Edry-TX-II v. CCND-Main St. Shopping Ctr.

683 S.W.3d 450

EDRY-TX-II, GP, Edry-TX-III, OP, Robert J. Salek, Ruth E. Salek, and Brian Salek, Appellants

v.CCND-MAIN ST SHOPPING CENTER, LP, Appellee

NO. 14-22-00826-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed August 10, 2023

On Appeal from the 165th District Court, Harris County, Texas, Trial Court Cause No. 2022-25863

Michael Reeder II, Kevin Eugene Cadwell, for Appellant.

J. W. Beverly, Kenneth Hugh Holt, Joli Wright Guerra, Richard L. Spencer, Plano, for Appellee.

Panel consists of Chief Justice Christopher and Justices Zimmerer and Poissant.

OPINION

Tracy Christopher, Chief Justice

This is an interlocutory appeal from a deemed denial of a motion to dismiss under the Texas Citizens Participation Act ("TCPA"). Assuming without deciding that the TCPA applies, we conclude that the nonmovant met its burden of establishing with clear and specific evidence a prima facie case for each essential element of its legal action. We further conclude that—for purposes of the TCPA—the movant waived its affirmative defense by not asserting any such defense in its original TCPA motion or in any reply filed before the TCPA’s sixty-day deadline. We therefore affirm the deemed denial of the motion to dismiss.

BACKGROUND

This case arises out of a parking dispute.

The parties are the owners of three separate but contiguous tracts of commercial property, which altogether comprise a shopping center. The appellants, whom we identify collectively as "Edry," are the owners of two tracts, and the appellee, whom we identify as "CCND," is the owner of the third tract.

In 1993, the parties’ predecessors in interest recorded a "Declaration of Reciprocal Easement, Access and Parking Agreement." That easement allows the owners and their respective tenants, employees, guests, invitees, and licensees to park on all three tracts in the shopping center.

In 2017, CCND applied for a permit from the city to build an additional commercial structure on an area of its tract that was then being used as a parking lot. When Edry learned of CCND’s permitting application, Edry contacted the city and objected that CCND’s proposed project would violate the terms of the easement, as well as the terms of the city’s own parking code, which mandates a certain number of parking spaces per establishment. Despite these objections, the city indicated that it would grant the requested permit to CCND.

When Edry learned of the city’s permitting decision, Edry contacted the city again and demanded to know what sort of analysis the city had performed to ensure that there would be enough parking spaces available for CCND’s project. The city referred Edry’s demand to the Office of the Attorney General to determine if a response was required, and that office opined that the city must withhold the requested information.

In 2018, shortly after learning that the city would not disclose the requested information, Edry unilaterally recorded two instruments, each entitled "Parking Designation as Provided for in the Declaration of Reciprocal Easement Access and Parking Agreement." In these two instruments, Edry declared that the parking spaces in its separate tracts may be assigned and designated for the sole and exclusive use of each tract’s tenants. Edry further explained that these designations were authorized by a clause in the easement, which provided that parking spaces may be reserved "in the event that … there becomes a need to designate specific assigned and reserved parking spaces."

Edry notified both CCND and the city of its two parking designations. CCND responded to that notice by explaining that there was no need for the parking designations and by demanding that Edry release both instruments. Edry did not file any such release.

In 2022, more than four years after receiving Edry’s notice of the parking designations, CCND filed suit against Edry to quiet title, specifically challenging the two parking designations. CCND also sought a declaratory judgment.

Edry filed a motion to dismiss CCND’s suit under the TCPA. Following a response and a hearing, the trial court took no action on the motion, which meant that the motion was eventually denied by operation of law.

Edry now brings this interlocutory appeal of that deemed denial. See Tex. Civ. Prac. & Rem. Code § 27.008(a) ("If a court does not rule on a motion to dismiss under Section 27.003 in the time prescribed by Section 27.005, the motion is considered to have been denied by operation of law and the moving party may appeal.").

ANALYSIS

[1] When considering a trial court’s ruling on a TCPA motion (or in this case a deemed ruling), there are typically three steps in the reviewing court’s analysis. See Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 132 (Tex. 2019) ("The statute requires a three-step decisional process."). In the first step, the reviewing court considers whether the moving party demonstrated that a legal action was based on or was in response to the party’s exercise of the right of free speech, the right to petition, or the right of association. See Tex. Civ. Prac. & Rem. Code § 27.005(b). If the reviewing court determines that the moving party satisfied that initial burden, then the court proceeds to the second step, which is to consider whether the nonmoving party established by clear and specific evidence a prims facie case for each essential element of the claim in question. See Tex. Civ. Prac. & Rem. Code § 27.005(c). If the reviewing court determines that the nonmoving party satisfied that burden, then the court turns to the third step, which is to consider whether the moving party established an affirmative defense or other grounds for judgment as a matter of law. See Tex. Civ. Prac. & Rem. Code § 27.005(d). Whether the parties have met these respective burdens is a question of law that the reviewing court considers de novo. See Dallas Morning News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019).

I. Step One

Edry was the moving party below, which meant that Edry had the initial burden of showing that CCND’s legal action was based on or was in response to Edry’s exercise of a protected right. See Tex. Civ. Prac. & Rem. Code § 27.005(b). Edry argued in the trial court that CCND’s legal action was based on or was in response to Edry’s exercise of the right to petition, or alternatively, the right of free speech. Edry repeats those arguments on appeal.

We need not determine whether Edry’s arguments in Step One are meritorious, because we ultimately resolve the arguments in Step Two and Step Three in favor of CCND. Therefore, for purposes of this appeal, we can simply assume without deciding that Edry successfully demonstrated that CCND’s legal action was based on or was in response to Edry’s exercise of a protected right. See Tex. R. App. P.47.1.

II. Step Two

[2] If, as we assume, that Edry demonstrated that the TCPA applies to CCND’s legal action, then the burden shifted to CCND to establish with clear and specific evidence a prima facie case for each essential element of the claim in question. See Tex. Civ. Prac. & Rem. Code § 27.005(c).

CCND asserted a claim to quiet title, and another claim for declaratory judgment. We examine each of these claims in turn.

A. Suit to Quiet Title

[3] To establish a prima facie case under the TCPA for its suit to quiet title, CCND was required to show with clear and specific evidence the following essential elements: (1) CCND has an interest in a specific property; (2) that specific property interest is affected by a claim from Edry; and (3) Edry’s claim, although facially valid, is invalid or unenforceable. See Lil C Ranch, LLC v. Ridgefield Eagle Ford Minerals, LLC, No. 14-21-00285-CV, 2023 WL 2386940, at *8 (Tex. App.—Houston [14th Dist.] Mar. 7, 2023, no pet.) (mem. op.).

[4, 5] The TCPA does not define "prime facie case," but in the absence of a statutory definition for this phrase, we apply its traditional legal meaning, which is the "minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true." See In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015) (orig. proceeding). The TCPA does not define the "clear and specific" standard either, but "clear" means "unambiguous, sure, or free from doubt," and "specific" means "explicit or relating to a particular named thing." Id.

[6] When deciding whether these standards were satisfied, the scope of our review includes the pleadings and any supporting affidavits, both of which are taken as evidence in the TCPA context. See Tex. Civ. Prac. & Rem. Code § 27.006(a); Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017). We also review this evidence in the light most favorable to CCND, because CCND is the nonmovant. See Hieber v. Percheron Holdings, LLC, 591 S.W.3d 208, 211 (Tex. App.—Houston [14th Dist.] 2019, pet. denied).

[7] Beginning with the first element—whether CCND has an interest in a specific property—CCND produced an affidavit from its general partner, who testified that CCND has been the owner of one of the three tracts in the shopping center since 2005, and that Edry is the current owner of the remaining two tracts. The partner further testified that, when CCND purchased its tract, CCND also acquired parking rights under the easement that governed all three tracts. When combined with a copy of that easement, which was also attached to CCND’s response to Edry’s TCPA motion, this affidavit testimony constitutes clear and specific evi- dence that CCND possesses an ownership interest in its singular tract, as well as an easement interest in the two tracts owned by Edry.

[8] For the second element, CCND was required to show that its interest in a property was affected by a claim from Edry. In its response to Edry’s TCPA motion, CCND focused specifically on its easement interest in Edry’s two tracts, rather than the ownership interest in its separate third tract. And as to that easement interest, CCND argued that its rights were...