HouReal Corporation v. Rescue Concepts Inc.
01-23-00211-CV
Tex. App.Jun 3, 2025Background
- HouReal Corporation sued Rescue Concepts Inc. (RCI) for breach of a 2014 contract to purchase a 300-acre property after RCI failed to provide a required survey and secretly sold the property to a third party (NPH Dayton) during ongoing litigation.
- HouReal had placed a notice of lis pendens to protect its rights, but the trial court later expunged this after a mandamus proceeding initiated by RCI.
- HouReal discovered the sale only shortly before a scheduled trial in its first lawsuit; believing key information was concealed and discovery improperly denied, it could not add NPH Dayton or seek specific performance in that first litigation.
- In a subsequent suit, HouReal again sued RCI for breach of contract, seeking specific performance and other remedies, and asserted that NPH Dayton was not a bona fide purchaser because it had notice of HouReal’s claims.
- RCI moved to dismiss under the Texas Citizen Participation Act (TCPA), claiming HouReal’s claims were “based on or in response to” RCI’s communications (i.e., right to petition); the trial court granted dismissal and awarded RCI attorney’s fees.
- The Court of Appeals reviewed whether the TCPA properly applied and whether RCI was entitled to dismissal and attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the TCPA apply to HouReal’s breach of contract? | Claims are based on RCI’s conduct (contract breach), not protected communications. | Claims are based on or in response to RCI’s prior court communications. | TCPA does not apply; suit is based on conduct, not communications. |
| Was dismissal under the TCPA warranted? | No, RCI failed to meet the initial burden showing TCPA applies. | TCPA’s requirements are met, so dismissal required. | Dismissal was improper due to failure to meet TCPA burden. |
| Entitlement to attorney’s fees under the TCPA? | RCI not entitled because dismissal was improper. | Award proper since dismissal was granted. | Award of attorney’s fees to RCI was erroneous. |
| Should the harmless error rule apply to dismissal? | No, error not harmless as dismissal and fee award affect rights. | Yes, dismissal was proper for alternate reasons (e.g., res judicata). | Harmless error rule does not apply to affirm erroneous dismissal. |
Key Cases Cited
- Sommers for Alabama & Dunlavy, Ltd. v. Sandcastle Homes, Inc., 521 S.W.3d 749 (Tex. 2017) (explains the public notice effect and legal consequences of filing a notice of lis pendens)
- McLane Champions, LLC v. Houston Baseball Partners LLC, 671 S.W.3d 907 (Tex. 2023) (sets out the burden-shifting framework for TCPA motions)
- Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40 (Tex. 2021) (standard of review for TCPA dismissal is de novo)
- Rescue Concepts Inc. v. HouReal Corp., 696 S.W.3d 127 (Tex. App.—Houston [1st Dist.] 2022, pet. denied) (prior related litigation giving context to current claims)