Supreme Court of Texas 

══════════

No. 21-0437 

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USA Lending Group, Inc., 

Petitioner, 

v. 

Winstead PC and James Ruiz, 

Respondents

═══════════════════════════════════════

On Petition for Review from the 

Court of Appeals for the Twelfth District of Texas 

═══════════════════════════════════════

Argued March 21, 2023 

JUSTICE BLAND delivered the opinion of the Court. 

The Texas Citizens Participation Act’s stated objective is to 

safeguard constitutional rights while permitting meritorious lawsuits to 

go forward. To achieve this, the Act requires early dismissal of 

qualifying legal actions when the plaintiff lacks evidence of any 

essential element of its claim. The Act describes this evidence as the 

“prima facie case.” The prima facie case is the measurement the 

Legislature selected to distinguish genuine claims from suits brought to 

harass or silence. It is not a high hurdle. Rather, it is that minimum 
2 

quantity of evidence necessary to rationally infer that an allegation is 

true. 

In this legal malpractice case, a client sued its former law firm, 

claiming that the law firm neglected to request monetary damages in a 

motion for default judgment. The failure to do so, the client claims, 

proximately caused it the loss of those damages. Assuming that the Act 

covers the claim at issue, we hold that the client presented prima facie 

evidence sufficient to survive a motion to dismiss. Because the court of 

appeals held differently, we reverse its judgment and remand the case 

to the trial court. 

I 

Petitioner USA Lending Group, Inc. hired Respondent 

Winstead PC to sue USA Lending’s former employee for breach of 

fiduciary duty. In its complaint to the United States District Court for 

the Western District of Texas, USA Lending alleged that it directed 

Mike Ahmari to acquire domain names and toll-free phone numbers for 

USA Lending to support its new home-mortgage program. When 

Ahmari resigned, USA Lending discovered that he had acquired the 

assets in his own name rather than in USA Lending’s.1 USA Lending’s 

chairman and CEO avers that Ahmari used the assets to benefit a 

competitor, All Home Lending, Inc., controlled by Ahmari or his wife. In 

the federal court lawsuit, USA Lending sought a declaratory judgment 

1 Though USA Lending’s complaint references multiple domain names 

and telephone numbers, in its motion for default judgment USA Lending 

sought a declaration of its ownership of only the www.usalend.com domain 

name and the 800-USA-LEND toll-free phone number. 
3 

that it is the rightful owner of the assets and “actual and exemplary 

damages.” 

Ahmari failed to answer USA Lending’s suit. As a next step, 

Winstead drafted a motion for default judgment and prepared an 

accompanying affidavit for USA Lending’s CEO. The draft affidavit 

included a blank for USA Lending to supply a figure representing lost 

profits attributable to Ahmari’s wrongful conduct. The CEO filled in the 

blank with “$1,000,000.00.” Winstead and USA Lending later revised 

the affidavit to create a table showing lost income attributable to the 

wrongfully acquired domain name and phone number over four years, 

with total lost income alleged to be $1,285,000. 

Winstead eventually revised the affidavit a third time. Unlike 

earlier versions, the final version omits a claim for lost income, a 

revision that USA Lending denies approving. Winstead attached this 

version to the motion for default judgment. It requested no relief other 

than a declaration that USA Lending owns the domain name and phone 

number. The federal district court entered judgment for USA Lending 

accordingly. It did not award money damages. 

Upon discovering the omission of money damages from the 

judgment, USA Lending sued Winstead and its attorney James Ruiz in 

Harris County state court, seeking over $1,000,000 in damages. USA 

Lending alleges that Winstead’s malpractice caused USA Lending to 

forfeit its claim for monetary damages against Ahmari in the federal 

court suit: 

In the process of securing a default judgment against 

Ahmari, Ruiz and Winstead without authority, permission, 

or with the knowledge of [USA Lending], dropped from 
4 

their motion any claim for monetary relief. As a result, 

[USA Lending] was caused to lose a damage claim in excess 

of $1,000,000 that would more likely than not been 

included in and ordered by the judgment. 

Winstead moved to dismiss USA Lending’s malpractice claim 

under the Texas Citizens Participation Act, stating that USA Lending’s 

suit is based on Winstead’s exercise of the right to petition. USA Lending 

responded that (1) the Act does not apply to Winstead’s communications; 

(2) if the Act applies, then the commercial-speech exemption precludes 

dismissal; and (3) in any event, prima facie evidence supports each 

essential element of USA Lending’s malpractice claim. The district court 

denied Winstead’s motion, and Winstead appealed. 

The court of appeals reversed.2 First, it held that Winstead’s 

motion for default judgment qualifies as a protected “communication” 

under the Act.3 Second, the court held that the commercial-speech 

exemption does not apply because the motion for default judgment “did 

not arise out of the sale or solicitation of Winstead’s legal services or a 

commercial transaction.”4 Finally, the court held that USA Lending 

failed to establish a prima facie case for legal malpractice. Though the 

court of appeals agreed that prima facie evidence exists that the alleged 

malpractice caused some damage, it rejected USA Lending’s evidence 

that it could have collected a judgment against Ahmari as “not based on 

2 ___ S.W.3d ___, 2021 WL 1047208, at *1 (Tex. App.—Tyler Mar. 18, 

2021). 

3 Id. at *3. 

4 Id. at *4. 
5 

demonstrable, reasonable facts.”5 We granted USA Lending’s petition 

for review. 

II 

A 

Under the Act, a trial court “shall dismiss a legal action against 

the moving party if the moving party demonstrates that the legal action 

is based on or is in response to . . . the party’s exercise of: (A) the right 

of free speech; (B) the right to petition; or (C) the right of association.”6

The Act defines each of these rights expansively.7 

A plaintiff survives a motion to dismiss under the Act if it 

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

essential element of the claim in question.”8 Prima facie means “at first 

sight,”9 and under the Act, is the “minimum quantum of evidence 

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

true.”10 Evidence is “clear and specific” if it provides enough detail to 

5 Id. at *8–9. 

6 Tex. Civ. Prac. & Rem. Code § 27.005(b). 

7 Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 

133–34 (Tex. 2019). 

8 Tex. Civ. Prac. & Rem. Code § 27.005(c). 

9 Prima facie, Garner’s Dictionary of Legal Usage (3d ed. 2011). 

10 S&S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 847 

(Tex. 2018) (quoting In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015)). 
6 

show the factual basis for the claim.11 Such evidence need not be 

conclusive, uncontroverted, or found credible.12

In ruling on a motion to dismiss under the Act, the trial court 

must consider evidence that a party could proffer in connection with a 

summary judgment motion, as well as “supporting and opposing 

affidavits stating the facts on which the liability or defense is based.”13

The Act does not contemplate extensive discovery.14 In this case, none 

has occurred. Given the very preliminary stage of the case, “[n]either the 

court’s ruling on the motion nor the fact that it made such a ruling shall 

be admissible in evidence at any later stage of the case, and no burden 

of proof or degree of proof otherwise applicable shall be affected by the 

ruling.”15 

11 In re Lipsky, 460 S.W.3d at 590–91. 

12 Id. at 590 (observing that a prima facie case “refers to evidence 

sufficient as a matter of law to establish a given fact if it is not rebutted or 

contradicted”). 

13 Tex. Civ. Prac. & Rem. Code § 27.006(a) (“In determining whether a 

legal action is subject to or should be dismissed under this chapter, the court 

shall consider the pleadings, evidence a court could consider under Rule 166a, 

Texas Rules of Civil Procedure, and supporting and opposing affidavits stating 

the facts on which the liability or defense is based.”). Though the court shall 

consider the pleadings, they are not a substitute for clear and specific evidence 

of “each essential element of the claim in question.” In re Lipsky, 460 S.W.3d 

at 590–91 (quoting Tex. Civ. Prac. & Rem. Code § 27.005(c)). 

14 See Tex. Civ. Prac. & Rem. Code § 27.003(c) (halting discovery upon 

filing of a motion to dismiss under the Act); but see id. § 27.006(b) (permitting 

the court to allow “specified and limited discovery relevant to the motion” on a 

showing of good cause within the allotted time frame). 

15 Id. § 27.0075. 
7 

We review de novo whether the Act applies, and if so, whether 

prima facie evidence exists to support each element of the claim.16

Because we conclude that USA Lending has adduced sufficient prima 

facie evidence to support its malpractice claim, we need not determine 

whether its legal action was based on Winstead’s exercise of the right to 

petition. We express no views on that aspect of the court of appeals’ 

opinion. 

B 

A plaintiff claiming legal malpractice must prove that the 

defendant breached a duty it owed to the plaintiff and proximately 

caused the plaintiff an injury.17 If the plaintiff asserts that an attorney’s 

negligence resulted in the denial of actual damages, then the plaintiff 

must also prove, in reasonable probability, that it would have collected 

those damages in the underlying case.18 

Winstead challenges two elements of USA Lending’s prima facie 

case: causation and damages. It argues that the prima facie evidence 

does not show that a breach of the standard of care caused USA Lending 

actual damages. Further, Winstead contends that USA Lending 

provided insufficient evidence that it would have collected a money 

judgment from Ahmari even if the court had awarded actual damages. 

The court of appeals held that prima facie evidence supports USA 

16 Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40, 45–46 (Tex. 

2021).

17 Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Rsch. 

Corp., 299 S.W.3d 106, 112 (Tex. 2009). 

18 Id. 
8 

Lending’s claim that a breach caused it some damages but not that it 

would have collected that amount from Ahmari.19

In response to Winstead’s motion to dismiss, USA Lending 

proffered an affidavit from its CEO, as well as three expert affidavits. 

These affidavits address the standard of care, breach, damages, and 

collectibility. USA Lending’s CEO avers that he retained Winstead to 

sue Ahmari for diverting ownership of USA Lending’s domain name and 

telephone number for Ahmari’s personal use or for the use of “other 

companies including, but not limited to All Home Lending, Inc.” 

The CEO avers that he and Winstead agreed that the firm would 

seek monetary damages in the motion for default judgment and that he 

provided affidavits to the firm to support that request. The CEO 

discovered Winstead’s failure to request money damages only after the 

federal court signed the default judgment. As the custodian of records 

for USA Lending, the CEO asserts that USA Lending’s business records 

demonstrate that the “amount of expenses, fees, and other out of pocket 

costs incurred or expended” exceeds $1,200,000. He attached financial 

records, only some of which are in USA Lending’s name. The records are 

undifferentiated and voluminous, but a review shows funds transferred 

from USA Lending to Ahmari, including a check for $32,783.83 dated 

February 5, 2013, and two transfers totaling $31,841.59 on March 13, 

2013. 

On causation, USA Lending’s first expert, a retired state judge, 

avers that a reasonably prudent lawyer would have followed the client’s 

19 2021 WL 1047208, at *9–10. 
9 

instructions to seek monetary damages in connection with a default 

judgment. Had Winstead sought damages, the expert avers, then “more 

likely than not, the default judgment rendered in USA Lending’s favor 

would have included judgment for damages represented by USA 

Lending’s out of pocket costs and expenses as described and attested to 

in the affidavit of the CEO.” 

As to the likelihood that USA Lending would have collected 

damages on a judgment against Ahmari, a California resident, USA 

Lending proffered the testimony of a second expert, a California lawyer. 

Under California law, the expert concludes that it was “reasonably 

likely” that, had the judgment rendered against Ahmari included an 

award of actual damages, it could have been collected from assets that 

“Ahmari held.” Those assets include community property or assets 

Ahmari fraudulently transferred either to his wife or to All Home 

Lending, an entity controlled by Ahmari’s wife. According to the expert’s 

affidavit, records from the California Secretary of State show that 

Ahmari’s wife “is listed on publicly available California Secretary of 

State records as the . . . President, CFO, and Secretary” of All Home 

Lending, and that the company “was acquired” in 2012, around the time 

that Ahmari began working for USA Lending. 

The third expert, a Texas attorney, avers that public records 

indicate that All Home Lending was a Federal Housing Administration 

Approved Mortgagee, requiring a minimum net worth of at least 

$1,000,000. 
10 

C 

Under the Act, “the evidence must be sufficient to allow a rational 

inference that some damages naturally flowed from the defendant’s 

conduct.”20 A general averment of loss, like any conclusory opinion, is 

not sufficient.21 For example, in In re Lipsky, we rejected the plaintiff’s 

general averment that it had sustained “direct pecuniary and economic 

losses and costs, lost profits, loss of its reputation, and loss of 

goodwill . . . in excess of three million dollars.”22 We criticized the 

affidavit as “devoid of any specific facts illustrating how [the 

defendant’s] alleged remarks about [the plaintiff’s] activities actually 

caused such losses.”23 

We contrasted the insufficient evidence in Lipsky with the 

sufficient evidence adduced in S&S Emergency Training Solutions, Inc. 

v. Elliott.24 In that case, a provider of emergency medical training sued 

its former employee, alleging that her breaches of nondisclosure 

agreements caused the provider to be unable to offer accredited training 

under a consortium agreement.25 In her motion to dismiss under the Act, 

the former employee argued that the provider could not establish its 

damages. We observed that the provider “was not required to provide 

20 Elliott, 564 S.W.3d at 847.

21 In re Lipsky, 460 S.W.3d at 592–93. 

22 Id. at 592. 

23 Id. at 593. 

24 564 S.W.3d at 848. 

25 Id. at 845. 
11 

evidence sufficient to allow an exact calculation of the lost profits.”26

Instead, “it was only required to present evidence sufficient to support 

a rational inference that [the employee’s] actions caused it to lose some 

specific, demonstrable profits.”27 The provider did so by adducing a 

record demonstrating that the “lost revenues were susceptible to 

calculation with reasonable certainty.”28 

The facts in this case align with those in Elliott. USA Lending’s 

causation expert avers that the company’s out-of-pocket costs and 

expenses would more likely than not have been awarded in a default 

judgment. USA Lending’s evidence of out-of-pocket expenses includes 

those it incurred in acquiring and maintaining the domain name and 

toll-free number during the time Ahmari deprived USA Lending of their 

use.29 The expert testimony, combined with the existence of 

demonstrable out-of-pocket expenses, establishes that USA Lending 

suffered some specific, demonstrable injury attributable to Winstead’s 

conduct. Accordingly, we agree with the court of appeals that USA 

26 Id. at 848. 

27 Id. 

28 Id.

29 Exhibits attached to the motion for default judgment support USA 

Lending’s outlay of $5,000 to acquire the domain www.usalend.com and an 

outlay of $3,150.50 related to the acquisition and operation of the toll-free 

phone number. The amounts paid to maintain the phone number after 

Ahmari’s resignation appear to be trifling ($21.49 over three months). The 

record contains a midden of other business records, some for an entity called 

USA Lend Cash LLC, which may or may not support USA Lending’s additional 

theories of damages. 
12 

Lending presented prima facie evidence that the failure to request 

money damages caused it some injury.30

Winstead responds that USA Lending’s assertion of over 

$1,000,000 in malpractice damages is conclusory. To make a prima facie 

case under the Act, however, plaintiffs need not prove the entirety of 

their damages with specificity.31 It is enough that USA Lending has 

evidence supporting the inference that Winstead’s actions caused it to 

lose “some specific, demonstrable” amount.32 The costs expended to 

acquire and maintain the domain name and telephone number, along 

with the amounts it transferred to Ahmari, are some evidence that USA 

Lending could have shown the federal court to receive a judgment for 

monetary damages. 

Winstead also argues that the default judgment awarded USA 

Lending ownership of the domain name and telephone number, and thus 

recovery of the out-of-pocket expenses incurred to acquire the assets is 

duplicative relief. At least some of the expenses attached to the motion 

for default judgment, however, show that USA Lending continued to pay 

for the use of the toll-free number both before and after Ahmari 

resigned. USA Lending’s outlays to maintain an asset while a 

competitor held it are separate alleged losses not compensated by the 

eventual return of the assets. 

30 See 2021 WL 1047208, at *7. 

31 Elliott, 564 S.W.3d at 848. 

32 See id. 
13 

Winstead will have opportunities to contest the proposition that 

the district court would have awarded monetary damages. Under the 

Act, however, prima facie evidence is taken at face value.33 At this phase 

of the proceedings, the evidence supports a rational inference causally 

connecting Winstead’s conduct to a specific, demonstrable injury. 

D 

Winstead next challenges USA Lending’s expert affidavit as 

speculative in concluding that it was “reasonably likely” that USA 

Lending could have collected monetary damages from Ahmari, had USA 

Lending obtained such a judgment. We have said that “collectibility 

must be proved; it is not presumed.”34 

USA Lending’s CEO avers that Ahmari used USA Lending’s 

domain name and toll-free telephone number to benefit All Home 

Lending, Inc., a California lender. Circumstantial evidence in the 

default judgment record supports this allegation: invoices categorized 

entries from June 2013 to November 2013 as “Rec-All Home.” Relying in 

part on the CEO’s affidavit and public records, USA Lending’s second 

expert avers that Ahmari’s wife is publicly identified as All Home 

Lending’s President, Chief Financial Officer, and Secretary. The expert 

also referred to a June 24 email not present in the record. The expert 

avers that this email is from Ahmari to USA Lending’s CEO, seeking an 

investment in All Home, in which Ahmari claimed to exercise some 

33 See In re Lipsky, 460 S.W.3d at 590 (giving “prima facie case” its 

“traditional legal meaning” of referring to “evidence sufficient as a matter of 

law to establish a given fact if it is not rebutted or contradicted”). 

34 Akin, Gump, 299 S.W.3d at 115. 
14 

control over the entity. The expert noted that the Ahmaris appear to 

have acquired All Home Lending in 2012, approximately the time that 

Ahmari was supposed to be creating a similar home mortgage business 

for USA Lending. From these specific facts, the expert opined that either 

Ahmari or his wife owned, or at least controlled, All Home Lending. 

Applying California community property and fraudulent transfer laws, 

the expert further concluded that it was likely that USA Lending could 

collect a judgment against Ahmari through All Home Lending’s assets 

or against any salary his wife drew from the company. 

A third expert assembled evidence of the assets of All Home 

Lending. Relying on publicly available reports from federal agencies and 

minimum net-worth regulations, the expert concluded that All Home 

Lending had “assets of at least $1,000,000 . . . for almost two full years 

post judgment.” 

Though Winstead may demonstrate that the experts’ conclusions 

do not support USA Lending’s claim because they prove to be incredible, 

unreliable, countered, or outweighed by legal defenses or other evidence, 

we conclude that USA Lending met the minimum requirement for a 

prima facie case of collectibility. Some circumstantial evidence and 

expert opinion support an inference that Ahmari used assets paid for by 

USA Lending to further the interests of All Home Lending, an entity 

with evidence of assets against which a judgment could be collected 

under fraudulent transfer laws. Additionally, some evidence supports 

the expert’s conclusion that Ahmari’s wife, as an owner or salaried 

employee, had assets reachable under California community property 

laws. 
15 

The court of appeals concluded that the evidence of collectibility 

rested on too many assumptions, such as the assumption that Ahmari 

or his wife owned All Home Lending and that no pre- or post-nuptial 

agreement affected its ownership.35 These assumptions may well be 

undercut by evidence adduced at a future juncture. The expert 

addressed the assumptions, however, by opining that California 

fraudulent transfer laws prevent the diversion of assets and that public 

records demonstrate that Ahmari’s wife controls that company. A prima 

facie case eventually may be controverted. At this stage, however, a 

claim survives if the evidence “is legally sufficient to establish a claim 

as factually true if it is not countered.”36 

Though circumstantial and subject to counterattack, USA 

Lending presented sufficient evidence to rationally infer that a 

judgment could have been collected against Ahmari’s community 

property or against All Home Lending as the recipient of a fraudulent 

transfer. The experts’ assumptions, as yet unproven, are susceptible of 

proof and based on untested, specific facts that are available at this early 

stage of the proceedings: (1) that Ahmari used USA Lending’s assets to 

benefit a competitor company operated by his wife; (2) that Ahmari 

claimed to control USA Lending; (3) that Ahmari’s wife is publicly 

identified as an officer of All Home Lending; and (4) that All Home 

Lending, at the relevant time after judgment, satisfied federal net-worth 

minimums. 

35 2021 WL 1047208, at *9. 

36 Elliott, 564 S.W.3d at 847. 
16 

Finally, Winstead complains that the affidavits lack specificity 

regarding the process for domesticating a judgment in California and 

any defenses to enforcement. Though discovery may bear out such 

concerns, the Full Faith and Credit Clause of the United States 

Constitution supplies sufficient guarantee, for this stage of the 

proceedings, that a judgment in one state may be enforced in another.37

The Act permits a moving party to overcome the prima facie case by 

establishing grounds on which it is entitled to judgment as a matter of 

law.38 Winstead did not seek to establish that a defense to the judgment 

defeated its enforcement in California.

* * * 

37 U.S. Const. art. IV, § 1. 

38 Tex. Civ. Prac. & Rem. Code § 27.005(d) (“[T]he court shall dismiss a 

legal action against the moving party if the moving party establishes an 

affirmative defense or other grounds on which the moving party is entitled to 

judgment as a matter of law.”). 
17 

The motion to dismiss stage is not a battle of evidence; it is the 

clearing of an initial hurdle.39 The Act does not select for plaintiffs 

certain to succeed; it screens out plaintiffs certain to fail—those who 

cannot support their claims with clear and specific evidence.40 

Because USA Lending adduced prima facie evidence to support 

its claim for legal malpractice, the court of appeals erred in ordering the 

case dismissed. Accordingly, we reverse the judgment of the court of 

appeals and remand the case to the trial court. 

 

 

 Jane N. Bland 

 Justice 

OPINION DELIVERED: May 19, 2023 

39 See In re Lipsky, 460 S.W.3d at 589 (“That the [Act] should create a 

greater obstacle for the plaintiff to get into the courthouse than to win its case 

seems nonsensical.”). 

40 See Tex. Civ. Prac. & Rem. Code § 27.005(c).