Court Opinion

ID: 7806318
Source: CourtListenerOpinion
Date Created: 2022-09-05 00:19:43.132784+00
Date Added: 2024-06-11T16:30:11.891791
License: Public Domain

Reversed and Remanded; Cross-Appeal Dismissed as Moot; and Majority
Opinion and Concurring and Dissenting Opinion filed September 1, 2022.

                                 In The

                  Fourteenth Court of Appeals

                           NO. 14-21-00165-CV

 DONALD WELSH AND LISA MARSHALL, Appellants / Cross-Appellees
                                   V.
      RIVER HOLLOW ASSOCIATION, Appellee / Cross-Appellant

                 On Appeal from the 113th District Court
                         Harris County, Texas
                   Trial Court Cause No. 2020-43000

                                OPINION

     Homeowners Donald Welsh and Lisa Marshall sued their homeowners’
association, River Hollow Association (HOA), to enforce a deed restriction
requiring the HOA to maintain common properties. The HOA filed a motion to
dismiss the homeowners’ claims under the Texas Citizens Participation Act
(TCPA).1 The trial court granted the motion based on the HOA’s statute of
limitations defense. The homeowners appeal, contending among other things that
the trial court erred because the TCPA does not apply to their claims. The HOA
also appeals, contending that the trial court made an improper advisory finding
based on a construction of the declarations and that the court awarded inadequate
attorney’s fees.

       We hold that the TCPA does not apply to the homeowners’ claims. Thus,
we reverse the trial court’s judgment and remand the case for further proceedings,
and we dismiss as moot the HOA’s cross-appeal.

                           I.     TCPA LEGAL PRINCIPLES

       The TCPA was designed to protect a defendant’s rights of speech, petition,
and association while protecting a claimant’s right to pursue valid legal claims for
injuries caused by the defendant. Montelongo v. Abrea, 622 S.W.3d 290, 295
(Tex. 2021) (citing Tex. Civ. Prac. & Rem. Code § 27.002). To accomplish this
objective, the TCPA provides for a multi-step process for the dismissal of a legal
action to which it applies. See id. First, the movant must demonstrate that the
legal action is “based on or is in response to” the movant’s exercise of the right of
free speech, petition, or association. Id. If the movant meets this burden, the
claimant may avoid dismissal by establishing by clear and specific evidence a
prima facie case for each essential element of the claim in question. Id. Finally, if
the claimant meets their burden, the court still must dismiss the legal action if the
defendant establishes an affirmative defense on which the movant is entitled to
judgment as a matter of law. Id.

       1
         See Tex. Civ. Prac. & Rem. Code ch. 27; see also In re Lipsky, 460 S.W.3d 579, 584 &
n.1 (Tex. 2015).

                                             2
      An “exercise of the right of free speech” means a communication made in
connection with a matter of public concern. Id. § 27.001(3). An “exercise of the
right to petition” means, among other things, (1) “a communication in or pertaining
to . . . an executive or other proceeding before . . . a subdivision of the state or
federal government,” id. § 27.001(4)(A)(iii); (2) “a communication in connection
with an issue under consideration or review by a . . . governmental body,” id.
§ 27.001(4)(B); or (3) “a communication that is reasonably likely to encourage
consideration or review of an issue by a . . . governmental body,” id.
§ 27.001(4)(C).2 An “exercise of the right of association” means to join together to
collectively express, promote, pursue, or defend common interests relating to a
governmental proceeding or a matter of public concern. Id. § 27.001(2).

      A “communication” is broadly defined as “the making or submitting of a
statement or document in any form or medium.”                     Id. § 27.001(1); see also
Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018).                        A “matter of public
concern” includes a statement or activity regarding “a matter of political, social, or
other interest to the community” or “a subject of concern to the public.” Tex. Civ.
Prac. & Rem. Code § 27.001(7).

      We review de novo whether the parties have met their respective burdens.
See M.A. Mills, P.C. v. Kotts, 640 S.W.3d 323, 326 (Tex. App.—Houston [14th
Dist.] 2022, pet. filed). In reviewing these issues, the plaintiff’s petition is the
“best and all-sufficient evidence of the nature” of a claim. Hersh v. Tatum, 526
S.W.3d 462, 467 (Tex. 2017) (quotation omitted). The basis of a legal action is not
determined by the defendant’s admissions or denials but by the plaintiff’s
allegations.     Id.   We view the pleadings in the light most favorable to the
nonmovants, favoring the conclusion that their claims are not predicated on

      2
          We recite the statutory definitions upon which the HOA relies.

                                                3
protected expression. Sanchez v. Striever, 614 S.W.3d 233, 246 (Tex. App.—
Houston [14th Dist.] 2020, no pet.).

                                II.    BACKGROUND

      The homeowners sued the HOA, which is a non-profit Texas corporation,
and alleged claims for breach of contract and breach of declaration.           The
homeowners asked the trial court to issue a temporary and permanent injunction to
require the HOA to maintain common properties, or in the alternative, to award
economic damages of at least $1.5 million.

      The homeowners alleged that pursuant to the declaration of covenants and
restrictions for their subdivision, the HOA is obligated to provide maintenance for
the common properties. They alleged that part of the common properties abuts
Buffalo Bayou, and as a result of the flow of water in the bayou, “the soil has
experienced erosion and avulsion causing an urgent need for maintenance and
preservation of the Common Properties.”          The homeowners alleged that their
property is adjacent to the common properties, and the maintenance is necessary to
prevent the destruction of their property.

      The homeowners alleged that the HOA commissioned a company to create a
“construction plan” for stabilizing the common properties, and it had been
approved by the Harris County Flood Control District. However, “As a result of a
campaign orchestrated by the current President of the Association’s Board of
Directors, the owners did not approve the funding to implement the Construction
Plans.” The homeowners alleged that the HOA has “failed and refused to proceed
with the Construction Plans thereby allowing the Common Properties to continue
to deteriorate.” The homeowners alleged that the HOA’s failure to maintain the
common properties amounts to a violation of the declaration, resulting in unique
damages to the homeowners.
                                             4
      The HOA filed a motion to dismiss under the TCPA, contending that the
homeowners’ lawsuit implicated the HOA’s right of association, right of free
speech, and right to petition. The HOA attached the minutes of an HOA meeting
at which the members voted against approving a special assessment to fund the
construction plan. The minutes noted that “some funding support may be possible”
from Harris County, and the construction plan was capable of being permitted by
the Army Corps of Engineers, the Harris County Flood Control District, and the
City of Houston.

      The HOA argued further that the homeowners’ claims were barred by the
statute of limitations and the failure of a condition precedent. The trial court
granted the motion based on the limitations defense but also noted in its order that
the alleged common property along Buffalo Bayou was “part of the Common
Properties maintenance obligation” of the HOA.           The trial court awarded
attorney’s fees to the HOA—less than requested—and signed a final judgment
dismissing the homeowners’ claims.

                                 III.   NO WAIVER

      As an initial matter, the HOA contends that the homeowners have waived
their argument that the TCPA does not apply to their claims because the claims are
not based on or in response to the HOA’s rights of speech, association, or petition.
In their response to the HOA’s motion to dismiss, the homeowners generally
“dispute[d] the applicability of the TCPA to this matter,” but did not advance
significant argument “challenging its applicability to this matter, except to state
that, under the Association’s logic, every act by every [property owners’
association] in Texas is now subject to scrutiny under the TCPA, even when the
Association’s acts (or omissions) have nothing substantively to do with any
exercise of constitutional rights.”

                                         5
      The HOA relies on Hong Phuoc Ngo v. Association of Woodwind Lakes
Homeowners, Inc., No. 01-18-00919-CV, 2020 WL 7391696, at *4 n.6 (Tex.
App.—Houston [1st Dist.] Dec. 17, 2020, no pet. h.). In that case, the court of
appeals held that the movant failed to preserve an argument for why the TCPA
applied. See id. Here, however, the homeowners were nonmovants and did not
bear the burden in the trial court to show the non-applicability of the TCPA. See
Tex. Civ. Prac. & Rem. Code § 27.005 (movant has the burden). Thus, the
homeowners did not waive error regarding the applicability of the TCPA. See
Neely v. Allen, No. 14-19-00706-CV, 2021 WL 2154125, at *4–5 (Tex. App.—
Houston [14th Dist.] May 27, 2021, no pet. h.) (mem. op.) (nonmovants, who were
also appellees, did not need to preserve error regarding applicability of the TCPA
because they bore “no burden with regard to the issue of whether the TCPA applies
to their claims”); see also Adams v. Starside Custom Builders, LLC, 547 S.W.3d
890, 897 (Tex. 2018) (holding that the movant preserved error despite not relying
on the same case law or statutory subpart regarding applicability of the TCPA;
noting that the “unique language of the TCPA directs courts to decide its
applicability based on a holistic review of the pleadings,” and the supreme court
has “not previously cabined [its] TCPA analysis to the precise legal arguments or
record references a moving party made to the trial court regarding the TCPA’s
applicability”).

      We overrule the HOA’s argument that the homeowners waived error
regarding the applicability of the TCPA.

                         IV.   TCPA DOES NOT APPLY

      In their second and dispositive issue on appeal, the homeowners contend that
the TCPA does not apply because their claims are not based on or in response to
the HOA’s exercise of the right of free speech, right of association, or right to

                                           6
petition. They contend that the HOA failed to meet its burden to show that the
homeowners’ claims are based on or in response to the HOA’s communication, or
that the communication was made in connection with a matter of public concern,
or that the HOA joined together to collectively express, promote, pursue, or defend
common interests relating to a governmental proceeding or a matter of public
concern.

A.    Not Based on or in Response to a Communication
      (Right of Free Speech and Right to Petition)
      To establish that the homeowners’ claims are based on or in response to the
HOA’s right of free speech or right to petition, the HOA had to prove that the
claims are based on or in response to the HOA’s communication.

      The basis of the homeowners’ claims is that the HOA has failed to comply
with a duty outlined in the declaration—to maintain the common properties.
Although the individual members of the HOA made communications about
funding the construction plan, the homeowners’ claims are based on the HOA’s
failure to act rather than the members’ communications.        “[S]imply 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.” Sanchez v. Striever, 614 S.W.3d 233, 246 (Tex. App.—Houston [14th
Dist.] 2020, no pet.) (considering the gravamen of the claim as pleaded) (quoting
Kawcak v. Antero Res. Corp., 582 S.W.3d 566, 587 (Tex. App.—Fort Worth 2019,
pet. denied)). Although communications among the HOA’s members may have
accompanied the HOA’s failure to maintain the common properties, the
communications themselves did not provide the basis for the legal claims or
impetus for suit. See ML Dev, LP v. Ross Dress for Less, Inc., No. 01-20-00773-

                                        7
CV, 2022 WL 1037757, at *4 (Tex. App.—Houston [1st Dist.] Apr. 7, 2022, no
pet. h.).

       In ML Dev, the plaintiff filed suit for easement access to land adjacent to
land the plaintiff bought from one of the defendants. Id. at *4. The defendants
pointed to their statements made in connection with denying the easement rights to
the plaintiff, a refusal to approve a plat submitted to a governmental entity, and
statements made at a meeting of a governmental entity. See id. at *4, *5. The First
Court of Appeals held that the communications themselves did not provide the
basis for the legal claims or impetus for suit, noting that the plaintiff did not
contend it was injured by the statements or seek to prevent similar statements in
the future. Id. at *4. Instead, the plaintiff sought to force the defendants to take
specific action that was required by contract. See id. Although the plaintiff’s
claims may have “related to” communications, the claims were not “based on or in
response to” communications. See id. at *4–5.3

       Here, the homeowners seek to force the HOA to take specific action required
by the declaration—to maintain the common properties against erosion and
avulsion. The homeowners’ claims are not based on or in response to the HOA’s
communications, so the claims are not based on or in response to the HOA’s
exercise of the right of free speech or right to petition.

       3
         The TCPA was amended in 2019 to narrow the categories of connections a claim could
have to the exercise of a protected right in order for a defendant to obtain a dismissal. See
generally ML Dev, 2022 WL 1037757, at *2–3 (discussing removal of the phrase “relates to”
from the prior version of the TCPA that allowed dismissal if the movant proved that the claim
was “based on, relates to, or is in response to” the movant's exercise of a protected right). The
amendment “removed the broadest category of connection, thereby requiring future 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 *5.

                                               8
B.    Not a Matter of Public Concern
      (Right of Free Speech and Right of Association)
      To establish that the homeowners’ claims are based on or in response to the
HOA’s right of free speech, the HOA had to prove that the claims are based on or
in response to the HOA’s communication made in connection with a matter of
public concern. Similarly, to establish that the claims are based on or in response
to the HOA’s right of association, the HOA had to prove that the claims are based
on or in response to the HOA’s joining together to collectively express, promote,
pursue, or defend common interests relating to a matter of public concern.

      As pleaded, the homeowner’s claims based on the violation of a declaration
do not implicate the HOA’s communications or interests relating to a matter of
public concern because this case is about a “private contract dispute affecting only
the interests of the parties involved—the [homeowners], the HOA, and the other
HOA members.” Hong Phuoc Ngo v. Ass’n of Woodwind Lakes Homeowners,
Inc., No. 01-18-00919-CV, 2020 WL 7391696, at *5 (Tex. App.—Houston [1st
Dist.] Dec. 17, 2020, no pet. h.). In Ngo, a homeowners’ association sued two
property owners, alleging that the owners violated the subdivision’s declaration by
making improvements to the exterior of their home without obtaining authorization
from the association and by failing to remove modifications that violated deed
restrictions. Id. at *2. The First Court of Appeals reasoned that the only parties
with a tangible interest in any diminished resale value or property value of the
homes in the subdivision caused by the defendants’ breaches of the declaration
were the homeowners in the subdivision, i.e., other association members. Id. at *5.
The record did not reflect public involvement or interest in the dispute between the
association and the property owners. Id. at *5. The declaration for the subdivision
was a “private contract between private parties intended to protect the parties’
financial interests in their respective properties, including the common properties
                                         9
shared by all the [association’s] members.”                Id. at *6.     Thus, the owners’
communications or joining together did not implicate a matter of public concern,
even under the broader definition applicable in that case.4 See id. at *5–7.

         Other than arguing that Ngo was decided wrongly, the HOA contends that
the destruction of the community property and people’s homes caused by flooding,
erosion, and avulsion is a matter of public concern. For this proposition, the HOA
relies on Garton v. Shiloh Village Partners, LLC, No. 12-16-00286-CV, 2017 WL
6884451 (Tex. App.—Tyler Aug. 23, 2017, no pet.) (mem. op.), and Drerup v.
McQuilling, No. 01-20-00844-CV, 2021 WL 3555727 (Tex. App.—Houston [1st
Dist.] Aug. 21, 2021, pet. denied) (mem. op.).

         In Garton, a developer sued a resident of a subdivision for business
disparagement when the resident made statements about the developer causing
flooding to multiple homeowners’ properties. See Garton, 2017 WL 6884451, at
*1. The court applied the old statutory definition of “matter of public concern” to
conclude that the resident’s statements related to the “health and safety of the
homeowners [and] their environmental, economic, or community well-being.” Id.
at *3.

         In Drerup, the movants argued that the defamation suit against them was
based on their communication to a city employee about the nonmovant’s
construction of a concrete wall that caused flooding to a public street. See Drerup,
2021 WL 3555727, at *1. The nonmovants argued that the statement was not

         The TCPA was amended in 2019 to alter the definition of “matter of public concern” so
         4

that it more closely tracks the meaning used in First Amendment jurisprudence. See Tex. Civ.
Prac. & Rem. Code § 27.001(7)(B). Compare Act of May 21, 2011, 82d Leg., R.S., ch. 341, § 2,
2011 Tex. Gen. Laws 961, 962, with Brady v. Klentzman, 515 S.W.3d 878, 884 (Tex. 2017). See
generally Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 133–34 (Tex.
2019) (noting that the prior version of the TCPA’s definition of “right of free speech” was not
fully coextensive with the constitutional meaning, and the Legislature was “free to define ‘matter
of public concern’ to include matters of purely private concern”).

                                               10
made in connection with a matter of public concern because it concerned only the
flooding of a single street. See id. at *6. The court disagreed, reasoning that the
flooding of a public street affects those in a community beyond those who live on
the street, including the general public’s access to the street. Id.

      Here, the homeowners have not alleged that the HOA’s refusal to implement
the construction plan will affect any property other than the property maintained by
the HOA (the common property), or the plaintiff–homeowners’ property. That is,
the HOA’s refusal to maintain the common property, or any joining together to do
so, does not affect the general public according to the allegations and evidence in
this case. See Ngo, 2020 WL 7391696, at *5 (matter was not one of public concern
when it affected only the interests of those involved, including the homeowners,
the homeowners’ association, and the association’s members; and the record did
not reflect public involvement or interest in the dispute).

      The HOA also contends that its communications and activities related to a
matter of public concern because governmental entities were “involved” and had
approved the construction plan, citing Nguyen v. ABLe Communications, Inc., No.
02-19-00069-CV, 2020 WL 2071757 (Tex. App.—Fort Worth Apr. 30, 2020, no
pet.) (mem. op.), and CDM Constructors, Inc. v. City of Weslaco, No. 13-19-
00447-CV, 2021 WL 1133615 (Tex. App.—Corpus Christi–Edinburg Mar. 25,
2021, pet. denied).

      Nguyen involved allegations that one company used confidential information
of another company to win governmental contracts and in fulfilling those
governmental contracts.      See Nguyen, 2020 WL 20171757, at *4–5.           CDM
Constructors involved a lawsuit by a governmental entity against a contractor for
fraud, bribery, and conspiracy to defraud the governmental entity regarding the
contractor’s building of a water treatment plant for the government. See CDM

                                           11
Constructors, 2021 WL 1133615, at *1, *4. Both cases held that the claims were
based on communications made in connection with a matter of public concern
under the old statutory definition. See id. at *3–4 & n.1; Nguyen, 2020 WL
20171757, at *4–5 (noting statutory definition that a matter of public concern
included any “issue related to . . . the government”). Each case involved a more
direct relationship between the communications and the governmental entities.
Here, the alleged communications or joining together do not concern the permits or
permitting process, but instead the failure of the HOA to proceed with a
construction project that had already been approved by governmental entities. The
HOA’s interpretation would extend the TCPA’s reach to any lawsuit relating to a
construction project because a governmental entity had at some point issued a
permit approving of the plan. The statute, though far-reaching, has not been
applied in such a way. See ML Dev, 2022 WL 1037757, at *1, *4–5 (rejecting
movant’s argument that the lawsuit related to a matter of public concern because it
involved “the construction of a road using public funds,” when the claim was to
enforce an easement so the plaintiff could construct a road necessary to develop its
land; noting that the movants had refused a plat submitted to a governmental entity
and made statements at a meeting with another governmental entity).

      The HOA has not met its burden to establish that the issue of the HOA’s
maintaining its common properties is a matter of political, social, or other interest
to the community or a subject of concern to the public. See Ngo, 2020 WL
7391696, at *5–7. As such, the homeowners’ claims are not based on or in
response to the HOA’s exercise of the rights of free speech or association.

                                         12
C.    Not Based on or in Response to Joining Together
      (Right of Association)
      To establish that the homeowners’ claims are based on or in response to the
HOA’s right of association, the HOA had to prove that the claims are based on or
in response to the HOA’s joining together to collectively express, promote, pursue,
or defend common interests.

      In Ngo, the First Court of Appeals held that a homeowners’ association’s
suit against two property owners, i.e., members, was not based on their “joining
‘together’ with the HOA or other HOA members” because “the basis of the
petition is that the [property owners] have violated the Declaration and are in direct
conflict with the HOA.” Ngo, 2020 WL 7391696, at *6. The record and pleadings
showed that the property owners’ dispute with the association was “essentially a
contract dispute.” Id. at *7.

      The same rationale applies here. The homeowners’ suit is based on the
HOA’s alleged violation of the declarations; it is essentially a contract dispute.
Unlike cases relied upon by the HOA in which courts have held that the right of
association was implicated when plaintiffs sued individual members or board
members of an organization for claims related to the members’ communications, in
this case the homeowners have sued only the Texas corporation—the HOA—and
not any individual members or board members based on or in response to their
“joining together” to collectively express, promote, pursue, or defend the HOA’s
failure to comply with the declarations. Cf. O’Hern v. Mughrabi, 579 S.W.3d 594,
597, 603 (Tex. App.—Houston [14th Dist.] 2019, no pet.) (TCPA applied based on
right of association for lawsuit by one property owners’ association board member
against the other board members, noting that “[a]t the factual core of his claim are
communications amongst the Board members in making decisions”); Roach v.

                                         13
Ingram, 557 S.W.3d 203, 209, 219 (Tex. App.—Houston [14th Dist.] 2018, pet.
denied) (TCPA applied based on right of association for lawsuit against public
officials sued in their official capacities for collective decision-making made while
on governmental “Juvenile Board”); Green v. Port of Call Homeowners Ass’n, No.
03-18-00264-CV, 2018 WL 4100855, at *9 n.17 (Tex. App.—Austin Aug. 29,
2018, no pet.) (mem. op.) (TCPA applied based on right of association for
defamation claim against a homeowners’ association, its members, and its agents);
Neyland v. Thompson, No. 03-13-00643-CV, 2015 WL 1612155, at *4 (Tex.
App.—Austin Apr. 7, 2015, no pet.) (mem. op.) (TCPA applied based on right of
association for defamatory statements made between or among four members of a
homeowners’ association). Moreover, each of these cases was decided under the
prior version of the statute that required the claims to merely “relate to” a
communication between individuals who joined together, rather than be “based on”
or “in response to” a joining together. See supra note 3.

         The HOA has not met its burden to establish that the homeowners’ claims
are based on or in response to the HOA’s joining together to collectively express,
promote, pursue, or defend common interests. See Ngo, 2020 WL 7391696, at *6.
As such, the homeowners’ claims are not based on or in response to the HOA’s
exercise of the right of association.

D.       Summary

         The HOA has not demonstrated that the homeowners’ claims are based on or
in response to the HOA’s exercise of a protected right. Thus, the TCPA does not
apply.     The homeowner’s second issue is sustained.        We do not reach the
homeowners’ first and third issues concerning the homeowners’ burden to prove a
prima facie case or the HOA’s burden to establish its limitations defense. See Tex.
R. App. P. 47.1.

                                         14
                              V.       CROSS-APPEAL

      In its cross-appeal, the HOA complains about the trial court’s finding that
the HOA had a duty to maintain the alleged common property in the order granting
the HOA’s motion to dismiss.          The homeowners agree that the finding was
advisory and, therefore, error. The HOA also complains about the trial court’s
failure to award more attorney’s fees.

      Because we reverse the trial court’s judgment granting the motion to dismiss
and hold that the TCPA does not apply, we dismiss as moot the HOA’s cross-
appeal. See Sanders v. Bansal, No. 01-18-00508-CV, 2019 WL 7341660, at *6–7
(Tex. App.—Houston [1st Dist.] Dec. 31, 2019, pet. denied) (mem. op.).

                                VI.      CONCLUSION

      We reverse the trial court’s final judgment signed March 24, 2021, and
remand the case to the trial court for further proceedings. We dismiss as moot the
HOA’s cross-appeal.

                                         /s/    Ken Wise
                                                Justice

Panel consists of Justices Wise, Spain, and Hassan. (Spain, J., concurring and
dissenting)

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