Court Opinion

ID: 4438035
Source: CourtListenerOpinion
Date Created: 2019-09-13 14:11:00.437215+00
Date Added: 2024-06-11T12:51:50.709902
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-19-00117-CV

       Appellant, Branigan Mulcahy// Cross-Appellant, Cielo Property Group, LLC

                                                 v.

         Appellee, Cielo Property Group, LLC// Cross-Appellee, Branigan Mulcahy

               FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY
   NO. D-1-GN-18-007425, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING

              CONCURRING AND DISSENTING OPINION

               I agree with the Court that Branigan Mulcahy has not shown that the Texas

Citizens Participation Act (TCPA) applies based on his right to free speech.             However,

I respectfully dissent from the Court’s opinion because I would hold that the TCPA applies to the

claims asserted by Cielo Property Group, LLC, in that the claims relate to Mulcahy’s right to

petition. I would further hold that Cielo has not met its burden to establish by clear and specific

evidence a prima facie case for each essential element of its claims. Therefore, I would reverse

the district court’s order denying Mulcahy’s motion to dismiss. Accordingly, I concur with the

Court that Cielo is not entitled to attorney’s fees based on the motion to dismiss.
                                        BACKGROUND

               Cielo terminated Mulcahy in January 2018, with Mulcahy asserting that he was

terminated in retaliation for not participating in Cielo’s “Energy for Success” 1 program and

Cielo asserting that it terminated Mulcahy for poor performance and insubordination. Upon

termination, Mulcahy was not permitted to take with him his personal effects, which were

instead mailed to him by Cielo. Shortly after sending his belongings, Cielo also mailed to

Mulcahy the hard drive that is the focus of this appeal.

               In response to being terminated, Mulcahy filed a religious discrimination claim

with the Texas Workforce Commission and Equal Employment Opportunity Commission. In

addition, he sued Cielo on July 10, 2018, for breach of contract based on Cielo’s alleged failure

to pay him in accordance with the LLC agreements and other alleged “oral and written”

agreements. He also sued for a declaratory judgment concerning his rights under the contracts,

breach of fiduciary duty by Cielo’s founders for their treatment of him, and quantum meruit and

unjust enrichment based on Cielo’s alleged failure to compensate him in accordance with the

parties’ agreements. One week after the petition was filed, Cielo moved to compel arbitration in

Mulcahy’s suit. On July 27, pursuant to the employment agreement, Cielo filed an arbitration

demand that initiated a separate action with the American Arbitration Association seeking a

declaration that Mulcahy had no interest in certain Cielo properties and also alleging that

Mulcahy had breached the LLC agreements he was seeking compensation under, that Mulcahy

had breached the employment agreement by filing claims with a court rather than pursuing

arbitration, and that Mulcahy had breached the employment agreement by “improperly taking”

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          Mulcahy describes Cielo’s Energy for Success program as a religion, while Cielo
describes it as a professional development service that promotes professional and personal
excellence.
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the “entire hard drive of information.” Cielo’s arbitration demand sought “Actual damages,”

plus interest, costs, and attorney’s fees. The following month, the district court denied Cielo’s

motion to compel arbitration in the lawsuit. The parties agreed to stay the arbitration initiated by

Cielo pending the outcome of Cielo’s appeal of the denial of the motion to compel.

               In December 2018, Cielo sued Mulcahy in a separate lawsuit for breach of

contract, breach of fiduciary duty, and trade secret misappropriation, asserting, as the sole basis

for these claims, that Mulcahy has violated the employment agreement by taking and retaining

possession of the hard drive that Cielo sent to him. In its lawsuit, Cielo asks that the court enjoin

the use of any “confidential and proprietary business information of Cielo and the LLCs” and

require Mulcahy to return “all of that confidential information, including any derivative work

created therefrom,” in addition to seeking “disgorgement in an amount to be proven at trial,” plus

attorney’s fees, costs, and interest. Cielo asserts that Mulcahy refuses to return the hard drive;

Mulcahy alleges that Cielo has rebuffed his attempts to return it. Mulcahy’s attorney is currently

holding the hard drive under this Court’s order. Mulcahy v. Cielo Prop. Grp., No. 03-19-00117-

CV, 2019 Tex. App. LEXIS 4748 (Tex. App.—Austin June 6, 2019, order).

                                          DISCUSSION

               “In determining whether a legal action should be dismissed under [the TCPA], the

court shall consider the pleadings and supporting and opposing affidavits stating the facts on

which the liability or defense is based.” Tex. Civ. Prac. & Rem. Code § 27.006(a) (“Evidence”).

With this in mind, we consider whether the TCPA applies, and, if so, whether Cielo has

established by clear and specific evidence a prima facie case for each essential element of its

claims.

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Right of Free Speech

                Mulcahy asserts that the claims against him are based on, relate to, or respond to

his exercise of the right of free speech because the claims seek to enjoin his speech as it relates to

the unspecified contents of the hard drive. Neither the declaration nor the pleadings specify what

information is actually contained on the hard drive. Nor does the record contain any clues.

We agree with the Court that, without knowing what the information is, it would be difficult to

determine whether it is a matter of public concern. Under the circumstances, I agree with the

Court that Mulcahy has not shown by a preponderance of the evidence that Cielo’s suit is based

on his exercise of free speech.

Right to Petition

                The TCPA applies if “a legal action is based on, relates to, or is in response to a

party’s exercise of the . . . right to petition.” Id. § 27.003(a). “Exercise of the right to petition” is

broadly defined to include:

        (A) a communication in or pertaining to:

                (i) a judicial proceeding;

                (ii) an official proceeding, other than a judicial proceeding, to administer
                the law;

                ...

        (B) a communication in connection with an issue under consideration or review
        by a legislative, executive, judicial, or other governmental body or in another
        governmental or official proceeding;

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        (C) a communication that is reasonably likely to encourage consideration or
        review of an issue by a legislative, executive, judicial, or other governmental
        body or in another governmental or official proceeding;

        (D) a communication reasonably likely to enlist public participation in an effort to
        effect consideration of an issue by a legislative, executive, judicial, or other
        governmental body or in another governmental or official proceeding; and

        (E) any other communication that falls within the protection of the right to
        petition government under the Constitution of the United States or the constitution
        of this state.

Id. § 27.001(4).    “‘Communication’ 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). In its response to the motion to dismiss, Cielo argued the TCPA does not apply

because Cielo’s claims do not concern a “communication” Mulcahy made in the prior lawsuit.

But the petition Mulcahy filed in July was a “communication in or pertaining to . . . a judicial

proceeding,” which fits squarely within the act’s broad definition of exercising the right to

petition.   See id. § 27.001(4).      Cielo’s later-filed suit, which seeks an injunction and

disgorgement, relates to the same set of facts and the same employment agreement that are the

subject of Mulcahy’s petition. Cielo also contends that its lawsuit is properly independent of

Mulcahy’s lawsuit because the arbitration agreement allows claims for injunctive relief to

proceed outside of arbitration.    However, under the TCPA, whether Cielo’s suit relates to

Mulcahy’s right to petition does not depend on the contents of the parties’ arbitration agreement,

and we cannot write that exception into the statute.

               Mulcahy asserts that Cielo’s claims in the underlying lawsuit are based on, relate

to, or respond to his exercise of the right of petition because the claims relate to Mulcahy’s suit

that is now the subject of an arbitration proceeding. I agree. Mulcahy’s claims in the initial suit,

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Cielo’s arbitration claims, and Cielo’s claims in the instant suit all arise from the employment

agreement. All of these claims are based on the exact same facts surrounding Mulcahy’s

termination from Cielo. Mulcahy’s motion to dismiss stated that his successful defense against

arbitration at the trial court level “resulted in Cielo bringing this new suit.” In the declaration

attached to his motion to dismiss, Mulcahy observed that Cielo did not file the instant suit until

its motion to compel arbitration in Mulcahy’s suit had been denied, which was nearly a year after

Cielo sent the hard drive to Mulcahy. Mulcahy argues that the timeline and facts indicate that

Cielo’s claims responded to or related to the parties’ pending litigation and arbitration. Further,

Cielo’s claims are identical to claims it asserted in arbitration (an “official proceeding”), except

that Cielo seeks, in addition to other relief, injunctive relief that it asserts would not be available

to it in arbitration. See id. § 27.001(4)(A)(ii) (defining “exercise of the right of petition” to

include “a communication in or pertaining to . . . and official proceeding, other than a judicial

proceeding, to administer the law”). Following the language of the TCPA and considering, as

we must, the pleadings and attached declarations, Mulcahy has met his burden to show by a

preponderance of the evidence that Cielo’s suit is based on, relates to, or is in response to

Mulcahy’s exercise of the right of petition.

Cielo’s Prima Facie Case

               Because the TCPA applies based on the right to petition, I next consider whether

Cielo has established by clear and specific evidence a prima facie case for each essential element

of each of its three claims. Cielo’s breach of contract claim alleges that Mulcahy breached the

employment agreement by taking and retaining Cielo’s confidential information. Its breach of

fiduciary duty claim alleges that Mulcahy breached his alleged duty by taking and failing to

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return Cielo’s confidential and proprietary business information.         Its claim for trade secret

misappropriation alleges that Mulcahy misappropriated Cielo’s confidential information. Each

of these claims depends on showing that Mulcahy took or retained confidential or proprietary

information. Just as Mulcahy could not show the TCPA applied based on his right of free speech

because the record and pleadings do not reveal the kind of information contained on the hard

drive, Cielo cannot meet its prima facie case for any of its three claims because there is no clear

and specific evidence of the type of information on the hard drive. Therefore, I would conclude

that the trial court erred by denying the motion to dismiss Cielo’s claims.

                                         CONCLUSION

               Having determined that the TCPA applies and that Cielo did not establish its

prima facie case, I would reverse the district court’s order and remand the cause to the district

court for further proceedings.

                                              __________________________________________
                                              Gisela D. Triana, Justice

Before Chief Justice Rose, Justices Triana and Smith

Filed: September 13, 2019

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