Smith v. 2005 Tower LLC

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LAUREL SMITH, Appellant v. 2005 TOWER LLC, Appellee

No. 09-22-00350-CV

Court of Appeals of Texas, Ninth District, Beaumont

August 1, 2024

On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 22-07-09437-CV

Submitted on June 30, 2023

Before Go lemon, C.J., Johnson and Chambers, JJ.

MEMORANDUM OPINION

W SCOTT GOLEMON Chief Justice

This is an interlocutory appeal from an order denying a motion to dismiss under the Texas Citizens' Participation Act (TCPA), which is codified in Chapter 27 of the Texas Civil Practice and Remedies Code. Underlying the order denying the motion to dismiss is a guardianship proceeding initiated by Gavin Clarkson ("Gavin") on behalf of his mother Martha Clarkson ("Martha"), who Gavin alleged was partially incapacitated. Laurel Smith ("Smith"), a guardian ad litem appointed to represent Martha's interests, filed a petition for declaratory judgment asking the guardianship court to determine whether Martha lacked capacity to convey a duplex (the Property) that she owned in Travis County to 2005 Tower LLC (Tower). Smith also filed a notice of lis pendens, putting the public on notice of ongoing litigation about the duplex. After Smith filed the notice of lis pendens, Tower sued Smith for filing a fraudulent lien under Section 12.002(a), for tortious interference with a contract, and to quiet title. Smith moved to dismiss each claim under the TCP A, but the trial court denied the motion and awarded Tower attorney's fees for responding to the motion.

In two issues, Smith challenges the trial court's order denying her motion to dismiss. First, Smith contends the trial court erred in denying the motion because she established the TCPA entitles her to dismissal of each of Tower's claims. Second, Smith contends the trial court abused its discretion in awarding Tower attorney's fees by finding her motion frivolous and solely intended to delay. Concluding the TCPA entitles Smith to dismissal of Tower's fraudulent lien under Section 12.002(a) and tortious interference claims, we affirm in part, reverse in part, and remand the case for further proceedings consistent with this opinion.

BACKGROUND

A. Underlying Litigation: Guardianship Lawsuit

This appeal involves two separate lawsuits. The first lawsuit, which we identify as the "Guardianship Lawsuit," was styled In the Guardianship of Martha Atelia Clarkson, an Incapacitated Adult, in the County Court at Law No. 2 of Montgomery County, Texas. It was started in September 2020 by Gavin, who filed an Application for Appointment of Permanent Guardian of the Person and Estate (Application for Guardianship), seeking guardianship over his eighty-one-year-old mother, Martha. Gavin alleged that Martha was "partially without capacity" to manage, among other things, the Property.

A week before Gavin filed the Application for Guardianship, a physician diagnosed Martha with dementia. The physician signed a Certificate of Medical Examination (CME) stating that Martha was partially incapacitated. The physician observed, for instance, that Martha had cognitive deficits preventing her from responsibly making complex business and financial decisions. After Gavin filed the Application for Guardianship, at least two more physicians performed a mental examination on Martha. In February 2021, for instance, a second physician signed a CME stating Martha was partially incapacitated. Likethe first physician, the second physician noted that Martha had cognitive deficits preventing her from responsibly making complex business and financial decisions.

In October 2020, the guardianship court appointed an attorney ad litem to represent Martha, and the attorney ad litem filed an answer contesting Gavin's Application for Guardianship. See Tex. Est. Code Ann. § 1054.001 (providing that in a proceeding for the appointment of a guardian, "the court shall appoint an attorney ad litem to represent the proposed ward's interests, including the proposed ward's expressed wishes[]"). A year later, after discharging Martha's first attorney ad litem, the guardianship court appointed Martha's second attorney ad litem, who moved to dismiss Gavin's Application for Guardianship because Martha's CMEs demonstrated her statutory durable power of attorney appointing Gavin her agent was more appropriate, and less restrictive, than guardianship.

In January 2022, Gavin non suited his Application for Guardianship with prejudice, and the guardianship court signed an Order Approving Gavin's Non suit. The Order Approving Gavin's Nonsuit functioned as a final judgment because Gavin's non suit rendered all claims opposing his Application for Guardianship moot, and at that time, no other applications for guardianship had been filed. That said, in February 2022, a court-appointed investigator filed a Motion to Reinstate and Retain Case on Docket along with an Application for Guardianship. Although the guardianship court never signed an order reinstating the case, over the next four months, the guardianship court behaved as if the case had been reinstated.

In February 2022, for instance, the guardianship court signed an Amended Order appointing a guardian ad litem for Martha. See id. § 1054.051(a) (stating "the judge may appoint a guardian ad litem to rep resent the interests of an incapacitated person in a guardianship proceeding[]"). In April 2022, after discharging that guardian ad litem, the guardianship court signed an order appointing Smith, an attorney, to be Martha's successor guardian ad litem. The order stated Smith "is appointed as Successor Guardian Ad Litem to continue as such until further order of this Court." The order also substituted Smith "in on all the pleadings filed by [Martha's previous guardian ad litem]."

One of Smith's duties as guardian ad litem was to investigate whether a guardianship was necessary for Martha by reviewing her financial, medical, psychiatric, and personal records. During her investigation, Smith discovered Martha had executed various documents, during the guardianship proceeding, transferring her interests in real property. For instance, in March 2021, Martha executed a General Warranty Deed conveying the Property to Tower, a limited liability company formed by Gavin. Therefore, Smith filed a Petition for Declaratory Judgment, alleging that "it has become necessary to construe certain contracts, deeds, and other writings because disputes concerning [Martha's] capacity to contract and her ability to make complex business decisions have existed between the parties to this matter since September of 2020." Smith requested, among other things, a declaration as to the validity of the General Warranty Deed, considering the CMEs declaring Martha partially incapacitated-and unable to responsibly make complex business decisions-around the time she executed the document.

Along with her Petition for Declaratory Judgment, Smith filed a Notice of Lis Pendens against the Property, which was recorded in the real property records of Travis County. The Notice of Lis Pendens states that ongoing disputes exist "as to whether [Martha] had capacity to transact business and manage her property." It also states that, Smith filed the Petition for Declaratory Judgment, in her capacity as Martha's guardian ad litem, requesting the guardianship court "declare the title and ownership to [the Property], the validity of any documents signed by [Martha] or transactions entered into by her, as well as the rights and remedies of each party with respect to [the Property]."

The guardianship court never ruled on Smith's Petition for Declaratory Judgment. In July 2022, the guardianship court filed a Notice Regarding Plea to the Jurisdiction in response to a Plea to the Jurisdiction and Motion to Dismiss filed by Gavin. The guardianship court explained that after signing the Order Approving Gavin's Nonsuit, it never signed an order granting the court-appointed investigator's Motion to Reinstate and Retain Case on Docket before the motion was overruled by operation of law. Thus, the guardianship court found it "lack[ed] jurisdiction to take any [further] action in this closed and dismissed cause. "The guardianship court also found it lacked jurisdiction to render orders related to the court-appointed investigator's Application for Guardianship, including the order appointing Smith to be Martha's successor guardian ad litem.

B. Current Litigation: Tower Lawsuit

In May 2022-before Smith filed the Notice of Lis Pendens in the Guardianship Lawsuit-Tower executed a Residential Sales Contract to sell the Property. Tower was set to close the Residential Sales Contract on or before July 25, 2022, but after Smith filed the Notice of Lis Pendens on June 23, 2022, a title underwriter issued Tower a list of requirements that had to be fulfilled before closing, including the release of the Notice Lis Pendens. Tower demanded Smith release the Notice of Lis Pendens but made the demand before the Notice Regarding Plea to the Jurisdiction was filed in the Guardianship Lawsuit, so Smith refused to release the Notice of Lis Pendens. When Tower failed to close the Residential Sales Contract, Tower blamed Smith.

On July 22, 2022, Tower sued Smith by filing an Original Petition with Application for Temporary Restraining Order, Application for Temporary Injunction Pendente Lite, and Application for Permanent Injunction, and Emergency Motion to Cancel Lis Pendens. Tower sued Smith for filing a fraudulent lien in violation of Section 12.002(a), seeking actual damages exemplary damages, and attorney's fees. Tower sued Smith for tortiously interfering with the Residential Sales Contract, seeking actual damages, exemplary damages, and injunctive relief Tower also sued Smith to...