from using 

IntegraCare for their home health care. 

The Hotel and Miller sued Patterson, IntegraCare, and NHI (“the newspaper 

defendants”) for defamation, business disparagement, and tortious interference 

with contract. The Hotel alleged that NHI, and in some instances, Patterson, who 

was a managerial employee of IntegraCare, published false and defamatory 

statements about Miller and the Hotel and interfered with the Hotel’s contractual 

relationships with its residents. Patterson, IntegraCare, and NHI responded to the 

suit by moving to dismiss it under the newly-enacted Texas Citizens’ Participation 

Act (TCPA). See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–27.011 (West 

Supp. 2012). The trial court denied the motion.

 

1 Appellees Crazy Hotel Assisted Living, Ltd., Crazy Hotel Assisted Living, GP, 

and Leisure Life Senior Apartment Housing II, Ltd. did business as the Crazy 

Water Retirement Hotel, and we collectively refer to them as the Hotel.
3

NHI, IntegraCare, and Patterson appeal, contending that they have met the 

requirements for dismissal under the TCPA—namely, that they have showed that 

the allegedly defamatory statements constitute the exercise of protected free 

speech, and that the Hotel and Miller have failed to make a prima facie case for 

each of their claims. IntegraCare and Patterson also claim that Miller and the 

Hotel failed to provide any evidence that the published statements were false or 

made with negligence or actual malice, or that Miller and the Hotel incurred 

damages as a result of the challenged publications. For their part, Miller and the 

Hotel respond that we lack jurisdiction to consider the appeal. . We grant 

rehearing, withdraw our earlier opinion, and issue this one in its stead. We vacate 

our earlier judgment. Our disposition remains unchanged. We hold that we have 

appellate jurisdiction, and we reverse. 

Background

Events leading to suit

From 2010 through 2011, the Index published articles about problems

encountered at the Hotel. In an end-of-the-year article reviewing its major stories 

in 2010, it summarized the articles as follows:

Month after month in 2010 complaints from residents and employees 

at the Crazy Water Retirement Hotel kept city and state inspectors 

returning to the building, investigating complaints of unsafe 

conditions, building disrepair, failure to provide services and verbal 

abuse of residents.
4

After going without air conditioning, hot water and gas to cook food 

and dry clothes for days at a time in August, residents of the Crazy 

Water Retirement Hotel had significant amounts of water come 

through the ceilings during the first week of September after a roofing 

job was left incomplete for several weeks. 

As the roof remained unrepaired into September, the Department of 

Aging and Disability Services pulled the facility’s assisted living 

license and attempted to close that portion of the facility.

However as residents were fed in the lobby of the building because of 

rainwater coming through the dining room ceiling that weekend, 

owner Charles Miller was granted a temporary restraining order 

against the case by a judge in Austin which essentially nullified any 

[e]ffect of license suspension.

A nurse in the assisted-living portion of the building was also accused 

of verbal abuse of a resident and was terminated.

State investigators cited a myriad of problems throughout the building 

and its management.

Though the roofing work was completed in October, the state and the 

city continued to respond to complaints at the facility through 

December.

In the first half of 2011, the Index also reported on

 the Hotel’s five-month lapse in payment of its water bill, which put 

it on the verge of having the water turned off;

 Miller’s negotiations with the city of Mineral Wells to pay the past 

due water bill;

 the Hotel’s failure to fully meet its negotiated payment obligations 

to the city in a timely manner;

 Texas Department of Adult and Disabled Services’ investigations, 

which revealed licensing violations stemming from uncorrected 

problems with the physical plant; and
5

 the Hotel’s hiring of a management company to rehabilitate the 

Hotel and that company’s decision to sever its ties with the Hotel 

just a few months later due to delays and paperwork problems in 

connection with the Hotel’s state license application. 

In early August 2011, Miller authored a letter to the Hotel’s residents 

informing them that the Hotel would no longer allow IntegraCare home health or 

hospice workers into the building. The letter advised patients that they were 

limited to choosing between two other service providers: Health Care Partners at 

Home or Beyond Faith. A resident who was an IntegraCare patient called 

Patterson to complain about the Hotel’s decision. Patterson contacted Miller in an 

attempt to resolve the issue. They quickly reached an impasse, so Patterson called 

the county district attorney, the Texas Department of Aging and Disability 

Services, and the Mineral Wells city manager to inform them of the Hotel’s 

actions.

The Index named Patterson as a source for its next article about the Hotel, 

entitled, “Miller target of fraud probe,” which it published on August 31. The 

Hotel and Miller’s original petition focuses on that article, which we reproduce 

below in its entirety:

District Attorney Mike Burns said Tuesday he will be meeting with 

investigators from the State Attorney General’s office concerning an 

investigation into the Crazy Water Retirement Hotel and its owner, 

Charles Miller.

“Their Medicaid Fraud unit is opening a case on it,” he said.
6

Burns said his office has been in contact with the AG’s office, though 

he did not provide specific details discussed in their correspondence.

Thomas Kelley with the Texas AG’s press office said in an e-mail, 

“We can only confirm that this is an ongoing investigation.”

“I should hear from them and have a meeting with them in a few 

days,” Burns noted, adding the investigation was in its infancy and a 

decision on what, if any, future action will be taken against Miller will 

likely not be made anytime soon.

While Burns did not elaborate on the scope of this case, the DA’s 

office has been busy over the past few weeks investigating the legality 

of demands made by Miller that residents of the Crazy Water choose 

one of two preferred home health providers. 

The first such letter, sent to residents Aug. 5, listed the two remaining 

choices for home health care, specifically stating the facility would 

“no longer be allowing IntegraCare Home Health or Hospice in our 

building.”

When IntegraCare’s chief corporate compliance officer, Charlotte 

Patterson, contacted Burns, the threat of a grand jury subpoena from 

the DA’s office reportedly led to Miller’s decision to rescind that 

demand, Patterson noted.

At that time, Patterson said her concern was that Miller would try to 

achieve the same result by including the home health care restrictions 

in a future lease agreement, citing a statement in Miller’s rescission 

letter stipulating residents can retain their current provider “under 

your current lease.”

Her fears were realized when, about two weeks later, Miller sent 

residents a subsequent letter informing those unwilling to choose one 

of the two preferred providers to “consider this letter to you to be 

Crazy Water’s advance written notice of its intent to terminate your 

current agreement effective September 30, 2011.”

While the letter refers to lease terms allowing either the hotel or its 

residents to “terminate the agreement, without cause, by giving 

written notice to the other party 30 days in advance of the effective 

termination date” Burns confirmed he is currently investigating 

whether the eviction notice is in violation of any law.
7

Also included in the eviction notice was a section informing residents 

that today is the last day the hotel will operate as a licensed assistedliving facility.

In response to the latest development, Patterson said IntegraCare has 

not been made aware of the details of the case but, as with any 

investigation, is willing to assist in any way possible. 

“I’ve been told that they might contact us for information or 

statements,” she said, “but that has not occurred yet.”

Patterson said this case involves a number of possible areas of focus 

for prosecutors, such as “varying issues of patient choice and, I think, 

the question of elderly abuse.”

In the meantime, she said, IntegraCare employees remain dedicated to 

assisting Crazy Water residents however they can, as evidenced on 

Aug. 22, when three workers volunteered their time to assist two 

residents in their move to a facility in Jacksboro.

“On our own, [IntegraCare is] continuing to try to find alternative 

living arrangements” for residents of the hotel, Patterson noted.

Neither Miller nor Crazy Water manager Juan Guardado returned 

numerous calls and e-mails requesting a comment.

After Miller learned that the district attorney planned to embark on an 

investigation, the Hotel reversed its earlier position with respect to visits from 

IntegraCare. In an August 12, 2011 letter to residents, Miller rescinded the earlier 

limitation on providers and informed the residents that the Hotel would allow their 

health care provider of choice, including IntegraCare, into the building. 

On August 18, however, the Hotel reverted to its original stance. Miller 

notified the residents who continued to receive services from IntegraCare that the 

Hotel intended to terminate their leases effective September 30, after which they 
8

would have the option either to sign new leases restricting their choice of home 

health care providers to one of the two approved providers or to vacate their 

apartment by October 1. The Index reported these developments in an August 14, 

2011 article:

Mineral Wells Police Chief Mike McAllester said he was contacted by 

an IntegraCare representative questioning whether Miller’s action [in 

restricting home health care providers] was legal. After discussing 

details, McAllester said the department’s position was that a property 

owner cannot restrict who renters allow in their residences.

He contacted the district attorney, who reportedly agreed and began 

an investigation into the matter. 

On September 9, the Index reported that the district attorney “previously 

stated he met with investigators from the state Attorney General’s office 

concerning an investigation into Miller and the hotel,” and that “their Medicaid 

fraud unit is opening a case on it.” A reporter from the Index contacted the attorney 

general’s office and received confirmation that it had an ongoing investigation into 

the Hotel, but no further comment. The newspaper contacted Miller for his 

response, and he gave “no comment.”

In January 2012, the Attorney General applied for a temporary restraining 

order “to gain access to [the Hotel] . . . for the purpose of conducting an 

investigation to determine whether the facility is operating as an unlicensed 

assisted living facility and to determine whether any resident neglect has occurred 

in violation of Chapter 247 of the Texas Health and Safety Code.” The application 
9

alleged that the Texas Department of Aging and Disability Services (DADS) 

received a complaint in September 2011 that the Hotel was being operated as an 

unlicensed assisted living facility in violation of state law and, when the DADS 

sent an investigator to the Hotel, the facility staff denied her entry. An affidavit 

from the investigator supported these allegations. 

Trial court proceedings

The Hotel and Miller instituted this suit in late 2011, bringing claims for 

defamation, business disparagement, and tortious interference against the 

defendants. Patterson and IntegraCare moved to dismiss the claim in mid-March 

2012, and, in a separate motion filed a few days later, NHI also sought dismissal. 

Both motions invoke the parties’ free speech rights under the TCPA as grounds for 

dismissal. 

The trial court held a hearing on April 16th. At that hearing, plaintiffs’ 

counsel moved to withdraw from representation. The trial court acknowledged 

that, “for purposes of the statute[,] . . . the hearing has already started,” but it 

granted a continuance to allow the Hotel and Miller time to obtain new counsel. 

The trial court resumed the hearing on May 29th, more than 30 days later, and 

signed an order denying the newspaper defendants’ motions to dismiss on May 

30th.
10

Discussion

I. Appellate Jurisdiction

As a threshold matter, we address Miller and the Hotel’s motion to dismiss 

this appeal for lack of jurisdiction. Section 27.008 of the Civil Practice in 

Remedies Code, entitled “Appeal,” provides:

(a) If a court does not rule on a motion to dismiss under Section 27.003 in 

the time prescribed by Section 27.005, the motion is considered to 

have been denied by operation of law and the moving party may 

appeal.

(b)An appellate court shall expedite an appeal or other writ, whether 

interlocutory or not, from a trial court order on a motion to dismiss a 

legal action under Section 27.003 or from a trial court’s failure to rule 

on that motion in the time prescribed by Section 27.005.

(c) An appeal or other writ under this section must be filed on or before 

the 60th day after the date the trial court’s order is signed or the time 

prescribed by Section 27.005 expires, as applicable.

TEX. CIV. PRAC. & REM. CODE ANN. § 27.008.

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.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(b). A hearing on the 

motion must occur by the 30th day after the date the defendant serves the motion, 

and the trial court must rule on the motion by the 30th day after the hearing. Id.

§§ 27.004, 27.005(a). 
11

Miller and the Hotel rely on the Fort Worth Court of Appeals’s recent 

decision in Jennings v. Wallbuilders Presentations, Inc. to contend that the TCPA 

does not authorize an interlocutory appeal of a trial court’s signed order denying a 

motion to dismiss under the TCPA. 378 S.W.3d 519 (Tex. App.—Fort Worth 

2012, no pet.). The Jennings court held that the language in the TCPA conferred 

jurisdiction to review a decision under the TCPA, but only if the motion is denied 

by operation of law, and not if the trial court signs an order denying the motion. 

Id. at 526–28. The Fort Worth Court of Appeals reasoned that the legislature 

intended to ensure that a court would review and rule on the motion, but not that its 

ruling would be subject to appellate review. See id. at 527.

We need not decide whether we agree with the Fort Worth Court of 

Appeals’ interpretation of section 27.008, because the trial court in this case signed 

its order denying the motion too late—the defendants’ motions to dismiss were 

overruled by operation of law. The statute allows a trial court to hear a motion 

more than thirty days after the filing date of the motion to dismiss, but only when 

its docket conditions require it. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.004 

(declaring that “[a] hearing on a motion [to dismiss] must be set not later than the 

30th day after the date of service of the motion unless the docket conditions of the 

court require a later hearing.”). In this case, the trial court continued the hearing 

solely at Miller and the Hotel’s request, but it made no finding that the docket 
12

conditions of the court required a hearing outside the thirty days. Because the 

statute does not authorize a continuance of the hearing based solely on a party’s 

request, the continuance did not stop the statutory-deadline clock; thus, the motions 

were denied by operation of law on May 16, 2012, thirty days after the initial 

hearing. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.005 (ruling required “not 

later than the 30th day following the date of the hearing on the motion”);

27.008(a), (c) (providing that if court does not rule on motion to dismiss under 

TCPA by 30th day after hearing, motion “is considered to have been denied by 

operation of law and the moving party may appeal” “on or before the 60th day 

after the date . . . the time prescribed by Section 27.005 expires”). Patterson, 

IntegraCare, and NHI timely filed their notices of appeal on June 19th. Because 

the trial court issued its ruling more than thirty days after hearing the motion, we 

hold that we have jurisdiction over this appeal.

II. Standard of review

We consider the TCPA’s language and purpose in determining the 

applicable standard of review. In enacting the TCPA, the Legislature explained 

that its purpose “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. &
13

REM. CODE ANN. § 27.002. The courts are to “construe it liberally to effectuate its 

purpose and intent fully.” Id. § 27.011(b). 

In deciding whether to grant a motion under the TCPA and dismiss the 

lawsuit, the statute instructs a trial court to “consider the pleadings and supporting 

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

Id. § 27.006. The court must determine: (1) whether the moving defendant has 

shown “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”; and (2) whether the plaintiff has shown “by 

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

claim in question.” Id. § 27.005(b), (c). The first step of this inquiry is a legal 

question we review de novo. See City of Rockwall v. Hughes, 246 S.W.3d 621, 

625 (Tex. 2008). 

The legislature’s use of the term “prima facie case” in the second step 

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.” Rodriguez v. Printone Color Corp., 982 S.W.2d 69, 72 (Tex. App.—

Houston [1st Dist.] 1998, pet. denied). The statute nonetheless requires that the 

proof offered address and support each element of every claim asserted with clear 

and specific evidence. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b), (c). 
14

Accordingly, we examine the pleadings and the evidence to determine whether 

Miller and the Hotel marshaled “clear and specific” evidence to support each 

alleged element of their causes of action. We review the pleadings and evidence in 

a light favorable to Miller and the Hotel. Cf. Tex. Dep’t of Parks & Wildlife v. 

Miranda, 133 S.W.3d 217, 227 (Tex. 2004); Fort Bend Indep. Sch. Dist. v. Gayle, 

371 S.W.3d 391, 394 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).

III. Right to dismissal under the TCPA

Patterson, IntegraCare, and NHI contend that they showed both that Miller 

and the Hotel’s claims against them are in response to the exercise of their right to 

free speech, by a preponderance of the evidence, and that Miller and the Hotel 

failed to present clear and specific evidence to support each element of their claims 

to establish their prima facie case. We address each contention in turn.

A. Exercise of the right to free speech, petition, and association

The TCPA defines “the exercise of the right of free speech” as “a 

communication made in connection with a matter of public concern.” Id.

§ 27.001(1). A “matter of public concern” includes, among other things, issues 

relating to “health or safety,” and “environmental, economic, or community wellbeing.” Id. § 27.001(7) (A), (B). The business of operating an assisted living 

facility is a highly regulated one. See Tex. HEALTH & SAFETY CODE ANN. 

§§ 247.001–247.069 (West 2010 & Supp. 2012) (the Assisted Living Facility 
15

Licensing Act (AFLA)); 40 TEX. ADMIN. CODE §§ 46.1–46.71 (chapter entitled 

“Contracting to Provide Assisted Living and Residential Care Services”). To 

“ensure that assisted living facilities in this state deliver the highest possible 

quality of care,” the legislature specifically has provided for both state and 

municipal enforcement of licensing requirements. See Tex. HEALTH & SAFETY 

CODE ANN. §§ 247.0011, 247.031 (West 2010). The Index’s articles relate directly 

to Miller and the Hotel’s obligations to fulfill the licensing requirements and 

standards set forth in these laws and regulations. AFLA not only permits, but 

encourages an open airing of information relating to an assisted living facility’s 

quality of care. See TEX. HEALTH & SAFETY CODE ANN. § 247.068 (West Supp. 

2012) (making it unlawful for a person licensed to operate an assisted living 

facility to retaliate “against a person for filing a complaint, presenting a grievance, 

or providing in good faith information relating to personal care services provided 

by the license holder”).

In considering the statements attributed to Patterson and IntegraCare, we 

observe that the statute reflects the specific public concern of ensuring that assisted 

living facility residents retain the right to choose their own health care 

professionals. See TEX. HEALTH & SAFETY CODE ANN. § 247.067(c) (West Supp. 

2012) (providing that “[a] resident of an assisted living facility has the right to 

contract with a [licensed] home and community support services agency . . . or 
16

with an independent health professional for health care services”); see also id.

§ 247.0011(1) (including as components of quality care “resident independence 

and self-determination”). We hold that, as defined by the legislature, a 

preponderance of the evidence establishes that each of the articles at issue in this 

suit involve communications made in connection with a matter of public concern 

and relate to the exercise of free speech. Accordingly, Patterson, IntegraCare, and 

NHI have met the first requirement for obtaining dismissal under the TCPA. We 

next turn to whether the Hotel and Miller have adduced sufficient evidence to 

establish a prima facie case for each of their claims.

B. Plaintiffs’ prima facie case

1. Defamation

To maintain a defamation cause of action, the plaintiff must prove that the 

defendant (1) published a statement; (2) that was defamatory concerning the 

plaintiff; (3) while acting with either actual malice, if the plaintiff was a public 

official or public figure, or with negligence, if the plaintiff was a private 

individual, regarding the truth of the statement. WFAA-TV, Inc. v. McLemore, 978 

S.W.2d 568, 571 (Tex. 1998).

“Whether words are capable of the defamatory meaning the plaintiff 

attributes to them is a question of law for the court.” Carr v. Brasher, 776 S.W.2d 

567, 569 (Tex. 1989). Questions of law are subject to de novo review. In re 
17

Humphreys, 880 S.W.2d 402, 404 (Tex. 1994). Whether a publication is an 

actionable statement of fact depends on its verifiability and the context in which it 

was made. See Bentley v. Bunton, 94 S.W.3d 561, 581 (Tex. 2002).

a. NHI

As the owner of a newspaper, NHI claims that Miller and the Hotel failed to 

overcome NHI’s evidence that the alleged defamatory statements either are 

substantially true or that it exercised due care in making them, thereby requiring 

dismissal of the claims against it. 

Before addressing NHI’s appellate challenge that its showing that the 

reported statements are substantially true entitles it to dismissal, we consider Miller 

and the Hotel’s contention that the version of the TCPA in effect when NHI moved 

to dismiss their petition does not permit dismissal based on that defense. On

rehearing, Miller and the Hotel point to the Legislature’s recent passage of 

subsection 27.005(d), which provides:

Notwithstanding the provisions of Subsection (c), the court shall 

dismiss a legal action against the moving party if the moving party 

establishes by a preponderance of the evidence each essential element

of a valid defense to the nonmovant’s claim.

Act of June 14, 2013, 83d Leg. R.S., ch. 1042, § 2, 2013 Tex. Sess. Law Serv. 

(codified at Tex. Civ. Prac. & Rem. Code Ann. § 27.005). According to Miller and 

the Hotel, the subsequent addition of subsection 27.005(d) shows that the preamendment Act’s silence on this issue means that movants cannot base a dismissal 
18

motion upon a showing of substantial truth. We disagree. Section 27.011 of the 

TCPA explains that “[t]his chapter does not abrogate or lessen any other defense . . 

. available under other constitutional, statutory, case, or common law or rule 

provisions,” and declares that “[t]his chapter shall be construed liberally to 

effectuate its purpose and intent fully.” Id. § 27.011. The TCPA’s declared 

purpose “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 (West Supp. 2012). An interpretation of the TCPA that 

would prohibit a movant from procuring dismissal based on a showing of truth 

would thwart the Legislature’s declared purpose for enacting the TCPA and render 

section 27.011 a nullity. TEX. GOV’T CODE ANN. § 311.023 (West 2013) 

(providing that, in interpreting statute, court may consider object sought to be 

attained by statute and consequences of particular statutory construction). The 

Legislature could not have intended such a result. See In re Derzapf, 219 S.W.3d 

327, 332 (Tex. 2007). We reject Miller and the Hotel’s urged interpretation and 

hold that the pre-amendment TCPA allows a movant to procure dismissal based on 

a successful showing of substantial truth.
19

Our grant of rehearing also permits us to revisit our analysis of the merits of 

NHI’s substantial truth defense in light of the Supreme Court’s intervening 

decision in Neely v. Wilson, No. 11-00228, 2013 WL 3240040 (Tex. June 28, 

2013). In Neely, the Supreme Court clarified its prior opinion in McIlvain v.

Jacobs, 794 S.W.2d 14 (Tex. 1990), explaining that accurate reporting of thirdparty allegations, standing alone, is not enough to satisfy the substantial truth 

defense; rather, if a media defendant “reports that allegations were made and an 

investigation proves those allegations to be true, the defamation claim is brought 

within the scope of the substantial truth defense.” Id. at *8. The Court expressly 

disapproved of the analysis of McIlvain’s holding on that issue in Green v. CBS, 

Inc., 286 F.3d 281 (5th Cir. 2002), and KTRK Television v. Felder, 950 S.W.2d 

100 (Tex. App.—Houston [14th Dist.] 1997, no writ), both of which we relied on 

in analyzing NHI’s challenge to Miller and the Hotel’s claims. The United States 

Supreme Court has held that, in a suit against a media defendant, the plaintiff bears 

the burden of proving that the alleged defamatory statements are false. 

Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776–77, 106 S. Ct. 1558, 

1564 (1986) (holding that common-law presumption that defamatory speech is 

false cannot stand when plaintiff sues media defendant for speech of public 

concern), cited in Miranda v. Byles, 390 S.W.3d 543, 554 (Tex. App.—Houston 

[1st Dist.] 2012, pet. filed). Our own court’s precedent on this issue does not 
20

clearly identify which party properly bears the burden, nor has the Texas Supreme 

Court definitively addressed that issue. See Miranda, 290 S.W.3d at 554. We 

need not decide it in this case, however, because, in moving for dismissal, the 

defendants either presented proof of substantial truth or due diligence in their 

reporting or contended that the speech itself is incapable of defamatory meaning. 

We consider whether the record as a whole allows a rational inference that 

any of the Index’s factual allegations was false. In the context of a defamation 

claim, a showing of falsity requires more than minor inaccuracies in the alleged 

defamatory statements. See Turner v. KTRK Tel., Inc., 38 S.W.3d 103, 115 (Tex. 

2000) (noting that substantial truth doctrine “precludes liability for a publication 

that correctly conveys a story’s ‘gist’ or ‘sting’ although erring in the details”). A 

statement is substantially true if the alleged defamatory statement was no more 

damaging to plaintiff’s reputation, in the mind of the average listener, than a 

truthful statement would have been. McIlvain v. Jacobs, 794 S.W.2d 14, 16 (Tex. 

1990); Langston v. Eagle Printing Co., 797 S.W.2d 66, 69–70 (Tex. App.—Waco 

1990, no writ) (concluding that statement is substantially true even if it exaggerates 

plaintiff’s misconduct, as long as average reader would not attach any more 

opprobrium to plaintiff’s conduct merely because of exaggeration).

Miller and the Hotel base their defamation claims against NHI on several 

statements made in the Index’s reports, each of which we address in turn. They 
21

first challenge the report that “The Texas Department of Aging and Disability 

Services [DADS] determined in a September 2010 investigation that [a nurse 

working at the Hotel] verbally abused, threatened, and intimidated a resident.” 

This statement refers to an alleged incident in which a licensed vocational nurse 

(LVN) reacted to a patient’s resistance to taking medication. Miller and the Hotel 

deny that the event took place, but do not contest that the DADS’s investigation 

proved the contrary. The Index’s report refers to “documents released by DADS” 

that the Hotel did not look into the resident’s allegations before the state’s 

investigation of the incident as well as other documentation, including the DADS’s 

own investigative report and determination. Miller and the Hotel do not dispute 

the existence or authenticity of the documentation that the Index relied on in 

writing its article or the report that a Hotel attendant corroborated the resident’s 

version of the event. The Index could accurately characterize the conduct found by 

the report as “elder abuse.” As no evidence exists to counter the Index’s showing 

that its report of the administrative determination is substantially true, it does not 

provide a basis for Miller and the Hotel’s defamation claim. 

Miller and the Hotel point next to the Index article entitled “Miller target of 

fraud probe,” because, they contend, it falsely indicates that the Attorney General’s 

office had opened an investigation into the Hotel owner’s activities for possible 

Medicaid fraud. The article at issue focuses on the letters that the Hotel, under 
22

Miller’s signature, sent to its residents informing them that IntegraCare would not 

be permitted to enter its facility and purporting to require the residents to select as 

their home health care provider one of two named providers. The article attributes 

to Mike Burns, the Palo Pinto County District Attorney, statements that “th[e State 

Attorney General’s] Medicaid fraud unit is opening a case on it,” and that the 

district attorney’s office had met with the Attorney General’s office. In an 

affidavit accompanying NHI’s motion to dismiss, Chris Agee, the Index’s reporter 

who wrote the article, testified that Burns had informed him that his office had 

been investigating the legality of Miller and the Hotel’s demands that the Hotel 

residents choose between only two health care providers as well as the propriety of 

the August 18, 2011 letter. Agee contacted the Attorney General’s office to verify 

Burns’s comments. The Attorney General’s office confirmed that it had an 

ongoing investigation but would not provide further details. 

With respect to the Index’s August 31 article that Miller was the target of a 

fraud probe, the record contains evidence that the Hotel’s state license to operate as 

an assisted living facility had lapsed and had not been renewed as of the date the 

Index published the article. Texas statute recognizes an assisted-living facility

resident’s right to contract with a licensed home and community support service 

agency to deliver health care services to the residents at the facility, a right echoed 

in the licensing standards for those facilities. See TEX. HEALTH & SAFETY CODE 
23

ANN. § 247.067(c); 40 TEX. ADMIN. CODE 92.5(b). By requiring the residents to 

choose between two named providers and by prohibiting them from choosing 

IntegraCare as their provider, the Hotel imposed a restriction on the residents’

choices in violation of applicable licensing requirements. The article specified that 

the district attorney’s office was investigating the legality of the Hotel’s attempt to 

restrict the residents to choose between two home health care providers. The 

article also explained that the investigation was “in its infancy” and ongoing, and 

reported that the Attorney General did not identify the investigation’s subject 

matter, only that it was “an ongoing investigation.” The fact that the article 

mentions Medicaid does not, on balance, tip it from being substantially true to 

being false and defamatory. See Turner, 38 S.W.3d at 115 (explaining that error in 

details does not render media defendant liable for defamation as long as article is 

substantially true). 

Miller and the Hotel also point to the statement, in an August 23rd article, 

that the Hotel had served “eviction notices” on its residents. The article describes a 

Hotel letter as amounting to an eviction notice “for any resident unwilling to 

change his or her home health care provider” from IntegraCare to one of the two 

preferred home health providers. The article quotes the letter, verbatim, as 

directing residents who failed to change from IntegraCare that they should: 

“consider this letter to you to be Crazy Water’s advance written notice of its intent 
24

to terminate your current agreement effective September 30, 2011.” While Miller 

and the Hotel object to the use of the term “eviction notice” to describe the letter’s 

effect on residents who preferred to remain patients of IntegraCare, the 

characterization reasonably describes one possible view of the letter’s content. 

Finally, Miller and the Hotel allege, as defamatory, the Index’s use of 

descriptive words in reporting about the living conditions at the Hotel, such as 

stating that the Hotel had a “myriad” of problems and describing water leaks as 

causing water to “cascade” into the building. In an affidavit submitted with the 

NHI’s motion to dismiss, Index Editor David May testified that 

The Index has received, and, on occasion, reported on numerous 

complaints by others about the hotel . . . ranging from health and 

sanitary issues to fire code and structural violations. Many of these 

complaints resulted in investigations by City and State officials. At 

various times over the past few years, the City of Mineral Wells or the 

[DADS] threatened to shut down the Hotel because of structural or 

safety deficiencies.

Miller and the Hotel do not dispute May’s testimony. The Index’s 

immoderate—in the Hotel’s view—word choice does not present a prima facie 

case that the descriptions, viewed in context, are less than substantially true. See 

Langston, 797 S.W.2d at 69 (exaggeration alone does not render substantially true 

publication actionable). 

NHI also moved to dismiss on the ground that Miller and the Hotel failed to 

show that NHI acted negligently. Private plaintiffs must prove that the defendant 
25

was at least negligent. See Foster v. Laredo Newspapers, Inc., 541 S.W.2d 809, 

819 (Tex. 1976) (holding that “a private individual may recover damages from a 

publisher or broadcaster of a defamatory falsehood as compensation for actual 

injury upon a showing that the publisher or broadcaster knew or should have 

known that the defamatory statement was false”); see also Gertz, 418 U.S. at 347, 

94 S. Ct. 2997 (holding that states may define for themselves the appropriate 

standard of liability for a publisher of a defamatory falsehood injurious to a private 

individual “so long as they do not impose liability without fault”). Texas courts 

have defined negligence in the defamation context as the “failure to investigate the 

truth or falsity of a statement before publication, and [the] failure to act as a 

reasonably prudent [person].” Marathon Oil Co. v. Salazar, 682 S.W.2d 624, 631 

(Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.) (citing El Paso Times, Inc. 

v. Trexler, 447 S.W.2d 403, 406 (Tex. 1969)).

In his affidavit submitted with NHI’s motion, reporter Agee testified about 

the August 31 article: 

The Article summarizes the information I received from the state 

attorney general’s office and from the local district attorney. It also 

summarizes the quotes and information I received from Charlotte 

Patterson at Integra. I had no reason to doubt the credibility of those 

sources. Based on the consistency of their statements, the consistency 

of the written documents shown to me, I had no reason to doubt the 

credibility or accuracy of those sources or the information conveyed 

by them. Based on this information and these sources, I believed at 

the time the Article was published that the statements therein were 

substantially true, if not literally true. . . . 
26

The article also recites that “[n]either Miller nor [the Hotel] manager Juan 

Guardado returned numerous calls and e-mails requesting comment.” Miller and 

the Hotel did not provide any evidence controverting these efforts or suggesting 

that Agee should have more fully investigated some aspect of the report to satisfy 

due diligence before reporting. Because Miller and the Hotel did not respond to 

the Index’s showing by adducing clear and specific evidence that the challenged 

statements made in the articles were false or negligently reported, they have not 

made a prima facie case to support Miller and the Hotel’s defamation claim against 

NHI.

b. Patterson and IntegraCare

Patterson and IntegraCare contend that they should prevail on their motion 

to dismiss as well, because Miller and the Hotel have failed to provide evidence to 

show that Patterson acted negligently or intentionally in making any alleged 

defamatory statements. “Fault is a constitutional prerequisite for defamation 

liability.” McLemore, 978 S.W.2d at 571 (citing Gertz v. Robert Welch, Inc., 418 

U.S. 323, 347, 94 S. Ct. 2997, 3010–11 (1974)). “Private plaintiffs must prove that 

the defendant was at least negligent.” Id. Miller and the Hotel’s defamation 

claims against Patterson and IntegraCare stand on two statements quoted in the 

Index: (1) Patterson’s statement that “[t]his case involves a number of possible 

areas of focus for prosecutors, such as “varying issues of patient choice and, I 
27

think, the question of elderly abuse,” and (2) her statement that Miller told 

IntegraCare that it was denying it access to the Hotel because IntegraCare was not 

“sending referrals.” 

We first examine whether either of these statements was defamatory. “[T]he 

meaning of a publication, and thus whether it is false and defamatory, depends on a 

reasonable person’s perception of the entirety of [the] publication and not merely 

on individual statements.” Bentley, 94 S.W.3d at 579. To determine whether 

language is capable of having a defamatory meaning, a court should construe the 

statement as a whole, in light of the surrounding circumstances, and based upon a 

reasonable person’s perception of it. Vice v. Kasprzak, 318 S.W.3d 1, 17 (Tex. 

App.—Houston [1st Dist.] 2009, pet. denied).

With respect to the first statement, “elderly abuse” was a strong choice of 

words, but Patterson softened her meaning by indicating that some doubted the 

applicability of the term, noting it only as a “possible area of focus.” Her 

statement, viewed in context, refers to Miller and the Hotel’s conduct in forcing the 

residents to choose between accepting one of two preferred providers or leaving 

the facility—and the official investigation into whether that conduct amounted to 

unlawful interference in the residents’ choice of health care providers. The record 

shows that Patterson had personal knowledge that state and local officials had 

opened investigations into the matter. Miller and the Hotel acknowledge that 
28

ongoing investigations existed; they take issue with the descriptions of the 

investigation’s scope. But an objectively reasonable person could conclude, in 

context, that the statement had a basis in fact, and thus we hold that the record 

lacks a prima facie showing that Patterson failed to exercise due care in making it. 

We examine the second statement to determine whether it is reasonably 

capable of a defamatory meaning. In Musser v. Smith Protective Services, the 

Texas Supreme Court held that a former employer’s letter in which it sarcastically 

accused the plaintiff of taking accounts with him when he left the business was not 

reasonably capable of a defamatory meaning. 723 S.W.2d 653, 655 (Tex. 1987). 

The Court reasoned that the statement “call[ed] plaintiff a strong and successful 

competitor,” and that it did not accuse the plaintiff of committing a crime or 

violating a law or contract. Id. 

Miller and the Hotel do not offer an alternative reason for the end of the 

parties’ business relationship with IntegraCare. In the articles, neither the Index 

nor Patterson suggested that the Hotel’s problem lay in its motive for excluding 

IntegraCare as a provider; rather, their thrust was that, regardless of the reason for 

it, the Hotel’s decision to exclude IntegraCare thwarted the patients’ right to 

choose their own health care provider. We hold that a statement speculating about 

the Hotel’s motive for its decision is not defamatory as a matter of law. See id.
29

We hold that Miller and the Hotel failed to marshal clear and clear and specific 

evidence to support their defamation claim against IntegraCare.

2. Business disparagement

To prevail on a business disparagement claim, a plaintiff must establish that 

(1) the defendant published false and disparaging information, (2) with malice, 

(3) without privilege, (4) that resulted in special damages to the plaintiff. Hurlbut 

v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987). “A business 

disparagement claim is similar in many respects to a defamation action.” Forbes 

Inc. v. Granada Bioscis., Inc., 124 S.W.3d 167, 170 (Tex. 2003). The two torts 

differ in the interest protected: a defamation claim protects an injured party’s

personal reputation, while a business disparagement claim protects economic 

interests. Id. “[A] business disparagement defendant may be held liable ‘only if 

he knew of the falsity or acted with reckless disregard concerning it, or if he acted 

with ill will or intended to interfere in the economic interest of the plaintiff in an 

unprivileged fashion.’” Id. (quoting Hurlbut, 749 S.W.2d at 766).

Miller and the Hotel’s business disparagement claims lack merit for the 

same reasons we reject their defamation claims: the lack of any evidence that the 

alleged defamatory statements made by the Index were false, and, with respect to 

Patterson, that she acted with malice—a higher burden than the negligent conduct 

that Miller and the Hotel failed to show for their defamation claim against her. 
30

3. Tortious interference

To establish a cause of action for tortious interference, a plaintiff must prove 

that (1) a contract subject to interference exists, (2) the defendant committed a 

willful and intentional act of interference with the contract, (3) the act proximately 

caused injury, and (4) the plaintiff sustained actual damages or loss. ACS Invs., 

Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997). “Ordinarily, merely 

inducing a contract obligor to do what it has a right to do is not actionable 

interference.” Id.

The Hotel offered its residents a contractual option of whether to remain at 

the Hotel and change to one of its two preferred health care providers or leave the 

Hotel to continue to receive health care services from IntegraCare. Nothing in the 

record suggests that NHI, Patterson, or IntegraCare influenced the Hotel residents 

to do anything other than exercise that option. Miller and the Hotel therefore fail 

to sustain their burden to make a prima facie case of interference with a contractual 

obligation. 

IV. Applicability of Statutory Exclusion for Commercial Speech

Finally, the Hotel contends that IntegraCare and NHI are for-profit 

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

services and that the challenged statements arise out of their provision of 

commercial services, thereby triggering the TCPA exclusion for commercial 
31

speech. TCPA section 27.010 (b) provides that “[t]his chapter does not apply to 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 or a commercial transaction in 

which the intended audience is an actual or potential buyer or customer.” TEX.

CIV. PRAC. & REM. CODE ANN. § 27.001(b). The Hotel observes that (1) the 

statements involved the Hotel’s business relationship with IntegraCare, and (2) the 

Hotel’s residents were both IntegraCare customers and newspaper subscribers. 

In Simpson Strong-Tie Co., Inc. v. Gore, 230 P.3d 1117 (Cal. 2010), the 

Supreme Court of California considered “the scope and operation of the exemption 

for commercial speech” set forth in the exemption to its own anti-SLAPP statute, 

which is similar to the Texas statute’s exemption. See id. at 1123 (quoting CAL.

CODE CIV. PROC. § 425.17(c)).

2

It devised a four-prong analysis for determining 

whether the exemption applies. Courts should examine whether:

 

2

The California provision declares that:

Section 425.16 does not apply to any cause of action brought against a 

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

services, including, but not limited to, insurance, securities, or financial 

instruments, arising from any statement or conduct by that person if both of 

the following conditions exist: [¶] (1) The statement or conduct consists of 

representations of fact about that person’s or a business competitor’s 

business operations, goods, or services, that is made for the purpose of 

obtaining approval for, promoting, or securing sales or leases of, or 

commercial transactions in, the person’s goods or services, or the statement 

or conduct was made in the course of delivering the person’s goods or 
32

(1) the cause of action is against a person primarily engaged in the 

business of selling or leasing goods or services;

(2) the cause of action arises from a statement or conduct by that 

person consisting of representations of fact about that person’s or 

a business competitor’s business operations, goods, or services; 

(3) the statement or conduct was made either for the purpose of 

obtaining approval for, promoting, or securing sales or leases of, 

or commercial transactions in, the person’s goods or services or in 

the course of delivering the person’s goods or services; and 

(4) the intended audience for the statement or conduct [is an actual or 

potential buyer or customer].

Id. at 1129.3

The Simpson court first noted, as a matter of statutory construction, that the 

burden of proving the applicability of an exemption from the provisions of an antiSLAPP statute falls on the party asserting it. See id. at 1124 (“One claiming an 

exemption from a general statute has the burden of proving that he comes within 

the exemption.”) (citations omitted); see generally McIntyre v. Ramirez, 109 

S.W.3d 741, 745 (Tex. 2003) (holding that doctor had burden of proof to show he 

was exempted from general applicability of emergency care statute). We follow 

the California Supreme Court’s analysis in Simpson and conclude that the burden 

 

services, [and ¶] (2) The intended audience is an actual or potential buyer or 

customer, or a person likely to repeat the statement to, or otherwise 

influence, an actual or potential buyer or customer . . . . 

CAL. CODE CIV. PROC. § 425.17(c).

3 We have modified the fourth prong of this test to track the Texas statute. Compare

TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(b) with CAL. CODE CIV. PROC. 

§ 425.17(c). 
33

rested with the Hotel to show that the statute does not apply to its suit against NHI 

and IntegraCare. See Simpson, 230 P.3d at 1126 (“The burden of proof as to the 

applicability of the commercial speech exemption, therefore, falls on the party 

seeking the benefit of it—i.e., the plaintiff.”).

The Hotel did not meet its burden to establish that the statements at issue 

were commercial speech unprotected by the TCPA. 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. To read news content to 

constitute statements “arising out of the sale or lease” of newspapers would 

swallow the protections the statute intended to afford; such a construction does not 

match the statute’s dual purpose of safeguarding the right to speak, to associate, 

and to petition the government, while protecting the right of an aggrieved person to 

file a meritorious defamation suit. See TEX. CIV. PRAC. & REM. CODE ANN. 

§ 27.002.

As for IntegraCare, its employees had a statutory duty to report problems 

with respect to care of the elderly to certain state authorities, and it proffered 

Patterson’s affidavit that her statements involved matters of public health and 

safety. See e.g., TEX. HUM. RES. CODE ANN. § 48.051(a) (West 2013) (requiring 

that “a person having cause to believe that an elderly . . . person is in the state of 
34

abuse, neglect, or exploitation . . . shall” report same to Department of Protective 

and Regulatory Services); TEX. HEALTH AND SAFETY CODE ANN. § 260A.002(a)

(West Supp. 2012) (“A person, including an owner or employee of a facility, who 

has cause to believe that the physical or mental health or welfare of a resident has 

been or may be adversely affected by abuse, neglect, or exploitation caused by 

another person shall report the abuse, neglect, or exploitation in accordance with 

this chapter.”). Patterson complained about the Hotel’s actions to the local district 

attorney, the Department of Aging and Disability Services, the Mineral Wells City 

Manager, and the Texas Attorney General Consumer Protection Division. 

Patterson was also a source for the newspaper coverage. 

The Hotel counters that its business dispute with IntegraCare was the reason 

Patterson complained, not any public safety concern. The motive for making the 

statements aside, however, Patterson made none in connection with “the sale or 

lease of goods, services, or an insurance product or a commercial transaction,” nor 

was her “intended audience an actual or potential buyer or customer.” Although 

the Hotel’s residents may have learned about Patterson’s statements and 

complaints through reading the newspaper, she did not direct the complained-of 

comments to them to secure the sale of goods or services. The newspaper 

concluded that the matters involved in Patterson’s statements were newsworthy to 

the general public, and thus reported them aside from IntegraCare’s commercial 
35

interests. The Hotel did not adduce evidence that the statements were otherwise 

made in a commercial context. We hold that the Hotel failed to establish that its 

suit against IntegraCare involved statements, directed to customers, arising out of a 

commercial transaction, rather than statements, directed to state officials and the 

general public, concerning a matter of public health and safety. 

Conclusion

We hold that NHI, Patterson, and IntegraCare satisfied their burden under 

the TCPA to show that Miller and the Hotel’s claims against them are based on

statements that they made in the exercise of rights to free speech and to petition the 

government. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b). We further 

hold that Miller and the Hotel have failed to sustain their burden to show a prima 

facie case for each essential element of their claims, or that their lawsuit falls

within the commercial speech exemption to the statute. See id. §§ 27.005(c),

27.010(b). 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. See id. § 27.009(a).

Jane Bland

Justice 

Panel consists of Chief Justice Radack and Justices Bland and Huddle.