Court Opinion

ID: 9838356
Source: CourtListenerOpinion
Date Created: 2023-09-06 06:10:14.024419+00
Date Added: 2024-06-11T07:45:32.902224
License: Public Domain

Affirmed in part and Reversed in part and Opinion Filed August 29, 2023

                                      In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-22-01260-CV

     WILLIAM FRANCIS AND INCLINE ENERGY PARTNERS, L.P.,
                         Appellants
                             V.
         PHOENIX CAPITAL GROUP HOLDINGS, LLC, Appellee

               On Appeal from the 116th Judicial District Court
                            Dallas County, Texas
                    Trial Court Cause No. DC-22-06350

                        MEMORANDUM OPINION
                Before Justices Nowell, Goldstein, and Breedlove
                         Opinion by Justice Breedlove
      Appellants William Francis (Francis) and Incline Energy Partners, L.P.

(Incline) appeal the trial court’s November 9, 2022 order partially granting and

partially denying their motion to dismiss appellee Phoenix Capital Group Holdings,

LLC (Phoenix)’s claims under the Texas Citizens Participation Act (TCPA). See

TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a). We reverse the portions of the trial

court’s judgment denying dismissal of Phoenix’s claims for: (1) disparagement;

(2) defamation; (3) tortious interference with prospective contract; (4) conspiracy;
and (5) unfair competition. We affirm the portion of the trial court’s judgment

denying dismissal of Phoenix’s claim for defamation per se, and we remand the case

for further proceedings on that cause of action, as well as on the issue of attorney’s

fees.

                                       I.      BACKGROUND1

        Incline and Phoenix are direct competitors in the oil and gas industry. Francis

serves as Incline’s managing partner.                  Incline also competes with companies

previously operated by Adam Ferrari with whom Incline had previously been

involved in business disputes and litigation. In 2019, Ferrari pleaded guilty to a

felony theft charge related to forgery of deeds in a mineral transaction, and Incline

obtained information regarding Ferrari’s criminal proceedings in litigation between

one of Ferrari’s businesses and an affiliate of Incline. In exchange for his guilty plea

Ferrari received a deferred sentence pursuant to which the felony charge would be

dismissed following the expiration of three years upon compliance with the terms of

his probation. Ferrari’s criminal records were then sealed, and the felony charge

was dismissed in 2022. Ferrari’s arrest and plea deal became the subject of articles

published in The Greeley Tribune, a local newspaper, as well as the Denver Post.

1
 Many of the facts of this case are disputed; therefore, we limit our discussion to those facts necessary to
our analysis and, where specific facts necessary to our analysis are disputed, we identify both parties’
assertions.
                                                   –2–
         At some point after receiving the documents related to Ferrari’s criminal

background, Incline began investigating Ferrari’s possible involvement with

Phoenix. While Incline asserts that Ferrari controls Phoenix as its CEO and that

Phoenix has attempted to conceal Ferrari’s role within the company, Phoenix

contends that Ferrari is only one of many non-executive consultants it employs.

Specifically, Phoenix asserts that Ferrari’s role is limited to being a “Petroleum

Engineering Consultant.” Phoenix offered evidence that it has no CEO and instead

is managed by Manager and COO Lindsey Wilson, along with CFO Curtis Roger

Allen.

         The present dispute centers primarily on an email sent by Francis to Crystal

Taylor on June 17, 2021 (the “Taylor email”).2 Both Phoenix and Incline sought a

potential transaction with the family of Sheila Krystal, a landowner with mineral

interests in Colorado. Taylor is Krystal’s niece. In April 2021, Incline contracted

with the Krystal family to purchase certain oil and gas interests. The deed conveying

those interests to Incline was recorded on June 2, 2021. At some point, Phoenix

made a competing offer and characterized Incline’s offer as a “low ball” offer,

prompting some of Krystal’s family members, led by Taylor, to seek to renegotiate

the deal with Incline. In response, Francis sent the following to Taylor:

2
  Phoenix also alleged that Francis sent an anonymous package to First International Bank & Trust (FIBT)
containing allegedly defamatory content. The trial court dismissed the portions of the lawsuit relying on
the FIBT package, and Phoenix does not cross-appeal. Therefore, our discussion is limited only to the
Taylor email.
                                                  –3–
      You citing Phoenix/Ferrari as the other offer/group that is telling you
      that we low balled you is all the information I need to know. We made
      your aunt aware of those permits when she had called us and not the
      other way around.

      I would love nothing more than to defend my company’s track record
      versus the misdeeds that Phoenix/Ferrari has performed over the years.
      Namely, the fact that their CEO was arrested and convicted for forging
      a mineral owners signature in order to defraud her of hundreds of
      thousands of dollars.

Francis also included the links to several articles regarding Ferrari’s criminal history.

      Phoenix filed suit on June 15, 2022, alleging: (1) defamation and defamation

per se, libel and libel per se, slander and slander per se; (2) business disparagement;

(3) tortious interference with contract; (4) tortious interference with prospective

contract and relationship; (5) unfair competition; and (6) civil conspiracy. Francis

and Incline filed a general denial and affirmative defenses on July 8, 2022. Francis

and Incline filed a motion to dismiss under the TCPA on August 16, 2022. Phoenix

filed objections to evidence submitted along with Francis’s and Incline’s motion to

dismiss on September 29, 2022, along with their response to the motion to dismiss.

Francis and Incline filed their own motion to strike evidence on October 3, 2022.

The trial court held a hearing on the motions to strike as well as the motion to dismiss

on October 6, 2022, and entered an order on November 8, 2022 partially granting

and partially denying objections from both sides. On November 9, 2022, the trial

court entered an order partially granting and partially denying appellants’ TCPA

                                          –4–
motion to dismiss. More specifically, the order reads that Francis’s and Incline’s

motion to dismiss

       is denied except as to the tortious interference with a [sic] existing
       contract claim and, to the extent that such claims rest upon statements
       other than the Taylor email, Plaintiff’s defamation and business
       disparagement claims are dismissed to that extent only. It is further
       ordered that movant is awarded $10,000 for reasonable and necessary
       costs and fees in defending against the dismissed legal action.3

       Francis and Incline appealed the trial court’s ruling on November 23, 2022.

In five issues, they complain that the trial court erred: (1) in denying the motion to

dismiss regarding the disparagement and defamation claims relying on the Taylor

email; (2) in denying the motion to dismiss regarding the tortious interference with

prospective contract claim; (3) in denying the motion to dismiss regarding the

conspiracy and unfair competition claims; (4) regarding evidentiary objections,

which likely resulted in the improper denial of their motion; and (5) by abusing its

discretion regarding the fee award.

                               II.     APPLICABLE LAW

       The TCPA is Texas’s anti-SLAPP law, providing a means to dismiss so-called

“Strategic Lawsuits Against Public Participation.” Krasnicki v. Tactical Entm’t,

LLC, 583 S.W.3d 279, 282 (Tex. App.—Dallas 2019, pet. denied). The TCPA

“protects citizens who petition or speak on matters of public concern from retaliatory

3
  The order is unclear whether by “movant” the court means both Francis and Incline, and if so, whether
the award is for $10,000 to each party or $10,000 split between the two moving parties.
                                                 –5–
lawsuits that seek to intimidate or silence them.” In re Lipsky, 460 S.W.3d 579, 584

(Tex. 2015) (orig. proceeding). That protection comes in the form of a motion to

dismiss suits, or claims within suits, that appear to stifle the defendant’s exercise of

those rights. Barnes v. Kinser, 600 S.W.3d 506, 509 (Tex. App.—Dallas 2020, pet.

denied); see White Nile Software, Inc. v. Carrington, Coleman, Sloman &

Blumenthal, LLP, No. 05-19-00780-CV, 2020 WL 5104966, at *4 (Tex. App.—

Dallas Aug. 31, 2020, pet. denied) (mem. op.). We construe the TCPA liberally to

fully effectuate its purpose and intent.        TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.011(b). We review a trial court’s ruling on a TCPA motion to dismiss de novo.

Mireskandari v. Casey, 636 S.W.3d 727, 734 (Tex. App.—Dallas 2021, pet. denied).

In our review, we consider the pleadings, evidence a court could consider under civil

procedure rule 166a, and any supporting and opposing affidavits stating the facts on

which the liability or defense is based. Id. at 735.

      Under the TCPA, a party may file a motion to dismiss a legal action based on

or in response to a party’s exercise of the right of free speech. TEX. CIV. PRAC. &

REM. CODE ANN. § 27.003(a). “Exercise of the right of free speech” means a

communication made in connection with a matter of public concern. Id. § 27.001(3).

A “matter of public concern” is defined 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
                                          –6–
      (C) a subject of concern to the public.

Id. § 27.001(7).

      The TCPA process generally involves three steps. Mireskandari, 636 S.W.3d

at 734. First, the TCPA movant has the burden to demonstrate the nonmovant’s

legal action is based on or in response to the moving party’s exercise of the right of

association, right of free speech, or the right to petition. Id. Second, if the movant

meets its step-one burden, the burden of proof shifts to the nonmovant to establish

by clear and specific evidence a prima facie case for each essential element of the

claim. Id. Third, if the nonmovant meets its step-two burden, the burden of proof

shifts back to the movant to establish an affirmative defense or other grounds on

which the moving party is entitled to judgment as a matter of law. Id. at 735. If the

nonmovant either cannot meet its step two burden or the movant establishes an

affirmative defense, the motion to dismiss will be granted. Id.

                                 III.   DISCUSSION

A.    TCPA Step One

      Because we review the denial of a motion to dismiss under the TCPA de novo,

we first consider whether the appellants have satisfied their step-one burden. See

Dallas Morning News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019); Thomas v.

Wm. Charles Bundren & Assocs. Law Grp. PLLC, No. 05-20-00632-CV, 2021 WL

3159795, at *3 (Tex. App.—Dallas July 26, 2021, no pet.) (mem. op.). In conducting

                                         –7–
our review, we consider the pleadings, evidence a court could consider under Texas

Rule of Civil Procedure 166a, and supporting and opposing affidavits stating the

facts on which the liability or defense is based. See TEX. CIV. PRAC. & REM. CODE

ANN. § 27.006(a). More specifically, we must determine whether the Taylor email,

the communication upon which Phoenix’s lawsuit rests, constitutes a matter of

public concern. Id. § 27.001(7). For a movant to trigger the TCPA’s dismissal

framework, there must first be a “communication” as defined by section 27.001(1).

Id. § 27.001(1).

      The relevant portion of the Taylor email states:

      [T]he fact that their CEO was arrested and convicted for forging a
      mineral owners [sic] signature in order to defraud her of hundreds of
      thousands of dollars.

      Neither party challenges whether the Taylor email is a “communication.”

Therefore, we must analyze whether the statement was made while exercising the

right of free speech. See Thomas, 2021 WL 3159795, at *5. The “exercise of the

right of free speech” means “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

                                          –8–
of political, social, or other interest to the community; or (C) a subject of concern to

the public.” See id. § 27.001(7)(A)–(C).4

        We are constrained by this court’s interpretation of “matter of public

concern,” which includes within its ambit “criminal acts.” See Garcia v. Semler,

663 S.W.3d 270, 281 (Tex. App.—Dallas 2022, no pet.) (communication alleging

theft of estate sale signs is a matter of public concern because “[i]t is well-settled

that even after the 2019 amendments, ‘criminal acts are matters of public concern’”);

Austin v. Amundson, No. 05-22-00066-CV, 2022 WL 16945911, at *3 (Tex. App.—

Dallas Nov. 15, 2022, no pet.) (mem. op.) (allegation of road rage is a matter of

public concern); Page v. Bakewell, No. 05-21-00905-CV, 2022 WL 4007879, at *4

(Tex. App.—Dallas Sept. 2, 2022, no pet.) (mem. op.) (communication alleging the

hiring of a hit man to “take care” of ex-wife is a matter of public concern); Beard v.

McGregor Bancshares, Inc., No. 05-21-00478-CV, 2022 WL 1076176, at *6 (Tex.

App.—Dallas Apr. 11, 2022, pet. denied) (mem. op.) (statements about the killing

of Joanna Gaines’ goats implicated a matter of public concern because they

concerned criminal activity); Miller v. Schupp, No. 02-21-00107-CV, 2022 WL

60606, at *2 (Tex. App.—Fort Worth Jan. 6, 2022, no pet.) (mem. op.) (Instagram

    4
      In 2019, the legislature amended the definition of “matter of public concern.” The prior definition
included: “(A) health or safety; (B) environmental, economic, or community well-being; (C) the
government; (D) a public official or public figure; or (E) a good, product, or service in the marketplace.”
Act of May 18, 2011, 82nd Leg., R.S., Ch. 341, 2011 Tex. Gen. Laws 961, 962 (current version at TEX.
CIV. PRAC. & REM. CODE ANN. § 27.001(7)).
                                                   –9–
message alleging drug addition, sexual assault, and physical assault is a matter of

public concern); CBS Stations Grp. of Tex., LLC v. Burns, No. 05-21-00042-CV,

2021 WL 4398031, at *3 (Tex. App.—Dallas Sept. 27, 2021, no pet.) (mem. op.)

(news broadcast involving robbery, high-speed chase, and arrest of suspect is a

matter of public concern).

      Incline’s accusation that Phoenix’s CEO “was arrested and convicted for

forging a mineral owners [sic] signature in order to defraud her of hundreds of

thousands of dollars” is a communication regarding an allegation of criminal

activity. See TEX. PENAL CODE ANN. § 32.21 (forgery). Phoenix argues, however,

that this particular communication is not a subject of concern to the public because

the allegation was made in a private communication, between private parties,

regarding a private transaction, which affects only the fortunes of the parties to the

communication.     Phoenix asks this court to reject a bright line rule that all

communications regarding criminal activity are a matter of public concern, without

regard to the content, form, and context of the speech. See Saks & Co., LLC v. Li,

653 S.W.3d 306, 316 (Tex. App.—Houston [14th Dist.] 2022, no pet.) (finding

“dubious” the proposition that any statement about the commission of a crime is

matter of public concern). Phoenix asserts that the content, form, and context of the

speech removes it from the scope of a matter of public concern because the Taylor

email was not addressed to the community and was not a news report, a statement

made to law enforcement, or a public social media post.
                                        –10–
        We need not reach the broader question of whether every communication

regarding criminal activity is a subject of concern to the public because the Taylor

email fits squarely within the scope of “public concern” that has been adopted by

this court. Phoenix’s focus on the fact that the allegation was shared in a private

email is misplaced because whether Incline had posted its allegations of criminal

activity on a public social media post, rather than in a private email, does not change

the subject matter of the allegation or the TCPA analysis. The TCPA does not

require a communication to be public in order for it to constitute a matter of public

concern. See Lippincott v. Whisenhunt¸ 462 S.W.3d 507, 508 (Tex. 2015) (per

curiam) (holding that despite the private context of a private email regarding the

employment of a nurse anesthetist, the communication nevertheless amounted to a

matter of public concern because it regarded the provision of medical services by a

health care professional).5

        Because the Taylor email regards a matter of public concern, we conclude that

Francis and Incline have satisfied their step-one burden. See Page, 2022 WL

5
  During oral argument and in subsequent briefing, the parties considered the applicability of Morris v.
Daniel, 615 S.W.3d 571, 573, 578 (Tex. App.—Houston [1st Dist.] 2020, no pet.), to the present case. We
find Morris distinguishable. In that case, the general subject of the communication, the health and safety
of children, was a matter of public concern, but the specific issue identified in the communication, the
health and safety of one child, was not because it affected only the concerns of that specific child. Id. By
contrast, the criminal history and continued involvement of Ferrari with a large-scale oil and gas company
is potentially relevant to anyone involved in the buying and selling of mineral rights in the areas the parties
do business. The present case is therefore more analogous to Lippincott. See Lippincott¸ 462 S.W.3d at
508, discussed above.
                                                    –11–
4007879, at *4; Beard, 2022 WL 1076176, at *6. We now turn to consider whether

Phoenix satisfied its burden under step two.

B.      TCPA Step Two

        Because Francis and Incline satisfied their initial burden, we now move to

step two of the burden-shifting analysis: whether Phoenix established by clear and

specific evidence a prima facie case for each essential element of its claims for

defamation,6 defamation per se, business disparagement,7 tortious interference,8 and

civil conspiracy.9 10 TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c).

6
  The elements of a defamation action include (1) publication of a false statement of fact to a third party;
(2) that was defamatory concerning the plaintiff; (3) with the requisite degree of fault; and (4) caused
damages. In re Lipsky, 460 S.W.3d at 594. The plaintiff must plead and prove damages, unless the
defamatory statements are defamatory per se. Id. at 593. Defamation per se refers to statements that are so
obviously harmful that general damages may be presumed. See id. at 592. The elements of a defamation
per se claim are similar to that of a claim for defamation and differ only in that damages are presumed. See
Van Der Linden v. Khan, 535 S.W.3d 179, 198 (Tex. App.—Fort Worth 2017, pet. denied).
7
 To prevail on a business disparagement claim, the plaintiff must establish that (1) the defendant published
disparaging words about the plaintiff’s economic interests; (2) with malice; (3) without privilege; (4) that
resulted in special damages. Marketshare Telecom, L.L.C. v. Ericsson, 198 S.W.3d 908, 924–25 (Tex.
App.—Dallas 2006, no pet.).
8
  The elements of a tortious interference with prospective business relations claim are: (1) there was a
reasonable probability that plaintiff would have entered into a business relationship with a third party;
(2) 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; (3) the defendant’s
conduct was independently tortious or unlawful; (4) the interference proximately caused the plaintiff injury;
and (5) the plaintiff suffered actual damage or loss as a result. Coinmach Corp. v. Aspenwood Apt. Corp.¸
417 S.W.3d 909, 923 (Tex. 2013). Phoenix plead tortious interference with existing contract but limits
itself to tortious interference with prospective contract and business relations on appeal.
9
  The elements of civil conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a
meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and
(5) damages as a proximate result. RTLC AG Prod. Inc. v. Treatment Equip. Co., 195 S.W.3d 824, 833
(Tex. App.—Dallas 2006, no pet.).
10
  Phoenix also pleaded “unfair competition” but provided no elements or legal analysis to support its claim
beyond the mere assertion that Francis’s defamatory and tortious conduct constituted unfair competition.
Accordingly, Phoenix has not presented anything for our review on this claim. TEX. R. APP. P. 38.1.
                                                   –12–
      “[A prima facie case, in its traditional legal meaning] refers to evidence

sufficient as a matter of law to establish a given fact if it is not rebutted or

contradicted.” In re Lipsky, 460 S.W.3d at 590. A prima facie standard generally

requires only the “minimum quantum of evidence necessary to support a rational

inference that the allegation of fact is true.” Id. (quoting In re E.I. DuPont de

Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004) (orig. proceeding) (per curiam)).

“Prima facie evidence is evidence that, until its effect is overcome by other evidence,

will suffice as proof of a fact in issue. In other words, a prima facie case is one that

will entitle a party to recover if no evidence to the contrary is offered by the opposite

party.” Rehak Creative Servs., Inc. v. Witt, 404 S.W.3d 716, 726 (Tex. App.—

Houston [14th Dist.] 2013, pet. denied) (citation omitted), disapproved on other

grounds by In re Lipsky, 460 S.W.3d at 587–88).

      “[A] plaintiff must provide enough detail to show the factual basis for its

claim.” In re Lipsky, 460 S.W.3d at 591; see D Magazine Partners, L.P. v. Rosenthal,

475 S.W.3d 470, 480 (Tex. App.—Dallas 2015), aff’d in part, rev’d in part on other

grounds, 529 S.W.3d 429 (Tex. 2017). “Conclusory statements are not probative

and accordingly will not suffice to establish a prima facie case.” Serafine v. Blunt,

466 S.W.3d 352, 358 (Tex. App.—Austin 2015, no pet.) (op. on reh’g). In other

words, “bare, baseless opinions” are not “a sufficient substitute for the clear and

specific evidence required to establish a prima facie case” under the Act. In re

                                         –13–
Lipsky, 460 S.W.3d at 592. “Opinions must be based on demonstrable facts and a

reasoned basis.” Id. at 593.

      1. Defamation, business disparagement, tortious               interference    with
         prospective contract, and civil conspiracy

      With the sole exception of defamation per se, all of Phoenix’s causes of action

require a showing of damages; therefore, we turn first to evaluating whether Phoenix

established a prima facie case of damages.

      Phoenix alleges that the evidence shows that the Taylor email “(1) interfered

with and disrupted Phoenix’s business and economic interest with Taylor and her

family; (2) harmed Phoenix’s reputation; (3) caused Taylor not to do business with

or sell mineral rights to Phoenix; and (4) caused Taylor to do business with and sell

mineral rights to Incline despite Incline’s substantially inferior ‘low ball’ offer.” The

evidence Phoenix relies on to support this assertion is the Taylor email itself as well

as the fact that Krystal did not ultimately sell mineral rights to Phoenix. However,

Phoenix fails to address the timeline of events showing that Incline and Krystal had

already entered into a contract for the subject mineral rights prior to Phoenix’s

involvement.

      According to the mineral and royalty deed offered by Phoenix as an exhibit to

its response to the TCPA motion to dismiss, the deed transferring Krystal’s mineral

rights to Incline was effective as of April 1, 2021, was signed and notarized by Sheila

Krystal on May 19, 2021, and was recorded in the Dunn County records on June 2,

                                         –14–
2021. Phoenix’s CFO, Curtis Allen, attests that the interests conveyed in that deed

are the same interests that are the subject of Phoenix’s offer referenced in Taylor’s

email. This evidence shows that, at the very latest, the transaction at issue between

Krystal and Incline was completed by June 2, 2021. The Taylor email upon which

Phoenix’s claims are based was not sent until June 17, 2021. By the time Francis

sent the Taylor email the mineral rights had already been transferred to Incline.

Accordingly, the email came too late for any prospective interference with Phoenix’s

interests in the subject mineral rights.

      Further, a close reading of the email from Taylor that prompted Francis’s

response does not support Phoenix’s allegations that, if not for the Taylor email, the

Krystal family would have sold its interests to Phoenix because its offer was twice

that of Incline’s.     Instead, Taylor describes ongoing negotiations between

Francis/Incline and Taylor regarding the price discrepancy in an attempt to seek a

resolution. Taylor notes that “[w]e do very much appreciate your offer to make

things right by honoring any other official offers during that time period” and

provides Francis with the details of Phoenix’s offer, ostensibly so that Incline could

address the discrepancy as discussed. There is no suggestion in Taylor’s email that

she or the family were planning to breach their existing contract with Incline or to

enter into a new agreement with Phoenix—every indication in the email instead

suggests an ongoing attempt to resolve discrepancies with Incline despite Phoenix’s

higher offer.
                                           –15–
       Phoenix’s Manager and COO Lindsey Wilson alleges in her affidavit that

“Phoenix was close to closing the transaction with Ms. Krystal and Ms. Taylor, but

after the email from Francis, Ms. Taylor had doubts about Phoenix and Incline

ultimately purchased the mineral rights.” However, not only is this statement

contradicted by the clear timeline of events, her allegation that Phoenix was “close

to closing the transaction” is unsupported by any evidence in the record. Phoenix

offers no other evidence to support its assertion that the Taylor email caused

damages.

       Phoenix failed to establish a prima facie case for the essential element of

damages; therefore, we sustain Francis’s and Incline’s first, second, and third issues

as they apply to the defamation, business disparagement, tortious interference with

prospective contract, and civil conspiracy claims. See In re Lipsky, 460 S.W.3d at

592.

       2. Defamation per se

       In addition to its other causes of action, Phoenix pled defamation per se.

Unlike Phoenix’s other causes of action, defamation per se does not require a

showing of damages. See Van Der Linden, 535 S.W.3d at 198. Therefore, Phoenix

can still carry its step two burden by making a prima facie showing of the elements

of a defamation per se claim. See id.

       Defamation per se refers to statements that are so obviously harmful that

general damages may be presumed. See In re Lipsky, 460 S.W.3d at 592. General

                                        –16–
damages include non-economic losses, such as loss of reputation and mental

anguish. Id. Defamation per se is itself broken down into separate categories of

falsehoods. Id. at 596. Accusing someone of a crime, of having a foul or loathsome

disease, or of engaging in serious sexual misconduct are examples of defamation per

se. Id. Remarks that adversely reflect on a person’s fitness to conduct his or her

business or trade are also deemed defamatory per se. Id. And whether a statement

qualifies as defamation per se is generally a question of law. Id. If false and

disparaging statements injure a corporation’s reputation, it can sue for defamation

per se just like flesh-and-blood individuals. Waste Mgmt. of Texas, Inc. v. Texas

Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 151 (Tex. 2014). Francis and Incline

do not argue that defamation per se is inapplicable to the facts of this case; therefore,

we turn to consider whether Phoenix satisfied its step two burden on each element

of defamation per se.

      The elements of a defamation per se claim are similar to that of a claim for

defamation: (1) the publication of a false statement of fact to a third party; (2) that

was defamatory concerning the plaintiff; (3) with the requisite degree of fault. In re

Lipsky, 460 S.W.3d at 593. Defamation per se differs only in that damages are

presumed. Van Der Linden, 535 S.W.3d at 198.

      a. Publication of a false statement

      Francis and Incline first contend that Phoenix cannot meet its burden on the

first element of defamation per se because the allegedly defamatory statement in the
                                         –17–
Taylor email was true “in its gist.” Truth in the “gist” exists where the actual

statement is no more “damaging to the person affected by it than a literally true

statement would have been.” River Oaks L-M. Inc. v. Vinton-Duarte, 469 S.W.3d

213, 239–40 (Tex. App.—Houston [14th Dist.] 2015, no pet.). To support this

argument, they assert that the statement at issue is “Phoenix’s CEO, Adam Ferrari,

is a felon,” and argue that because Ferrari pled guilty to a felony, the statement is

true in its gist even though Ferrari ultimately completed probation and was cleared

of the felony charges as a result.

      However, Francis’s and Incline’s assertion ignores the plain text of the

statement in an attempt to distinguish what Francis allegedly “meant” from what he

actually said. Unlike appellants’ rewriting of the statement, the actual email said

“the fact that their CEO was arrested and convicted for forging a mineral owners

signature in order to defraud her of hundreds of thousands of dollars.” A factual

restatement of the allegedly disparaging statement at issue, then, can be condensed

to “Phoenix’s CEO is a felon,” and Phoenix has met its burden of providing

competent evidence demonstrating that Phoenix does not have a CEO and that none

of its executives have been convicted of a felony.

      b. Defamatory concerning the plaintiff

      Francis and Incline argue that Phoenix cannot meet its burden on this element

because Phoenix failed to address how or why the email’s assertion of Ferrari’s

relationship with Phoenix was defamatory; however, this again requires us to read
                                        –18–
additional words into the Taylor email that are not there. Francis and Incline do not

argue that the statement “Phoenix’s CEO is a felon” is not defamatory; indeed, Texas

law provides that this is exactly the type of statement that satisfies the showing

required under a defamation per se standard. See In re Lipsky, 460 S.W.3d at 596

(holding remarks that adversely reflect on a person’s fitness to conduct his or her

business or trade are defamatory per se). Therefore, Phoenix has established a prima

facie showing of the second element of defamation per se.

      c. Requisite degree of fault

      A private individual need only prove negligence to prevail on a defamation

per se claim. Id. at 593. To prove negligence, a private individual must show “that

the publisher . . . knew or should have known that the defamatory statement was

false.” Foster v. Laredo Newspapers, Inc., 541 S.W.2d 809, 819 (Tex. 1976).

Although appellants allege that they believe that a felon (Ferrari) actually is acting

as Phoenix’s CEO despite their attempts to conceal the extent of his involvement,

the court must review the evidence in the light most favorable to Phoenix, the

claimant/nonmovant. Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 424

(Tex. App.—Dallas 2019, pet. denied). The evidence provided by Phoenix satisfies

a prima facie showing that Incline and Francis, as regular business competitors

experienced in dealing with Phoenix and its executives, should have known that the

statement was false, despite its allegations of having conducted research that created

the suspicion of Ferrari’s deeper involvement with Phoenix. See D Magazine
                                        –19–
Partners, L.P. v. Rosenthal, 529 S.W.3d 429, 437–40 (Tex. 2017) (holding that a

prima facie showing of negligence was made in spite of evidence that raised

suspicion of the allegedly defamatory statement’s truth).

      Because Phoenix has satisfied its step two burden regarding its defamation

per se claim, we turn to step three of the TCPA analysis. See Mireskandari, 636

S.W.3d at 735.

C.    TCPA Step Three
      If the nonmovant meets its step-two burden, the burden of proof shifts back to

the movant to establish an affirmative defense or other grounds on which the moving

party is entitled to judgment as a matter of law. Id. One such affirmative defense to

defamation per se is privilege, an affirmative defense which Francis and Incline pled.

See In re Lipsky, 460 S.W.3d at 592; Butler v. Cent. Bank & Tr. Co., 458 S.W.2d

510, 514 (Tex. App.—Dallas 1970, writ dism’d).

      Qualified privilege in the context of defamation includes all communications

made in good faith on any subject matter in which the author has an interest. Id.

Circumstances that may give rise to the privilege include:

      (1) a belief that publication protects the publisher’s interest; (2) a belief
      that publication protects the interest of certain recipients or third
      persons; (3) a belief that a person sharing a common interest in the
      published information is entitled to know that information…and (5) a
      belief that an important public interest requires publication.

Steinhaus v. Beachside Envtl. LLC, 590 S.W.3d 672, 677 (Tex. App.—Houston

[14th Dist.] 2019, pet. denied). As discussed in detail above, at the time of the Taylor

                                         –20–
email, Incline produced evidence demonstrating that it had an existing contract with

the Krystal family as well as an ongoing business relationship which Phoenix was

attempting to disrupt. Accordingly, we conclude that Francis and Incline have

provided evidence raising the affirmative defense of privilege, and we remand the

case to the trial court for further consideration of this issue. See id.

      Because we sustain issues one through three, we need not address appellants’

fourth issue. TEX. R. APP. P. 47.1. Further, our disposition of issues one through

three require us to remand the case to the trial court for reconsideration of the award

of attorney’s fees challenged in issue five; therefore, we do not address it here. Id.

                                 IV.    CONCLUSION

      We reverse the portions of the trial court’s judgment denying dismissal of

Phoenix’s claims for: (1) disparagement; (2) defamation; (3) tortious interference

with prospective contract; (4) conspiracy; and (5) unfair competition. We affirm the

portion of the trial court’s judgment denying dismissal of Phoenix’s claim for

defamation per se, and we remand the case for further proceedings on that cause of

action as well as on the issue of attorney’s fees.

                                             /Maricela Breedlove/
221260f.p05                                  MARICELA BREEDLOVE
                                             JUSTICE

                                          –21–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                 JUDGMENT

WILLIAM    FRANCIS     AND                      On Appeal from the 116th Judicial
INCLINE ENERGY PARTNERS,                        District Court, Dallas County, Texas
L.P.,              Appellants                   Trial Court Cause No. DC-22-06350.
                                                Opinion delivered by Justice
No. 05-22-01260-CV                  V.          Breedlove. Justices Nowell and
                                                Goldstein participating.
PHOENIX    CAPITAL      GROUP
HOLDINGS, LLC, Appellee

      In accordance with this Court’s opinion of this date, the trial court’s
November 9, 2022 “Order Partially Granting and Partially Denying Defendants’
TCPA Motion to Dismiss” is AFFIRMED in part and REVERSED in part. We
REVERSE that portion of the trial court’s order denying appellee Phoenix Capital
Group Holdings, LLC’s motion to dismiss appellants William Francis and Incline
Energy Partners, L.P.s’ claims for disparagement, defamation, tortious interference
with prospective contract, conspiracy, and unfair competition.

       In all other respects, the trial court’s order is AFFIRMED. We REMAND
this cause to the trial court for further proceedings consistent with this opinion.

      It is ORDERED that each party bear its own costs of this appeal.

Judgment entered this 29th day of August, 2023.

                                         –22–