Court Opinion

ID: 3116560
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:42:31.452194+00
Date Added: 2024-06-11T10:19:40.312961
License: Public Domain

Opinion issued July 16, 2013

                                     In The

                               Court of Appeals
                                    For The

                         First District of Texas
                          ————————————
                               NO. 01-12-00990-CV
                           ———————————
                 THE BETTER BUSINESS BUREAU OF
               METROPOLITAN HOUSTON, INC., Appellant
                                       V.
                 JOHN MOORE SERVICES, INC. AND
              JOHN MOORE RENOVATION, LLC, Appellees

              On Appeal from the 269th Judicial District Court
                           Harris County, Texas
                    Trial Court Case No. 2012-35162

                                  OPINION

      This interlocutory appeal arises from a dispute between the Better Business

Bureau of Metropolitan Houston, Inc. and John Moore, Inc. over a business quality
rating and the right to display past awards. Asserting that a lawsuit John Moore

filed against the Bureau was related to its exercise of free speech, the Bureau filed

a motion to dismiss pursuant to the Texas Citizen’s Participation Act (TCPA). See

TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001–.011 (West Supp. 2012). The trial

court denied the motion.        We reverse and remand for further proceedings

consistent with this opinion.

                                   Background

      The Better Business Bureau is a non-profit corporation that seeks to promote

ethical business practices, and it espouses a mission of “advancing marketplace

trust” by setting standards for trustworthy businesses, encouraging best business

practices, promoting business role models, and denouncing substandard

marketplace behavior. To these ends, the Bureau rates business in the greater

Houston area on a letter-grade scale and publishes information about area

businesses on its website. On its website, the Bureau notes that its letter grades

represent its “opinion of the business” and that the “grades are not a guarantee of a

business’s reliability or performance.” The Bureau also invites selected businesses

to become “accredited” members by asking them to abide by Bureau-promulgated

standards and to pay a membership fee. In exchange, the Bureau offers accredited

members the use of the Better Business Bureau seal, a page for the business on the

                                         2
Bureau’s website, and various services to help resolve disputes between

businesses, such as a mediation program.

      John Moore is in the business of providing home repair and maintenance

services, such as air conditioner repair, pest control, and plumbing.     Before

December 2010, John Moore was an accredited business with the Houston Better

Business Bureau, and it had received an “A+” rating on the Bureau’s website.

From 2003 to 2010, John Moore received the Bureau’s “Award of Excellence,”

which the company displayed on its advertising materials. John Moore’s president,

Don Valentine, served as Chairman of the Houston Bureau from 2007 to 2008. In

late 2010, however, John Moore resigned from the Houston Bureau, complaining

about the methodology it used to determine its business ratings. The resignation

coincided with the Houston Bureau’s decision to revoke John Moore’s

accreditation in response to numerous consumer complaints. John Moore then

informed the Houston Bureau that it moved its business headquarters to the Bryan-

College Station area. Because the move of headquarters meant that the Houston

Bureau no longer considered John Moore an area business, it changed its letter

grade for the company to “NR” for “not rated.”

      In 2012, the Houston Bureau learned that John Moore was continuing to

display a Houston address on its advertising and that the company’s office in

Bryan-College Station had no indications of actual business activity. John Moore

                                           3
had also continued to display Better Business Bureau markings, including the

Award of Excellence logo, on the company’s website, trucks, employee uniforms,

and written invoices. After learning of these activities, the Houston Bureau once

again considered John Moore as a Houston-area business, and it resumed

publication of a business rating on its website. Additionally, the Houston Bureau

filed a trademark infringement lawsuit in federal court to challenge John Moore’s

continued use of the Bureau markings. For its part, John Moore believed it had the

right to continue to display the awards because no temporal restrictions on their use

were imposed when it originally received the awards. The Houston Bureau gave

John Moore an “F” rating for a high number of consumer complaints, the failure to

address those complaints, and the company’s allegedly misleading use of the

Bureau’s trademarks.

      John Moore then filed this lawsuit, asserting numerous causes of action

against the Houston Bureau. The Bureau filed a motion to dismiss pursuant to the

TCPA, which applies to legal actions based on, related to, or in response to the

exercise of the rights of free speech, petition, and association. See TEX. CIV. PRAC.

& REM. CODE ANN. § 27.003(a). John Moore responded in support of the viability

of only four of its causes of action: defamation, business disparagement, fraud, and

tortious interference with business relationships. The trial court held a hearing and

                                         4
timely denied the motion to dismiss. The Bureau then filed this interlocutory

appeal.

                                      Analysis

      The TCPA provides a procedure for dismissing meritless suits that are based

on the defendant’s exercise of the rights of free speech, petition, or association as

defined within the statute. TEX. CIV. PRAC. & REM. CODE ANN. § 27.003. If the

legal action is “based on, relates to, or is in response to” the exercise of those

constitutional rights, a party may file to dismiss “the legal action.”       See id.

§ 27.003(a). In deciding whether to grant a motion under the TCPA and dismiss

the lawsuit, the statute instructs a trial court to “consider the pleadings and

supporting and opposing affidavits stating the facts on which the liability or

defense is based.” Id. § 27.006(a).

I.    Appellate jurisdiction

      John Moore challenges our appellate jurisdiction to review the trial court’s

ruling, so we address that as a threshold matter. The parties do not dispute that

section 27.008(a) permits an interlocutory appeal when a motion to dismiss is

denied by operation of law due to the trial court’s failure to rule.             See

id. § 27.008(a). But the trial court in this case did timely rule on the Houston

Bureau’s motion. John Moore, relying on the opinion of the Second Court of

Appeals in Jennings v. WallBuilder Presentations, Inc., 378 S.W.3d 519, 525 (Tex.

                                         5
App.—Fort Worth 2012, pet. filed), contends that section 27.008 does not provide

an interlocutory appeal under these circumstances.

      We disagree. This court has recently held, along with several other intermediate

courts of appeal, that “section 27.008 permits an interlocutory appeal from the trial

court’s written order denying a motion to dismiss under the TCPA.”              KTRK

Television, Inc. v. Robinson, No. 01-12-00372-CV, slip op. at 11 (Tex. App.—

Houston [1st Dist.] July 11, 2013, no pet. h.) (citing Direct Commercial Funding,

Inc. v. Beacon Hill Estates, LLC, No. 14–12–00896–CV, 2013 WL 407029 (Tex.

App.—Houston [14th Dist.] Jan. 24, 2013, order); Better Bus. Bureau of Metro.

Dallas, Inc. v. BH DFW, Inc., No. 05-12-00587-CV, 2013 WL 2077636, at *6

(Tex. App.—Dallas May 15, 2013, no pet. h.); San Jacinto Title Svcs., LLC v.

Kingsley Props., LP, No. 13-12-00352-CV, 2013 WL 1786632, at *4 (Tex. App.—

Corpus Christi Apr. 25, 2013, no pet. h.)). Accordingly, we have interlocutory

appellate jurisdiction over this appeal, and thus we address the denial of the Bureau’s

motion to dismiss.

II.   Application of the TCPA

      The Bureau argues that dismissal of John Moore’s suit was required because

it demonstrated by a preponderance of the evidence that the claims are a response

to the Bureau’s exercise of its right to free speech, and John Moore failed to

present clear and specific evidence to support each element of its claims to

                                          6
establish its prima facie case. John Moore disputes these points and also asserts

that a business transaction exemption to the statute applies. 1 We address each

contention in turn.

A.    Exercise of “the right of free speech”

      To obtain dismissal under the TCPA, a defendant must show “by a

preponderance of the evidence that the legal action is based on, relates to, or is in

response to the party’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). We

review this determination de novo as an application of law to facts.               See

Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., No. 01-12-00581-

CV, 2013 WL 1867104, at *6 (Tex. App.—Houston [1st Dist.] May 2, 2013, no

pet. h.); see also Rehak Creative Servs., Inc. v. Witt, No. 14-12-00658-CV, 2013
WL 2211654, at *6 (Tex. App.—Houston [14th Dist.] May 21, 2013, no. pet. h.).

1
      John Moore also argues that an interpretation of the “clear and specific
      evidence” standard in the TCPA that requires a high burden of proof before
      trial would violate the open-courts provision of the Texas Constitution and
      the right to a trial by jury. To the extent that John Moore argues that the
      statute is unconstitutional, that argument was waived due to failure to
      present it to the trial court. See TEX. R. APP. P. 33.1(a); see also Sw. Elec.
      Power Co. v. Grant, 73 S.W.3d 211, 222 (Tex. 2002) (“A litigant must raise
      an open-courts challenge in the trial court.”); In re Doe 2, 19 S.W.3d 278,
      284 (Tex. 2000) (attacks on the presumption that a statute is constitutional
      should be raised as an affirmative defense through appropriate pleadings
      before the trial court).

                                          7
      The TCPA defines “the exercise of the right of free speech” as “a

communication made in connection with a matter of public concern.” TEX. CIV.

PRAC. & REM. CODE ANN. § 27.001(3). John Moore contends that the statute only

applies to speech for the purpose of participation in government, and that the

statute does not apply to lawsuits relating to commercial speech.

      We review questions of statutory construction de novo.              Tex. Lottery

Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010). In

interpreting statutes, our primary purpose is to give effect to the legislature’s intent

by relying on the plain meaning of the text adopted by the legislature, unless a

different meaning is supplied by statutory definition or is apparent from the

context, or the plain meaning leads to absurd results. Id.

      The expressly stated purpose of the TCPA “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.               John

Moore’s interpretation places great weight on the words “and otherwise participate

in government” as a limitation on the preceding list of “constitutional rights” that

the statute is intended to “encourage and safeguard.” Id. But this interpretation

would render completely meaningless the references to the constitutional rights to

                                           8
“speak freely” and “associate freely,” if neither adds any additional meaning to the

protection of the constitutional right “to petition” and to “otherwise participate in

government.” Id.

      The right to free speech that is protected by the statute is expressly defined

to include “communication made in connection with a matter of public concern,”

id. § 27.001(3), with a “matter of public concern” itself being defined to include,

among other things, “a good, product, or service in the marketplace.”             Id.

§ 27.001(7)(E). These broadly defined references to speech rights do not support

any inference that only a limited subclass of such communications is protected.

John Moore’s interpretation is further undermined by the statute’s unqualified

protection of the “exercise of the right of free speech,” considering that the First

Amendment protects speech conveying information about products and transaction

in the commercial marketplace. See 44 Liquormart, Inc. v. Rhode Island, 517 U.S.
484, 503–04, 116 S. Ct. 1495 (1996); Va. State Bd. of Pharmacy v. Va. Citizens

Consumer Council, Inc., 425 U.S. 748, 762, 96 S. Ct. 1817 (1976).

      We conclude that the scope of the statute is not limited only to protect

speech directed toward the government. Accord BH DFW, 2013 WL 2077636, at

*7 (concluding that a Better Business Bureau’s rating of a company was a

communication relating to an issue of public concern within the meaning of the

TCPA); Newspaper Holdings, 2013 WL 1867104, at *7 (applying TCPA to tort

                                         9
claims against a newspaper and its source). The exercise of the right of free speech

as contemplated by the TCPA includes a person’s right to communicate reviews or

evaluations of services in the marketplace. The Houston Better Business Bureau’s

rating system falls within this definition. Opinion of the quality of a business’s

products and services are published based on the Bureau’s own criteria, including

customer feedback and complaints about those products and services. The Bureau

characterizes its business ratings as “opinions,” and it discloses its criteria for

determining those opinions.

      Because the Houston Bureau presented evidence that the legal actions at

issue all relate to or are in response to the expression of opinions regarding the

quality of John Moore’s goods and services, principally business ratings and

associated commentary, the legal actions are necessarily “related to” a matter of

public concern, John Moore’s products and services in the marketplace. See TEX.

CIV. PRAC. & REM. CODE ANN. §§ 27.001, 27.005(b). Therefore, the Houston

Bureau met its burden to prove that John Moore’s legal action related to the

exercise of its right of free speech.

B.    Applicability of statutory exclusion

      John Moore additionally argues that the TCPA does not apply because the

Houston BBB is primarily engaged in the business of selling advertising and

customer relations services. Section 27.010(b) provides that the TCPA “does not

                                        10
apply to a legal action brought against a person primarily engaged in the business

of selling or leasing goods or services, if the statement or conduct arises out of the

sale or lease of goods, services . . . or a commercial transaction in which the

intended audience is an actual or potential buyer or customer.” Id. § 27.010(b).

      Because the intended audience of the Houston Bureau’s statements and

conduct that John Moore complains about in this case is the consumer public at

large, not the businesses to which the Bureau attempts to “sell” its membership

services, the exemption does not apply. The statements or conduct that John

Moore complains of are (1) the rating system, (2) the rating the Houston Bureau

gave John Moore on its website and in its customer service interactions, and (3) the

notice on its website that John Moore is not entitled to display the Award of

Excellence logo. The intended audience all of these statements is the public

consumer, not businesses who may be eligible for accreditation.

      Even if, based on the evidence John Moore presented, the Bureau could be

considered a business primarily engaged in selling membership services, the actual

or potential buyers or customers of those services would be the accredited

businesses, not the general public. In its lawsuit, John Moore does not complain of

or make allegations regarding the Houston Bureau’s statements or conducts related

to selling its membership services to businesses, which would be the potential

                                         11
buyers or customers of the Houston Bureau. Thus, we conclude that the exemption

does not apply to John Moore’s legal action in this case.

C.    Prima facie case

      To avoid dismissal of a claim covered by the TCPA, a plaintiff must

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

element of the claim in question.” Id. § 27.005(c). The Houston Bureau contends

that John Moore failed to do so. The Legislature’s use of the term “prima facie

case” implies a minimal factual burden: “prima facie” evidence is “the minimum

quantum of evidence necessary to support a rational inference that the allegation of

fact is true.” Newspaper Holdings, 2013 WL 1867104, at *6; see also Rodriguez v.

Printone Color Corp., 982 S.W.2d 69, 72 (Tex. App.—Houston [1st Dist.] 1998,

pet. denied). Conclusory statements are not probative and accordingly will not

suffice to establish a prima facie case. See In re E.I. DuPont de Nemours & Co.,

136 S.W.3d 218, 223–24 (Tex. 2004). The statute requires that the proof offered

address and support each “essential element” of every claim asserted with “clear

and specific evidence.” See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c).

Accordingly, we examine the pleadings and the evidence in a light favorable to

John Moore to determine whether it marshaled “clear and specific” evidence to

support each element of its causes of action. See Newspaper Holdings, 2013 WL
1867104, at *6.

                                         12
      As the statute does not define “clear and specific” evidence, these terms are

given their ordinary meaning. See TGS-NOPEC Geophysical Co. v. Combs, 340
S.W.3d 432, 439 (Tex. 2011). “Clear” means “free from obscurity or ambiguity,”

“easily understood,” “free from doubt,” or “sure.”              MERRIAM-WEBSTER’S

COLLEGIATE DICTIONARY 229 (11th ed. 2003); see also BLACK’S LAW DICTIONARY

287 (9th ed. 2009) (“unambiguous,” “sure,” or “free from doubt”). “Specific”

means “constituting or falling into a specifiable category,” “free from ambiguity,”

or “accurate.” MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY, supra, at 1198;

see also BLACK’S LAW DICTIONARY, supra, at 1528 (“explicit” or “relating to a

particular named thing”). Clear and specific evidence has also been described as

evidence that is “unaided by presumptions, inferences, or intendments.” Rehak

Creative Servs., 2013 WL 2211654, at *7 (citing McDonald v. Clemens, 464
S.W.2d 450, 456 (Tex. Civ. App.—Tyler 1971, no writ)).

      Attached to its response to the motion to dismiss, John Moore filed the

affidavit of its president, Don Valentine, as evidence to support its claims. John

Moore also attached copies of relevant pages from the Houston Bureau’s website

to show the “F” rating, as well as copies of some customer complaints it had

received along with the affidavit of its customer service director. 2

2
      John Moore’s brief also extensively relies on evidence that was excluded by
      the trial court, such as the transcript of a recorded conversation between

                                          13
      We consider each cause of action to determine whether it has been supported

by clear and specific evidence.

      1.     Defamation

      Defamation is a false and injurious impression of a plaintiff published

without legal excuse. See Turner v. KTRK Television, Inc., 38 S.W.3d 103, 115

(Tex. 2000); Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex.

1995). To maintain a defamation cause of action, the plaintiff must prove that the

defendant: (1) published a statement; (2) that was defamatory concerning the

plaintiff; (3) while acting with either actual malice, if the plaintiff was a public

official or public figure, or with negligence, if the plaintiff was a private

individual, regarding the truth of the statement. WFAA-TV, Inc. v. McLemore, 978
S.W.2d 568, 571 (Tex. 1998); see also Neely v. Wilson, No. 11-0228, 2013 WL
3240040, at *5 (Tex. June 28, 2013). “[S]tatements that are not verifiable as false

cannot form the basis of a defamation claim.” Neely, 2013 WL 3240040, at *6

(citing Milkovich v. Lorain Journal Co., 497 U.S. 1, 21–22, 110 S. Ct. 2695, 2707

(1990)). A statement is defamatory if the words tend to injure the plaintiff’s

reputation, exposing it to public hatred, contempt, ridicule, or financial injury, or if

      John Moore’s president and the president of the Houston Bureau. John
      Moore has not challenged the trial court’s evidentiary rulings, and our
      analysis does not consider the excluded evidence.

                                          14
it tends to impeach the person’s honesty, integrity, or virtue. TEX. CIV. PRAC. &

REM. CODE ANN. § 73.001 (West 2012). To qualify as defamatory, a statement

should be derogatory, degrading, somewhat shocking, and contain elements of

disgrace. Means v. ABCABCO, Inc., 315 S.W.3d 209, 214 (Tex. App.—Austin

2010, no pet.) (citing 1 ROBERT D. SACK, SACK       ON   DEFAMATION 2–17 (3d ed.

2009)).    But a communication that is merely unflattering, abusive, annoying,

irksome, or embarrassing, or that only hurts the plaintiff’s feelings, is not

actionable. Id.

      Whether words are capable of the defamatory meaning the plaintiff

attributes to them is a question of law for the court. Carr v. Brasher, 776 S.W.2d
567, 570 (Tex. 1989); Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653,

654–55 (Tex. 1987). Questions of law are subject to de novo review. In re

Humphreys, 880 S.W.2d 402, 404 (Tex. 1994).           Whether a publication is an

actionable statement of fact depends on its verifiability and the context in which it

was made. See Bentley v. Bunton, 94 S.W.3d 561, 580–83 (Tex. 2002). We

construe the statement as a whole based upon a reasonable person’s perception of

it. Vice v. Kasprzak, 318 S.W.3d 1, 17 (Tex. App.—Houston [1st Dist.] 2009, pet.

denied).

                                         15
      a.    “Not accredited”

      John Moore alleges that it was defamed by statements that it was never

accredited with the Houston Bureau and that it was not Better Business Bureau

accredited in 2012.   In his affidavit, Valentine identified a statement on the

Houston Bureau’s website that John Moore “is not BBB accredited” as misleading,

untruthful, and harmful because the company “was BBB accredited with the

Bryan-College Station BBB and in turn the Dallas BBB.” For the same reasons,

Valentine complained that the “NR” classification for “not rated” listed on the

Houston Bureau website from 2010 to 2012 was false and misleading.

      A statement that a business is not Better Business Bureau “accredited,” even

if false, is not defamatory. Such a statement does not impugn John Moore’s

reputation by suggesting that it engaged in wrongful or unethical conduct. See,

e.g., Musser, 723 S.W.2d at 655. Instead, these statements would merely suggest

that John Moore did not obtain accreditation with the Better Business Bureau—a

purely optional accolade. The printout from the Houston Bureau’s website that

John Moore included in its evidence explains:

      Businesses are under no obligation to seek BBB accreditation, and
      some businesses are not accredited because they have not sought BBB
      accreditation.

      To be accredited by BBB, a business must apply for accreditation and
      BBB must determine that the business meets BBB accreditation
      standards, which include a commitment to make a good faith effort to
      resolve any consumer complaints. BBB Accredited Businesses must
                                       16
      pay a fee for accreditation review/monitoring and for support of BBB
      services to the public.

In short, accusing John Moore of not being accredited or never having been

accredited does no more than characterize the company as abstaining from

participation. Instead of portraying unaccredited businesses as worthy of public

hatred, contempt, or ridicule, the Houston Bureau confirmed that businesses are

not obligated to seek accreditation and must pay for the designation. Accordingly,

the allegations regarding John Moore’s purported non-accreditation are not

defamatory.

      Likewise, the statement on the Houston Bureau website from 2010 to 2012

that listed John Moore as “not rated” is not defamatory. Even if untrue, not being

rated does not expose John Moore “to public hatred, contempt, ridicule, or

financial injury.” TEX. CIV. PRAC. & REM. CODE ANN. § 73.001. The statement

does not suggest that John Moore committed some wrong or engaged in any

nefarious activities. Like being unaccredited by the Bureau, having no rating on

the website suggests merely that John Moore has no rating. See Musser, 723
S.W.2d at 655 (holding statement not defamatory as matter of law that does not

charge plaintiff with commission of a crime, violation of any law or contract, or

with any unethical acts and business dealings).

                                        17
      b.    Advertising excellence awards

      Next, John Moore alleges it was defamed by a statement that it was not

permitted to advertise having won Bureau awards of excellence. In his affidavit,

Valentine pointed to “bold and extra large language” on the website “which clearly

and improperly implied that John Moore Services only ‘claimed’ to have won all

the Education Foundation Awards for Excellence, but hadn’t actually won them.”

      The Houston Bureau’s statements regarding John Moore’s disputed right to

display the “Award of Excellence” mark are non-defamatory because, as Valentine

himself acknowledged, the website truthfully described the parties’ opposing

contentions concerning the use of the marks. The Houston Bureau explained on its

website that John Moore “continue[s] to advertise winning numerous BBB Awards

for Excellence for the years 2003–2010,” despite the fact that the Bureau “has

asked that this practice cease.” Acknowledging that a dispute exists over these

advertising of these awards is not a defamatory statement, let alone a statement

showing the Bureau’s negligent regard for the truth, as a defamation showing

requires.

      Moreover, despite characterizing the webpage as having “clearly and

improperly implied” that the awards had not been actually won, John Moore did

not present clear and specific evidence of the actual content of these statements—

as opposed to what Valentine contends they “implied”—to facilitate a

                                       18
determination of whether they were defamatory. John Moore did not include a

copy of that webpage, actually quote the allegedly offending language, or even

describe in detail what the Houston BBB website stated, as opposed to Valentine’s

conclusory description of what he thought the website “implied.”

      c.    “F” rating

      John Moore also complains about the publication of the “F” rating on the

Houston Bureau website. But the “F” rating itself cannot be defamatory because it

is the Bureau’s self-described “opinion” of the quality of John Moore’s services,

which lacks a high degree of verifiability. See Neely, 2013 WL 3240040, at *6;

Vice, 318 S.W.3d at 18. Even to the extent such an opinion is verifiable based on

the standards the Bureau uses to determine its ratings, the “F” is not a false and

defamatory statement. The Bureau considers customer complaints regarding the

business in its standards for determining the ratings, and the website identified

customer complaints and advertising issues as the reason for John Moore’s low

rating. The consumer complaint evidence that John Moore itself filed in response

to the motion to dismiss includes several complaints about the company’s costly

services and poor customer support, supporting the low opinion expressed on the

website.

                                       19
      Accordingly, after carefully reviewing the record, we conclude that John

Moore failed to adduce clear and specific evidence to establish a prima facie case

that the Houston Bureau made any actionable defamatory statements.

      2.     Business disparagement

      To prevail on a business disparagement claim, a plaintiff must establish that

(1) the defendant published false and disparaging information, (2) with malice,

(3) without privilege, (4) that resulted in special damages to the plaintiff. Forbes

Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003); Hurlbut v.

Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987).              “A business

disparagement claim is similar in many respects to a defamation action.” Forbes,
124 S.W.3d at 170. The two torts differ in the interest protected: a defamation

claim protects an injured party’s personal reputation, while a business

disparagement claim protects economic interests. Id. “[A] business disparagement

defendant may be held liable ‘only if he knew of the falsity or acted with reckless

disregard concerning it, or if he acted with ill will or intended to interfere in the

economic interest of the plaintiff in an unprivileged fashion.’”        Id. (quoting

Hurlbut, 749 S.W.2d at 766). Accordingly, at a minimum, a statement must be

defamatory to support a business disparagement claim. See, e.g., Rehak Creative

Servs., 2013 WL 2211654, at *9; Means, 315 S.W.3d at 212. John Moore makes

the same allegations to support its business disparagement claim as it made

                                         20
regarding its defamation claim. But as explained above, it did not present clear

and specific evidence establishing that the Houston Bureau published a false and

defamatory statement, which is essential to a business disparagement claim. See

Hurlbut, 749 S.W.2d at 766. Accordingly, John Moore did not present a prima

facie case of business disparagement.

      3.     Fraud

      A person commits fraud by (1) making a representation of material fact

(2) that is false (3) and was known to be false or asserted recklessly without

knowledge of its truth (4) with the intent that the misrepresentation be acted upon,

and (5) the person to whom the misrepresentation is made justifiably relies upon it

and (6) is injured as a result. Aquaplex, Inc. v. Rancho La Valencia, Inc., 297
S.W.3d 768, 774 (Tex. 2009). The defendant’s acts or omissions must be a cause-

in-fact of the plaintiff’s injury, i.e., a substantial factor in bringing about an injury

which otherwise would not have occurred. See Formosa Plastics Corp. USA v.

Presidio Eng’rs & Contractors Inc., 960 S.W.2d 41, 47 (Tex. 1998); Marathon

Corp. v. Pitzner, 106 S.W.3d 724, 727 (Tex. 2003).                 The maker of the

misrepresentation must have had reason to expect the plaintiff to rely on his

statement when the statement was made. Ernst & Young, L.L.P. v. Pac. Mut. Life

Ins. Co., 51 S.W.3d 573, 580 (Tex. 2001). The transaction sued upon must be of

the type the defendant could have contemplated. See id. Furthermore, promises of

                                           21
future performance generally do not constitute actionable fraud, as they are not

representations of fact, but may be actionable if made with the intent and purpose

to deceive and with no intention of performing. Formosa Plastics, 960 S.W.2d at

48.

      In its original petition and response to the motion to dismiss, John Moore

alleged specifically that the Houston Bureau falsely represented the following

information to it:

      (1) that John Moore could continue advertising its receipt of the
      Awards of Excellence, even after it was no longer a member of the
      Houston BBB, by not placing any restrictions on the awards when
      they were given to John Moore from 2003 to 2010; (2) that John
      Moore could not advertise with the BBB “trademark(s)” registered to
      the Council of Better Business Bureaus, Inc., since it is no longer a
      member of the Houston BBB; (3) that the Houston BBB would not
      include price complaints in a business’s complaint record, nor would
      it factor price complaints into the overall rating of a business; (4) that
      the Houston BBB is an independent and unbiased rating agency; and
      (5) that the Houston BBB follows its mission statement and values
      statement that claims its goal is to “[b]e honest and ethical in all of its
      business activities;” “[t]reat everyone with integrity[,] . . . respect and
      dignity;” and “communicate with honesty.”

John Moore referred to its affidavits as evidence of the damages it suffered as a

result of these allegedly fraudulent representations.       In those affidavits, John

Moore stated that the Houston Bureau’s “statements to John Moore’s current and

prospective customers are false and are causing John Moore to lose customers,

valuable goodwill and revenue.” Based on representations that it could continue to

display Bureau markings, John Moore allegedly “continued to spend millions of
                                          22
dollars in advertising with the Awards.” John Moore also stated it suffered a 20%

decrease in business after the Houston BBB posted the “F” rating on its website.

      a.    Alleged misrepresentations regarding advertising of awards

      The first category of misrepresentations alleged in support of the fraud claim

relate to John Moore’s advertising of its past awards from the Bureau.          The

allegations are that John Moore was told “that it could continue advertising its

receipt of the Awards of Excellence, even after John Moore was no longer a

member of the Houston BBB, by not placing any restrictions on the awards when

they were given to John Moore from 2003 through 2010,” yet it was subsequently

told that it “cannot advertise with the BBB trademark(s), registered to the Council

of Better Business Bureaus, Inc., since they are no longer members of the Houston

BBB.”

      The allegation that the Houston Bureau did not affirmatively restrict John

Moore’s use of the Bureau’s markings and award insignia does not amount to a

misrepresentation of a material fact. To the extent John Moore was “encouraged”

to advertise the awards in the past, there is no allegation that this encouragement

was tantamount to a perpetual license to use Bureau trademarks, nor could it mean

that the Bureau could never take a subsequent position that it would be misleading

for a company with a current “F” rating to prominently feature Bureau awards in

its advertising. Even if John Moore was encouraged at one point to advertise its

                                        23
Better Business Bureau status and awards, that does not preclude the Houston

Bureau from later taking the position that to continue such advertising is

misleading in light of John Moore’s current rating and status.

      John Moore also relies on a letter it received from the manager of the

Education Foundation of the Better Business Bureau of Greater Houston and South

Texas as a representation that it could continue to display the awards, but this letter

actually undermines any claim of reasonable reliance. The letter confirmed “that

John Moore Services has been ‘grandfathered’ to use the wreath version of the

Awards for Excellence logo as a graphic element in its advertising as long as the

current BBB logo is also displayed on the ad.” The letter also acknowledged that

John Moore “invested heavily in signage for its vehicles using the wreath graphic

when the [award] program was first resurrected years ago.” Nevertheless, the

letter also stated: “Although this ‘grandfather’ exemption will eventually end, it is

currently in effect to avoid saddling the Company with the expense of re-painting

all its fleet and re-designing all of its advertising graphics.” The full context of the

letter defeats any justifiable reliance by John Moore on further investment in

signage, uniforms, or other similar uses of the Bureau logo. The letter indicated

that the “exemption” would not be permanent, and that it was intended to save

John Moore the expense of repainting and redesigning existing materials—not to

authorize fresh expenditures on promotional materials featuring the Bureau and

                                          24
Awards of Excellence logos. The letter also cannot be reasonably read to suggest

that the Bureau was forfeiting its right to ever take the position in the future that it

would be misleading for an F-rated or nonrated business to advertise Bureau

awards it had won in the past.

      John Moore also complains that the Houston Bureau represented that it

“cannot advertise with the BBB trademark(s), registered to the Council of Better

Business Bureaus, Inc., since they are no longer members of the Houston BBB.”

John Moore may disagree with the Bureau, but the statement is not an actionable

misrepresentation of material fact. The statement reflects the Houston Bureau’s

legal position. The Houston Bureau sued John Moore in court for trademark

infringement, so John Moore was presumably aware of the Houston Bureau’s

position regarding the display.

      b.     Alleged misrepresentations about rating based on price complaints

      John Moore alleges that the Houston Bureau represented that it “would not

count price complaints” in its record of a complaints or factor such price

complaints into the Bureau’s rating.       But John Moore failed to provide any

evidence to establish that it reasonably relied on this alleged misrepresentation.

John Moore did not present evidence that it acted or failed to act due to the

Bureau’s alleged misrepresentation.       See Ernst & Young, 51 S.W.3d at 577

                                          25
(plaintiff establishes reliance by showing that the defendant’s acts and

representations induced it to either act or refrain from acting to its detriment).

      c.      Alleged misrepresentations of independence and neutrality

      The original petition and response to the motion to dismiss alleged that the

Bureau committed fraud by misrepresenting that it “is an independent and unbiased

rating agency” and that it follows its mission statement and values statement that

claims the Houston Bureau’s goal is to “‘[b]e honest and ethical in all of its

business activities;’ ‘[t]reat everyone with integrity[,] respect and dignity;’ and

‘communicate with honesty.’” But John Moore presented no clear and specific

evidence of when or how the Houston Bureau represented that it was “independent

and unbiased,” and it provided no evidence that made any reference whatsoever to

the Bureau’s “mission statement and values statement.” For instance, John Moore

did not provide any relevant context for the alleged misrepresentations, such as

who made them, where and when they were made, or even how they were

communicated (such as orally, in writing, or on the website). John Moore also

presented no clear and specific evidence to establish the element that it justifiably

relied on the alleged representation that the Bureau is a neutral and unbiased rating

agency. In sum, John Moore did not offer clear and specific evidence to establish

its claim that the Houston Bureau made an actionable misrepresentation about its

neutrality.

                                          26
      Accordingly, John Moore’s evidence does not clearly and specifically

establish all of the essential elements of a prima facie fraud claim for the alleged

misrepresentations made by the Houston Bureau.

      4.     Tortious interference

      To establish a cause of action for tortious interference with contract, a

plaintiff must prove that (1) a contract subject to interference exists, (2) the

defendant committed a willful and intentional act of interference with the contract

(3) the act proximately caused injury, and (4) the plaintiff sustained actual damages

or loss. ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997). To

establish a cause of action for tortious interference with prospective contract or

business relationships, a plaintiff must show that (1) there was a reasonable

probability that the parties would have entered into a business relationship; (2) the

defendant committed an independently tortious or unlawful act that prevented the

relationship from occurring; (3) the defendant either acted with a conscious desire

to prevent the relationship from occurring or knew the interference was certain or

substantially certain to occur as a result of the conduct; and (4) the plaintiff

suffered actual harm or damages as a result of the defendant's interference.

Richardson-Eagle, Inc. v. William M. Mercer, Inc., 213 S.W.3d 469, 475 (Tex.

App.—Houston [1st Dist.] 2006, pet. denied).

                                         27
      John Moore’s tortious interference with contract claims fail for failing to

establish by clear and specific evidence the essential element of the existence of a

contract subject to interference. John Moore argues that the evidence showed that

some complaining customers mentioned on the Bureau’s website that they would

file complaints demanding their money back from John Moore and that there was

interference with its contracts with the Dallas and Bryan-College Station chapters.

But John Moore offered no clear and specific evidence of any of these contracts or

their terms.

      “To prevail on a tortious interference claim, a plaintiff must present

evidence that the defendant interfered with a specific contract.” Funes v. Villatoro,

352 S.W.3d 200, 213 (Tex. App.—Houston [14th Dist.] 2011, pet. denied). To

establish interference, “the plaintiff must present evidence that some obligatory

provision of a contract has been breached.” Id. John Moore did not present

evidence regarding the terms of any of contracts with customers or the other Better

Business Bureau chapters, or how those contracts were breached. Instead, John

Moore only alleged that such contracts exist. John Moore also did not clearly and

specifically demonstrate what injuries or damages it suffered as a result of the

interference—two other necessary elements of the tortious interference claim. It

only contended that its general revenues fell after the “F” rating was published.

This does not amount to clear and specific evidence establishing the essential

                                         28
elements of a prima facie claim that the Houston Bureau willfully and intentionally

interfered with John Moore’s contracts with its customers and other Better

Business Bureau chapters.

      John Moore’s tortious interference with business relationships claim also

fails because it did not present clear and specific evidence that the Houston BBB

committed an “independently tortious or unlawful act.”          Brown v. Swett &

Crawford of Tex., Inc., 178 S.W.3d 373, 381–82 (Tex. App.—Houston [1st Dist.]

2005, no pet.). As discussed above, John Moore did not present clear and specific

evidence to establish a prima facie claim that the Houston BBB committed any

other tortious or unlawful acts. Thus, John Moore necessarily has failed to present

a prima facie claim supported by clear and specific evidence of interference with

business relationships.     See id. at 382–83 (noting that this element requires

determining the validity of the plaintiff’s only tort claim).

                                     Conclusion

      We hold that the Houston Better Business Bureau satisfied its burden under

the TCPA to show that John Moore’s claims against it are based on, relate to, or

are in response to, the exercise of their free speech rights. See TEX. CIV. PRAC. &

REM. CODE ANN. § 27.005(b). We further hold that John Moore has failed to

sustain its burden to show, by clear and specific evidence, a prima facie case for

each essential element of its claims, or that its claims fall within the commercial-

                                          29
speech exemption. See id. §§ 27.005(c), 27.010(b). We therefore reverse the trial

court’s denial of the motion to dismiss and remand the case to the trial court for

further proceedings. See id. § 27.009(a).

                                                Michael Massengale
                                                Justice

Panel consists of Chief Justice Radack and Justices Sharp and Massengale.

Justice Sharp, dissenting. Dissent to follow.

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