Adams v Starside (Tex. 2018) Finding Matters of Public Concern, Texas Supreme Court sends TCPA case back to Dallas COA

Adams v. Starside Custom Builders LLC, No 16-0786 (Tex April 20, 2018)

WHAT IS A MATTER OF PUBLIC CONCERN? 

Adams v. Starside Custom Builders LLC, No 16-0786 (Tex April 20, 2018) 

John David Adams v. Starside Custom Builders LLC, No 16-0786 (Tex April 20, 2018) (Opinion by Blacklock) (The Court reverses the court of appeals' judgment and remands the case to that court).

Argued January 9, 2018

JUSTICE BLACKLOCK delivered the opinion of the Court.

This is an appeal from the denial of a motion to dismiss under the Texas Citizens Participation Act (TCPA). The defendant, John Adams, moved to dismiss the defamation claim filed against him. The court of appeals affirmed the denial of the motion to dismiss, holding that Adams’s allegedly defamatory communications did not relate to a “matter of public concern.” Because we conclude that the challenged communications do relate to a “matter of public concern” as defined by the TCPA, we reverse the court of appeals judgment and remand the case to that court for further proceedings. 

Court of Appeals case citation: Adams v Starside Custom Builders, LLC, No. (05-15-01162-CV (Tex.App.- Dallas, June 28, 2016)
Westlaw Cite for COA Opinion: Adams v. Starside Custom Builders, LLC, No. 05-15-01162-CV, 2016 WL 3548013 (Tex. App.—Dallas June 28,  2016, pet. filed).

SCOTX OPINION IN ADAMS VS. STARSIDE 

JOHN DAVID ADAMS, Petitioner,
v.
STARSIDE CUSTOM BUILDERS, LLC, Respondent.

No. 16-0786.

Supreme Court of Texas.

Argued January 9, 2018. Opinion delivered: April 20, 2018.

Byron K. Henry, Andrea K. Bouressa, for John David Adams, Petitioner.

Lindy D. Jones, Nathan Allen Jr., Laura L. Worsham, Lynn Warren Schleinat, for Starside Custom Builders, LLC, Respondent.

On Petition for Review from the Court of Appeals for the Fifth District of Texas.

JUSTICE JAMES D. BLACKLOCK delivered the opinion of the Court.

JAMES D. BLACKLOCK Justice.

This is an appeal from the denial of a motion to dismiss under the Texas Citizens Participation Act (TCPA). The defendant, John Adams, moved to dismiss the defamation claim filed against him. The court of appeals affirmed the denial of the motion to dismiss, holding that Adams's allegedly defamatory communications did not relate to a "matter of public concern." Because we conclude that the challenged communications do relate to a "matter of public concern" as defined by the TCPA, we reverse the court of appeals judgment and remand the case to that court for further proceedings.

I. Legal, Factual, and Procedural Background

A. The TCPA

Under the TCPA, a party may file a motion to dismiss a "legal action" that is "based on, relates to, or is in response to a party's exercise of the right of free speech." TEX. CIV. PRAC. & REM. CODE § 27.003(a). A "legal action" can consist of an entire lawsuit or a single cause of action. Id. § 27.001(6). The TCPA provides its own definition of "exercise of the right of free speech." The statutory definition is not fully coextensive with the constitutional free-speech right protected by the First Amendment to the U.S. Constitution and article I, section 8 of the Texas Constitution. In the TCPA, the "`[e]xercise of the right of free speech' means a communication made in connection with a matter of public concern." Id. § 27.001(3). "`Communication' includes the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic." Id. § 27.001(1). A "`[m]atter of public concern' includes an issue related to . . . environmental, economic, or community well-being; . . . the government; . . . or . . . a good, product, or service in the marketplace." Id. § 27.001(7).

The TCPA requires a court to "consider the pleadings and supporting and opposing affidavits" filed by the parties before ruling on a motion to dismiss. Id. § 27.006(a). The statute directs the trial court to dismiss the action "if the moving party shows by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the party's exercise of . . . the right of free speech." Id. § 27.005(b)(1). The court may not dismiss the claim if the non-moving party "establishes by clear and specific evidence a prima facie case for each essential element of the claim." Id. § 27.005(c). Nevertheless, the movant can still win dismissal by establishing "by a preponderance of the evidence each essential element of a valid defense to the nonmovant's claim." Id. § 27.005(d). An order denying a TCPA motion to dismiss may be appealed. Id. § 51.014(a)(12). If the trial court does not rule on a motion to dismiss within a prescribed time, the motion is considered denied by operation of law and the moving party may appeal. Id. § 27.008(a).

B. Trial Court Proceedings

This appeal is part of a long-running dispute between Adams and the developer of the neighborhood where he lives. Bentley Premier Builders, LLC (Bentley) developed the Normandy Estates subdivision in Plano, Texas. Adams and his wife own a home in the subdivision. After bankruptcy, Bentley became Starside Custom Builders, LLC (Starside), as described further below.

Starside and Adams became embroiled in an ugly dispute over a common area in the subdivision. Starside sued Adams and his wife, asserting claims for threat of imminent bodily injury and business disparagement. The petition also sought a declaratory judgment that Adams did not own any of the land that Starside alleged was a common area. Adams moved to dismiss the business disparagement claim under the TCPA. Starside then filed an amended petition that dropped the business disparagement claim and added a defamation claim.

The amended petition contained the following pertinent allegations. Starside is the developer of the Normandy Estates subdivision. Starside undertook to develop the neighborhood's common areas, including a common area adjacent to Adams's property. At the time in issue, the common area was owned by Starside but was dedicated as a common area by plat. Starside controlled the common area during this period. Starside and the Normandy Estates homeowners' association (HOA) worked together to improve the common area. These improvements benefitted Starside's business because they attract future homeowners to the neighborhood. Starside's owner and CEO, Phillip Pourchot, is one of three members of the HOA board.

Adams opposed the work done by Starside and the HOA in the common area. Adams accused the HOA of clear cutting trees in violation of Plano city ordinances. On March 15, 2015, Adams sent angry texts to the HOA board and others, in which he threatened to shoot people involved in the landscaping work. Pourchot and his attorney contacted the Plano police department. Two officers visited Adams and reported that "the situation was worse than was thought." Adams claimed he owned a portion of the common area stretching from his property to a creek running through the common area.

The amended petition alleges that Adams defamed Starside in a 2014 blog and in a March 18, 2015 e-mail Adams sent to Pourchot, to the HOA president, and to others. The blog's homepage is attached to the petition. The page shows a handcuffed man with a tab stating "undisclosed felony conviction." It states the names of Sandy Golgart and Phill Pourchot, the prior owners of Bentley, allegedly implying that Pourchot is a felon. The page has a large image of the logo for "Bentley Premier Builders" and also has tabs for "unpaid creditors," "commingled funds," and "contract fraud/felony investigation." Under the Bentley logo, the page states, "How a west Plano Developer took a prime Plano location[,] a group of high end home builders[,] several hardworking subcontractors[,] a few families eager to build new homes[, and] made life miserable for all involved." The March 18 e-mail asserts that the HOA "clear cut" land and did not follow city ordinances. The e-mail alleges that Pourchot is in complete control of the HOA. The e-mail claims that Adams and Starside had an agreement in principle to sell part of the common area to Adams. The petition alleged that this e-mail was sent "to the Normandy Estates Residents and builders, all of whom are members of the HOA."^[1]

Adams's motion to dismiss contains the following allegations. Adams purchased his home from Bentley, Starside's predecessor. Phillip Pourchot was an owner of Bentley. Bentley filed for bankruptcy and changed its name to Starside. Starside controls the Normandy Estates HOA. Adams filed a police report because the other owner of Bentley, Sandy Golgart, had falsely attested that there were no liens on his property. In late 2014, Starside began cutting down trees and landscaping the subdivision's common area. The tree cutting was done without a city permit. Adams sent text and e-mail messages asking Starside's officers and the HOA president to stop the tree cutting. The messages prompted a visit from law enforcement. The motion attaches deposition excerpts from Pourchot, who described the blog as referencing Golgart's legal problems and connecting Pourchot to those problems.

After Starside amended its petition to assert a defamation claim rather than a business disparagement claim, Adams filed a supplemental motion to dismiss the defamation claim, incorporating his prior motion to dismiss and arguing that Starside could not establish a prima facie case to survive dismissal under the TCPA. The trial court granted the motion to dismiss the business disparagement claim. The court did not rule on the motion to dismiss the defamation claim within the statutory period, so it was denied by operation of law.

C. The Court of Appeals Decision

Adams appealed, arguing that the trial court should have dismissed the defamation claim under the TCPA. The court of appeals reached only the issue of whether Adams established under section 27.005(b) that his defamation claim "is based on, relates to, or is in response to [Adams's] exercise of . . . the right of free speech." TEX. CIV. PRAC. & REM. CODE § 27.005(b). The court concluded that Adams failed to meet this burden. Adams v. Starside Custom Builders, LLC, ___ S.W.3d ___, ___ (Tex. App.-Dallas 2016, pet. granted). The court of appeals rejected Adams's argument that statements made in the blog and the March 18, 2015 e-mail relate to Starside's services in the marketplace. The court of appeals reasoned that while "Adams asserts the statements on which Starside's defamation claim are based related to Starside's services in the marketplace," "the complained-about statements do not mention Starside at all." Id. at ___. The court did not reach the merits of Adams's argument that his statements related to community well-being. The court effectively found that Adams waived this argument by failing to argue it with sufficient specificity in the trial court. Id. at ___ n.4.

II. Discussion

This appeal turns on our construction of the text of the TCPA, and we review issues of statutory construction de novo. Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam). We disagree with the court of appeals' conclusion that the defamation claim against Adams was not based on or related to Adams's "exercise of the right of free speech" as defined by the TCPA. We must construe the TCPA according to its text. See ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 899 (Tex. 2017) (per curiam); Lippincott, 462 S.W.3d at 509. The statute assigns detailed definitions to many of the terms it employs, and we must adhere to statutory definitions. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011).

The TCPA casts a wide net. Among other things, it covers any legal action that is "based on, relates to, or is in response to" a party's "exercise of the right of free speech." TEX. CIV. PRAC. & REM. CODE §§ 27.003(a), 27.005(b). The "exercise of the right of free speech" extends to any "communication made in connection with a matter of public concern." Id. § 27.001(3). Almost every imaginable form of communication, in any medium, is covered. Id. § 27.001(1). A matter of public concern "includes" but is not limited to "an issue related to . . . environmental, economic, or community well-being; . . . the government; . . . or . . . a good, product, or service in the marketplace." Id. § 27.001(7).

The alleged defamatory communications made by Adams raise "issues related to" Starside's products or services in the marketplace as a homebuilder and neighborhood developer. The 2014 blog claimed that Starside's predecessor, Bentley, "took a prime Plano location" and "made life miserable for" homebuilders, subcontractors, and home buyers. Starside alleges that the blog accused Bentley or Pourchot of not paying creditors, commingling funds, engaging in contract fraud, and failing to disclose a felony conviction. The blog advised the reader to contact attorneys for Sandy Golgart and Phill Pourchot, the owners of Bentley. While the blog is not a model of clarity, it plainly raises "issues related to" services in the marketplace by complaining about Bentley's development and management of the Normandy Estates subdivision. Allegations of "unpaid creditors," "commingled funds," and "contract fraud/felony investigation" all relate directly to Bentley's provision of homebuilding and neighborhood developing services, as does the accusation that Bentley made life miserable for contractors and home buyers.

The March 18, 2015 e-mail from Adams also raises "issues related to" Starside's services as a neighborhood developer. The e-mail describes an ongoing dispute between Adams and the HOA, which Adams claims was controlled by Pourchot, Starside's CEO. The dispute concerned the ownership and the landscaping of the neighborhood's common area. The amended petition alleged that Starside, as developer of the neighborhood and owner of the common area, was engaged in the business of "develop[ing] the natural beauty of the neighborhood," especially the common area, and that these efforts "directly affect its business." The e-mail's accusations therefore relate to Starside's services to the residents of Normandy Estates. One of those services was the maintenance of the disputed common areas, a service Adams claimed Starside performed illegally and in violation of Adams's property rights.

The court of appeals rejected Adams's argument that his statements related to Starside's services in the marketplace. The court reasoned that "the complained-about statements do not mention Starside at all." ___ S.W.3d at ___. Technically, that is true. But only very technically. Adams's challenged statements mention both Starside's corporate predecessor, Bentley, and Starside's CEO and owner, Pourchot. The parties do not dispute that Bentley changed its name to Starside after Bentley's bankruptcy. Starside's own petitions allege that Starside is the developer of the subdivision, which must mean that Starside considers itself the alter ego of Bentley, the company that actually developed the neighborhood. And at oral argument, Starside's counsel stated that Bentley "morphed into" Starside and that Bentley and Starside are "the same corporation." When even Starside admits that there is no practical difference between Bentley and Starside, Adams should not lose his motion to dismiss merely for conflating the two entities in his briefing.

Starside itself seems to disagree with the court of appeals' conclusion that Adams's statements did not concern Starside's services in the marketplace. Ironically, Starside must take the position that Adams's statements concern its services in the marketplace in order to maintain its claim that Adams's statements injured Starside. To establish injury flowing from Adams's allegedly defamatory statements, Starside contends in its brief that the statements "questioned Starside's fitness and ability as a luxury neighborhood developer." Starside's petitions likewise alleged that Adams's speech "caused injury to Starside's name and business reputation" and its "standing in the business community." Starside argues that the March 18 e-mail "imputes criminal behavior as it states and implies that both Starside and its CEO have violated statutes, committed a felony, and are guilty of dishonesty and underhanded business dealings." The brief later argues that Adams's claims that Starside "did not follow city ordinances on tree preservation," and in an earlier e-mail that "land was cleared without getting the appropriate permit from the City" were "likewise defamatory per se. . . . These statements concerning violation of the law clearly injured Starside in its profession as a luxury developer and builder." All of this amounts to an admission by Starside that Adams's statements relate to Starside's services in the marketplace. This admission may help Starside maintain its defamation claim, but it undermines the argument that Adams's statements did not relate to a matter of public concern under the TCPA.

The TCPA's definition of "matter of public concern" also "includes an issue related to . . . environmental, economic, or community well-being." TEX. CIV. PRAC. & REM. CODE § 27.001(7)(B). For several reasons, Adams's alleged defamatory statements satisfy this element of the statutory definition. To begin with, the March 18 e-mail alleges that the HOA "did not follow city ordinances on tree preservation." It later describes how Adams complained "about the trees being clear cut" and that "city code needed to be followed to cut down a huge area of trees." The allegation that the HOA repeatedly violated the law in caring for land that is open to the public is a matter of public concern, whether viewed as related to community well-being under section 27.001(7)(B), as related to "the government" under section 27.001(7)(C), or viewed as a matter of public concern apart from the non-exclusive statutory list. Concerns about tree cover in the neighborhood's common area are also related to "environmental" well-being under section 27.001(7)(B).

Furthermore, in the context of a small residential community like Normandy Estates, any allegation of malfeasance and criminality by the developer and the HOA likely concerns the well-being of the community as a whole. HOAs wield substantial, quasi-governmental powers in many neighborhoods. See, e.g., TEX. PROP. CODE chs. 204, 209. Particularly in a planned community like Normandy Estates, an allegation of HOA misconduct is not altogether unlike an allegation of local government misconduct in a small city, which would quite plainly count as a matter of public concern under section 27.001(7)(C).

The court of appeals found that Adams failed to preserve arguments based on community or environmental well-being by failing to raise them in the trial court. ___ S.W.3d at ___ n.4. We are not convinced that Adams failed to argue community and environmental well-being in the trial court, as he expressly mentioned these concerns at the hearing on the motion to dismiss.^[2] Further, the court of appeals imposed too strict a view of error preservation in this context. Rules of error preservation should not be applied so strictly as to unduly restrain appellate courts from reaching the merits of a case. Adams raised as an issue in the trial court and the court of appeals that he was entitled to dismissal under the TCPA because the defamation claim was based on his speech about a matter of public concern. He was not required on appeal or at trial to rely on precisely the same case law or statutory subpart that we now find persuasive. See Greene v. Farmers Ins. Exchange, 446 S.W.3d 761, 764 n.4 (Tex. 2014) ("We do not consider issues that were not raised in the courts below, but parties are free to construct new arguments in support of issues properly before the Court."); Marino v. King, 355 S.W.3d 629, 634 (Tex. 2011) ("Constitutional imperatives favor the determination of cases on their merits rather than on harmless procedural defaults.").

Moreover, the unique language of the TCPA directs courts to decide its applicability based on a holistic review of the pleadings. Section 26.006(a) provides that when considering a TCPA motion to dismiss, the court "shall consider the pleadings and supporting and opposing affidavits." In TCPA appeals, we have decided whether communications are matters of public concern under a de novo standard of review, suggesting that the determination is one of law. ExxonMobil, 512 S.W.3d at 899; Lippincott, 462 S.W.3d at 509. We have not previously cabined our TCPA analysis to the precise legal arguments or record references a moving party made to the trial court regarding the TCPA's applicability. Our focus instead has been on the pleadings and on whether, as a matter of law, they are based on or relate to a matter of public concern. "When it is clear from the plaintiff's pleadings that the action is covered by the Act, the defendant need show no more." Hersch v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017); see also id. at 468 (concluding as a matter of law that suicide prevention and awareness relate to health, safety, and community well-being and are therefore matters of public concern under the statute); ExxonMobil, 512 S.W.3d at 901 (concluding as a matter of law that private statements by movants concerning plaintiff's alleged failure to gauge a storage tank related to a matter of public concern); Lippincott, 462 S.W.3d at 510(concluding as a matter of law that provision of medical services by a health care professional are matters of public concern).

In this case, a review of the pleadings and the record demonstrates that Adams's alleged defamatory communications relate to Starside's services in the marketplace and to the community and environmental well-being of the Normandy Estates subdivision. Adams was therefore exercising his "right of free speech," as defined by the TCPA, when he made the challenged communications. As a result, he was entitled to file a motion to dismiss challenging the sufficiency of Starside's defamation allegations.

* * *

We emphasize that whether Adams's colorful allegations were valid, partly valid, or completely concocted by a disgruntled resident with an axe to grind is not the question before us. Further litigation may seek those answers. The question at this stage is whether Adams's challenged statements involve a "matter of public concern" as defined by the TCPA. The allegation that a neighborhood developer and the HOA it controls have chopped down residents' trees, generally made life miserable for the residents, and engaged in unspecified other corrupt or criminal activity is of public concern for the residents of the neighborhood. It is also of concern for residents of other neighborhoods built by the developer and for people considering whether to buy homes in any of the developer's neighborhoods. If these allegations had appeared in the local community newspaper instead of in an e-mail and blog post by a lone resident, few would question whether they raised a "matter of public concern." The TCPA makes no distinctions based on the identity of the speaker who claims its protections. Quite to the contrary, its stated purpose is "to encourage and safeguard the constitutional rights of persons to . . . speak freely." TEX. CIV. PRAC. & REM. CODE § 27.002. Adams indeed spoke very freely. It remains to be seen whether his statements will subject him to liability for defamation. For now, we hold only that Adams should have been allowed to test Starside's defamation claim with a motion to dismiss because his allegedly defamatory statements related to a "matter of public concern" as defined by the TCPA.

III. Conclusion and Disposition

Because the court of appeals concluded that Adams did not satisfy his initial burden to establish the applicability of the TCPA under section 27.005(b), it did not proceed to decide whether Starside established a prima facie case for each essential element of its defamation claim under section 27.005(c) or whether Adams established a valid defense under section 27.005(d). We therefore remand the case to the court of appeals to make these determinations in the first instance. See TEX. R. APP. P. 60.2(d). The judgment of the court of appeals is reversed, and the case is remanded to that court for further proceedings consistent with this opinion.

[1] There may be some disagreement about the recipients of the e-mail. The copy of the e-mail in the record is addressed only to Starside employee Cindy Warren, HOA President Kim Castleberry, HOA board member Marc Powell, and Pourchot.

[2] Adams argued: "Let's go to public concern. I think this Court is on point. But the definition under 27.001 includes environmental, economic, or community well[-]being. It also includes a good product or service in the marketplace. And it appears that the cases consistent with the statute says that this is to be construed [liberally], and the cases seems to say that if — if you saw something in the marketplace, your goods or services, that is a public concern. So that's how we directly get into place." While lacking in specificity, this argument did mention environmental and community well-being.

DALLAS COURT OF APPEALS OPINION 
IN ADAMS V. STARSIDE 

JOHN DAVID ADAMS, Appellant,

v.
STARSIDE CUSTOM BUILDERS, LLC, Appellee.

No. 05-15-01162-CV.

Court of Appeals of Texas, Fifth District, Dallas.

Opinion Filed June 28, 2016.

Before Justices Fillmore, Stoddart, and O'Neill.^[1]

MEMORANDUM OPINION

Opinion by Justice ROBERT M. FILLMORE.

Starside Custom Builder, LLC sued John David Adams asserting, among other causes of action, a claim for defamation. Adams filed a supplemental motion under the Texas Citizens Participation Act, TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001-.011 (West 2015) (TCPA), requesting that the trial court dismiss Starside's defamation claim. The trial court failed to rule on the supplemental motion within the time period set out in the statute, and the supplemental motion was denied by operation of law. Id. §§ 27.005(a), 27.008(a). Adams filed this interlocutory appeal, challenging the denial of the supplemental motion. We conclude Adams failed to establish the TCPA applies to Starside's defamation claim and affirm the denial of the supplemental motion to dismiss.

Background

Bentley Premier Builders, LLC, which was owned by Sandy Golgart and Phillip Pourchot, developed and constructed homes in the Normandy Estates subdivision in Plano, Texas. Adams and his wife own a home in the subdivision. On August 6, 2013, Bentley filed for bankruptcy protection. Adams and several other homeowners subsequently filed a criminal complaint against Golgart for signing false "all bills paid" affidavits concerning their homes.

During Bentley's bankruptcy proceedings, Adams published an internet blog regarding his experiences with Bentley. The home page of the blog contains an image of Bentley's website superimposed with the statement that Bentley had "made life miserable" for builders, subcontractors, and families. Across the bottom of the page were tabs labeled "unpaid creditors," "commingled funds," "contract fraud/felony investigation," and "undisclosed felony conviction."^[2] The blog page invited the reader to contact Golgart's and Pourchot's attorneys for "their rebuttal to these allegations." The bankruptcy court ultimately confirmed a plan of reorganization for Bentley proposed by Pourchot. Bentley was then renamed Starside. Pourchot is Starside's chief executive officer.

Behind Adams's home is a creek and a parcel of land owned by Starside and designated as a "common area" of the subdivision. Adams desired to purchase the common area to provide more privacy for his family and believed Starside had agreed in principle to sell him the land if the City approved the "replat." However, in late 2014, the Normandy Estates Homeowners Association (the HOA), with funds provided by Starside, began performing landscaping work in the common area, including the removal of small trees, brush, and undergrowth. Adams and his wife strongly objected to the landscaping work being done in the common area.

On March 15, 2015, Dr. Kim Castleberry, the president of the HOA, and his wife, were marking trees in the common area that were to be removed. Adams sent an email to Starside's attorney and a number of text messages to members of the board of the HOA threatening to shoot anyone who cut down trees in the common area. Pourchot contacted the Plano police department the following day. The police officer who spoke to Adams told Pourchot that Adams claimed he owned the common area.

On March 18, 2015, at 10:18 a.m., Starside sent an email to "Normandy Estates Owners" attaching a letter and "follow up attachments" concerning "an ongoing situation in the neighborhood." The information attached to the email is not in the appellate record and the email does not reveal the recipients. Adams sent a response to the email at 11:36 a.m. that, although addressed to "HOW [sic] members," appears to have been sent only to Cindy Warren, who was an employee of Starside, Pourchot, Castleberry, and Marc Powell, a member of the board of the HOA. In the response, Adams stated, as relevant to this appeal:

First, I would like to apologize that this had to become public. It is a situation that frustrates our family very much, but we have tried to keep the rest of the neighborhood our [sic] of it, and have had no private (other homeowners) conversations regarding this since the first incident where the HOA clear cut land, and did not follow city ordinances on tree preservation. . . .

In order to avoid making claims that can not [sic] be substantiated, I will attempt to just provide verifiable facts. If you are interested in this, you can verify the facts for yourself, and I think it will give you a clear understanding that the issues we had with Sandy Golgart have continued on now that Phill is completely in control. Starside has made claims in their email that they can not [sic] substantiate. This does not matter to them though.

Adams then set out a recitation of his views about the dispute over the common area.

Starside sued Adams and his wife on March 20, 2015, asserting claims against Adams for threat of imminent bodily injury and business disparagement. Starside also sought injunctive relief as well as a declaratory judgment stating that Starside owned the common area. In its claim for business disparagement, Starside did not set out any specific conduct by Adams that it alleged caused it harm, stating generally that Adams had "maliciously made false and disparaging statements regarding [Starside], about CEO Pourchot's character and as a business person."

Adams moved to dismiss Starside's business disparagement claim pursuant to the TCPA. In his motion, Adams alleged that Starside's business disparagement claim was based on his: (1) expressed intent to protest Starside's services at the front entrance of the HOA; (2) expressed intent to protest Starside's services in yard signs on his lawn; (3) filing a police report against an individual affiliated with Starside; (4) allegedly posting a blog about a former business partner of Pourchot; (5) threatening to send a text message asking for feedback regarding Starside's services; and (6) statements to law enforcement after Starside contacted them about the "communications made the basis of this suit." Adams asserted that Starside filed the suit to prevent him "from exercising his constitutional rights of free speech and to petition the government." He argued he was entitled to the dismissal of the business disparagement claim because he had a "constitutional right to voice his opinions regarding [Starside's] services and officers of the HOA, of which he is a member," and had a "privilege and right to interact with law enforcement, including filing a police report against those individual(s) [he] believes might have committed a crime."

Starside filed an amended petition, dropping its claim for business disparagement and adding a claim for defamation that was based on the homepage of Adams's 2014 blog and Adams's March 18, 2015 email. As to the blog, Starside asserted the page included Golgart's and Pourchot's names and contained a tab entitled "undisclosed felony conviction." Starside alleged that, because this tab contained a picture of a man's handcuffed wrists, it "appears to say" Pourchot has an undisclosed felony conviction. Starside alleged the March 18, 2015 email contained the defamatory statements that "the issues we had with Sandy Golgart have continued on now that Phill is completely in control," and "land was cleared without getting the appropriate permit from the City." Starside contended these statements were defamatory because they tended to injure its reputation, impeached its honesty and integrity, and exposed it to contempt, hatred, and financial injury. Starside also alleged the statements in the March 18, 2015 email were defamatory per se because they suggested it was guilty of violating City codes and engaging in felony criminal activity.

Adams filed a three-page supplemental motion to dismiss Starside's defamation claim. The supplemental motion incorporated Adams's original motion to dismiss and briefly addressed the elements of a claim for defamation. It did not, however, address how the specific statements relied upon by Starside to support its defamation claim fell within the purview of the TCPA.

The trial court heard Adams's motion to dismiss on August 5, 2015. The trial court found that Starside attempted to avoid the motion to dismiss by "nonsuiting [its] claim for business disparagement in favor of a claim for defamation." The trial court granted the motion; dismissed Starside's business disparagement claim with prejudice; awarded Adams court costs, attorneys' fees, and other expenses incurred in defending the claim for business disparagement, in an amount to be determined at a later date; and ordered Starside should be sanctioned in an amount, to be determined at a later date, sufficient to deter it from bringing a similar action in the future.

The trial court heard Adams's supplemental motion to dismiss on August 14, 2015. The trial court failed to rule on Adams's supplemental motion within thirty days of the hearing, and the supplemental motion was denied by operation of law. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.005(a), 27.008(a). Adams's brought this interlocutory appeal from the denial of his supplemental motion to dismiss. See id. § 51.014(a)(12) (West Supp. 2015).

Analysis

Adams contends the trial court erred by denying his supplemental motion to dismiss because Starside's defamation claim is subject to the TCPA and Starside failed to present clear and specific evidence of each element of the claim.

The TCPA's purpose is "to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury." TEX. CIV. PRAC. & REM. CODE ANN. § 27.002; see also Tervita, LLC v. Sutterfield, 482 S.W.3d 280, 282 (Tex. App.-Dallas 2015, pet. denied). To that end, the TCPA provides a procedure for the expedited dismissal of retaliatory lawsuits that seek to intimidate or silence citizens on matters of public concern. In re Lipsky, 460 S.W.3d 579, 586 (Tex. 2015) (orig. proceeding); see also TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a); Andrews Cty. v. Sierra Club, 463 S.W.3d 867, 867 (Tex. 2015) (per curiam) ("When a plaintiff's claim implicates a defendant's valid exercise of First Amendment rights, the [TCPA] allows the defendant to move for dismissal.").

To obtain dismissal under the TCPA, the movant bears the initial burden of showing by a preponderance of the evidence "that the legal action is based on, relates to, or is in response to the party's exercise of" a statutorily protected right. TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b); see also In re Lipsky, 460 S.W.3d at 586. If the movant carries its initial burden, the claimant must then establish "by clear and specific evidence a prima facie case for each essential element of the claim in question." TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c); see also In re Lipsky, 460 S.W.3d at 587. But the trial court shall dismiss a legal action against the movant if the movant "establishes by a preponderance of the evidence each essential element of a valid defense to the nonmovant's claim." TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(d); see also Trevita, LLC, 482 S.W.3d at 282. When determining whether a legal action should be dismissed under the TCPA, the court must consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based. TEX. CIV. PRAC. & REM. CODE ANN. § 27.006(a); D Magazine Partners, L.P. v. Rosenthal, 475 S.W.3d 470, 479 (Tex. App.-Dallas 2015, pet. granted).

We review de novo whether the parties met their burdens of proof under section 27.005. Levatino v. Apple Tree Café Touring, Inc., No. 05-15-00614-CV, 2016 WL 929221, at *2 (Tex. App.-Dallas Mar. 11, 2016, pet. filed); Serafine v. Blunt 466 S.W.3d 352, 359 (Tex. App.-Austin 2015, no pet.). In doing so, we focus on the extent to which the factual bases of the challenged "legal action" constitute "expression" within the statutory definitions of the "`exercise of' the `right of free speech,' `right of association,' or `right to petition.'" Sloat v. Rathbun, No. 03-14-00199-CV, 2015 WL 6830927, at *2 (Tex. App.-Austin Nov. 6, 2015, pet. filed). We "do not blindly accept" attempts by the movant to characterize the plaintiff's claims as implicating protected expression. Id. at *3. Rather, we view the pleadings in the light most favorable to the plaintiff; i.e., favoring the conclusion that the claims are not predicated on protected expression. Id.Further, any activities by the movant that are not a factual predicate for the plaintiff's claim are not pertinent to the inquiry. Id.

Adams argues he was exercising his right to free speech in both the 2014 blog and the March 18, 2015 email and, therefore, established his statements are entitled to protection under the TCPA. For a communication to qualify for protection under the TCPA as the "exercise of the right of free speech" the communication must be "made in connection with a matter of public concern." TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(3); Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam).^[3]A "matter of public concern" includes an issue related to health or safety; environmental, economic, or community well-being; the government; a public official or public figure; or a good, product, or service in the marketplace. TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(7).

Adams asserts the statements on which Starside's defamation claim are based related to Starside's services in the marketplace and, therefore, are protected by the TCPA.^[4] However, the complained-about statements do not mention Starside at all, much less comment on its services in the marketplace. See Lahijani v. Malifera Partners, LLC, No. 01-14-01025-CV, 2015 WL 6692197, at *4 (Tex. App.-Houston [1st Dist.] Nov. 3, 2015, no pet.) (mem. op.) (statements that did not mention service in marketplace did not relate to matter of public concern); Bacharach v. Garcia, No. 13-14-00693-CV, 2015 WL 5136192, at *3 (Tex. App.-Corpus Christi Aug. 31, 2015, no pet.) (mem. op.) ("The public-concern argument that [movant] brings to this Court regarding statements she posted about [a third-party] does not support her motion to dismiss [plaintiff's] lawsuit."). Rather, the statements in the March 18, 2015 email generally compare Pourchot to Golgart, without explaining the basis for that comparison, and accuse the HOA, not Starside, of cutting trees in the common area without a permit from the City. The blog page refers to Bentley, not Starside, and lists Pourchot's and Golgart's attorneys as people to contact for a rebuttal. The blog page does not describe any relationship Pourchot or Golgart had with Bentley. Further, even considering Starside's argument that the picture of a man's handcuffed wrists on the tab labeled "undisclosed felony conviction" could be construed as accusing Pourchot of criminal activity, that accusation is directed toward Pourchot, not Starside's services in the marketplace.

We conclude Adams failed to establish by a preponderance of the evidence that the statements forming the basis of Starside's defamation claim were an exercise of his right to free speech as defined by the TCPA. See ExxonMobil Pipeline Co. v. Coleman, 464 S.W.3d 841, 846 (Tex. App.-Dallas 2015, pet. filed) (because communications did not relate to matter of public concern, movants failed to establish lawsuit was based on exercise of right to free speech); Sloat, 2015 WL 6830927, at *7-8. Because Adams failed to meet his burden to show the TCPA applies to Starside's defamation claim, the trial court did not err by denying Adams's supplemental motion to dismiss. See Combined Law Enforcement Ass'ns of Tex. v. Sheffield, No. 03-13-00105-CV, 2014 WL 411672, at *5 (Tex. App.-Austin Jan. 31, 2014, pet. denied) (mem. op.). We resolve Adams's issue against him and affirm the trial court's denial of the supplemental motion.^[5]

JUDGMENT

In accordance with this Court's opinion of this date, the judgment of the trial court is

AFFIRMED.

It is ORDERED that appellee Starside Custom Builders, LLC recover its costs of this appeal from appellant John David Adams.

[1] The Hon. Michael J. O'Neill, Justice, Assigned.

[2] Information, if any, that might have been accessed through these tabs is not in the record.

[3] A communication "includes the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic." Id. § 27.001(1). It is undisputed that Adams's email and blog page constitute communications under the TCPA.

[4] Adams contends on appeal that his statements also related to community well-being of the other homeowners in Normandy Estates. However, in his motion to dismiss, that was incorporated into the supplemental motion, Adams argued only that the TCPA applied because he had a constitutional right to speak about Starside's services and to interact with law enforcement. During the hearing on the supplemental motion to dismiss, Adams stated:

But the definition under 27.001 includes environmental, economic, or community wellbeing. It also includes a good[,] product or service in the marketplace. And it appears that the cases consistent with the statute says [sic] that this is tobe construed literally [sic], and the cases seem to say that if — if you saw something in the marketplace, your goods or services, that is a public concern. So that's how we directly get that into place.

Adams did not argue in either his motion, supplemental motion, or during the hearing that the complained-of statements fell within the TCPA because they related to the community well-being of the other homeowners in Normandy Estates. Accordingly, he failed to preserve that argument for appeal. See TEX. R. APP. P. 33.1(a)(1); Lahijani v. Melifera Partners, LLC, No. 01-14-01025-CV, 2015 WL 6692197, at *3 (Tex. App.-Houston [1st Dist.] Nov. 3, 2015, no pet.) (mem. op.); see also Tatum v. Hersh, No. 05-14-01318-CV, 2015 WL 9583494, at *3-4 (Tex. App.-Dallas Dec. 30, 2015, pet. filed).

[5] Because Adams failed to carry his initial burden of establishing the TCPA applies to Starside's defamation claim, we need not address his argument that Starside failed to establish by clear and specific evidence a prima facie case for each element of the claim. See TEX. R. APP. P. 47.1; Sloat, 2015 WL 6830927, at *8; Combined Law Enforcement Ass'ns of Tex. 2014 WL 411672, at *4-

TEXAS SUPREME COURT DISPOSITION OF CASE (DOCKET INFO AND LINKS)

THE SUPREME COURT OF TEXAS

Orders Pronounced April 20, 2018

ORDERS ON CAUSES

16-0786
JOHN DAVID ADAMS v. STARSIDE CUSTOM BUILDERS, LLC; from Collin County; 5th Court of Appeals District (05-15-01162-CV, ___ SW3d ___, 06-28-16)
 
The Court reverses the court of appeals' judgment and remands the case to that court.

Justice Blacklock delivered the opinion of the Court.

View Electronic Briefs | Oral Argument | Video

Texas Supreme Court lets oil field services company off the hook in chemical spill case; denies benefits of discovery rule to worker harmed by toxic liquids at drilling site. Schlumberger Technology Corp. v. Pasko (Tex. April 13, 2018)

WORKER ON DRILL SITE DID NOT DISCOVER SKIN CANCER CAUSED BY EXPOSURE TO TOXIC FRACKING LIQUID FAST ENOUGH
TEXAS SUPREME COURT DENIES APPLICATION OF DISCOVERY RULE 

Schlumberger Technology Corp. v Pasko (Tex. April 13, 2018) (Texas Supreme Court denies application of discovery rule in personal injury suit as equitable exception to the two-year statute of limitations when the injury is not discovered until later; faults court of appeal for reversing summary judgment and allowing worker whose cancer was not diagnosed until some time after the chemical exposure additional time to pursue lawsuit against Schlumberger for not providing protective equipment).

The discovery rule delays accrual until the plaintiff "knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury." S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). A related doctrine, the latent occupational disease rule, defers accrual until "a plaintiff's symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice that he or she suffers from some injury and he or she knows, or in the exercise of reasonable diligence should have known, that the injury is likely work-related." Childs, 974 S.W.2d at 40. Courts applying either the discovery rule or the latent occupational disease rule must determine when a plaintiff knew or, in the exercise of reasonable diligence, should have known she has been injured.

17-0231
SCHLUMBERGER TECHNOLOGY CORPORATION v. MICHAEL PASKO AND PEGGY PASKO; from De Witt County; 13th Court of Appeals District (13-15-00619-CV, ___ SW3d ___, 12-08-16) (After granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and reinstates the trial court's judgment.)

SCHLUMBERGER VS PASKO CASE COVERAGE BY OTHERS:
“Latent Occupational Disease” Rule Inapplicable to Frac Fluid Exposure Causing Skin Cancer
LEXOLOGY (April 18, 2018); Texas Justices Ax 'Latent Injury' Suit Against Schlumberger - Law360 (April 13, 2018). Schlumberger Technology Corp. has asked the Texas Supreme Court to reverse 'Latent Disease" Suit. By Jess Krochtengel, Law360, Dallas (March 28, 2017, 6:00 PM EDT).

SUPREME COURT OPINION 

SCHLUMBERGER TECHNOLOGY CORPORATION, Petitioner,
v.
MICHAEL PASKO AND PEGGY PASKO, Respondents.

No. 17-0231.

Supreme Court of Texas.

Opinion delivered: April 13, 2018.

Michael G. Terry, John Reid Simpson, for Schlumberger Technology Corporation, Petitioner.

Nicole Denise Lodde, Gilbert James Martinez, for Peggy Pasko, Respondent.

On Petition for Review from the Court of Appeals for the Thirteenth District of Texas.

PER CURIAM.

This appeal concerns application of the statute of limitations in a personal injury case. Michael Pasko was injured when he was exposed to and burned by caustic chemicals while working at an oil well site. Less than two years later, Pasko sued several defendants because of his injuries. He joined Schlumberger Technology Corporation as a defendant more than two years after he was injured, but less than two years after he was diagnosed with cancer that he attributed to the chemical exposure. In response to Schlumberger's motion for summary judgment based on limitations, Pasko urged that he sued Schlumberger timely because his cancer was inherently undiscoverable and that his cause of action did not accrue until he discovered the cancer. The trial court granted Schlumberger's motion for summary judgment. The court of appeals applied the discovery rule and reversed, concluding that Pasko raised a genuine issue of material fact about whether he knew or should have known the nature of his injury before his cancer diagnosis. Because the court of appeals erred in applying the discovery rule, we reverse its judgment and reinstate that of the trial court.

Pasko was employed by JC Fodale Energy Services, LLC, a contractor on the location where an oil well was being drilled. Schlumberger was also a contractor at the well site. Pasko alleges that on May 6, 2013, a Schlumberger employee instructed him to clean up a spill of fracking liquid backflow but did not provide him with protective equipment. Pasko alleges that the liquid contained toxic fracking chemicals, including a substance called "U028," and that during the course of his cleaning the spill, most of his body came into contact with the liquid. Pasko claims that the chemicals caused his skin to burn and that within hours, he was in severe pain. He was seen at several hospitals and finally received treatment in San Antonio. In the days immediately following the incident, Pasko's symptoms were severe enough that he claims to have feared for his life. On September 12, 2013, a little over four months after being exposed to the liquid, Pasko was diagnosed with squamous cell carcinoma cancer.

On May 5, 2015, Pasko sued several entities and individuals for causing his injuries, but he did not name Schlumberger as a defendant until he filed his first amended petition on August 13, 2015. In his first amended petition, Pasko alleged that Schlumberger negligently allowed the toxic chemical U028 to leak into the liquid he was asked to clean and that Schlumberger's employee negligently instructed him to clean the liquid without providing proper protective equipment or instructions. Pasko sought to recover from Schlumberger for the cancer—a "new injur[y] and illness"—which developed as a result of his exposure.

Schlumberger filed a motion for summary judgment, arguing that Pasko's claims against it were untimely under the two-year statute of limitations. TEX. CIV. PRAC. & REM. CODE § 16.003(a). Pasko filed a response to Schlumberger's motion as well as a second amended petition. In the amended petition, he asserted that limitations were tolled by the discovery rule until at least August 6, 2015, which he alleged was the earliest date he could have known of Schlumberger's negligence. Pasko also alleged that his injuries were inherently undiscoverable and that his delay in suing Schlumberger was a result of several of the defendants' fraudulent concealment of information regarding the accident, including information about which entity had supplied the U028. Pasko attached several exhibits to his response. In its reply, Schlumberger requested the trial court to consider several of Pasko's exhibits as well as his second amended petition in support of its motion. The trial court granted Schlumberger's motion for summary judgment.

The court of appeals reversed and remanded. ___ S.W.3d ___ (Tex. App.-Corpus Christi 2016). As characterized by the court of appeals, Pasko made three arguments: (1) the trial court considered untimely evidence from Schlumberger; (2) Schlumberger did not disprove each element of the discovery rule; and (3) a genuine issue of material fact existed as to whether the statute of limitations was tolled by fraudulent concealment. Id.at ___. The appeals court addressed only the second argument because it was dispositive. Id. at ___. In addressing the discovery rule, the court discussed the accrual date for a "latent occupational disease" cause of action, which the court stated was not "until a plaintiff's symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice that he or she suffers from some injury and he or she knows, or in the exercise of reasonable diligence should have known, that the injury is likely work-related." Id. at ___ (quoting Markwardt v. Tex. Indus., Inc., 325 S.W.3d 876, 887 (Tex. App.-Houston [14th Dist.] 2010, no pet.)). The court concluded that Schlumberger had not proved that as a matter of law Pasko (1) knew or should have known as of May 6, 2013, that he suffered from a latent occupational illness, and (2) was aware of Schlumberger's alleged wrongful conduct before he was diagnosed with cancer. Id. at ___.

Schlumberger argues that the court of appeals erred by applying the "latent occupational disease rule," which Schlumberger describes as an offshoot of the discovery rule. According to Schlumberger, a personal injury claim accrues when a claimant sustains a known, discernable injury, even if the injury is not "complete" and even if the alleged "complete" injury is not ascertainable until later. Thus, Schlumberger reasons, Pasko's entire claim against it accrued on May 6, 2013, and was barred by limitations when he joined Schlumberger as a defendant on August 13, 2015. Schlumberger claims that the court of appeals erred by applying the discovery rule to delay the accrual date because one of the discovery rule's threshold elements—an "inherently undiscoverable" injury—was not met. Schlumberger points out that not only did Pasko incur a known, acute injury on May 6, 2013, but his cancer was discovered well within the limitations period.

Pasko characterizes Schlumberger's arguments as an attempt to avoid its burden to produce evidence negating the discovery rule. According to Pasko, the court of appeals correctly held Schlumberger to its burden to prove as a matter of law that Pasko knew or, in the exercise of reasonable diligence, should have known of his cancer before August 15, 2013. Pasko further argues that it does not matter whether the court of appeals applied the discovery rule or the latent occupational disease rule because either would require Schlumberger to produce evidence negating it as a matter of law, which Schlumberger failed to do. Pasko also maintains the evidence supporting Schlumberger's motion is legally insufficient and that Schlumberger was not entitled to rely on the evidence attached to Pasko's response or his pleadings.

A trial court's decision to grant summary judgment is subject to de novo review. Shell Oil Co. v. Writt, 464 S.W.3d 650, 654 (Tex. 2015). Courts review the record "in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion." City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005). "Undisputed evidence may be conclusive of the absence of a material fact issue, but only if reasonable people could not differ in their conclusions as to that evidence." Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012). A defendant moving for summary judgment on the affirmative defense of limitations bears the burden of conclusively establishing the elements of that defense. KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). This includes conclusively establishing when the cause of action accrued. Id. In cases in which the plaintiff pleads the discovery rule, the defendant moving for summary judgment on limitations bears the additional burden of negating the rule. See id.; Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex. 1998). Defendants may do this by either conclusively establishing that (1) the discovery rule does not apply, or (2) if the rule applies, the summary judgment evidence negates it. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223-24 (Tex. 1999).

Texas Civil Practice and Remedies Code section 16.003(a) mandates that suits for personal injury must be brought no later than two years after the day the cause of action accrues. Ordinarily, the legal injury rule dictates that accrual occurs when "a wrongful act causes a legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred." Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 721 (Tex. 2016). Absent some exception, such as the discovery rule, injuries that arise or develop after the legal injury are still deemed to have accrued on the same date as the legal injury that caused them. See Childs, 974 S.W.2d at 36 ("In most cases, a cause of action accrues when a wrongful act causes an injury, regardless of when the plaintiff learns of that injury or if all resulting damages have yet to occur."). However, to avoid the sometimes "shocking results" caused by application of the legal injury rule, an exception is recognized: the discovery rule. See Comput. Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 457 (Tex. 1996). The discovery rule delays accrual until the plaintiff "knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury." S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). A related doctrine, the latent occupational disease rule, defers accrual until "a plaintiff's symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice that he or she suffers from some injury and he or she knows, or in the exercise of reasonable diligence should have known, that the injury is likely work-related." Childs,974 S.W.2d at 40. Courts applying either the discovery rule or the latent occupational disease rule must determine when a plaintiff knew or, in the exercise of reasonable diligence, should have known she has been injured.

Here, the summary judgment evidence and the pleadings establish that (1) Pasko sustained severe burn injuries to his body when he came into contact with backflow liquids on May 6, 2013; (2) he knew immediately that he had been burned by the liquids and sought medical treatment; and (3) he knew that Schlumberger's employees assigned him to the cleanup job without providing protective equipment. Schlumberger established conclusively that pursuant to the legal injury rule, Pasko's cause of action accrued that day.

The court of appeals based its holding, in part, on Schlumberger's failure to offer evidence "suggest[ing] that Pasko was aware of Schlumberger's alleged wrongful conduct before he was diagnosed." ___ S.W.3d at ___. But whether the discovery rule applies turns on whether the injured person is aware that she has an injury and that it was likely caused by the wrongful acts of another. See S.V., 933 S.W.2d at 4. It does not turn on whether the injured person knows the exact identity of the tortfeasor or all of the ways in which the tortfeasor was at fault in causing the injury. See Childs, 974 S.W.2d at 40. Nor does it turn on when the full effects of the injury became known or developed. See id. at 41. In this case, Pasko knew he was injured by the fluids and that he had not been provided safety equipment to protect him from coming into contact with them. It does not matter, for purposes of when his cause of action accrued, that he did not develop, or learn that he had developed, cancer until four months later. See ExxonMobil Corp. v. Lazy R Ranch, LP, 511 S.W.3d 538, 542-43 (Tex. 2017) ("[A] claim accrues when injury occurs, not afterward when the full extent of the injury is known."); In re Jorden, 249 S.W.3d 416, 422 (Tex. 2008) ("Texas law has never required that a plaintiff know all the essential facts before a cause of action exists. To the contrary, a cause of action accrues . . . when a claimant learns of an injury, even if the rest of the essential facts are unknown."); see also Pustejovsky v. Rapid-Am. Corp., 35 S.W.3d 643, 651 (Tex. 2000) (holding that under the "single action rule," providing plaintiffs with separate causes of action for separate diseases arising from a defendant's single breach would be "incompatible" with the Court's "transactional approach" for res judicata).

In reaching its conclusion, the court of appeals discussed the accrual of a cause of action where a latent occupational disease is involved. ___ S.W.3d at ___. It noted Pasko presented evidence that he did not know his cancer—which the court termed a "latent disease"—was work related until months after the incident, and that Schlumberger failed to prove Pasko was aware of Schlumberger's alleged wrongful actions before his cancer was diagnosed. Id. at ___. We disagree that the latent occupational disease rule applies in this case. When we first announced the rule, we cabined in the circumstances under which it would apply: "Unlike traumatic injury cases, a plaintiff who suffers from a latent injury or disease typically does not and cannot immediately know about the injury or its cause because these injuries often do not manifest themselves for two or three decades following exposure to the hazardous substance." Childs, 974 S.W.2d at 38. As discussed above, Pasko's injuries are not of a latent type: he immediately knew that the fluids were burning him, even though the full effects of his exposure were not immediately known. Many injuries result in the injured person developing more extensive problems or diseases than are at first apparent. But those developmental types of problems or diseases do not move the injury into the category of a latent occupational disease. There was nothing latent about what was happening to Pasko or his injury. Accordingly, to the extent the court of appeals incorporated the latent occupational disease analysis into its decision, it erred.

Pasko also complains that the trial court improperly considered Pasko's own summary judgment evidence against him. Pasko argues that Schlumberger was not entitled to rely on his summary judgment evidence because Schlumberger did not serve it on Pasko at least twenty-one days prior to the hearing on Schlumberger's motion. See TEX. R. CIV. P. 166a(c) (requiring affidavits supporting a summary judgment motion to filed and served at least twenty-one days before the hearing on the motion). According to Pasko, Schlumberger was required to seek leave of court to submit new evidence less than twenty-one days before the hearing, and to reset the hearing to no sooner than twenty-one days after it filed its reply relying on Pasko's evidence. We disagree. Rule 166a(c) plainly provides for the court to consider evidence in the record that is attached either to the motion or a response. Wilson v. Burford, 904 S.W.2d 628, 629 (Tex. 1995). Schlumberger was allowed to rely on, and the trial court could consider, the evidence and pleadings Pasko filed.

The court of appeals did not address Pasko's argument that the defendants' fraudulent concealment produced the delay in his bringing suit against Schlumberger. However, Pasko does not urge that the judgment of the court of appeals should be affirmed on that basis. Nor does he pray that if we reverse the court of appeals judgment, then we should remand the case to that court for it to consider the fraudulent concealment argument. Accordingly, we neither address the argument nor remand the case to the court of appeals for it to consider it.

We grant Schlumberger's petition for review. Without hearing oral argument, we reverse the court of appeals' judgment and reinstate that of the trial court. TEX. R. APP. P. 59.1.

Per Curiam Opinion

Schlumberger signage on grounds of West Houston office building
on Dairy Ashford Rd (2014 photo) 

OPINION OF THE COURT OF APPEALS BELOW

MICHAEL PASKO, Appellant,
v.
SCHLUMBERGER TECHNOLOGY CORPORATION, Appellee.

No. 13-15-00619-CV.

Court of Appeals of Texas, Thirteenth District, Corpus Christi, Edinburg.

Delivered and filed December 8, 2016. 

Michael G. Terry, for Schlumberger Technology Corporation, Appellee.

Gilbert Martinez, Nicole Henning, for Peggy Pasko, Appellant.

Nicole Henning, Gilbert Martinez, for Michael Pasko, Appellant.

On appeal from the 24th District Court of DeWitt County, Texas.

Before Justices Garza, Perkes and Longoria.

MEMORANDUM OPINION

Memorandum Opinion by Justice NORA L. LONGORIA.

Appellant Michael Pasko sued various parties regarding a work-related injury, including appellee Schlumberger Technology Corporation ("Schlumberger"). The trial court granted Schlumberger's motion for summary judgment based on the affirmative defense of limitations. Pasko argues on appeal that the trial court erred in granting Schlumberger's motion for summary judgment. We conclude that Pasko raised a genuine issue of material fact concerning the date he became aware of his injury and reverse and remand.

I. BACKGROUND

Pasko was working as a third-party contractor for JC Fodale Energy Services, LLC on a well site in DeWitt County on May 6, 2013. Schlumberger is a third-party contractor that supplied employees, equipment, and chemicals to the well site. Pasko claims that while he was waiting for his job safety analysis sheet to be signed, a Schlumberger employee told Pasko that a berm was about to overflow due to a water spill. Under the direction of Schlumberger's employee, Pasko cleaned the spill. However, the spilled water actually contained a mixture of chemicals described as "frac chemical residue" that caused his hands to burn when the mixture came into contact with him. Pasko was taken to several hospitals but ultimately received treatments for his chemical burns in San Antonio. In September 2013, Pasko was diagnosed with squamous cell carcinoma.

Pasko filed suit against various parties and individuals on May 5, 2015 for negligence, gross negligence, negligent misrepresentation, fraud, fraudulent concealment, conspiracy, and intentional infliction of emotional distress. Pasko amended his petition to include Schlumberger as a defendant in August 2015. Among several other claims, Pasko alleged that Schlumberger negligently rigged a hose containing U028, a gelling agent, on May 5, 2013, the day before the incident. In other words, Pasko does not argue that Schlumberger's negligence caused the frac chemical residue overflow on May 6, but rather he alleges that Schlumberger's negligence on May 5 caused U028 to leak into the frac chemical residue that he was forced to clean.

Schlumberger filed a motion for summary judgment based upon limitations. Schlumberger argued that more than two years had passed since Pasko's injury and thus Pasko's claims against Schlumberger were barred by the statute of limitations. Pasko filed a second amended petition that pled the discovery rule as to all causes of action against Schlumberger. The trial court granted Schlumberger's motion for summary judgment and severed Schlumberger from the original lawsuit. This appeal ensued.

II. SUMMARY JUDGMENT

In three issues, Pasko argues on appeal that it was an error for the trial court to grant summary judgment because: 1) the trial court considered untimely evidence from Schlumberger; 2) Schlumberger did not disprove each element of the discovery rule as pled by Pasko; and 3) Pasko established a genuine issue of material fact as to whether the statute of limitations was tolled by fraudulent concealment.

A. Standard of Review

We review a traditional summary judgment de novo. See Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). In a traditional motion for summary judgment, the movant has the burden to show both that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). Thus, a defendant moving for traditional summary judgment has the burden to conclusively prove its affirmative defense. See Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015).

When the plaintiff pleads the discovery rule, the defendant has the burden to negate the discovery rule by establishing as a matter of law no genuine issue of material fact exists regarding when the plaintiff became aware, or should have become aware, of his injury. See Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998). "The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence." Transcon. Ins. Co. v. Briggs Equip. Trust, 321 S.W.3d 685, 692 (Tex. App.-Houston [14th Dist.] 2010, no pet.). All evidence favorable to the nonmovant must be taken as true, and all reasonable doubts must be resolved in favor of the nonmovant. See Childs, 974 S.W.2d at 44. "Typically, inquiries involving the discovery rule raise questions to be decided by the trier of fact, although the trial court may determine the commencement of limitations as a matter of law if reasonable minds could not differ about the conclusion to be drawn from the facts." Nugent v. Pilgrim's Pride Corp., 30 S.W.3d 562, 567 (Tex. App.-Texarkana 2000, pet. denied).

B. Applicable Law

Texas has established a two-year limitations period from the date a cause of action accrues for a plaintiff to file a claim based on personal injury. See TEX. CIV. PRAC. & REM. CODE § 16.003(a) (West, Westlaw through 2015 R.S.). "[T]he discovery rule operates to defer accrual of a cause of action until a plaintiff discovers or, through the exercise of reasonable care and diligence, should discover the `nature of his injury.'" See Childs, 974 S.W.2d at 44 (citing Trinity River Auth. v. URS Consultants, Inc., 889 S.W.2d 259, 262 (Tex. 1994)). Discovering the nature of the injury requires "knowledge of the wrongful act and the resulting injury." Id.; see also Shell Oil Co. v. Ross, 356 S.W.3d 924, 929-30 (Tex. 2011). Thus, accrual is tolled until a claimant discovers or should have "discovered the injury and that it was likely caused by the wrongful acts of another." Childs, 974 S.W.2d at 40 (emphasis added); see Pressure Sys. Int'l, Inc. v. Sw. Research Inst., 350 S.W.3d 212, 217 (Tex. App.-San Antonio 2011, pet. denied) ("That is, the plaintiff must be aware that his injury was caused by someone's wrongful act, but need not necessarily know who performed the wrongful act."); Baxter v. Gardere Wynne Sewell LLP, 182 S.W.3d 460, 463 (Tex. App.-Dallas 2006, pet. denied) (same). More specifically, the

accrual of a "latent occupational disease" claim is deferred "until a plaintiff's symptoms manifest themselves to a degree or for a duration that would put a reasonable person on notice that he or she suffers from some injury and he or she knows, or in the exercise of reasonable diligence should have known, that the injury is likely work-related."

Markwardt v. Tex. Indus., Inc., 325 S.W.3d 876, 887 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (quoting Childs, 974 S.W.2d at 40). A plaintiff's "mere suspicion . . . that a causal connection exists between [his] exposure and symptoms is, standing alone, insufficient to establish accrual as a matter of law." Id. at 888. However, a medical diagnosis is sufficient to start the limitations period. Id.

C. Discovery Rule

In Pasko's second issue, he claims that the trial court erred in granting summary judgment because he raised genuine issues of material fact regarding the application of the discovery rule.

In response to Schlumberger's motion for summary judgment based on limitations, Pasko amended his petition to plead the discovery rule. Pasko was injured on May 6, 2013 but did not serve Schlumberger until August 2015, more than two years later. Schlumberger asserts that because Pasko failed to serve Schlumberger within two years of discovering the injury on May 6, 2013, his suit against Schlumberger is barred by the statute of limitations. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) (West, Westlaw through 2015 R.S.). However, Pasko argues that he did not discover the injury he suffered from Schlumberger on May 6. Pasko admits that he knew he suffered chemical burns to his hands as of May 6 but argues that he did not discover the latent disease until September of 2013 when he was diagnosed with squamous cell carcinoma. He also argues that he exercised due diligence in fully discovering the extent of his injury through discovery with the defendants; however, he claims that the defendants took several months to disclose vital information regarding what was in the mixture he was exposed to, which delayed his ability to discover his latent disease.

Furthermore, Pasko claims that he was initially unaware of Schlumberger's alleged wrongful acts and negligence on May 5; he asserts that he did not discover the alleged negligent hose set up until he was diagnosed with carcinoma, filed suit, and commenced discovery. Thus, according to Pasko, the accrual date for the injuries he suffered as a result of Schlumberger was in September of 2013 when he became aware of his latent disease. See Markwardt, 325 S.W.3d at 887.

Schlumberger counters by arguing that Pasko was aware of his injury on May 6, 2015. Since the squamous cell carcinoma developed in the exact area he was burned, Pasko should have already been aware of that injury. Therefore, Schlumberger argues that the discovery rule is inapplicable because Pasko knew he was harmed on May 6, 2013 and that is when the limitations period began to accrue. See id.

Pasko admits that he was aware of the chemical burn on May 6, 2013, but asserts that he was not aware that his exposure to U028 was allegedly caused by Schlumberger's wrongful acts on May 5 until his diagnosis several months later. See Childs, 974 S.W.2d at 40. Pasko argues that until he had conducted discovery for several months and had been diagnosed with skin cancer, he had no reason to suspect Schlumberger of negligent behavior and he had no reason to believe he would develop squamous cell carcinoma.
  

Viewing all the evidence in the light most favorable to Pasko, we conclude that he raised a genuine issue of material fact concerning when he discovered, or should have discovered, that he suffered from an occupational disease as a result of Schlumberger's alleged negligence. See Provident, 128 S.W.3d at 215; Transcon.,321 S.W.3d at 692. It was Schlumberger's burden in this case to negate the application of the discovery rule in order to prevail on its summary judgment. See Childs, 974 S.W.2d at 40. Pasko presented evidence suggesting that he did not discover his latent disease and he did not know it was work related until several months after being exposed to the chemicals. See Markwardt, 325 S.W.3d at 887. However, Schlumberger failed to establish as a matter of law that as of May 6, 2015, Pasko was aware, or that diligent investigation would have led Pasko to be aware, that he suffered from a latent occupational illness. See Childs, 974 S.W.2d at 47. In fact, Schlumberger presented no summary judgment evidence to establish as a matter of law that Pasko was aware of his squamous cell carcinoma before September of 2013. See Markwardt, 325 S.W.3d at 887. And Schlumberger offered no evidence to establish as a matter of law that through the exercise of reasonable diligence Pasko could have discovered his latent disease before September of 2013. See id. Even if Schlumberger is arguing that Pasko should have suspected he had squamous cell carcinoma because of the nature of his injury, mere suspicion alone is insufficient to establish that the limitations period began to accrue as a matter of law. See id. Furthermore, Schlumberger offered no evidence to suggest that Pasko was aware of Schlumberger's alleged wrongful conduct before he was diagnosed with squamous cell carcinoma. See Childs, 974 S.W.2d at 44.

Consequently, a fact question remains with respect to whether Pasko knew or should have known through the exercise of reasonable diligence the nature of his injury before he was diagnosed with squamous cell carcinoma. See Childs, 974 S.W.2d at 47; see also Nugent, 30 S.W.3d at 574 (holding that the discovery rule tolled the plaintiffs' injury claims because they did not discover that they had developed squamous cell carcinoma until several years after exposure). Therefore, we sustain Pasko's second issue. Because we sustain Pasko's second issue, we need not address his other two issues. See Tex. R. App. P. 47.1.

III. CONCLUSION

We reverse the trial court's order granting the summary judgment and remand to the trial court for further proceedings in accordance with this opinion.

17-0231	SCHLUMBERGER TECHNOLOGY CORPORATION v. MICHAEL PASKO AND PEGGY PASKO; from De Witt County; 13th Court of Appeals District (13-15-00619-CV, ___ SW3d ___, 12-08-16)
	Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and reinstates the trial court's judgment. Per Curiam Opinion View Electronic Briefs | Oral Argument N/A | Video N/A