Court Opinion

ID: 4399672
Source: CourtListenerOpinion
Date Created: 2019-05-23 11:45:10.906059+00
Date Added: 2024-06-11T14:24:11.114527
License: Public Domain

AFFIRM; and Opinion Filed May 22, 2019.

                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-18-00654-CV

  JEFFREY ERDNER, D.O. AND THE EMERGENCY CENTER AT WEST 7TH, LLC,
                              Appellants
                                 V.
           HIGHLAND PARK EMERGENCY CENTER, LLC, Appellee

                        On Appeal from the 191st Judicial District Court
                                     Dallas County, Texas
                             Trial Court Cause No. DC-18-01059

                                          OPINION
                         Before Justices Whitehill, Molberg, and Reichek
                                   Opinion by Justice Molberg
        Highland Park Emergency Center, LLC (HPEC) sued Jeffrey Erdner, D.O. for breach of

fiduciary duty. It sued The Emergency Center at West 7th, LLC (West 7th) for aiding and abetting

the breach. Specifically, HPEC alleged that Erdner, one of its members, usurped an opportunity

to expand HPEC’s business operations for his own personal benefit, communicated with investors

about forming West 7th to capitalize on the opportunity, and misled HPEC and its other members

about his activities.

        Appellants filed a motion to dismiss HPEC’s claims pursuant to the Texas Citizens

Participation Act, TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–.011 (the TCPA). Following a

hearing, the trial court denied the motion. In two issues, appellants argue the trial court erred by
denying the motion to dismiss because the TCPA applies to HPEC’s claims and HPEC failed to

establish by clear and specific evidence a prima facie case for each element of its claims.

       The TCPA applies only if HPEC’s claims are based on, related to, or in response to

appellants’ exercise of one of the rights protected by the statute, each of which requires a

“communication.” Appellants assert they are entitled to the protection of the statute because

Erdner’s communications with other investors constituted the exercise of the right of association

and the right of free speech, as defined by the TCPA.

       We conclude appellants failed to meet their burden of establishing the TCPA applies to

HPEC’s claims because Erdner’s communications did not (1) involve the public or citizen’s

participation required for the exercise of the right of association or (2) relate to a matter of public

concern as required for the exercise of the right of free speech. Accordingly, we affirm the trial

court’s order denying the motion to dismiss.

                                            Background

       HPEC, a member-managed limited liability company, operates a freestanding emergency

room (FSER) in Dallas. In 2011, Erdner was admitted as a member of HPEC and named as one

of its managers. Erdner was considered to be the chief financial officer of HPEC.

       On December 16, 2013, Perren Gasc of Centennial Retail Services sent an email to “admin”

at HPEC about an “HP Emergency Care Site” in Fort Worth. Gasc indicated the location proposed

for a new FSER was a mixed-use project similar to HPEC’s location in Dallas. Gasc attached

marketing information to the email and inquired as to who would be the best person to speak to

regarding the opportunity.

       HPEC alleges that Erdner, the only member of HPEC who had access to the “admin” email,

became aware of the opportunity but did not disclose it to the other members of HPEC. Instead

Erdner contacted investors in Arizona about the opportunity and formed a number of limited

                                                 –2–
liability companies, including West 7th, to hide his conduct. West 7th ultimately built an FSER

in the same area as proposed by Gasc in his email.

       Erdner, on the other hand, contends the “front desk” at HPEC monitored the “admin” email,

and he did not see the email from Gasc. Rather, he was approached in December 2013 by a

neighbor and long-time friend who offered him an investment opportunity. The opportunity was

available only to Erdner individually and not to the other members of HPEC. Erdner spoke with

HPEC’s attorney about the investment opportunity and was told the HPEC Company Agreement

did not prevent him from taking advantage of the opportunity and he was not required to tell the

other members of HPEC about the opportunity.

       Erdner claims that, because he wanted to be transparent, he disclosed his involvement in

the investment opportunity to the other members of HPEC. In a July 20, 2014 email to one of the

other members, Erdner stated he had been contacted by a start-up medical company, his work for

that company would be from home on his own time, and there would be no shift-work. Erdner

stated the new company “deals with a variety of aspects, including medical software, hospital

management, ER physician contracts, ER physician management, and hospital/ER development.”

He represented that most of the new company’s work “intends to be outside of Texas,” but the

company was interested in opening “a limited number of free standing ER’s in Texas.” Erdner

stated the new company had agreed to abide by the non-compete clause in HPEC’s Company

Agreement, and the work would “by no means affect anything from the HPEC standpoint.”

       On July 25, 2014, Erdner sent another email, this time to all the other members of HPEC.

Erdner stated he was not joining a group of doctors whose “mission” was to open FSERs. Rather,

the new company had a primary focus of “micro-hospitals” in states in which FSERs were not

protected by law. Following its initial discussions with Erdner, the company expressed an interest

in “a minimal FSER involvement in Texas and Colorado.” Erdner stated that HPEC was his

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primary job and responsibility, his commitment and goals toward HPEC were “unwavering,” and

he would not share “insider information” with the new company.

       Erdner withdrew as a member of HPEC on May 2, 2015. West 7th opened an FSER in

Fort Worth in June or July of 2016. HPEC alleged that Erdner and his partners subsequently

opened an FSER in Arlington and had plans to open one in San Antonio and that Erdner also

“parlayed” the initial opportunity for the Fort Worth FSER into four emergency centers in Arizona.

       HPEC sued Erdner for breach of fiduciary duty for usurping HPEC’s opportunity to open

an FSER in Fort Worth and West 7th for aiding and abetting Erdner’s conduct. HPEC specifically

alleged that Erdner failed to offer or advise HPEC or its members of the Fort Worth opportunity,

used “corrupted business judgment” to withhold information about the opportunity from HPEC

and its members, made misleading and materially false representations to HPEC and its members

about the scope and nature of his separate business dealings, and misappropriated HPEC’s

confidential and proprietary information for his personal benefit.

       Appellants filed a motion to dismiss HPEC’s claims pursuant to the TCPA. Appellants

asserted that HPEC’s claims were based on, related to, or in response to appellants’ exercise of

their right of association and right of free speech and that HPEC could not produce clear and

specific evidence of a prima facie case for each claim. The trial court denied the motion to dismiss,

and appellants filed this interlocutory appeal.

                            Applicable Law and Standard of Review

       The TCPA “protects citizens . . . from retaliatory lawsuits that seek to intimidate or silence

them.” In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015) (orig. proceeding). The stated 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

                                                  –4–
demonstrable injury.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.002; see also ExxonMobil

Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (per curiam) (Coleman II). We

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

CODE ANN. § 27.011(b); see also State ex rel. Best v. Harper, 562 S.W.3d 1, 11 (Tex. 2018).

         “To effectuate the statute’s purpose, the Legislature has provided a two-step procedure to

expedite the dismissal of claims brought to intimidate or to silence a defendant’s exercise of [the]

First Amendment Rights” protected by the statute. Coleman II, 512 S.W.3d at 898; see also TEX.

CIV. PRAC. & REM. CODE ANN. §§ 27.003(a), .005(b); Youngkin v. Hines, 546 S.W.3d 675, 679

(Tex. 2018). The movant bears the initial burden of showing by a preponderance of the evidence

that the legal action is based on, relates to, or is in response to the movant’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); see also S&S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 847

(Tex. 2018). If the movant makes this showing, the burden shifts to the non-movant to establish

by clear and specific evidence a prima facie case for each essential element of its claims. TEX.

CIV. PRAC. & REM. CODE ANN. § 27.005(c); see Elliott, 564 S.W.3d at 847.

         Whether the TCPA applies to HPEC’s claims is an issue of statutory interpretation that we

review de novo. See Youngkin, 546 S.W.3d at 680. In construing the statute, we “ascertain and

give effect to the Legislature’s intent as expressed in the language of the statute.” Harper, 562
S.W.3d at 11; see also Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 58 (Tex. 2011)

(“Legislative intent . . . remains the polestar of statutory construction.” (internal citations omitted)).

We consider both the specific statutory language at issue and the statute as a whole. In re Office

of Att’y Gen., 422 S.W.3d 623, 629 (Tex. 2013) (orig. proceeding); see also Youngkin, 546 S.W.3d

at 680 (“[L]egislative intent derives from an act as a whole rather than from isolated portions of

it.”).

                                                   –5–
        We endeavor to read the statute contextually, giving effect to every word, clause, and

sentence. In re Office of Att’y Gen., 422 S.W.3d at 629; see also Norman, 342 S.W.3d at 58 (noting

courts should “never” apply requirement that Legislature clearly and unambiguously express its

intent to waive immunity “mechanically to defeat the law’s purpose or the Legislature’s intent”).

We apply the statute’s words according to their plain and common meaning, “unless a contrary

intention is apparent from the context, or unless such a construction leads to absurd results.”

Youngkin, 546 S.W.3d at 680; see also Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011)

(“The plain meaning of the text is the best expression of legislative intent unless a different

meaning is apparent from the context or the plain meaning leads to absurd or nonsensical results.”).

Although we must adhere to the definitions supplied by the Legislature in the TCPA, Adams v.

Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018); Youngkin, 546 S.W.3d at 680,

in the process of applying those “isolated” definitions, we are required to construe individual words

and provisions in the context of the statute as a whole, Youngkin, 546 S.W.3d at 680–81.

                                               Analysis

        In their first issue, appellants assert they met their initial burden of showing the TCPA

applies because HPEC’s claims are based on, related to, or in response to appellants’ exercise of

the right of association or the right of free speech. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.005(b). Both the right of association and the right of free speech, as defined by the TCPA,

require a “communication,” see TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(2)–(3), which

includes “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).

                                                  –6–
         The communications referenced in HPEC’s petition1 include (1) Gasc’s email about the

opportunity to build an FSER in Fort Worth; (2) Erdner’s communications with the Arizona

investors about opening an FSER in Fort Worth;2 and (3) Erdner’s emails to the other HPEC

members in July 2014 in which he allegedly misrepresented the scope and purpose of the company

with which he had been having discussions. However, in their appellate brief, appellants rely only

on Erdner’s communications with the Arizona investors to support their contentions that HPEC’s

claims are based on, related to, or in response to appellants’ exercise of their right of association

or of free speech.

                                       Exercise of Right of Association

         The TCPA broadly defines the “exercise of the right of association” as “a communication

between individuals who join together to collectively express, promote, pursue, or defend common

interests.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(2); see also Kawcak v. Antero Res. Corp.,

No. 02-18-00301-CV, 2019 WL 761480, at *6 (Tex. App.—Fort Worth Feb. 21, 2019, pet. filed).

Appellants argue they met their burden of establishing the TCPA applies to HPEC’s claims

because Erdner and the Arizona investors communicated to “promote and pursue their common

interest in forming an LLC to open and operate an FSER in the West 7th project.”

         This Court has concluded that “to constitute an exercise of the right of association under

the [TCPA], the nature of the ‘communication between individuals who join together’ must

involve public or citizen’s participation.” Dyer v. Medoc Health Servs., LLC, No. 05-18-00472-

CV, 2019 WL 1090733, at *5 (Tex. App.—Dallas Mar. 8, 2019, pet. filed) (quoting ExxonMobil

Pipeline Co. v. Coleman, 464 S.W.3d 841, 847 (Tex. App.—Dallas 2015) (Coleman I), rev’d on

    1
     Whether a legal action is based on, related to, or in response to the exercise of a protected right is determined
based on the claims made in the non-movant’s petition. Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017).
    2
      Neither the form nor the actual substance of Erdner’s communications with the Arizona investors are in the
appellate record. However, the parties do not dispute that the communications occurred and encompassed at least the
formation of a company to build an FSER.
                                                        –7–
other grounds, Coleman II, 512 S.W.3d at 900–01 (Tex. 2017)). The communications between

Erdner and the Arizona investors were private communications relating to establishing a business

to open an FSER in Fort Worth. Because those communications did not involve public or citizen’s

participation, it would be “illogical” for those communications to support a right of association

under the TCPA. Id.; Coleman I, 464 S.W.3d at 847; Kawcak, 2019 WL 761480, at *5 (concluding

definition of “common” under right of association in TCPA “embrace[s] a larger set defined by

the public or at least a group”).

       We conclude appellants failed to establish the TCPA applies to HPEC’s claims based on

appellants’ exercise of their right of association.

                                    Exercise of Right of Free Speech

       As defined by the TCPA, the “exercise of the right of free speech” is a communication

made in connection with a matter of public concern. TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.001(3).   A “matter of public concern” includes an issue related 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). Appellants argue they

met their burden of establishing the TCPA applies to HPEC’s claims because Erdner’s

communications with the Arizona investors were made in connection with health, community

well-being, and a service in the marketplace.

       Private communications made in connection with a matter of public concern fall within the

TCPA’s definition of the exercise of the right of free speech under the TCPA. Lippincott v.

Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam). Further, the TCPA does not require

that communications specifically “mention” a matter of public concern or have more than a

“tangential relationship” to such a matter. Coleman II, 512 S.W.3d at 900. Rather, the TCPA

                                                  –8–
applies so long as the movant’s statements are “in connection with” “issue[s] related to” any of the

matters of public concern listed in the statute. Id.

       The TCPA, however, “has its limits” and not every communication falls under the statute.

In re IntelliCentrics, Inc., No. 02-18-00280-CV, 2018 WL 5289379, at *4 (Tex. App.—Fort Worth

Oct. 25, 2018, orig. proceeding) (mem. op.); see also Dyer, 2019 WL 1090733, at *6. A private

communication made in connection with a business dispute is not a matter of public concern under

the TCPA. Staff Care, Inc. v. Eskridge Enters., LLC, No. 05-18-00732-CV, 2019 WL 2121116,

at *5 (Tex. App.—Dallas May 15, 2019, no pet. h.) (mem. op.); see also Brugger v. Swinford, No.

14-16-00069-CV, 2016 WL 4444036, at *3 (Tex. App.—Houston [14th Dist.] Aug. 23, 2016, no

pet.) (mem. op.). Further, if a communication itself does not relate to a matter of public concern,

a contention that it will result in a matter of public concern is not sufficient to establish the TCPA

applies. Nguyen v. Hoang, 318 F. Supp. 3d 983, 1001 (S.D. Tex. 2018).

       In this case, HPEC alleges Erdner usurped a corporate opportunity in December 2013. All

of Erdner’s communications with the Arizona investors occurred after the alleged wrongdoing and

related to the formation of a business that was considering offering healthcare services in the

marketplace in the future. There is no evidence that Erdner’s communications with the Arizona

investors were about the existence of healthcare services in the market or an issue relating to

current community well-being; rather, at most, the communications were about the formation of a

business and the possible scope of its future activities. Using a “wispy” definition of “tangential,”

the dissent argues those communications are tangentially related to health and community well-

being because the communications “projected” or “proposed” the building of an FSER. The

dissent then attempts to analogize Erdner’s communications about the formation of a business to

a situation where citizens are discussing a proposal to build a nuclear power plant in their

community, presumably by a business already in existence and ready to offer that service.

                                                 –9–
        Erdner’s communications, however, did not involve a proposal to the community to build

anything anywhere. Rather, those communications involved, at most, the potential formation of a

company that might, in the future, have the resources to acquire the right to build an FSER

somewhere in a general area. The fact that the communications could result in healthcare service

being offered to the public at some location at some point in the future is not enough to bring them

within the scope of the TCPA. See Nguyen, 318 F. Supp. 3d at 1001.3

        We recognize that we may not “substitute the words of a statute in order to give effect to

what we believe a statute should say.” Coleman II, 512 S.W.3d at 901. However, in defining

“exercise of the right of free speech” in the TCPA, the Legislature required that a protected

communication be made in connection with a matter of public concern. TEX. CIV. PRAC. & REM.

CODE ANN. § 27.001(3). This statutory requirement is satisfied if the communication has a

“tangential relationship” to a matter of public concern. Coleman II, 512 S.W.3d at 900. But, a

communication cannot have a “tangential relationship” to a matter of public concern that does not

yet exist. See Nguyen, 319 F. Supp. 3d at 1001.

        Further, if a “matter of public concern” encompasses communications about possibly

forming a business that intends at some point to offer healthcare or other goods, products, or

services in the marketplace, no communication pertaining to a business that offers, or intends to

offer, such goods, products, or services would fall outside the reach of the statute. Construing the

statute to denote that all private business discussions are a “matter of public concern” if the

business offers a good, service, or product in the marketplace or is related to health or safety is a

potentially absurd result that was not contemplated by the Legislature. See, e.g., Brugger, 2016

     3
       The communications in this case, therefore, are distinguishable from those in Coleman II, which involved oral
discussions about an employee’s alleged failure to gauge a storage tank, implicating existing environmental, health,
safety, and economic risks, see Coleman II, 512 S.W.3d at 901, and Lippincott, which involved email communications
about a healthcare provider’s failure to provide adequate care to patients, implicating existing health concerns, see
Lippincott, 462 S.W.3d 509–10.
                                                       –10–
WL 4444036, at *3 (concluding communications made in connection with business dispute was

not matter of public concern under TCPA); I-10 Colony, Inc. v. Lee, No. 01-14-00465-CV, 2015
WL 1869467, at *5 (Tex. App.—Houston [1st Dist.] Apr. 23, 2015, no pet.) (mem. op.)

(concluding that because fraud claim was based on allegation that lawyer fraudulently represented

to plaintiff that lawyer would comply with a previous judgment, rather than on communications

about lawyer’s service in the marketplace, TCPA did not apply).

         We conclude appellants failed to establish the TCPA applies to HPEC’s claims based on

appellants’ exercise of their right of free speech.

                                             Conclusion

       We resolve appellants’ first issue against them and affirm the trial court’s order denying

appellants’ TCPA motion to dismiss. Based on our resolution of appellants’ first issue, we need

not address their second issue. TEX. R. APP. P. 47.1.

                                                      /Ken Molberg/
                                                      KEN MOLBERG
                                                      JUSTICE

180654F.P05

                                                –11–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 JEFFREY ERDNER, D.O. AND THE                        On Appeal from the 191st Judicial District
 EMERGENCY CENTER AT WEST 7TH,                       Court, Dallas County, Texas,
 LLC, Appellants                                     Trial Court Cause No. DC-18-01059.
                                                     Opinion delivered by Justice Molberg,
 No. 05-18-00654-CV          V.                      Justices Whitehill and Reichek
                                                     participating.
 HIGHLAND PARK EMERGENCY
 CENTER, LLC, Appellee

       In accordance with this Court’s opinion of this date, the trial court’s May 21, 2018 order
denying appellants Jeffrey Erdner, D.O. and The Emergency Center at West 7th, LLC’s motion
to dismiss pursuant to the Texas Citizens Participation Act is AFFIRMED.

        It is ORDERED that appellee Highland Park Emergency Center, LLC recover its costs
of this appeal from appellants Jeffrey Erdner, D.O. and The Emergency Center at West 7th, LLC.

Judgment entered this 22nd day of May, 2019.

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