A Houston law firm won its bid to dismiss breach of fiduciary duty and breach of contract allegations using the state’s anti-SLAPP law, according to a ruling by the Texas Court of Appeals.
Jetall Cos. Inc. and Hoover Slovacek LLP were in court disputing the firm’s representation of a title company owner, after Jetall had failed to buy the title company.
Hoover Slovacek moved to dismiss the suit under the Texas Citizens Participation Act, arguing Jetall’s case was related to the firm exercising its right to petition. The firm also moved for summary judgment on Jetall’s fraud allegation.
The TCPA applies to the breach of contract and fiduciary duty claims raised by Jetall, because the law firm was communicating in relation to a judicial proceeding, the Texas Court of Appeals, Fourteenth District, said Tuesday.
The appeals court rejected Jetall’s argument that the lawyers can’t invoke their own TCPA rights, just their clients’, because the law only protects a client. Hoover Slovacek’s alleged liability stems from its legal representation of Renee Davy during litigation involving Jetall, therefore, the appeals court said, these communications pertain to a judicial proceeding, which is protected under the TCPA.
Jetall’s owner, Ali Choudhri, hired Hoover Slovacek LLP in 2010 to represent him as a defendant in a deed restriction lawsuit. In 2016, when attempting to purchase 50% of a title company called Declaration Title, Choudhri asked Declaration’s owner—Davy—and the law firm to sign a conflict of interest waiver because she was also represented by Hoover Slovacek.
Jetall and Davy signed the waiver and consented to Hoover Slovacek’s representation of Davy in the business transaction. It also included a provision that if an adversarial relationship were to develop, Jetall could ask the law firm to withdraw its representation in the business transaction.
Later, Jetall invoked this part of the provision, with Davy’s counsel, Michael Ballases of Hoover Slovacek, withdrawing.
After the negotiations fell through, Jetall sued Davy and her then-husband, Todd Oakum, for breach of contract and fraud because they allegedly both separately agreed to sell their ownership interest to Jetall but didn’t. Ballases represented Davy in that suit.
Jetall then filed a separate lawsuit against Ballases and the law firm alleging breach of contract, breach of fiduciary duty, and a fraud allegation.
‘Mere Speculation’
The appeals court also ruled that Jetall failed to show proof of its fiduciary duty allegation, because it didn’t provide evidence that the law firm used confidential information disclosed by Choudhri in 2010.
“This is nothing more than mere speculation,” Justice Kevin Jewell said in the opinion.
There is no clear evidence showing Hoover Slovacek would use or disclose confidential information during the Davy suit, and therefore “no specific evidence of breach,” he added.
Jetall also alleged Hoover Slovacek had committed fraud by inducing Jetall to sign the waiver with no “intention to perform the obligation.”
Hoover Slovacek had complied with the waiver, but it didn’t promise to abstain from representing Davy in the future, the court said. The wording of the document specifically covers the prospect of selling ownership of the title company, but says nothing about future representation.
The court agreed with the trial court’s decision to grant summary judgment to the law firm.
Justices Frances Bourliot and Margaret Poissant were part of the panel.
Jetall was represented by Camara & Sibley LLP. Lawyers from Hoover Slovacek represented the firm.
The case is Jetall Cos. v. Hoover Slovacek, LLP, Tex. App., 14th Dist., No. 14-20-00691-CV, 3/29/22.