Court Opinion

ID: 9910743
Source: CourtListenerOpinion
Date Created: 2023-12-18 15:09:27.495142+00
Date Added: 2024-06-11T12:54:02.024808
License: Public Domain

Opinion issued December 14, 2023.

                                    In The

                           Court of Appeals
                                    For The

                       First District of Texas
                         ————————————
                           NO. 01-23-00198-CV
                        ———————————
 KRJJ ENTERPRISES, D/B/A KRJJ ENTERPRISES (GULF COAST) LP,
                          Appellant
                                      V.
JOHANNA C. WILLIS, JERMAINE WILLIS, JR. , JERMIAH WILLIS BY
NEXT FRIEND JOHANNA WILLIS, JERMIA WILLIS BY NEXT FRIEND
                JOHANNA WILLIS, Appellees

                 On Appeal from the 152nd District Court
                          Harris County, Texas
                    Trial Court Case No. 2022-65704
                           MEMORANDUM OPINION

      This is an interlocutory appeal1 from a district court order denying a motion

to dismiss under the Texas Citizens Participation Act (TCPA) brought by

defendant/appellant KRJJ Enterprises, d/b/a/ KRJJ Enterprises (Gulf Coast) LP.

KRJJ contends that the trial court erred by denying its motion because the

defamation claim asserted by appellee Johanna Willis and her family against it was

in response to KRJJ’s right of free speech, right to petition, or right of association.

KRJJ further contends that the trial court erred by not dismissing the Willis

family’s claim for defamation because the Willis family failed to establish by clear

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

We affirm.

                                    Background

A.    Factual Allegations

      The Willis family rented a residential property from KRJJ beginning in

November 2020. The lease term ended on October 31, 2021. The parties dispute

what happened at the end of the lease term. The Willis family states that KRJJ filed

an eviction suit due to a delay in paying rent in September 2021. KRJJ states that

the Willis family refused to vacate at the end of the lease term. The Willis family

claims that they paid rent for October and November 2021. Eventually, KRJJ filed

1
      See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12).
                                          2
a forcible detainer action in justice court in Harris County, and the court awarded

KRJJ possession of the residence. The Willis family appealed to the county court,

but the family vacated the property before a trial de novo occurred in the county

court. KRJJ dismissed the eviction suit.

      In May 2022, KRJJ sent the Willis family a demand for six months of

unpaid rent, damages to the leased premises, and other fees. KRJJ alleges that the

Willis family did not respond. KRJJ states that it then “utilized the assistance of an

organization called Mrlandlord.com.” According to KRJJ, the organization aids

landlords, including placing tenant debts with collections agencies.

      In October 2022, the Willis family sued KRJJ for unconscionable actions

and defamation.2 In its defamation claim, the Willis family alleged that KRJJ

“caused information regarding the alleged unpaid balance . . . to be reported to one

or more credit reporting agencies or companies” against the credit rating of Joanna

Willis, causing her credit rating to decrease, harming her reputation, and impeding

her efforts to obtain another residential lease.

      KRJJ moved to dismiss under the Texas Citizens Participation Act. See TEX.

CIV. PRAC. & REM. CODE § 27.001–.011. The Willis family responded to the

dismissal motion. After a hearing, the trial court denied KRJJ’s motion. KRJJ

appealed.

2
      The unconscionable action claim is not part of this appeal.
                                           3
      On appeal, KRJJ argues that the trial court’s denial of its motion to dismiss

should be reversed because the Willis family’s defamation claim against KRJJ falls

within the scope of the TCPA and the Willis family failed to provide clear and

specific evidence to establish a prima facie case of defamation. We disagree, and

affirm.

                             Overview of the TCPA

      The TCPA provides special procedures allowing parties to obtain early

dismissal of meritless claims that implicate the exercise of the rights of free

speech, association, and petition. McLane Champions, LLC v. Houston Baseball

Partners LLC, 671 S.W.3d 907, 910 (Tex. 2023). The Legislature enacted the

TCPA “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 § 27.002; see also McLane, 671 S.W.3d at 913. The statute provides

this protection by authorizing a motion to dismiss early in the covered proceedings,

subject to expedited interlocutory review. See TEX. CIV. PRAC. & REM. CODE

§§ 27.003, .008. Trial courts review TCPA motions to dismiss in a multi-step

analysis. First, the moving party must show by a preponderance of the evidence

that the TCPA applies to the legal action against it. Id. §§ 27.003, .005(b). If the

                                         4
moving party satisfies that burden, the burden shifts to the nonmoving party to

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

element of its claim. Id. § 27.005(c). If the nonmoving party cannot satisfy that

burden, the trial court must dismiss the suit. Id.

      We review de novo the denial of a TCPA motion to dismiss. Dall. Morning

News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019); Better Bus. Bur. of Metro.

Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 353 (Tex. App.—

Houston [1st Dist.] 2013, pet. denied). In determining whether a legal action is

subject to or should be dismissed under the TCPA, a court shall consider the

pleadings, evidence the court could consider under the summary-judgment rule,

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

defense is based. TEX. CIV. PRAC. & REM. CODE § 27.006(a); cf. Hersh v. Tatum,

526 S.W.3d 462, 467 (Tex. 2017) (stating, in connection with step one, that the

plaintiff’s petition is the best and all-sufficient evidence of the nature of the

action). We review the pleadings and evidence in the light most favorable to the

nonmovant. Gaskamp v. WSP USA, Inc., 596 S.W.3d 457, 470 (Tex. App.—

Houston [1st Dist.] 2020, pet. dism’d) (en banc); Schimmel v. McGregor, 438

S.W.3d 847, 855–56 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). Whether

the TCPA applies is an issue of statutory interpretation that we also review de

                                           5
novo. S & S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 847 (Tex.

2018).

A.    Rights of free speech and association

      We begin by considering KRJJ’s contention that the Willis family’s claim

for defamation is based on or in response to KRJJ’s exercise of the rights of free

speech and association. 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 § 27.001(3). “Communication,” as used in the

statute, “includes the making or submitting of a statement or document in any form

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

§ 27.001(1). The 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).

      This case turns on whether the alleged communication by KRJJ to a credit

agency is a matter of public concern. Both the right of free speech and the right of

association, as defined in the TCPA, involve matters of public concern. See TEX.

CIV. PRAC. & REM. CODE §§ 27.001(2), (3). As relevant to appellant’s arguments in

this appeal, a “[m]atter of public concern” includes “a statement . . . regarding a

matter of political, social or other interest to the community; or a subject of

concern to the public.” Id. § 27.001(7)(B), (C). The TCPA’s express purpose is

                                         6
“safeguarding constitutional rights while simultaneously protecting plaintiffs’

rights to file meritorious lawsuits for demonstrable injuries.” McLane, 671 S.W.3d

at 917; see also Dall. Morning News, Inc., 579 S.W.3d at 376 (noting that the

TCPA “is a bulwark against retaliatory lawsuits meant to intimidate or silence

citizens on matters of public concern”).

      To be a matter of public concern, a communication must have public

relevance beyond the interests of the parties. Creative Oil & Gas, LLC v. Lona

Hills Ranch, LLC, 591 S.W.3d 127, 137 (Tex. 2019) (stating communications that

are merely “related somehow to one of the broad categories” set out in the statute

but that otherwise have no relevance to a public audience are not communications

made in connection with a matter of public concern.); see also McLane, 671

S.W.3d at 916 (construing the TCPA to cover communications that hold some

relevance to a public audience when they are made). The communication must

refer to matters of “political, social, or other concern to the community” as

opposed to purely private matters. Brady v. Klentzman, 515 S.W.3d 878, 884 (Tex.

2017)). The communication must address “a subject of legitimate news interest;

that is, a subject of general interest and of value and concern to the public.” Id.

(quoting San Diego v. Roe, 543 U.S. 77, 83–84 (2004) (per curiam)).

      With this in mind, we turn to the specific communication underlying the

Willis family’s suit and its connection to a matter of public concern when made. In

                                           7
their petition, the Willis family alleged that KRJJ reported allegedly false

information contained in a collection notice, including an alleged past due balance,

to “one or more of the three credit reporting agencies, Equifax, Experian,

Transunion, and/or to other credit reporting agencies.” KRJJ asserts that

communication by a creditor to third parties about the debtor’s fidelity in paying

bills implicates the rights of free speech and association and is a matter of public

concern.

      Under the TCPA, the moving party must show by a preponderance of the

evidence that the TCPA applies to the legal action against it. McLane, 671 S.W.3d

at 914. In considering the content, form, and context of whether speech is of public

or private concern, no factor is dispositive, and it is necessary to evaluate all the

circumstances of the speech, including what was said, where it was said, and how

it was said. Snyder v. Phelps. 562 U.S. 443, 454 (2011). Although “[t]he TCPA

casts a wide net,” the statute’s scope is not as expansive and far reaching as once

thought. Panton Inc. v. Bees360, Inc., No. 01-20-00267-CV, 2021 WL 3868773, at

*7 (Tex. App.—Houston [1st Dist.] Aug. 31, 2021, no pet.) (mem. op.) (citing

Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018)). As

the Texas Supreme Court explained in Creative Oil & Gas, “not every

communication related somehow to one of the broad categories set out in section

27.001(7) always regards a matter of public concern.” 591 S.W.3d at 137. In

                                         8
Creative Oil & Gas, the Supreme Court interpreted a prior, broader definition of

“matter of public concern,” and held that communications involving a contract

dispute about a purely private matter impacting the pecuniary interests of the

parties were not matters of public concern under the TCPA. Id. More recently, the

Supreme Court reiterated the importance of the public concern limitation on TCPA

applicability, stating that without this limitation, the TCPA would apply to any

communication as part of any private business deal involving industries that impact

economic or community well-being. McLane, 671 S.W.3d at 917 (holding

statements made during contract negotiations were not matters of public concern

under the TCPA).

      We hold that KRJJ did not meet its burden to establish that its

communication was a matter of public concern that falls under the TCPA. KRJJ

asserts that its communication was a matter of public concern because as a

business, it has a right to inform other businesses about potential customers. KRJJ

relies on MVS Int’l Corp. v. Int’l Advert. Sols., LLC, 545 S.W.3d 180 (Tex. App.—

El Paso 2017, no pet.). The case began as a collections suit. Id. at 186. The

creditor, MVS, sued several debtors for nonpayment of debt, as evidenced by

unpaid invoices. Id. The debtors filed a counterclaim asserting that several cross-

defendants conspired to falsify the invoices and then communicated the fact of

their subsequent non-payment to third parties. Id. at 187–88. They also asserted a

                                        9
claim for defamation. Id. MVS moved to dismiss under the TCPA. Id. In deciding

whether the TCPA applied to the conspiracy claim, the El Paso Court held that

warning other media outlets about potential customers who allegedly do not pay

their accounts was an exercise of free speech under the TCPA. Id. at 193. The

court held that by allegedly informing other media outlets that the appellees do not

pay their accounts, MVS “made a communication in connection with a service in

the relevant marketplace.” Id. at 195 (internal quotations removed).

      A closer reading of MVS shows that it is of limited applicability to the facts

at hand. First, though KRJJ relies on MVS to hold that communications to

collection agencies are matters of public concern covered by the TCPA, the court

did not rule on this specific issue because the amended counterclaim did not

include that factual allegation.3 MVS, 545 S.W.3d at 187. Moreover, the case was

decided under a prior version of the TCPA which had a more expansive definition

of “matter of public concern.”4 Whether comments to media outlets were covered

3
      The appellees amended their counterclaim and omitted earlier factual allegations,
      such as the contention that the counter-defendants had reported the bad debt to the
      credit bureaus. MVS Int’l Corp. Int’l Advert. Sols., 545 S.W.3d 180, 187 (Tex.
      App.—El Paso 2017, no pet.).
4
      The definition of “public concern” changed in the amended version. See TEX. CIV.
      PRAC. & REM. CODE § 27.001(2), (7). The 2019 amendment defines “matter of
      public concern” as “a statement or activity regarding: (A) a public official, public
      figure, or other person who has drawn substantial public attention due to the
      person's official acts, fame, notoriety, or celebrity; (B) a matter of political, social,
      or other interest to the community; or (C) a subject of concern to the public.” Act
      of May 17, 2019, 86th Leg., R.S., ch. 378, § 1, sec. 27.001(7), 2019 Tex. Sess.
                                             10
by the TCPA under the pre-2019 version of the statute does not determine whether

the alleged communication by KRJJ falls under the current version of the TCPA.

      Second, we note that the actual communication does not appear in our

record. The Willis family pleading states that KRJJ caused information regarding

an “alleged unpaid balance . . . to be reported to one or more credit reporting

agencies or companies.” In its motion to dismiss, KRJJ states that it “utilized the

assistance of an organization called Mrlandlord.com.” According to KRJJ, the

organization aids landlords, including placing tenant debts with collections

agencies. Without being able to review the communication, we are unable to

determine whether the communication did in fact relate to a matter of public

concern, or whether, instead merely related to KRJJ’s concern for its own

pecuniary interest regarding debt owed by the Willis family. See Gaskamp, 596

S.W.3d at 477–78 (record did not contain sufficient information from which court

could determine whether plaintiff’s lawsuit involved protected communications);

see also Clinical Pathology Labs., Inc. v. Polo, 632 S.W.3d 35, 49–50 (Tex.

App.—El Paso 2020, pet. denied) (holding plaintiff did not meet burden because

the relevant communication was not in the record and the court could not

      Law Serv. 684, 685. Previously, a “matter of public concern” was defined as “an
      issue related to health or safety; environmental, economic, or community well-
      being; the government; a public official or public figure; or a good, product, or
      service in the marketplace.”

                                          11
determine if communication regarding phlebotomist’s absence was a public health

concern or a private employment dispute). We cannot say that a landlord reporting

an alleged debt to a credit agency is “a subject of legitimate news interest; that is, a

subject of general interest and of value and concern to the public.” Brady, 515

S.W.3d at 884 (internal quotation and citation removed). We must look to the

content of the communications themselves, and not focus solely on the occupation

of the speaker or the related industry. See Staff Care, Inc. v. Eskridge Enterprises,

LLC, No. 05-18-00732-CV, 2019 WL 2121116, at *4–5 (Tex. App.—Dallas May

15, 2019, no pet.) (mem. op.) (stating that communications by a healthcare

professional in business dispute are not automatically matters of public concern).

      As the movant, KRJJ had the burden to demonstrate the applicability of the

TCPA. See TEX. CIV. PRAC. & REM. CODE § 27.005(b). On the record before us,

viewing the facts in the light most favorable to the nonmovant, we cannot say that

KRJJ’s communication to collection agencies involves a matter of public concern.

Multiple private concerns do not accrete to form a public concern. KRJJ failed to

carry its burden to establish by a preponderance of the evidence that the statement

had public relevance beyond the parties involved.

B.    Right to petition

      KRJJ also contends that the Willis family’s claim for defamation is “based

on” or “in response to” the exercise of KRJJ’s right to petition. See TEX. CIV.

                                          12
PRAC. & REM. CODE § 27.003(a). The TCPA defines “exercise of the right to

petition” to include “a communication in or pertaining to: (i) a judicial proceeding;

[or] (ii) an official proceeding, other than a judicial proceeding, to administer the

law.” TEX. CIV. PRAC. & REM. CODE § 27.001(4)(A)(i), (ii).

      KRJJ contends that after the Willis family vacated the property and after

KRJJ sent a demand for unpaid rent and damages without response, it

communicated with an organization that helps landlords collect debt. The Willis

family alleges that it was defamed by KRJJ communicating an inaccurate amount

of information to collection agencies. KRJJ has not met its burden to prove that the

communication was “based on” or “in response to” its right of petition. TEX. CIV.

PRAC. & REM. CODE § 27.003(a). The record reflects that in January 2022 KRJJ

filed suit for possession of the residence that had been leased to the Willis family.

KRJJ was awarded possession by the justice court in February 2022. Though the

Willis family appealed to the county court at law, the family vacated before the

case was called to trial, and KRJJ nonsuited the case. In May 2022, KRJJ sent a

demand for unpaid rent and repairs. According to KRJJ, rather than dispute the

debt with the collection agency, the Willis family sued KRJJ. KRJJ has not

established the nexus between the communication to a landlord organization or

collection agency and its exercise of the right to petition. KRJJ has not met its

                                         13
burden to establish that the TCPA applies to the defamation claim as an exercise of

the right to petition.

                                    Conclusion

       Having determined that the TCPA does not apply to the Willis family’s

defamation claim, we need not reach KRJJ’s second issue on appeal regarding

whether the Willis family established a prima facie case for defamation. The trial

court did not err in dismissing KRJJ’s TCPA motion to dismiss. We affirm.

                                              Justice Peter Kelly

Panel consists of Justices Kelly, Landau, and Farris.

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