The Houston [14th] Court of Appeals has affirmed the trial court’s ruling that the TCPA did not apply to Defendant Hutchison’s counterclaim for breach of fiduciary duties.
Jeff Carlson and Daniel Calderon v. Hutchison, Incorporated, Farm & Ranch Holdings, LLC, and Farm & Ranch Casualty Group (No. 14-24-00703-CV; December 9, 2025) arose from a dispute over the alleged misuse of a risk-pooling arrangement to underwrite an attorney’s malpractice premiums. In 2012, The Feldman Law Firm and Capstone Associated Services, Ltd. began providing legal and management services, respectively, to Hutchison and its related captive insuring entities. Carlson and Calderon were employees of Capstone, which was owned by attorney Steward Feldman. Feldman and Capstone allegedly advised Hutchison that captive insurance programs with sufficient risk distribution qualify for tax-exempt status. They founded “PoolRe,” “a risk-pooling arrangement involving sets of generally similar policies covering generally similar risks of closely held businesses. Feldman, however, allegedly misused PoolRe to underwrite malpractice claims against himself and Captstone. In 2018, a Tax Court ruled that PoolRe “was not a bona fide insurance company.”
In 2019, several former Capstone clients sued Feldman, Calrson, and Capstone. There were four separate arbitration proceedings [the “Sullivan” claims]. The claims were tried in four separate arbitration proceedings before four separate arbitrators. In one of them, the arbitrator certified a class action of all Capstone’s clients, allegedly including Hutchison. Subsequently, Capstone emailed Hutchison’s counsel stating, “In order for The Feldman Law Firm LLP and Capstone to continue to do work on your captive insurer and for the Firm to represent your captive, please execute the attached and return it to Capstone so that the Firm and Capstone can file the necessary paperwork to request that you be excluded from the class arbitration…” Hutchison alleged that Feldman, Capstone, and Carlson “improperly interfered with the class notification process.” All four arbitrations ended with final awards in favor of the Sullivan claimants, finding that Feldman and his related entities breached fiduciary duties, committed malpractice, and wrongfully converted funds belonging to the claimants. One of the arbitrators held Carlson individually liable. The district judge entered a partial final judgment confirming the awards and a final judgment against Carlson jointly and severally. The U.S. Fifth Circuit upheld the trial court’s judgment, but reversed Carlson’s liability because he was not bound by any arbitration agreement.
In 2023, Hutchison initiated arbitration against Carlson, Calderon, Capstone, and Feldman, asserting claims for breach of contract, legal malpractice, breach of fiduciary duty, negligence, fraudulent and negligent misrepresentation, fraud by non-disclosure, deceptive trade practices, RICO violations, and unjust enrichment, all arising from the PoolRe “scheme.” In response, Carlson and Calderon declared that the arbitration provision didn’t bind them and sought injunctive relief staying the arbitration. Hutchison (1) dismissed the appellants from the arbitration proceeding and (2) filed a counterclaim against the Carlson and Calderon for knowingly participating in the breaches of fiduciary duty committed by Captsone and Feldman. Hutchison ultimately settled its dispute with Capstone and Feldman, terminating the arbitration proceeding. Carlson and Calderon filed a motion to dismiss the counterclaim under the TCPA, arguing that Hutchison’s counterclaim was based on or in response to their exercise of the right to petition. Their motion was overruled by operation of law. Plaintiffs sought interlocutory relief.
In an opinion by Justice Jewell, the court of appeals affirmed. The issue was whether Hutchison’s counterclaim iwas “based on” Plaintiffs’ communication in or pertaining to a judicial or official proceeding. A party moving for dismissal under the TCPA must “demonstrate that the TCPA applies to the legal action against it—that is, the action is ‘based on’ or in response to a party’s exercise of the right of free speech, right to petition, or right of association.” The court of appeals interpreted “based on” as requiring that the exercise of a protected right be the “gravamen” of the claim, factually predicated on the protected right’s exercise, or the exercise be a “main ingredient” or “fundamental part” of the claim. The court further interpreted “response to” to mean “some sort of answer or other act in return.”
Hutchison alleged in its counterclaim that the Carlson and Calderon knowingly participated in, and were jointly liable for, breaches of fiduciary duty. Including, among other things, “improperly coercing Hutchison to opt out of the class action arbitration” and “colluding to deprive Hutchison of its contractual right to arbitrate.” In their motion to dismiss, Carlson and Calderon argued that Hutchison’s counterclaims were based on protected communications made by them, the first being “the email urging Hutchison to opt out of the class arbitration,” and the second Plaintiffs’ original petition in this case, which Hutchison alleged in its counterclaim to “intentionally delay the arbitration proceedings” or “to wrongfully enjoin the arbitration.” According to Plaintiffs, these two communications constituted their right to petition under the TCPA.
The court concluded that Plaintioffs reading of the counterclaim was too narrow and the two factual allegations considered together or in isolation “cannot catapult Hutchison’s entire counterclaim into the ambit of the TCPA.” Rather, Hutchison’s counterclaim was based not on Plaintiffs’ communications, but on tortious actions committed them, “like wrongfully converting premiums and refusing to wind down Hutchison’s captive insurer.” In any event, the court continues, even if there was a limited connection between the communications and Hutchison’s counterclaim, “they cannot reasonably be said to be the ‘gravaman,’ ‘main ingredient,’ or a ‘fundamental part’ of Hutchison’s counterclaim.” As the court stated, “[t]here is a distinction between communications used as evidence to support a claim and claims that are based on or in response to those communications” (quoting Walker v Lunenberg, 679 S.W.3d 883, 889-90 (Tex. App.—Houston [1st] Dist.] 2023, no pet.). The court affirmed the trial court’s denial of Plaintiffs’ TCPA motion to dismiss Hutchison’s counterclaim.
TCJL Intern George E. Christian researched and prepared the first draft of this article.
