Co-author Jeremy Walter
Ark Sand Co., Inc. v. Bradley Demolition & Constr., LLC, et al has the appearance of a Hatfield and McCoy-grade grudge match. As often happens when litigation gets personal, the Texas Citizens Participation Act was invoked. The TCPA is the statute that protects citizens’ First Amendment rights such as free speech and the right to petition the government. As we will see, the statute will not cure all insults, real or perceived.
Ark owned an industrial sand pit, which it leased to Bradley Demolition & Construction, LLC (“BD&C”). Ark alleged the lease was oral only, for a term of five years with no option to renew. BD&C showed a written lease with a term of ten years. Ark claimed that the signature on the lease was a forgery and the lease was unenforceable. BD&C refused to vacate after the five-year term.
Ark sued BD&C for several causes of action, inflammatory and otherwise, and sought a declaratory judgment. BD&C counterclaimed.
The parties tried the declaratory judgment claim first because whether the purported written lease was valid would determine whether Ark had other claims. The jury found that Ark did not sign the purported written lease and that lease was not valid. The trial court granted declaratory relief and granted possession of the sand pit to Ark.
Ark then amended its petition to reflect that it owned the sand pit and added BD&C’s president Edward Bradley and BD&C affiliate Bradley Sand and Concrete Crushing Company to the suit, alleging BD&C sold them sand without authority, adding conspiracy, conversion, and other claims.
Turning up the heat, Defendants filed third-party claims against the president of Ark and others, alleging the sand pit was worthless when Defendants took over. Defendants alleged a handshake deal whereby the president tricked Defendants into revitalizing the sand pit by leading them to believe they would own and operate it for ten years. They argued the president always secretly intended to evict Defendants once the pit was profitable and that he operated Ark as his alter ego.
Ark moved to dismiss all third-party claims under the TCPA, arguing those claims were based on Ark’s exercise of its right to petition because they complained of Ark’s conduct in the lawsuit, pleadings, and previous trial. Defendants argued that Ark lacked standing to dismiss the third-party claims, that the motion was premature because those parties had not yet answered the lawsuit, and that the TCPA did not apply. The trial court denied the TCPA motion.
Ark argued on appeal that the TCPA applied to the third-party claims, specifically that those claims were based on Ark’s exercise of its right to petition and that Defendants failed to provide prima facie evidence of their claims.
Holding:
Ark Sand was not a named party in the third-party petition and the TCPA only allows “parties” to move to dismiss. Although the third-party petition alleged Ark’s president operated Ark as his alter ego, it did not seek to hold Ark liable for the president’s conduct (only vice versa).
The Court held that a party cannot avail itself of a TCPA motion to dismiss unless the target of the TCPA motion seeks relief from the moving party. “Because Ark [Sand] is not named as a third-party defendant and the third-party petition does not otherwise seek to hold Ark [Sand] liable, Ark [Sand] has no need of protection from the third-party action [under the TCPA].”, said the Court.
The Court upheld the denial of Ark’s TCPA motion.
Your musical interlude.
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