Court Opinion

ID: 9838034
Source: CourtListenerOpinion
Date Created: 2023-09-04 09:09:03.55888+00
Date Added: 2024-06-11T15:33:03.687959
License: Public Domain

In the
                    Court of Appeals
            Second Appellate District of Texas
                     at Fort Worth
                  ___________________________
                       No. 02-22-00506-CV
                  ___________________________

          NEWSTREAM ROANOKE 6.125, LLC, Appellant

                                  V.

JONELL SHORE, YOUNG OK KIM, AND SOON BOON CHANGE, Appellees

               On Appeal from the 431st District Court
                      Denton County, Texas
                   Trial Court No. 22-5855-431

             Before Sudderth, C.J.; Bassel and Womack, JJ.
              Memorandum Opinion by Justice Womack
                           MEMORANDUM OPINION

                                 I. INTRODUCTION

      This is an interlocutory appeal from the trial court’s order denying Appellant

Newstream Roanoke 6.125, LLC’s (Newstream) motion to dismiss the breach of

fiduciary duty claim of Appellees Jonell Shore, Young Ok Kim, and Soon Boon

Chang1 on Texas Citizen’s Participation Act (TCPA) grounds. See Tex. Civ. Prac. &

Rem. Code Ann. §§ 27.001–.011, 51.014(a). Newstream contends that Appellees’

breach of fiduciary duty claim is “based on or is in response to” its right to petition—

the filing of a Rule 11 agreement between Newstream and two other entities. See id. at

§§ 27.003(a), .005(b)(1)(B). Because we conclude that Appellees’ claim is not “based

on or is in response to” the Rule 11 agreement, we will affirm. See id.

                                  II. BACKGROUND

      This appeal stems from a business dispute involving the purchase and

development of certain real estate. In March 2022, Silk Capital Development, LLC

(Silk) sued Newstream, Newstream Land Partners – Roanoke LLC (the Company),

and Timothy C. Nystrom, stating that “[s]ometime in 2018,” Nystrom approached

Silk and proposed that it and several other investors form a company to purchase,

develop, and sell approximately 6.125 acres of real property in Roanoke, Tarrant

      The style in the pleadings before the trial court spells Chang’s name “Change.”
      1

Because this appears to be a typographical error, we will refer to this Appellee by
“Chang,” which is the name used in Appellees’ brief and the Company Agreement.

                                           2
County, Texas (the Property).2 Nystrom was alleged to own or operate Newstream.3

According to Silk, it agreed to invest $1,450,000 and to receive a majority share in the

Company’s ownership.          Newstream was the Company’s managing member, and

Shore, Kim, and Chang were three of the Company’s minority members.                The

Company was governed by the “Company Agreement of Newstream Land Partners –

Roanoke LLC” (the Company Agreement).

      Citing “misdeeds and failures to comply” with the Company Agreement, Silk’s

lawsuit sought an involuntary winding up and termination of the Company and

alleged various causes of action.      Shortly after the lawsuit was filed, Appellees

intervened in the lawsuit.4

      In May 2022, Silk settled its claims in the lawsuit against Newstream, the

Company, and Nystrom by way of a Rule 11 agreement that was filed with the trial

court. The Rule 11 agreement called for the Company to sell the Property; for Silk to

release its claims against Newstream, the Company, and Nystrom; for proceeds from

      2
       Silk, the Company, and Nystrom are not parties to this appeal.
      3
       Silk’s pleadings stated that Nystrom “owned and controlled” Newstream
through his company Newstream Commercial, LLC.
      4
        On the same day that it filed suit, Silk sent a letter to Newstream notifying it
that Silk had “determined, in good faith” that Newstream was “guilty of gross
negligence, fraud, theft, willful misconduct, and/or misappropriation of funds” and
that it was removing Newstream as manager of the Company and appointing itself as
“substitute” manager of the Company. According to Appellees, despite these
allegations, Newstream was not removed because it “obtained the acquiescence of Silk
to waive its complaints about [Newstream’s] misconduct.”

                                           3
the Property’s sale to pay off a portion of Silk’s loan to the Company; and for

proceeds from the Property’s sale to be preferentially distributed to Silk. Silk later

nonsuited its claims against Newstream, the Company, and Nystrom.

      Thereafter, Appellees amended their petition in intervention, quoted from the

Rule 11 agreement, and alleged both direct causes of action and derivative claims—

including breach of fiduciary duty—against Newstream.         Appellees claimed that

Newstream sold the Property to its “affiliate” and, rather than distribute the proceeds

pro rata as required by the Company Agreement, gave Silk an “unlawful preferential

distribution” of the proceeds. The suit alleged that Newstream as manager owed

fiduciary duties to the Company and engaged in an “interested transaction” and used

the company assets for its own self-interest.      See Tex. Bus. Orgs. Code Ann.

§ 101.255(b)(1)–(2) (providing that “[a]n otherwise valid and enforceable contract or

transaction” is valid and enforceable if one of the stated conditions is satisfied).

Further, Appellees asserted that “the terms of the Property sale were less favorable

than would have been achievable on the open market.”

      Newstream moved to dismiss Appellees’ breach of fiduciary duty claim

pursuant to the TCPA. It alleged that Appellees’ claim was a legal action based on or

brought in response to its right to petition. Citing Texas Civil Practice and Remedies

Code Section 27.001(4), Newstream contended that the “settlement agreement and

the Rule 11 memorialization of same, as well as the filing of the Rule 11 [a]greement

into the record, are all protected communications because those communications

                                          4
were made ‘in or pertaining to a judicial proceeding.’” In addition, Newstream

asserted that Appellees’ claim failed because it was barred by “judicial privilege.”5

      Thereafter, Appellees amended their petition in intervention and filed their

response to the motion to dismiss. In their response, Appellees asserted that the

breach of fiduciary duty claim was “based upon the actions of [Newstream] leading up

to and prompting the memorialization of the Rule 11, not the Rule 11, per se.”

According to Appellees, the Rule 11 agreement was only “the instrument

memorializing the bad acts” previously engaged in by Newstream.

      In their amended petition in intervention, Appellees attached and incorporated

several documents, including the Company Agreement; affidavit of Shore; Silk’s letter

removing Newstream as manager; the Rule 11 agreement; affidavit of Yuri Han, a

clerk with Appellees’ law firm, setting out information about the demand for an

accounting; the order of non-suit regarding claims by Silk against Newstream, the

Company, and Nystrom; the minority shareholder’s letter requesting to inspect books

and records and to preserve documents; the shareholder’s letter demanding corporate

action to remedy the alleged wrongdoing by Newstream, the Company, and Silk; and

emails between the attorneys. Shore’s affidavit stated the following:

      • She invested $500,000 in the Company in return for her membership
        units;

      5
       While Newstream and Appellees argued the applicability of “judicial privilege”
before the trial court, neither addressed it on appeal. Therefore, it is waived. See Tex.
R. App. P. 38.1(f), (i).

                                            5
      • Around March 4, 2022, she learned that the Company intended to
        sell its final property assets—the Property—to an entity affiliated
        with Newstream and to split the proceeds pro rata among the
        Company’s members;

      • Newstream never provided her with any information about whether
        the proposed sale of the Property was for market price or whether it
        presented the best return to the Company;

      • In connection with the March 4, 2022 notice of intent to sell the
        Property, she instructed her counsel to seek the books and records of
        the Company and an accounting of the planned distribution of
        proceeds from the Property’s sale, but Newstream refused;

      • She expressed her disapproval of the Property’s sale but knew that
        Silk generally had the votes to approve it and expected Silk would
        likely want assurances that the terms of the sale maximized the
        Company’s return on the investment;

      • Around May 11, 2022, she learned that Silk approved the Property’s
        sale in exchange for certain minimum guaranteed distributions;

      • The Company Agreement required the distribution of proceeds from
        the sale of the Company’s final assets to be pro rata to all of its
        members;

      • She never received disclosure that the Company planned to exclude
        her and the other minority members prior to the Property’s July 6,
        2022 closing; and

      • As of August 16, 2022 (the affidavit’s date), she had not received any
        pro rata distributions of the sale proceeds as required by the
        Company Agreement.

      Newstream filed a reply to the response, arguing that Appellees’ claim was not

based on negotiations of the written settlement agreement, but it was “squarely based

on [Newstream’s] written communication filed with the Court.” It further asserted

                                         6
that Appellees failed to present clear and specific evidence of wrongful conduct that

caused any derivative damages.

      The trial court held a non-evidentiary hearing on the motion to dismiss and

took the matter under advisement. It later signed an order finding that “the gravamen

of [Appellees’] claim for breach of fiduciary duty in this case is premised on conduct,

not on communication” and “[t]he fact that there were communications involved in

the events giving rise to the claim does not create a sufficient nexus to the claim to

invoke the TCPA.”      Accordingly, the trial court denied the motion to dismiss.

Newstream appeals from that order.

                                  III. DISCUSSION

      In three issues on appeal, Newstream asks: (1) Did the trial court err in

denying Newstream’s TCPA motion to dismiss based on its finding that the gravamen

of Appellees’ claims was premised on conduct rather than communications? (2) Is a

“legal action based on or in response to” a communication under the TCPA when, as

pleaded by claimant, the communication establishes the existence of a legal right or

duty and/or breach of that right or duty? (3) Is a “legal action based on or in response

to” a communication under the TCPA when the absence of that particular

communication would render the cause of action, as pleaded by claimant, to be non-

existent? We construe all of these questions as generally challenging the denial of

Newstream’s TCPA motion and will address them together.

                                           7
A. Standard of Review and Applicable Law

      The TCPA’s 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.            The statute provides this protection by

authorizing a motion to dismiss early in the covered proceedings, subject to expedited

interlocutory review. McLane Champions, LLC v. Hous. Baseball Partners LLC, No. 21-

0641, 2023 WL 4306378, at *4 (Tex. June 30, 2023) (citing Tex. Civ. Prac. & Rem.

Code Ann. §§ 27.003, .008).

      A party who moves for dismissal under the TCPA invokes a three-step,

burden-shifting process: (1) first, the movant seeking dismissal must demonstrate that

a “legal action” has been brought against it and that the action is “based on or is in

response to” an exercise of a protected constitutional right; (2) second, the burden

shifts to the party bringing the legal action to avoid dismissal by establishing, by clear

and specific evidence, a prima facie case for each essential element of the claim in

question; and (3) third, the burden shifts back to the movant to justify dismissal by

establishing an affirmative defense or other ground on which it is entitled to judgment

as a matter of law. Hanson v. Johnson, No. 02-23-00040-CV, 2023 WL 3643640, at *2

(Tex. App.—Fort Worth May 25, 2023, no pet.) (mem. op.) (citing Tex. Civ. Prac. &

Rem. Code Ann. § 27.005(b)–(d)); Miller v. Schupp, No. 02-21-00107-CV,

                                            8
2022 WL 60606, at *1 (Tex. App.—Fort Worth Jan. 6, 2022, no pet.) (mem. op.). If

the movant does not meet the initial burden, the motion to dismiss fails. Lugo v.

Sanchez, No. 03-21-00058-CV, 2021 WL 5312323, at *3 (Tex. App.—Austin Nov. 12,

2021, pet. denied) (mem. op.).

       We review a trial court’s ruling on a TCPA motion to dismiss de novo.

Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40, 45–46 (Tex. 2021); Hanson,

2023 WL 3643640, at *3. In considering whether a legal action is subject to or should

be dismissed under the TCPA, we consider the pleadings, evidence a court could

consider under Texas Rule of Civil Procedure 166a, and supporting and opposing

affidavits stating the facts on which the liability or defense is based. Tex. Civ. Prac. &

Rem. Code Ann. § 27.006(a). The plaintiff’s allegations, and not the defendant’s

admissions or denials, constitute the basis of a legal action.          Hersh v. Tatum,

526 S.W.3d 462, 467 (Tex. 2017). We view the pleadings and evidence in the light

most favorable to the nonmovant. Kassab v. Pohl, 612 S.W.3d 571, 577 (Tex. App.—

Houston [1st Dist.] 2020, pet. denied). Whether the TCPA applies is an issue of

statutory interpretation that we also review de novo. S & S Emergency Training Sols.,

Inc. v. Elliott, 564 S.W.3d 843, 847 (Tex. 2018).

B. Analysis

       Here, our analysis begins and ends with the first step of the TCPA three-step

process: whether the TCPA applies to this action. See McLane Champions, LLC,

2023 WL 4306378, at *5. As its initial burden under the TCPA, Newstream was

                                             9
required to establish a nexus between the rights protected by the statute and

Appellees’ claims.    See Apache Corp. v. Apollo Expl, LLC, No. 11-21-00295-CV,

2023 WL 3511262, at *3 (Tex. App.—Eastland May 18, 2023, no pet.) (mem. op.)

(citing Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865, 879 (Tex. App.—Austin 2018,

pet. denied)). To do so, it must have shown that the claim is “factually predicated on

the alleged conduct that falls within the scope of [the] TCPA’s definition of ‘exercise

of the right of free speech,’ petition or association.” Id. (citing Grant, 556 S.W.3d at

879). Newstream must have demonstrated that the action is either “based on” or is

“in response to” an exercise of a protected right. Id.

      The protected right at issue here is the “exercise of the right to petition,” which

is defined by the TCPA to include a communication in or pertaining to a judicial

proceeding.     Tex. Civ. Prac. & Rem. Code Ann. § 27.001(4)(A)(i).                    A

“communication” includes “the making or submitting of a statement or document in

any form or medium, including oral, visual, written, audiovisual, or electronic.” Id. at

§ 27.001(1). The ordinary meaning of “judicial proceeding” is “an actual, pending

judicial proceeding.” Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 429 (Tex.

App.—Dallas 2019, pet. denied) (citing Levatino v. Apple Tree Café Touring, Inc.,

486 S.W.3d 724, 728–29 (Tex. App.—Dallas 2016, pet. denied)).

      “[B]ased on or in response to” is not defined, and it was—until the TCPA

statute was amended in 2019—broadly worded as “based on, relates to, or is in

response to.” ML Dev, LP v. Ross Dress for Less, Inc., 649 S.W.3d 623, 626 (Tex.

                                           10
App.—Houston [1st Dist.] 2022, pet. denied). The 2019 amendment deleted “relates

to,” thereby requiring future movants to establish that the legal actions they seek to

dismiss are “based on” or “in response to” their exercise of a protected right. Id. at

627. Therefore, the amendment now requires TCPA movants “to establish a closer

nexus between the claims against them and the communications they point to as their

exercise of protected rights.” Id. at 629.

       “The ordinary meaning of the ‘is based on’ component denotes a legal action

that has the relevant TCPA-protected activity ‘as a main ingredient’ or ‘fundamental

part’ of the challenged legal action.” Ernst & Young, LLP v. Ryan, LLC, No. 01-21-

00603-CV, 2023 WL 4239350, at *8 (Tex. App.—Houston [1st Dist.] June 29, 2023,

no pet. h.) (mem. op.). The “in response to” component denotes some sort of answer

or other act in return. Id.

       The meaning of the phrase “based on or in response to” has been addressed in

a number of recent TCPA cases, two of which inform our decision in this case. See

Apache Corp., 2023 WL 3511262, at *4–5; Cweren v. Eureka Multifamily Grp., L.P.,

No. 01-21-00470-CV, 2023 WL 2977755, at *14 (Tex. App.—Houston [1st Dist.]

Apr. 18, 2023, no pet.) (mem. op.).

       In Apache Corp., a press release was at the center of the TCPA claim. 2023 WL

3511262, at *1. The press release referenced a reorganization of Apache’s assets as

well as a statement from Apache’s chief executive officer and president. Id. The

appellees filed a lawsuit against Apache and another corporation, APA, asserting a

                                             11
cause of action under the Texas Uniform Fraudulent Transfer Act, alleging that the

reorganization made it impossible, or at least more difficult, to reach certain assets of

APA in order to satisfy a judgment against Apache in another lawsuit. See Tex. Bus. &

Com. Code Ann. §§ 24.001–.013. Apache and APA then filed a motion to dismiss

that included relief under the TCPA, the trial court denied the motion, and Apache

and APA appealed. Apache Corp., 2023 WL 3511262, at *2.

      On appeal, Apache and APA asserted that the fraudulent transfer lawsuit was

“based on or in response to” their exercise of free speech because it was “factually

predicated” on the press release. Id. at *4. In affirming the trial court’s denial of the

TCPA motion to dismiss, the Eastland court noted that other courts of appeals have

frequently made a distinction between claims that are “based on” a communication

and claims that are “based on” conduct. Id.; see ML Dev, LP, 649 S.W.3d at 625; Smith

v. Crestview NuV, LLC, 565 S.W.3d 793, 794–95 (Tex. App.—Fort Worth 2018, pet.

denied); see also Pacheco v. Rodriguez, 600 S.W.3d 401, 410 (Tex. App.—El Paso 2020, no

pet.) (“[W]hen a claim does not allege a communication, and is instead based on a

defendant’s conduct, the TCPA is not implicated.”). Noting that “there is a difference

between communication that is part of the claim itself and communication which

merely serves as evidence in support of a claim,” the court stated,

      In this case, [a]ppellees’ pleadings reference the press release somewhat
      extensively in their statement of facts. However, the claim could also be
      stated without any reference to the press release whatsoever, and the
      press release is not essential to those claims. Instead, [a]ppellees’ claims
      are based on [a]ppellants’ conduct in transferring certain assets from

                                           12
      Apache to APA. . . . The references to the press release in [a]ppellees’
      pleadings merely point to evidence in support of their fraudulent transfer
      claim. The press release itself is not a part of the claim.

Apache Corp., 2023 WL 3511262, at *5. Concluding that the appellees’ claims were not

“in response to” the press release, the court stated that the “[a]ppellees’ claims are in

response to (or reaction to) the alleged fraudulent transfer of assets, not to the press

release which announced those transfers.” Id. at *5–6. The “mere sequence of a

communication, followed by a lawsuit that relates in some way to the

communication” is insufficient to establish that a claim is “in response to” the

communication. Id.

      In Cweren, the appellants—a lawyer and a law firm—challenged the trial court’s

denial of their TCPA motion to dismiss claims by the appellees—former clients of the

appellants. 2023 WL 2977755, at *1. The appellants argued that the appellees’ suit

against them in district court for negligence, gross negligence, breach of fiduciary

duty, and abuse of process “is based on or is in response to [the appellants’] right to

petition” because the appellees’ suit was in direct retaliation to the law firm filing suit

in county court against them to collect allegedly outstanding fee amounts. Id. at *2–3,

14. Rejecting that argument, the First Court of Appeals held that the “appellees’ suit

is not based on or in response to appellants’ asserted communications in the county

court suit, i.e., the filing of the county court suit, the serving of the county court suit

on appellees, and the ‘winning’ of a motion for sanctions in the county court.” Id. at

*14. Rather, “appellees’ suit is based on appellants’ failures to act, breaches of the

                                            13
standard of care, conduct, and misrepresentations, virtually all of which allegedly

occurred before the county court suit was filed.” Id. Therefore, it held that the

appellants had not shown by a preponderance of the evidence that the appellees’

claims were based on or in response to the appellants’ exercise of their right to

petition and that the appellants’ TCPA motion to dismiss was properly denied. Id. at

*16.

       Here, Newstream contends that the first numbered paragraph in Appellees’

amended pleadings “made clear that the Rule 11 Settlement Agreement, the written

terms and agreements contained therein, and the negotiations that le[d] to such

agreement are ‘essential facts’ to [Appellees’] breach of fiduciary duty claims”:

       [Appellees] . . . are forced to seek redress . . . because [Newstream] has
       sold the final real estate asset of the company to its affiliate, having first
       secured approval from the majority member [Silk] by promising a
       preferential distribution from the real estate sale proceeds without any
       provision for like kind distribution to [Appellees] or any other minority
       shareholders, all in exchange for [Silk’s] non-suit of live claims against
       [Newstream].

Newstream argues that all of these allegations are “based on and in response to” the

Rule 11 agreement and its written terms. Newstream further notes that the Rule 11

agreement was attached to and referenced or mentioned in at least nineteen

paragraphs of Appellees’ amended pleadings. Finally, Newstream contends that the

Rule 11 agreement is “an essential fact” to Appellees’ claim regarding an alleged

“improper interested transaction” and their claim regarding an alleged improper use

of Company assets.

                                            14
      Appellees respond that the breach of fiduciary duty claim arose not from the

entry of the Rule 11 agreement itself, but rather from Newstream’s conduct in

obtaining approval of the interested transaction from the majority member Silk in

exchange for granting Silk a preferential position in the Plan of Distribution—all in

violation of the Company’s Operating Agreement. Appellees point to their pleadings

as proof that their allegations are based on improper conduct:           “In this case,

[Newstream] engaged in an interested transaction by selling the Property to

[Newstream’s] affiliate without the approval of a truly disinterested member and

without determining whether the sale was objectively fair to the Company and by

extension its members including [Appellees].”         And Appellees reference their

allegations that Newstream improperly elicited Silk’s acquiescence to the “interested

transaction” without ever making a showing of the transaction’s objective fairness to

the Company in exchange for Silk “ratif[ying] th[e] transaction to gain an unlawful

distribution and to collect on the Company’s outstanding debts to Silk.”

      Stating that “all of the Appellant[’s] prior bad acts were engaged in prior to the

execution of the Rule 11,” Appellees further contend that:

      • Appellees were a part of the Company and entitled to a pro rata distribution
        of their investments pending the final sale of the Property;

      • Silk sought to remove Newstream due to its “gross negligence, fraud, theft,
        willful misconduct, and/or misappropriation of funds”;

      • Silk did not ultimately remove Newstream;

                                          15
      • After Newstream was not removed, Newstream proposed to sell the
        Property, including the final parcel, and distribute the proceeds to the
        Company’s members;

      • The Property’s sale was memorialized in the Rule 11; and

      • Appellees were not a party to the Rule 11.

Therefore, Appellees believe that the “culpable omission” on which their claims are

based occurred “prior to and independent of” the entry of the Rule 11 agreement.

      In determining whether Newstream satisfied its burden of proving that its

claims fell within the scope of the TCPA, we consider the pleadings and affidavits that

state the facts on which liability is based. See David H. Arrington Oil & Gas Operating,

LLC v. Wilshusen, 630 S.W.3d 184, 190 (Tex. App.—Eastland 2020, pet. denied)

(citing Tex. Civ. Prac. & Rem. Code Ann. § 27.006(a)). Here, Appellees’ claims are

not “in response to” or in reaction to the Rule 11 agreement, but rather in response to

the alleged breach of Newstream’s fiduciary duties.       See Apache Corp., 2023 WL

3511262, at *6. The mere sequence of Appellees’ claim—where it followed the Rule

11 agreement—is insufficient to establish that the breach of fiduciary duty claim is “in

response to” the filing of the Rule 11 agreement. See id. at *6. While the pleadings

reference the Rule 11 agreement, the breach of fiduciary duty claim could also be

stated without any reference to the Rule 11 agreement; the reference to the Rule 11

agreement in Appellees’ pleadings merely points to the Rule 11 agreement as some

evidence in support of the claim. See id. at *5; see also Harrell v. Smith, No. 05-22-

                                          16
00242-CV, 2022 WL 17335686, at *5 (Tex. App.—Dallas Nov. 30, 2022, no pet.)

(mem. op.) (“Simply alleging conduct that has a communication embedded within it

does not create the relationship between the claim and the communication necessary

to invoke the TCPA.”). And although Appellees’ breach of fiduciary duty claim may

relate to the Rule 11 agreement, it does not attack the fact that the Rule 11 agreement

was filed nor is it based on or in response to the filing itself. Instead, the gravamen of

Appellees’ claim is Newstream’s alleged role in selling the Company’s final property

asset and failing to split pro rata the proceeds as provided by the Company

Agreement. See Cweren, 2023 WL 2977755, at *14; see also Harrell, 2022 WL 17335686,

at *5 (“Rather[,] Smith’s claims are factually predicated solely on Harrell’s alleged

conduct of willfully violating the restated company agreement.”).

      Under a de novo standard of review, we cannot conclude that the Rule 11

agreement is either the “main ingredient” or “fundamental part” of the breach of

fiduciary duty claim or that the breach of fiduciary duty claim is in “answer” to the

Rule 11 agreement. See Ernst & Young, LLP, 2023 WL 4239350, at *8. Therefore, we

conclude that Newstream failed to show by a preponderance of the evidence that the

TCPA applied to Appellees’ claim. See McLane Champions, LLC, 2023 WL 4306378, at

*4 (“First, the moving party must show by a preponderance of the evidence that the

TCPA applies to the legal action against it.”). Because Newstream did not establish

that the TCPA applied to the claim, the burden never shifted to Appellees to establish

by clear and specific evidence a prima facie case for each element of their claim, and

                                           17
therefore, the trial court properly denied the TCPA motion to dismiss. See Newstream

Hotels & Resorts, LLC v. Abdou, No. 02-21-00343-CV, 2022 WL 1496537, at *4 (Tex.

App.—Fort Worth May 12, 2022, pet. denied) (mem. op.) (“Because Appellants did

not establish that the TCPA applied to Appellees’ amended claims, the burden never

shifted to Appellees to establish by clear and specific evidence a prima facie case for

each essential element of their claims, and the trial court properly denied the TCPA

motion.”). Accordingly, we overrule all of Newstream’s issues.

                                  IV. CONCLUSION

      Having overruled all of Newstream’s issues, we affirm the trial court’s order

denying the TCPA motion to dismiss.

                                                     /s/ Dana Womack

                                                     Dana Womack
                                                     Justice

Delivered: August 31, 2023

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