Court Opinion

ID: 9947113
Source: CourtListenerOpinion
Date Created: 2024-03-02 18:13:03.48346+00
Date Added: 2024-06-11T14:25:47.330415
License: Public Domain

NUMBER 13-23-00176-CV

                   COURT OF APPEALS

            THIRTEENTH DISTRICT OF TEXAS

             CORPUS CHRISTI – EDINBURG

MICHAEL NEUMAN, INDIVIDUALLY
AND DERIVATIVELY ON BEHALF OF
ROCKPORT AREA ASSOCIATION OF
REALTORS, INC.,                                        Appellant,

                                 v.

KEITH HAMILTON, GEMMA ANTHONY,
AND JENNIFER BRADSHAW, AS
EXECUTIVE OFFICERS AND MEMBERS
OF THE BOARD OF DIRECTORS OF THE
ROCKPORT AREA ASSOCIATION OF
REALTORS, INC.,                                        Appellees.

            On appeal from the 36th District Court
                 of Aransas County, Texas.

                MEMORANDUM OPINION
       Before Justices Benavides, Longoria, and Tijerina
           Memorandum Opinion by Justice Tijerina
       Appellant Michael Neuman, individually and derivatively on behalf of Rockport

Area Association of Realtors, Inc. (RAAR), appeals the trial court’s denial of his motion to

dismiss a countersuit filed by appellees Keith Hamilton, Gemma Anthony, and Jennifer

Bradshaw, as executive officers and members of the board of directors of RAAR

(collectively, the Board). By two issues, Neuman contends (1) that his First Amendment

rights were stifled by the Board’s defamation countersuit, and he is therefore entitled to a

dismissal pursuant to the Texas Citizens Participation Act (TCPA); and (2) the trial court

abused its discretion by awarding attorney’s fees to the Board. We affirm.

                                    I.     BACKGROUND

       Neuman is a licensed real estate broker and agent with offices in Aransas County,

Texas, and a member of RAAR, which is either a private, non-profit corporation or a trade

association consisting of local realtors and brokers. Neuman sued the Board for (1) a

declaratory judgment regarding several of RAAR’s internal operating procedures

including: the RAAR members’ right to inspect RAAR’s books and records, right to vote,

and on whether the Board “failed to certify election of officers and establish the validity of

board and committee decisions”; and (2) breach of fiduciary duty on behalf of RAAR’s

members.

       The Board countersued for defamation. In its petition, the Board alleged that

Neuman: (1) “engaged in defamatory, disparaging, intimidating, and unlawful conduct

against” the Board “by falsely and recklessly providing misinformation relating to RAAR”;

(2) “constantly email[ed] and contact[ed] RAAR members”; (3) made “statements and

comments that completely mischaracterized events at the RAAR Board meeting on

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September 12, 2022”; and (4) accused the Board after the September 12 meeting “of

discrimination and intentional humiliation of [Neuman].” According to the Board, “[s]uch

actions and communications have not only caused [the Board] to feel threatened and

intimidated but also presented incorrect and misleading information to all others present

at the RAAR Board meetings and the RAAR membership in general.” The Board claimed

that each of their reputations had been “damaged” and that each had “been receiving

phone calls and emails from RAAR members who are extremely upset by these

misleading and false communications that caused [each] to be negatively emotionally

impacted, taking valuable time away from their real estate careers and costing them

money.” The Board stated that Neuman’s “wrongful conduct” in defaming the Board also

violated RAAR’s bylaws.

       Neuman then filed a motion to dismiss the Board’s countersuit pursuant to the

TCPA. In his motion, Neuman claimed that he was “forced” to sue the Board because the

Board “blocked” him “from obtaining RAAR’s organizational books and records, which

they are required by law to keep and disclose to RAAR’s members.” Neuman argued that

the trial court should dismiss the Board’s counterclaim under the TCPA “because it is a

direct response to [his] exercise of his right to petition (through this proceeding), right to

free speech concerning RAAR’s operations, and right to free association with RAAR

members regarding [the Board’s] insular culture of obfuscation.”

       Specifically, as to the violation of his right to free speech, Neuman stated, “By this

lawsuit and through his email newsletter, Mr. Neuman has raised issues regarding

RAAR’s operations, its organizational controls, the competency of its leadership, and the

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validity of RAAR’s elections and official actions. This lawsuit is a direct result of [the

Board’s] inability or unwillingness to produce RAAR’s books and records as required by

law.” As to the violation of his right of association, Neuman alleged that the Board’s

countersuit “attempt[ed] to penalize [him] for asking questions about RAAR’s operations

and the validity of its elections, committee operations, and organizational decisions.” As

to violation of his right to petition, Neuman argued that the Board’s countersuit was “in

response to” his filing suit against the Board “to lawfully produce RAAR’s books and

records.” Neuman further alleged that the Board is unable to establish by clear and

specific evidence a prima facie case for each essential element of” its defamation claim.

      The Board filed a response stating that the communications at issue were not

matters of public concern. The Board also stated that it had established a prima facie

case. Neuman filed a response stating that the Board’s counterclaim for defamation

involves a matter of public concern under the TCPA, which he argued is broad and would

cover statements made at RAAR’s meetings. Neuman argued that RAAR meetings “were

designated for member participation at an agencywide meeting—precisely the forum for

public participation in RAAR’s business.” Neuman claimed that the Board’s complaints

involved statements he made when he “reached out to an agencywide audience with his

concerns about” the Board’s “endemic lack of transparency.” Neuman stated that the

Board’s countersuit challenged his “very public actions and communications about issues

of concern to all constituents” and that the Board’s “own pleading clearly demonstrates

that ‘matters of interest to the community’ and ‘subjects of public concern’ are at play.”

Neuman’s response focused mostly on his assertion that RAAR is a community for

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purposes of the TPCA. He said, “RAAR is more appropriately viewed as a subset of the

broader community; and ‘even communications made in a private forum will fall under the

TCPA when they involve a public subject.’” Neuman pointed out that RAAR’s own

founders recognized RAAR’s importance to the community and that “RAAR’s very

existence is evidence of a joining together to pursue common interests related to [the]

Rockport area real estate market.”

      The trial court denied Neuman’s motion to dismiss. This appeal followed. See TEX.

CIV. PRAC. & REM. CODE ANN. § 51.014(a)(12).

                           II.    MATTER OF PUBLIC CONCERN

      By his first issue, Neuman contends that the trial court erred by denying his TCPA

motion to dismiss because the Board’s countersuit is based on or is in response to his

right of free speech. See id. § 27.005(2); In re Lipsky, 460 S.W.3d 579, 586–87 (Tex.

2015) (orig. proceeding). Specifically, he argues that the allegations by the Board that

Neuman “mischaracteriz[ed] events” and that Neuman “accus[ed] [RAAR board

members] of discrimination and intentional humiliation” fall under the TCPA because each

of these alleged statements constitutes a communication made in connection with a

matter of public concern. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(3).

      A “‘matter of public concern’ means 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.

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Id. § 27.001(7).

       In Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, the Supreme Court of Texas

noted that “the phrase ‘matter of public concern’ commonly refers to matters ‘of political,

social, or other concern to the community,’ as opposed to purely private matters.” 591

S.W.3d 127, 135 (Tex. 2019) (quoting Brady v. Klentzman, 515 S.W.3d 878, 884 (Tex.

2017)). The Creative Oil court explained that when construing the previous statute’s

language that matters of public concern include topics such as “a good, product, or

service in the marketplace,” we should not view the language in isolation. See id.

Therefore, as viewed in context with the rest of the statute, that language does not include

matters of a purely private concern. See id. at 135–36. Thus, the Creative Oil court held

that the party’s counterclaims that were “based on private business communications to

third-party purchasers of a single well’s production,” which “allegedly caused the third-

party purchasers to refuse to pay the Lessee and the Operator their share of the proceeds

from this production” had no relevance to the broader marketplace or otherwise could

[not] reasonably be characterized as involving public concerns.” Id. at 136.

       The Creative Oil court stated, “On the contrary, the alleged communications were

made to two private parties concerning modest production at a single well.” Id. The court

explained that “communications, with a limited business audience concerning a private

contract dispute, do not relate to a matter of public concern under the TCPA.” Id. The

Creative Oil court set out that it had previously found private communications were

matters of public concern in limited situations which “had public relevance beyond the

pecuniary interests of the private parties involved.” Id. The court further noted, “A private

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contract dispute affecting only the fortunes of the private parties involved is simply not a

‘matter of public concern’ under any tenable understanding of those words.” Id. at 137.

Thus, to constitute a matter of public concern, the communication must be relevant to the

public beyond that of the parties’ private interests. Id.

       In McLane Champions, LLC v. Houston Baseball Partners LLC, the Supreme Court

of Texas applied the former version of the TCPA which defined matters of public concern

as including issues related to, in relevant part, health or safety, environmental, economic

or community well-being or a good, product or service in the marketplace. 671 S.W.3d

907, 914–16 (Tex. 2023). The McLane court stated that after reviewing previous cases,

“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.’” Id. The McLane

court noted that previously it construed the phrase “‘communication made in connection

with a matter of public concern’ in a broad, but not limitless, manner.” Id. at 915. Thus, it

has “held that some—but certainly not all—private communications may be made in

connection with a matter of public concern and thus subject to a TCPA motion to dismiss.”

Id. The McLane court explained that in two previous cases, private communications

implicated the right of free speech under the TCPA when those communications “held

some relevance to a public audience when they were made.” Id. at 916. “The

communications themselves must relate to a matter of public concern.” Goldberg v. EMR

(USA Holdings) Inc., 594 S.W.3d 818, 828 (Tex. App.—Dallas 2020, pet. denied). The

communications must not simply be between private parties on matters of a purely private

                                              7
concern.” Id.

       The McLane court stated that “[c]onstruing the TCPA to cover communications that

hold some relevance to a public audience when they are made is also more consistent

with the ordinary meaning of the phrase ‘in connection with.’” McLane Champions, LLC,

671 S.W.3d at 916. Citing the definition of “in connection with,” the McLane court

explained that the complained-of communications “must have some relevance to a public

audience” otherwise “the TCPA would apply to communications made as part of any

private business deal involving industry that impacts economic or community well-being”

and “[i]t does not.” Id. The McLane court further set out that “the statute’s plain terms

impose a temporal anchor on the relationship between the” complained-of

communications “and the matter of public concern” meaning that “the ‘connection’

between the [complained-of] communication and the matter of public concern must exist

when the communication is made.” Id. “That is, a communication cannot be made in

connection with a matter of public concern unless it had relevance to a public audience

at the time it was made, regardless of the happenstance of after-the-fact ramifications.”

Id. at 917. This is so to ensure “that the TCPA is not transformed into a far-reaching

procedural mechanism for obtaining early dismissal of cases well beyond the statute’s

express purpose.” Id.

       Here, the Board’s countersuit focuses on Neuman’s communications that it alleges

constituted misinformation relating to the Board, which included “making statements and

comments that completely mischaracterized events at the RAAR Board meeting on

September 12, 2022[,] and afterwards and accusing [the Board] of discrimination and

                                           8
intentional humiliation of Neuman.” According to the Board, Neuman’s communications

via emails to specific RAAR members violated the bylaws and constitute defamation as

they “presented incorrect and misleading information to all others present at the RAAR

Board meetings and the RAAR membership in general,” which have “damaged the

reputations of . . . RAAR board members, and employees.” The Board further claimed

that Neuman’s communications caused RAAR members to call and email the Board,

which in turn caused them to spend additional time and money on correcting these

allegedly false and misleading communications. Neuman himself acknowledged in his

pleadings in the trial court that he “has raised issues regarding RAAR’s operations, its

organizational controls, the competency of its leadership, and the validity of RAAR’s

elections and official actions” and that “[t]his lawsuit is a direct result of [the Board’s]

inability or unwillingness to produce RAAR’s books and records as required by law.”

       To prevail on his TCPA motion to dismiss based on the violation of his freedom of

speech, Neuman must have shown that his communications “had relevance to a public

audience at the time [they were] made, regardless of the happenstance of after-the-fact

ramifications.” Creative Oil, 591 S.W.3d at 135. However, according to the Board’s

petition, the communications that form the basis of their counterclaim is limited to internal

management and operations of RAAR. Nothing in the Board’s pleadings indicates that at

the time Neuman made them, the complained-of email communications were relevant to

matters “‘of political, social, or other concern to the community,’ as opposed to purely

private matters.” Id. Moreover, nothing in the Board’s pleading indicates that the

complained-of communications were relevant to the public beyond that of the parties’

                                             9
private interests. See id. In his brief, Neuman concedes that the dispute concerns RAAR’s

books and records. He does not state that or explain how his communications were

relevant to the public beyond that of the parties’ private interests and instead merely

asserts that his communications were made in a public forum.

       Neuman further argues that his communications involve a public subject. However,

under a de novo standard of review, the complained-of communications only involve the

private interests of the internal operations of RAAR. Additionally, although Neuman

alludes to the public’s general interests in how RAAR operates, broadly speaking, a

general interest in an organization “does not mean that the statements were made in

connection with a matter of public concern under the TCPA.” McLane Champions, LLC,

671 S.W.3d at 917.

       The Board claims that the communications caused them to spend additional time

and money on correcting them and that their reputations with RAAR members required

rehabilitation. Assuming that these allegations are true, the Board’s correction of the

alleged misrepresentations had no obvious effect on the public and would have only been

relevant to RAAR. See id. at 918 (explaining that “[t]he effect on the public writ

large . . . was the same” in that the Network would fail regardless of whether Partners

purchased the team). Thus, the Board’s complaint that Neuman’s communications

harmed them is connected to the Board’s internal management and operations of RAAR

under the bylaws and is therefore a matter of private and not public concern. See id.

Accordingly, whether RAAR membership constitutes its own community is irrelevant to

whether this matter is of a public concern. See id.

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        Therefore, we conclude that Neuman failed to show by a preponderance of the

evidence that the TCPA applied to the Board’s counterclaim. See id.; see also Day v.

McHazlett, No. 13-21-00124-CV, 2023 WL 2422499, at *3 (Tex. App.—Corpus Christi–

Edinburg Mar. 9, 2023, no pet.) (mem. op.) (concluding that a defamation suit concerning

an allegation of sexual harassment was not a matter of public concern because it

“occurred in a private employment office setting”). Because Neuman has not established

that the TCPA applies to the claim, the burden never shifted to the Board to establish by

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

therefore, the trial court properly denied the TCPA motion to dismiss. We overrule

Neuman’s first issue.1

                                        III.     ATTORNEY’S FEES

        By his second issue, Neuman contends that the trial court abused its discretion by

awarding attorney’s fees to the Board.2 The Board responds that the trial court correctly

        1 To the extent that Neuman argues his right to assembly was violated, this argument would fail

because his communications do not relate to a matter of public concern. See TEX. CIV. PRAC. & REM. CODE
ANN. § 27.001 (setting out that the right of association requires that the party joins together “to collectively
express, promote, pursue, or defend common interests relating to a governmental proceeding or a matter
of public concern”). As to Neuman’s claim that his right to petition was violated, we disagree because he
has not alleged or shown that his communications pertained to a judicial proceeding or an official
proceeding. See id. § 27.001(4)(A)(i), (ii). Neuman’s made his statements before he filed his lawsuit. Thus,
the complained-of statements were made pre-litigation, and those statements pertained to actions taken by
the Board in response to Neuman’s allegations that the Board had not complied with the bylaws prior to his
suit. All of the complained-of statements were made in a non-litigation setting and did not pertain to anything
occurring in Neuman’s suit. Thus, the Board’s counterclaim does not implicate Neuman’s right to petition.
See id.; Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018) (concluding that the plaintiff’s right to petition
had been violated because the communications were recited in open court and agreeing that entering the
communication in the judicial record constituted a communication or statement made in a judicial
proceeding); see also Doe v. Cruz, No. 04-21-00582-CV, 2023 WL 8246181, at *6 (Tex. App.—San Antonio
Nov. 29, 2023, no pet.) (mem. op.) (determining that a counterclaim based on a photograph that had been
attached to an amended petition in the original suit violated the plaintiff’s right to petition because the
photograph pertained to a judicial proceeding).
        2 By a sub-issue to his second issue, Neuman asserts that the trial court abused its discretion by

failing to award him attorney’s fees. However, because we have affirmed the trial court’s denial of his TCPA
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awarded it attorney’s fees because Neuman’s motion to dismiss was frivolous.

        As relevant here, § 27.009 allows the trial court to award the non-moving party

attorney’s fees if it “finds” that the motion to dismiss is frivolous. See TEX. CIV. PRAC. &

REM. CODE ANN. § 27.009(b). An appellate court reviews the award of attorney’s fees

pursuant to the TCPA for an abuse of discretion. Sullivan v. Tex. Ethics Comm’n, 551

S.W.3d 848, 857 (Tex. App.—Austin 2018, pet. denied). “A trial court abuses its discretion

if its decision ‘is arbitrary, unreasonable, and without reference to guiding principles.’” Id.

(quoting Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997)).

        Although “frivolous” is not defined in the TCPA “numerous courts have noted that

its common understanding contemplates that ‘a claim or motion will be considered

frivolous if it has no basis in law or fact and lacks a legal basis or legal merit.’” Doe v.

Cruz, No. 04-21-00582-CV, 2023 WL 8246181, at *17,                        S.W.3d        ,     , (Tex. App.—

San Antonio Nov. 29, 2023, no pet.) (internal quotations omitted) (quoting Jones v. Frisco

Fertility Ctr., PLLC, No. 05-21-00008-CV, 2022 WL 17248837, at *8 (Tex. App.—Dallas

Nov. 28, 2022, pet. denied) (mem. op.)). Such common meanings of frivolous as

contemplated in the TCPA include: “a claim or motion” that has “‘no basis in law or

fact, . . . and ‘lack[s] a legal basis or legal merit.’” Sullivan, 551 S.W.3d at 857. “[T]he fact

that a motion to dismiss under the TCPA is ultimately denied is not sufficient, in and of

itself, to support a finding that the motion was frivolous.” Caliber Oil & Gas, LLC v. Midland

Visions 2000, 591 S.W.3d 226, 244 (Tex. App.—Eastland 2019, no pet.).

motion to dismiss, Neuman is not entitled to attorney’s fees. See TEX. CIV. PRAC. & REM. CODE § 27.009(a)
(requiring award of fees “if the court orders dismissal of a legal action under this chapter”). We overrule this
sub-issue. See id.; Caliber Oil & Gas, LLC v. Midland Visions 2000, 591 S.W.3d 226, 243 (Tex. App.—
Eastland 2019, no pet.).

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        “[P]rior to filing the motion to dismiss, the movant must evaluate whether there is

a legal basis to assert that the nonmovant’s legal action is based on, related to, or in

response to the movant’s exercise of a right protected by the statute.” Caliber Oil & Gas,

LLC, 591 S.W.3d at 243–44 (citing CIV. PRAC. & REM. CODE ANN. §§ 27.003(a), .005). As

further explained below, Neuman’s motion to dismiss lacked such an evaluation. See id.

        In his motion to dismiss, Neuman did not address how the Board’s counterclaim

for defamation relating to a private organization’s internal operating procedures is a

matter of public concern. In his motion, Neuman acknowledged that “[b]y [his] lawsuit and

through his email newsletter, [he] has raised issues regarding RAAR’s operations, its

organizational controls, the competency of its leadership, and the validity of RAAR’s

elections and official actions.” Neuman stated, the Board’s countersuit “attempts to

penalize [him] for asking questions about RAAR’s operations and the validity of its

elections, committee operations, and organizational decisions.” However, he did not

provide any argument to substantiate his claim that these matters fell under the purview

of the TCPA because he failed to argue or explain how these matters relate to a matter

of public concern. Finally, regarding his right to petition, Neuman merely stated that the

Board countersued him for defamation after he filed his lawsuit against the Board.

Neuman made no claim that the Board’s lawsuit involved his statements that pertained to

a judicial or an official proceeding. See TEX. CIV. PRAC. REM. CODE ANN. § 27.001(4)(A)(i),

(ii).

        Therefore, on this record, we cannot conclude that the trial court abused its

discretion when it determined that Neuman’s motion to dismiss was frivolous. We overrule

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Neuman’s second issue.

                                  IV.    CONCLUSION

      We affirm the trial court’s judgment.

                                                      JAIME TIJERINA
                                                      Justice

Dissenting Memorandum Opinion by Justice Benavides.

Delivered and filed on the
29th day of February, 2024.

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