The Beaumont Court of Appeals has reversed a trial court order dismissing an attorney ad litem’s declaratory judgment action arising from a guardianship proceeding.
Laurel Smith v. 2005 Tower LLC (N o. 09-22-00350-CV; August 1, 2024) stemmed from two separate lawsuits. The first, a guardianship proceeding, was brought in September, 2020 by the son of an 81-year-old mother diagnosed with dementia. He alleged that his mother was “partially without capacity” to manage her financial affairs, particularly with respect to real property. The son eventually nonsuited this case in January 2022. The following month, a court-appointed investigator filed a motion to reinstate and a second application for guardianship, but the guardianship court never signed an order reinstating the case. Nevertheless, the court appointed Smith, an attorney, as the mother’s guardian ad litem. Smith discovered that the mother had in March 2021 executed a general warranty deed in real property located in Travis County transferring her interest to a limited liability company formed by her son. She filed a declaratory judgment seeking to block the transfer based on the son’s 2020 guardianship petition challenging his mother’s capacity to make business deals. She also filed a notice lis pendens against the property, which was recorded in the real property records in Travis County, to the effect that the mother’s capacity to transact business and manage her property was the subject of ongoing litigation. In the event, it occurred to the guardianship court that it had never reinstated the case, so the court concluded that it lacked jurisdiction over the whole proceeding.
Meanwhile, in May 2022 Tower executed a residential sales contract to sell the mother’s property, but the deal was put on hold when Smith filed the notice of lis pendens. Tower demanded that Smith release the notice but made the demand before the guardianship court determined it had no jurisdiction. The real estate deal fell through. Tower sued Smith for filing a fraudulent lien, tortious interference, and to quiet title, and sought injunctive relief and actual damages, exemplary damages, and attorney’s fees. Smith, among other things, filed a TCPA motion to dismiss, asserting that each of Tower’s claims concerned her right to petition in the guardianship proceeding by filing the notice of lis pendens and because she established affirmative defenses, including attorney immunity, the judicial-proceedings privilege, and immunity from damages under the Texas Estates Code. After a hearing, the trial court denied Smith’s TCPA motion and awarded Tower attorney’s fees. Smith filed an interlocutory appeal.
In an opinion by Chief Justice Golemon, the court of appeals reversed and remanded to the trial court. First, the court determined that the TCPA applied because Tower’s claims were based on Smith’s right to petition because a notice of lis pendens constituted “a communication in or pertaining to … a judicial proceeding.” The burden then shifted to Tower to establish by clear and specific evidence a prima facie case for each of its claims. As to the fraudulent lien claim, the court held that Tower failed to establish a prima facie case because it could not show that Smith filed the notice in order to perpetuate a fraud. Although the guardianship court subsequently determined it did not have jurisdiction, that was not true at the time Smith filed the notice. As to the tortious interference claim, the court concluded that Smith conclusively established the affirmative defense of judicial-proceedings privilege, which protected the filing of the notice of lis pendens. Tower could thus not “establish a prima facie case that Smith willfully and intentionally interfered with the Residential Sales Contract.”
The court, however, handed Tower a small victory on its claim to quiet title, holding that it established a prima facie case that it had an interest in the property and that, following the dismissal of the guardianship lawsuit, the notice of lis pendens was invalid. But at the same time, the court determined that Tower couldn’t recover attorney’s fees under the UDJA by refashioning its quiet title lawsuit as a declaratory judgment action, so it failed to establish a prima facie case for the recovery of fees under that theory. The court thus dismissed under the TCPA Tower’s fraudulent lien and tortious interference claims, as well as any claims for civil damages arising from actions. The court further held that the trial court abused its discretion in finding Smith’s TCPA motion to dismiss frivolous or solely intended to delay and reversed Tower’s attorney’s fees award. Finally, the court ruled that the TCPA entitled Smith to attorney’s fees incurred in defending the fraudulent lien and tortious interference claims and remanded to the trial court to award costs and fees to Smith and consider sanctions against Tower.
