In 2014 plaintiff started a business to flip houses. In her maiden venture, she bought a house, renovated it, and sold it to two buyers in 2016. A few months later, the house began falling apart. The buyers promptly sent plaintiff a demand letter under the DTPA alleging that she made material representations regarding the condition of the property. In early 2017, plaintiff hired a law firm to represent her. After that, things did not go well. Explaining that she did not want protracted and expensive litigation, she allegedly tried to get her lawyers to “‘go to the judge’ and ask him ‘throw the lawsuit out’” based on the seller’s disclosure and “as is” sales contract she executed with the buyers. The lawyers, however, conducted discovery, compelled mediation, added several third-party defendants, encouraged plaintiff to hire an expensive expert, and eventually advised her to settle the case in 2020 after running up more than $120,000 in expenses and attorney’s fees. In 2021 plaintiff filed suit against her lawyers for negligence, gross negligence, breach of fiduciary duty, and DTPA violations. The lawyers filed a TCPA motion to dismiss. The trial court granted the motion and ordered plaintiff to pay attorney’s fees to each of her several lawyers. Plaintiff appealed.
These are the basic facts in Kirsten Hanna, Upside UP Properties, LLC, and Upside Up Ventures, Inc. v. M. Matthew Williams; David Howell; Law Firm of M. Matthew Williams; Leighton, Williams, Adkinson & Brown, PLLLC; and Leighton, Michaux, Adkinson & Brown, PLLC (No. 03-22-00254-CV; decided December 7, 2022). The primary issue of interest in the case was the court’s TCPA analysis. First, plaintiff alleged that the TCPA did not apply because the lawyer defendants “failed to meet their burden to demonstrate by a preponderance of the evidence that her lawsuit is ‘based on or in response to’ their exercise of the right to petition” (this case was governed by the TCPA as amended in 2019). She argued that the lawyers could not point to any specific communications that implicated their right to petition and, furthermore, that her claims arose from alleged failures to communicate or act according to her instructions. The court, however, was having nothing of it, observing that in her pleadings plaintiff alleged multiple affirmative actions and communications that occurred during the course of the litigation. The court further cited several precedents holding that “when attorneys’ alleged failure to communicate is ‘in substance a criticism of [the attorneys’] communication,’ the attorneys will be considered to have been exercising their right to petition if the alleged failure occurred in or pertained to a judicial proceeding” (citations omitted). According to the court, “Hanna complains largely about alleged ‘unnecessary’ legal work, which caused her to incur the high fees about which she complains, and specifically identifies that unnecessary or negligent work as allegedly false communications and unnecessary or improper court filings and litigation communications.” The court thus concluded that the TCPA applied to her claims.
Second, plaintiff alleged that the TCPA’s commercial-speech exemption applied (§ 27.010(a)(2), CPRC). This exemption applies 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.” Here the lawyers conceded that they were primarily engaged in selling legal services, but argued that “their alleged misrepresentations to [plaintiff] and their alleged filing of unnecessary and excessive court and discovery documents . . . were not made in their capacity as sellers of legal services and did not arise out of a commercial transaction involving the sale of legal services” (citingCastleman v. Internet Money Ltd., 546 S.W.3d 684, 688 (Tex. 2018) for the four elements of the commercial-speech exemption). The court agreed. Plaintiff had already hired the lawyers when the alleged communications occurred, so they fell within the lawyers’ conduct in the attorney-client relationship, not in proposing or soliciting services. The commercial-speech exemption thus did not apply.
Third, plaintiff contended that the TCPA’s exemption for claims brought under the DTPA applied. The lawyers responded that plaintiff could not “‘fracture’ her professional negligence claim into multiple separate claims for purposes of avoiding the TCPA.” Noting that the “gist” of plaintiff’s claim involved whether the lawyers “exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise,” the court easily concluded that plaintiff’s claim boiled down to one for negligent legal representation and could not be recharacterized as a DTPA claim to avoid the TCPA.
Finally, the court held that plaintiff did not meet her burden to establish a prima facie case supporting the essential elements of her legal malpractice claim (duty, breach, causation, and damages), which is required to overcome a TCPA motion to dismiss. Though the court rejected the lawyers’ argument that plaintiff could not make such a showing without expert testimony that she didn’t have, it found that trial court rightly excluded statements in her declaration that were largely conclusory, mere opinion, or speculation (e.g., that the trial court would have dismissed the buyers’ case against her if her lawyers had simply asked). Plaintiff did not challenge the trial court’s evidentiary rulings, so she could not rely on them on appeal. In any event, the court held that it wouldn’t make any difference anyway. The statements were indeed conclusory and insufficient to make a prima facie case as to breach and causation. Moreover, the evidence that was admitted did not contain sufficient detail to show that the lawyers’ alleged failures and communication, which as we have seen largely concerned the necessity of their litigation efforts, caused her harm. The trial court thus did not err in granting the lawyers’ TCPA motion to dismiss.
The court of appeals cut plaintiff a small break on the trial court’s attorney’s fees order. Finding that some of the lawyers’ charges could not be substantiated by legally sufficient evidence (primarily because of heavily redacted and vague billing records), the court remanded to the trial court for a reconsideration of the fee award.
This case is highly instructive as to the application of the TCPA to a legal malpractice claim. Legislation has been introduced in the past couple of sessions to exempt legal malpractice claims from the TCPA. While we can see some good reasons for doing that (it seems that this case could have been just as efficiently disposed of by summary judgment without all the TCPA apparatus, and the TCPA’s attorney’s fee hammer probably deters some claimants from pursuing legal malpractice claims), the court of appeals, in our view, got the answer right under the existing law. At any rate, whatever the law may be, it’s clearly not enough to base one’s malpractice case on what amounts to Monday-morning quarterbacking because the lawyers didn’t get the desired result.
