669 S.W.3d 195
Tex.2023Background
- USA Lending hired Winstead PC to sue former employee Mike Ahmari for allegedly acquiring company domain and toll‑free number in his own name and diverting them to a competitor.
- Ahmari failed to answer; Winstead prepared a motion for default judgment and drafts of an affidavit seeking monetary damages, but the final affidavit Winstead filed omitted any request for money damages.
- The federal court entered a default judgment declaring USA Lending the owner of the assets but awarding no monetary relief; USA Lending then sued Winstead and attorney James Ruiz for legal malpractice seeking over $1,000,000.
- Winstead moved to dismiss under the Texas Citizens Participation Act (TCPA); the trial court denied dismissal and the court of appeals reversed, holding the motion for default judgment was a protected communication and that USA Lending failed to show prima facie collectibility of the damages.
- The Texas Supreme Court granted review and, without resolving whether the TCPA applies to the petitioning activity, held that USA Lending presented clear and specific prima facie evidence of both causation and the reasonable probability of collecting a monetary judgment, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the TCPA applies to Winstead’s conduct | USA Lending argued TCPA does not bar its malpractice claim or that exemptions apply | Winstead argued the suit targets its right to petition so TCPA dismissal required | Court avoided deciding TCPA applicability because it found prima facie evidence sufficient to survive dismissal |
| Whether the commercial‑speech exemption to TCPA applies | USA Lending contended the exemption (commercial speech) precludes dismissal | Winstead argued the motion did not arise from a commercial transaction so exemption doesn’t apply | Court did not decide on the exemption (ruled on prima facie sufficiency instead) |
| Whether USA Lending showed prima facie causation and some damages | USA Lending relied on CEO affidavit and expert testimony that Winstead breached instructions and that out‑of‑pocket costs and expenses flowed from the breach | Winstead said affidavits were conclusory and insufficient to prove damages caused by malpractice | Court held USA Lending presented clear, specific evidence to infer some specific, demonstrable damages causally linked to Winstead’s omission |
| Whether USA Lending showed prima facie that it would likely have collected a money judgment (collectibility) | USA Lending offered experts and circumstantial records tying Ahmari to All Home Lending and showing assets reachable via California community‑property or fraudulent‑transfer doctrines | Winstead argued the collectibility theory rested on speculative assumptions about ownership, transfers, and defenses to enforcement | Court held circumstantial evidence plus expert opinion met the low prima facie threshold to infer reasonable likelihood of collection; facts and defenses may be litigated later |
Key Cases Cited
- In re Lipsky, 460 S.W.3d 579 (Tex. 2015) (prima facie standard under TCPA requires clear and specific evidence; conclusory affidavits insufficient)
- S&S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843 (Tex. 2018) (plaintiff need only show evidence supporting a rational inference of some specific, demonstrable damages)
- Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Rsch. Corp., 299 S.W.3d 106 (Tex. 2009) (legal malpractice elements including requirement to prove collectibility of underlying judgment)
- Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127 (Tex. 2019) (broad definitions of rights protected under the TCPA)
- Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40 (Tex. 2021) (standards for reviewing TCPA applicability and dismissal)