Kostura v. John Judge

627 S.W.3d 380

Judy KOSTURA, Stan M. Putman, Jr., and Kostura & Putman, P.C. f/k/a Judge, Kostura & Putman, P.C., Appellants

v.John JUDGE, Appellee

No. 07-20-00310-CV

Court of Appeals of Texas, Amarillo.

June 7, 2021

Courtney D. Miller, Joe L. Lovell, for Appellants.

John Smithee, Robert L. Templeton, for Appellee.

Before QUINN, C.J., and PARKER and DOSS, JJ.

Lawrence M. Doss, Justice

"A lawyer's time and advice is his stock in trade."—Abraham Lincoln

This case examines whether a law firm's letters to its clients announcing changes in the relationship between the two arises out of the sale of services so as to exempt such communications from the reaches of the Texas Citizens Participation Act (TCPA)¹ , as amended in 2019. After considering the plain language of the statute, we hold that the exemption does apply under these circumstances. We therefore affirm the order of the district court.

Background

Appellants, Judy Kostura; Stan M. Putman, Jr.; and the law firm of Kostura & Putman, P.C. f/k/a Judge, Kostura & Putman, P.C. (collectively, "the firm") bring this interlocutory appeal from the district court's order denying their Texas Citizens Participation Act motion to dismiss some tort claims filed against them by Appellee and former law partner, John Judge. In 2003, Kostura, Putman, and Judge formed a law firm that is the predecessor to the Appellant firm. Each shareholder owned one-third of the firm's shares, and each served as a director.

The firm alleges that beginning as early as 2018 and continuing through much of 2020, Judge exhibited signs of physical and mental health problems, as well as alcohol dependency. On numerous occasions in 2020, Judge was absent from the firm when he presented at inpatient facilities for treatment of alcohol dependence and mental health concerns. On other occasions in 2020, Judge was absent so that he could receive healthcare for injuries sustained during multiple falls. The firm contends that Judge's unavailability and impairments posed problems for attorneys, clients, and staff, and allege that Judge was largely unresponsive to client needs or to Kostura's and Putman's remedial efforts.

The firm alleges that in April 2020, Kostura and Putman voted to invoke the disability clause in the firm's operating agreement and to remove Judge from participation in the firm. In June, following a period during which the firm alleges Judge did not respond to Kostura's and Putman's inquiries about his future plans, the firm sent letters to clients whom Judge had represented; virtually all of the letters state the following in relevant part:

As you are likely aware, John Judge has been suffering some health issues over the past several months. While we hoped he would be able to return to the practice of law, it is our personal opinion that he is not able to do so now and that his disability may continue into the foreseeable future. We have monitored your case on his behalf and responded to firm clients during this time, but it is not feasible for the firm to continue representation on your case. We therefore request that you retain new counsel for your legal matter. Please have that attorney contact us by June 15, 2020 so we can arrange an orderly transition of your file to your new attorney.

John Judge is no longer a member of this firm. If you wish to retain John Judge as a sole practitioner to continue with representation of you in your case, you may contact him at [Judge's contact information].

(alteration in brackets).

The firm sent one client a letter that differed in some respects. Unlike the sentence opining that Judge's disability might continue into the foreseeable future, this letter added, "Mr. Judge believes he will be able to handle cases and continue practicing." Rather than announcing the termination of the client's relationship with the firm, the firm instructed the client, "If you prefer for us to handle your case, you may retain us."

Judge filed the underlying lawsuit in June 2020, alleging defamation, invasion of privacy, and intentional infliction of emotional distress. The firm answered and filed a motion to dismiss under the TCPA, alleging Judge's claims against them were in response to their exercise of their right of free speech, right to petition, and right of association. Thereafter Judge amended his petition, adding claims of breach of fiduciary duty, a suit for accounting, and seeking declaratory relief. After receiving briefing, the district court denied the firm's motion to dismiss, expressly concluding the TCPA did not apply because of the commercial-speech exemption.²

Analysis

On appeal, the firm claims the commercial-speech exception is inapplicable for various reasons. We disagree, and hold the district court correctly denied the motion to dismiss after applying the commercial-speech exception.

This appeal requires us to review provisions of the TCPA, which we conduct de novo. ExxonMobil Pipeline Co. v. Coleman , 512 S.W.3d 895, 899 (Tex. 2017) (per curiam) ; Lippincott v. Whisenhunt , 462 S.W.3d 507, 509 (Tex. 2015). Drafting and passing legislation is often the result of compromise between competing policy interests, so it is essential that courts "stay in their lane" when construing the meaning of statutes. See In re Tex. Dep't of Family & Protective Servs. , 210 S.W.3d 609, 614 (Tex. 2006) (orig. proceeding). This means that courts should divine the meaning of the Legislature's intent by looking at the statute's plain language. Lippincott , 462 S.W.3d at 509. If that language is unambiguous, courts must apply its terms as written "unless a different meaning is supplied by statutory definition, is apparent from the context, or the plain meaning would lead to an absurd or nonsensical result." Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC , 591 S.W.3d 127, 133 (Tex. 2019) (quoting Beeman v. Livingston , 468 S.W.3d 534, 538 (Tex. 2015) ). "We do not read words into a statute to make it what we consider to be more reasonable, rather we may do so only to prevent an absurd result." Union Carbide Corp. v. Synatzske , 438 S.W.3d 39, 52 (Tex. 2014).

We also review de novo whether the parties met their respective burdens of proof under the TCPA. Tex. Custom Wine Works, LLC v. Talcott , 598 S.W.3d 380, 385 (Tex. App.—Amarillo 2020, no pet.).

Whether the TCPA Applies to the Firm's Communications

We begin with whether Judge's claims are based on the firm's exercise of the right of free speech, association, or to petition. Id. § 27.001(1)-(4); Castleman v. Internet Money Ltd. , 546 S.W.3d 684, 688 (Tex. 2018). As amended, the TCPA permits a party to file a motion to dismiss a legal action if the suit "is based on or is in response to a party's exercise of the right of free speech, right to petition, or right of association or arises from any act of that party in furtherance of the party's communication or conduct" described in section 27.010(b). Id. § 27.003(a).

At the time the firm moved to dismiss, Judge had sued to allege the firm sent the above-quoted letter to at least 14 clients as a "blatant act to terminate [Judge's] attorney-client relationship with his clients." Judge alleged that the letter's statements regarding his alleged inability to return to the practice of law were false, deliberate, and defamatory. He also claimed the defendants attempted to involuntarily expel him from the firm, and alternatively pleaded that the firm sought "to force him to resign from the firm and the practice of law, to his prejudice, irreparable injury, and legal damage; and that of his clients."

In an amended pleading after the firm filed its TCPA motion to dismiss, Judge also alleged the firm failed to comply with its corporate agreement when expelling Judge and compensating Judge for his interests in the firm. The parties agree these allegations are not being challenged in the firm's TCPA motion to dismiss.

The TCPA defines the "exercise of free speech" to mean "a communication made in connection with a matter of public concern." Id. § 27.001(3). "Public concern" is defined to include various statements and activities, including "matter[s] of political, social, or other interest to the community," and "subject[s] of concern to the public." Id. § 27.001(7)(B),(C). Private communications may fall under the reach of the TCPA if they are made in connection with a subject of public concern. See Coleman , 512 S.W.3d at 899 ; Lippincott , 462 S.W.3d at 509.

We hold that Judge's lawsuit to challenge the accuracy of statements in the firm's letter to clients constitutes a legal action based on the firm's "exercise of the right of free speech" as defined by the Legislature. The letters were communications made in connection with a matter of public concern because they were written statements, albeit private, changing the attorney-client relationship because of an alleged disability affecting Judge's capacity to practice law. The TCPA does not condition its reach to only those statements that expressly identify matters of public concern; the statute merely requires the statement be "in connection with" one. See Coleman , 512 S.W.3d at 901.

Certainly, statements in connection with an attorney's quality of legal services in the marketplace are matters of concern for the public. See DeAngelis v. Protective Parents Coal. , 556 S.W.3d 836, 852 (Tex. App.—Fort Worth 2018, no pet.) ; Deaver v. Desai , 483 S.W.3d 668, 673 (Tex. App.—Houston [14th Dist.] 2015). This is reinforced from the first paragraph to the preamble of Texas Disciplinary Rules of Professional Conduct, which observes, "[l]awyers, as guardians of the law, play a vital role in the preservation of society." TEX. DISCIPLINARY R. PROF. CONDUCT preamble ¶ 1, reprinted in TEX. GOV'T CODE ANN. , tit. 2, subtit. G, app. A. (State Bar Rules art. X, § 9).

An attorney's physical and mental capacity to practice law is an essential ingredient of the quality of legal services she provides. The public interest, as enforced through the disciplinary...