Grover Shields, Shields Management Group, L.L.C. and DFW Open MRI, L.P. v. Robert Shields

Citation: Not availableDocket: 05-18-01539-CV

Court: Court of Appeals of Texas; August 29, 2019; Texas; State Appellate Court

Original Court Document: View Document

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The Court of Appeals for the Fifth District of Texas affirmed the trial court's denial of a motion to dismiss under the Texas Citizens Participation Act (TCPA) in the case Grover Shields, Shields Management Group, L.L.C., and DFW Open MRI, L.P. v. Robert Shields and MRI Centers of Texas, LLC. The appellants failed to demonstrate that the claims made by the appellees were based on, related to, or in response to the appellants’ exercise of a right protected by the TCPA.

The background involves a lawsuit initiated in June 2018 by Robert Shields against his father, Grover Shields, alleging breach of contract, fraudulent inducement, and tortious interference with contract. Following the initiation of the lawsuit, the TCPA was amended, but those changes were not considered as they applied only to actions filed after September 1, 2019. Robert's claims stemmed from alleged tortious conduct by Grover concerning their joint business in medical imaging services, which included a settlement agreement that Robert contends Grover violated after locking him out of the business in 2012.

Subsequent amendments to the petition included new defendants, Shields Management Group, L.L.C. and DFW Open MRI, L.P., and introduced new claims, culminating in a second amended petition where Robert and MRI Centers of Texas, LLC collectively alleged fraudulent inducement, civil conspiracy, breach of contract, and tortious interference against all appellants. Notably, the second amended petition indicated that Robert no longer pursued breach of contract or tortious interference claims against the appellants, instead focusing solely on fraudulent inducement and civil conspiracy.

Timeliness of Robert’s claims for breach of contract and tortious interference is not addressed, as they were not included in his second amended petition. Had they been included, the TCPA motion by appellants would have been untimely regarding the claims against Grover but timely against Shields Management Group, L.L.C. and DFW Open MRI, L.P. The TCPA motion was filed eighty days after the original petition concerning Grover and forty-three days after the first petition regarding the other two entities. Even if the claims had been asserted, the outcome would remain unchanged due to appellants not demonstrating that the TCPA applies to the claims made by appellees.

Robert accepted less than the value of his ownership interests under a settlement agreement that included mutual releases of claims. However, Grover allegedly pressured vendors to cease working with MRI Centers, constituting tortious interference, and continued this behavior post-agreement. Grover and his associates conspired to conceal their actions, fraudulently inducing Robert into the settlement. After the agreement was signed, they violated its terms by instigating lawsuits against MRI Centers.

Four days after the second amended petition was filed, appellants moved to dismiss under the TCPA, claiming the lawsuit was retaliatory due to unrelated ongoing lawsuits brought by Virtual Chart Solutions I, Inc. (VCSI) against MRI Centers. Appellants asserted that VCSI was formed after the settlement agreement and later initiated two lawsuits against MRI Centers and others, with only MRI Centers being a party to the current lawsuit. Grover’s declaration, submitted with the TCPA motion, included the settlement agreement and VCSI’s complaint but did not provide additional facts. None of the appellants are parties to the lawsuits initiated by VCSI.

Appellees submitted a response that included an affidavit from a third party and Robert’s declaration, which authenticated various attachments and provided details regarding a prior settlement agreement, negotiations, Grover's actions, and Robert's lack of knowledge about them. Robert also outlined his reliance on specific matters during negotiations, potential actions he would have taken with more information, and his and his companies' collaboration with Brian Meredith in software development, along with expenditures related to other lawsuits. Appellants replied with Grover’s supplemental declaration, asserting that he had numerous communications with counsel and Brian Meredith aimed at promoting and defending their common interests related to trademark and copyright lawsuits, as well as their business partnership. After a hearing, the trial court denied the motion without specifying a reason, leading to an interlocutory appeal.

The Texas Citizens Participation Act (TCPA) aims to protect constitutional rights to petition, free speech, and association, while also allowing meritorious lawsuits for demonstrable injury. Under § 27.005(b) of the TCPA, a legal action must be dismissed if the moving party demonstrates that it relates to their exercise of protected rights, and merely showing a connection to another party's exercise of such rights is insufficient. The appellants in this case include Grover, Shields Management Group, LLC, and DFW Open MRI, LLP, and their claims will be analyzed in light of their TCPA-protected rights. The trial court's ruling on the motion to dismiss is reviewed de novo, considering the pleadings and affidavits in favor of the non-movant, while also interpreting the TCPA liberally to fulfill its intended purpose.

A TCPA (Texas Citizens Participation Act) ruling involves a three-step analysis. First, the appellants (movants) must demonstrate by a preponderance of the evidence that the TCPA applies to the appellees' claims, indicating that the claims are connected to the appellants’ exercise of rights such as free speech, petition, or association. If successful, the burden shifts to the appellees (non-movants) to establish a prima facie case for each essential element of their claims with clear and specific evidence. If the appellees meet this requirement, the burden returns to the appellants to prove valid defenses for each claim.

Appellants present seven issues, including the timeliness of their TCPA motion and the burdens of proof under the TCPA. The trial court did not specify the reasons for denying the TCPA motion, prompting a review of timeliness first. Appellants argue their TCPA motion, filed on September 28, 2018, was timely for all claims except Robert’s fraudulent inducement claim against Grover. Appellees argue the motion was late, claiming it was due on September 10, 2018, based on Grover being an alter ego of the other appellants. The court agrees with the appellants, noting that the TCPA allows sixty days post-service to file a motion, and finds the motion was timely for all claims except Robert's fraudulent inducement claim.

In their second issue, appellants contend that the trial court wrongly denied their TCPA motion, asserting that the lawsuit relates to their right to petition. To prove this, appellants must show they engaged in a "communication" as defined by the TCPA. They argue that their actions pertained to prior judicial proceedings, specifically the VCSI lawsuits. However, appellees counter that the appellants did not demonstrate any exercise of the right to petition. The court affirms the trial court's denial for Shields Management Group, LLC and DFW Open MRI, L.P., as they failed to show any evidence of exercising this right. Although Grover attempted to provide evidence through a supplemental declaration, his vague assertion of multiple communications does not meet the necessary burden under the TCPA.

Grover's TCPA motion lacks sufficient detail regarding his communications related to the VCSI lawsuits, failing to specify the content, context, or timing of these interactions, leaving it unclear whether they occurred before or after the lawsuits were filed. His vague references do not demonstrate that he exercised a right to petition as defined by the TCPA. Even if his communications were confined to post-filing discussions, Grover has not shown that the appellees' lawsuit is based on or connected to those communications. The trial court's evaluation favors the non-movant, and Grover's characterization of the appellees' claims as involving protected expression is not accepted. The primary allegations against Grover concern his alleged misconduct during business entity dissolutions that occurred prior to the VCSI lawsuits. In comparison to a previous case (Beving v. Beadles), where the context of communications was clear, Grover's case lacks substantive evidence of his right to petition. Without knowing the specifics of Grover's communications with VCSI’s counsel, it is impossible to assess their relevance under the TCPA. The absence of content in these communications equates to withholding a statement, which does not qualify as a communication under the Act. Consequently, Grover and the other appellants have not met their initial TCPA burden regarding their claimed right to petition. Additionally, they assert a right of association based on Grover's communications with VCSI's counsel and another individual, but this claim is also unsubstantiated.

Appellees contend that they did not exercise a right of association under the Texas Citizens Participation Act (TCPA), a position with which the court agrees. To prove a right of association, appellants must demonstrate communication among individuals uniting to express or defend common interests. The court emphasizes that such communication must involve public or citizen participation. For Shields Management Group, L.L.C. and DFW Open MRI, L.P., no evidence of relevant communications exists. Grover's claims of communications with VCSI’s attorney and Brian Meredith are deemed insufficiently detailed and lack proof of public participation, failing to meet the necessary criteria for a TCPA claim. Consequently, appellants did not fulfill the burden of establishing that appellees’ claims pertained to an exercise of their right of association, leading to the overruling of appellants’ third issue. While the first issue regarding timeliness is sustained, the court overrules the second and third issues related to the right to petition and association. The trial court's order denying the motion to dismiss is affirmed, and appellate costs are awarded to the appellees.