In 2011, the Texas Legislature passed the Texas Citizens Participation Act (TCPA) also characterized as an anti-SLAPP statute (Strategic Lawsuit Against Public Participation). “The purpose of this [Act] 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 (West). However, as can be seen from one recent case, due to the broad language within the statute, the TCPA is now being applied  to lawsuits arising out of business disputes that appear to exceed the TCPA’s expressed purpose.

In the case of Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865, 865–71 (Tex. App.—Austin 2018, no pet. h.), the Plaintiff Purchaser Entities sued the Defendant Seller Entity and its principals  for breach of contract, tortious interference, breach of fiduciary duty, fraud, misappropriation of trade secrets, civil conspiracy and violations of non-compete agreements. The dispute arose out of an asset purchase agreement entered into between one of the Defendant Purchaser Entities and the Defendant Seller Entity.  The Defendant Seller Entity was a technology solutions provider certified by the State of Texas as a Historically Underutilized Business (HUB) allowing it to compete for government contracts that give preferential treatment to HUBs. There was a series of transfers and modifications made in connection with the asset purchase agreement in order to preserve the HUB status of the  Defendant Seller Entity.

In the years following the execution of the asset purchase agreeement, the business relationship between the Defendant Seller Entity and Plaintiff Purchaser Entities deteriorated and the underlying lawsuit ensued. The Defendants filed a motion to dismiss under the TCPA. The trial court denied the motion in its entirety and the appeal followed.

The Austin Court of Appeals found that the trial court erred in denying the motion in its entirety because the allegations in the Plaintiffs’ lawsuit fell within the purview of the TCPA. According to the appellate court, the statute applied to Plaintiffs’ lawsuit in that the underlying transactions between the buyer and seller companies and allegations against Defendants were related to the Defendant Seller Entity’s HUB status. The TCPA applies to the “exercise of the right of free speech.” The HUB issues relate to “government”and to “economic well-being.”  This is sufficient to make the best TCPA applicable. Grant v. Pivot Technology Solutions, supra, pp. 877–878.

Further, the appellate court found that the TCPA applied because the allegations in Plaintiffs’ lawsuit  involved the “exercise of the right of association.” The court stated that many of the Plaintiffs claims were based upon the Defendants’ acting together to share and use  Plaintiff’s confidential information.  “Consequently, these claims (which are almost identical to those brought by the plaintiffs in Elite Auto ) are “based on, relate[d] to, or [are] in response to” communications “between [the Defendants] who had joined together to pursue a common interest in employment with [the Defendant Seller Entities] and ensuring [Defendant Seller Entity] was able to operate as a HUB,” protected as an “exercise of the right of association.”” Grant v. Pivot Tech. Sols., Ltd., supra, p. 881.The court even seemed to place importance upon the allegations that the Defendants conspired to commit illegal acts.

The appellate court held that the trial court erred by denying the Defendants’ TCPA motion to dismiss “because the [Plaintiffs] failed to present clear and specific evidence of a prima facie case for every essential element of each and every claim for relief.” Grant v. Pivot Tech. Sols., Ltd., supra, p. 884. The only claims of the Plaintiffs that survived were those based upon improper solicitation and competition which are excluded from the TCPA under the commercial-speech exemption.

In conclusion, this opinion seems to be a far reaching opinion in applying the TCPA.  Moreover, there seems to be a growing body of Texas case law applying the Act in ways that one would never have imagined when it was first enacted. Thus, business plaintiffs and their attorneys in many types of corporate disputes will have to be prepared at the early stages of litigation to defend against a possible motion to dismiss under the TCPA. Otherwise, they may find their otherwise meritorious cases being dismissed under the Act. This will no doubt increase the costs of litigation in the early stages for business plaintiffs.

The constructive trust is a powerful weapon that plaintiffs can use against defendants who have breached their fiduciary duties or committed fraud. In one Texas case, the court of appeals actually affirmed the trial court’s award to the plaintiffs of all the assets in the business owned by the defendant who breached his fiduciary duties and committed fraud. Bright v. Addison, 171 S.W.3d 588, 595 (Tex. App.—Dallas 2005, pet. denied) .

In the Bright case, supra, Plaintiffs sued their attorney, Bright, and his law firm(s) for usurping a business opportunity to manage a casino in Aruba. Plaintiffs also sued the Aruban corporation set up by Bright to manage the casino.  The factual record of the case is limited, but apparently, Plaintiffs were in the casino business and hired Bright to perform legal work related to Plaintiffs’ business operations.  In connection with Bright’s representation of Plaintiffs, he allegedly learned of an opportunity to manage a casino in Aruba and did not disclose this opportunity to Plaintiffs   Instead, Bright took advantage of this opportunity for himself by setting up his own corporation to manage the Aruba casino.

Plaintiffs later learned about Bright’s alleged misdeeds and sued Bright and his law firms for usurping this business opportunity. Plaintiff’s alleged causes of action against Defendants including for breach of fiduciary duty, fraud and tortious interference with a prospective contract. Plaintiffs requested that the trial court impose a constructive trust upon the assets of Bright’s corporation used to manage the Aruba casino, and also requested that the trial court award Plaintiffs lost profits and punitive damages against Defendants.  Plaintiffs prevailed at trial and the Defendants appealed.

The court of appeals held that there was legally and factually sufficient evidence to show that Bright was Plaintiffs’ attorney so that Bright owed Plaintiffs a fiduciary duty of full disclosure.  Bright had a duty to disclose the opportunity to Plaintiffs to manage the Aruba casino and intentionally chose not to disclose this opportunity to them. There was sufficient evidence to uphold the trial court’s determination that Bright breached his fiduciary duty, committed fraud and committed tortious interference.

The court of appeals also affirmed the trial court’s ruling that a constructive trust should be imposed in favor of Plaintiffs upon all the assets of the Aruban corporation set up by Defendant Bright to manage the Aruba casino. The court of appeals held that breach of fiduciary duty and fraud are grounds for imposing a constructive trust and the trial court did not abuse its discretion in imposing the constructive trust.

Defendants also challenged the trial court’s award of lost profits. Defendants grounds for appeal on this issue included that Plaintiff’s expert CPA was not qualified to testify as to lost profits.  The Court found that the trial court did not abuse its discretion in finding that the CPA who had extensive experience in valuing casinos was qualified to testify.  The court also upheld the trial court’s award of punitive damages against the Defendants.

In conclusion, Texas courts have the authority to award both equitable relief and damages against parties committing breach of fiduciary duty or fraud.  One of the available equitable remedies is the imposition of a constructive trust upon assets that are obtained as a result a breach of fiduciary duty or fraud. As can be seen from the Bright case, this remedy can be harsh and extensive.  Typically, an expert will need to be hired to trace the assets upon which the plaintiff seeks the imposition of the constructive trust as well as to support an award of lost profits. If the expert is qualified, and the plaintiff proves his case, a defendant may lose everything tainted by the breach of fiduciary duty or fraud.

 

Texas Corporate directors and officers owe fiduciary duties of obedience, loyalty and due care to the corporation.  Gearhart Indus., Inc. v. Smith Intern., Inc., 741 F.2d 707, 719 (5th Cir. 1984); Loy v. Harter, 128 S.W.3d 397, 407 (Tex. App.—Texarkana 2004, pet. denied). In this context, directors and officers are probably most often found liable for violating the fiduciary duty of loyalty.

“The duty of loyalty dictates that a corporate officer or director must act in good faith and must not allow his or her personal interest to prevail over the interest of the corporation. The duty of loyalty is described as requiring an extreme measure of candor, unselfishness, and good faith on the part of the officer or director.” Loy v. Harter, supra, p. 407. “An officer or director is considered “interested” if he or she (1) makes a personal profit from a transaction by dealing with the corporation or usurps a corporate opportunity, (2) buys or sells assets of a corporation, (3) transacts business in his or her officer’s or director’s capacity with a second corporation of which he or she is also an officer or director or is significantly financially associated, or (4) transacts corporate business in his or her officer’s or director’s capacity with a family member.” Loy v. Harter, supra, pp. 407–08.

A Texas corporation can make these insider transactions valid by following proper corporate formalities. More specifically, Texas Business Organizations Code § 21.418 sets forth procedures that can be followed to authorize and make this type of transaction valid. In general, these procedures require full disclosure by the interested directors and officers as well as approval of the transaction by the disinterested directors or shareholders. Further, even if this approval is not obtained, the transaction will be deemed valid if it meets the fairness scrutiny of the statute. Additionally, shareholders of a privately held  corporation may  enter into a shareholder agreement governing these transactions (see Tex. Bus. & Org. Code § 21.101. In fact, the Texas Supreme Court in the recent case of Richie v. Rupe, 443 S.W.3d 856, 881 (Tex. 2014) seemed to encourage shareholder agreements.

In conclusion, Texas corporate officers and directors must strictly comply with their fiduciary duties including the duty of loyalty. These issues can be addressed in advance in a manner that will protect the officers and directors from liability and simultaneously benefit the corporation.  This may be done by following applicable  procedures set forth in the Texas Business Organizations Code or through a shareholder agreement. This is why it is important for corporations of all sizes to follow proper corporate formalities.

Family estate planning issues arise far too often when a child takes financial advantage of a parent who is mentally incompetent because of dementia or other mental infirmities. This is why it is so important to plan our estates while we still have our mental faculties and to put trustworthy people in charge who have the necessary skills to manage our estates after we are gone.This can be seen from a recent 2018 opinion by the Dallas Court of Appeals.

In Anderton v. Green, 555 S.W.3d 361 (Tex. App.—Dallas 2018, no pet. h.), James sued his niece, Jennifer, who was raised by James’s mother, Frances, Jennifer’s grandmother. During her lifetime, Frances set up a trust for the benefit of James and his brother which later held about $1 million in assets. Frances provided for Jennifer by naming her as the beneficiary of several annuities. Frances also made Jennifer joint owner on some of Frances’s bank accounts.

In 2009, James bought his mother’s grass farm business.  James later became incarcerated. After his release, James and his wife lived on the grass farm. Whereas, Jennifer became a registered nurse and helped care for Frances in the remaining years before Frances’s death.

By 2011,  Frances suffered from dementia. On October 15, 2012, Frances’s second husband, Clarence, along with Frances’s son James drove Frances to the banks where her accounts were held and had Frances complete paperwork to remove Jennifer from the accounts. The next day Clarence took Frances to a lawyer’s office and Frances signed documents revoking powers of attorney previously granted to Jennifer and granting a new power of attorney to James. Jennifer took immediate action to have Frances reverse the account changes.

On October 19, 2012, only four days after Clarence and James had Frances change her accounts, James filed an application for guardianship of Frances, based upon Frances’s mental incapacity. During the guardianship proceedings, James testified that Frances was competent to undertake banking transactions on Monday and Tuesday but not on Wednesday and Thursday. After the completion of the hearing, the court later appointed individuals other than James to serve as Frances’s guardians.

Unfortunately, Frances died shortly afterwards on November 26, 2012. James then sued Jennifer alleging conversion of $750,000 in annuity benefits she received upon Frances’s death. Jennifer counter-sued James and asked the Court to declare that Frances’s bank accounts now belonged to Jennifer, and the October 16, 2012 power of attorney Frances signed in favor of James and any related transactions were invalid.

The court heard the testimony of 15 witnesses at the over seven-day trial. At the conclusion of the trial, the court rendered judgment in favor of Jennifer declaring that Frances lost her mental capacity prior to October 15, 2012; and all actions taken by Frances after that date, at any financial institution or attorney’s office, lacked any legal effect and were void. The court also awarded Jennifer $223,364 in attorney fees. James appealed. The Court of Appeals affirmed the trial court’s decision, except the court remanded the case back to the trial court for further consideration of attorney fees.

In the discussion by the Court of Appeals, the court states, “To have mental capacity, the person executing the instrument must have had sufficient mind and memory to understand the nature and effect of her act at the time of the document’s execution….”Capacity may be assessed by considering such factors as 1) the person’s outward conduct demonstrating an “inward and causing condition,” 2) preexisting external circumstances tending to produce a special mental condition, and 3) the person’s mental condition before or after the relevant point in time from which her mental capacity or incapacity may be inferred.”……..”Finally, expert testimony on the matter is not required since the requisite proof regarding mental capacity may reside within the common knowledge and experience of laypersons.”

The evidence included testimony from witnesses who testified that “Frances was unable to recall that she was married to Clarence; that Jennifer was her granddaughter; or that she had, one or two days prior, undertaken significant banking transactions, including moving $100,000 from one bank to another and changing her long-settled plan that Jennifer would be “taken care of” through investments managed by Mason.” There were also notations in Frances’s medical records that stated Frances’s  was “demented and cannot relate much history,” and looked “disheveled and tired.”

In its holding, the Court of Appeal’s stated: “We conclude the evidence supports the trial court’s declarations that Frances “lost her mental capacity to manage all aspects of her property sometime prior to October 15, 2012, and her loss of mental capacity to manage all aspects of her property continued uninterrupted until her death on November 26, 2012,” and that Frances’s actions on or after October 15, 2012 “at any financial institution or attorney’s office, lacked any legal effect and are invalid, null, and void.”  The Court of Appeals also held that the award of some of the attorney fees was authorized by law. However, not all of the attorney fees were recoverable, and Jennifer failed to present evidence segregating recoverable and unrecoverable fees. Therefore, the court reversed the portion of the trial court’s judgment awarding attorney fees and the case for further proceedings on that issue.

Lessons learned from this case are that it is important to do comprehensive estate planning while we are still mentally capable of managing our finances. Further, if one family member takes financial advantage of another family member who is not mentally competent, all is not lost.  Any transactions by the mentally competent family member are subject to being declared void and set aside.  To prove this, evidence will need to be presented from witnesses who knew the mentally incompetent family member and can testify that the family member was forgetful, confused or mentally incapable of managing his finances when the transactions in question were completed.  Also, medical evidence should be presented of the medical conditions in issue.  Of course, it is unfortunate that our surviving family members should have to go through the stress and expense of litigation to right the wrong.  That is why we should make sure that while we are still mentally capable that we get our estates in order.  This is a true gift of love we can give to our children and close family members.

Introduction. In Texas, officers and directors of a corporation owe fiduciary duties to the corporation. “Three broad duties stem from the fiduciary status of corporate directors; namely, the duties of obedience, loyalty, and due care. Ubelaker at 781–82. The duty of obedience requires a director to avoid committing ultra vires acts, i.e., acts beyond the scope of the powers of a corporation as defined by its charter or the laws of the state of incorporation.” …”The duty of loyalty dictates that a director must act in good faith and must not allow his personal interests to prevail over the interests of the corporation.” …“Under the law of most jurisdictions, the duty of care requires a director to be diligent and prudent in managing the corporation’s affairs.” Gearhart Indus., Inc. v. Smith Intern., Inc., 741 F.2d 707, 720 (5th Cir. 1984). What happens when an officer or director breaches one of these fiduciary duties?

Texas Supreme Court opinion. In the recent Texas Supreme Court case of Longview Energy Co. v. Huff Energy Fund LP, 533 S.W.3d 866, 868 (Tex. 2017), reh’g denied (Dec. 8, 2017), reh’g denied (Jan. 26, 2018), the court addressed the evidence required to support the remedies allowed for breach of corporate fiduciary duties. These remedies include the imposition of a constructive trust upon assets wrongfully acquired and disgorgement of ill-gotten gains.

In this case, Longview Energy Corporation sued two of its directors and entities associated with them after discovering one of the associated entities, Riley-Huff, purchased mineral leases in an area where Longview had been investigating the possibility of buying leases.  The jury found that the directors breached their fiduciary duties owed to Longview by usurping a corporate opportunity and by competing with the corporation without disclosure. The trial court rendered judgment awarding Longview $95.5 million, imposing a constructive trust in Longview’s favor on substantially all Riley-Huff’s Eagle Ford acreage leases and associated properties, together with future production from the leases; and ordering Riley-Huff to transfer the leases and properties to Longview. Unfortunately, for Longview, the court of appeals reversed the judgment and the Texas Supreme Court affirmed the reversal.

Background. Longview, an oil and gas exploration company, was looking into investment opportunities in the Eagle Ford. In 2010, Longview held a board meeting to discuss the results of its investigation. The proposal before the board involved investing up to $40 million to lease 7,000 acres for drilling. The proposal did not identify or target specific acreage or leases in the large blobs of land considered. Longview decided against investing, at least in part, because of alleged misrepresentations and factual omissions by two of Longview’s board of directors.

These two directors had formed Riley-Huff in the preceding year to locate and fund oil and gas investments including in Eagle Ford. This had not been disclosed to Longview. Just 3 days before the 2010 Longview board meeting, Riley-Huff agreed to purchase Eagle Ford leases from Wyldfire which was one of the lease brokers Longview consulted in developing the proposal. Riley-Huff eventually acquired mineral leases to approximately 50,000 Eagle Ford acres, some of which were within the blobs on maps Longview’s board had considered.

The jury found that the two Defendant directors breached their fiduciary duties owed to Longview by taking a corporate opportunity and by engaging in competition with Longview without the approval of its board of directors. The trial court rendered judgment awarding Longview $95.5 million; imposing a constructive trust in Longview’s favor on substantially all Riley-Huff’s Eagle Ford acreage leases and associated properties, together with future production from the leases; and ordering Riley-Huff to transfer the leases and properties to Longview.

Court’s holding. The Texas Supreme Court affirmed the reversal of the trial court’s judgment because Longview failed to prove that the leases in issue were acquired by Riley-Huff as a result of the Defendants’ breach of fiduciary duties. There was no evidence that the leases in question were leases that Longview intended to acquire.  There was only evidence that these leases were encompassed within the large blobs of land considered by Longview as part of the investment proposal.  Thus, the evidence was not specific enough to support the court’s imposition of a constructive trust upon these leases, award of $95 million in lost profits or award of other remedies.

Conclusion. The lessons learned from this case are that corporate officers and directors owe strict fiduciary duties to the corporation and must be open and honest with the corporation about any competing ventures in which the directors and officers have invested or intend to invest.  Otherwise, they may have to account to the corporation for these investments.  Further, it is important for a plaintiff suing for breach of fiduciary duty to hire competent financial experts to trace the specific assets that a plaintiff alleges were wrongfully acquired as a result of a defendant’s breach.  Can you imagine investing large amounts of money and time into a lawsuit, being awarded a judgment for almost $100 million in damages and then later having the judgment reversed?

Introduction. In Lyda Swinerton Builders, Inc. v. Oklahoma Sur. Co., 16-20195, 2018 WL 4113795 (5th Cir. Aug. 29, 2018), the United States Firth Circuit Court of Appeals had to decide whether a subcontractor’s commercial general liability (“CGL”) insurance policy covered the defense of the general contractor named as an additional insured under the policy.

Background. Lyda Swinerton Builders, Inc. (“Lyda”) was hired as the general contractor to build a 10 story building in College Station, Texas. Lyda hired numerous subcontractors including roofer, A. D. Wills Company, Inc. (“Willis”). The subcontract agreement between Lyda and Willis contained a broad indemnity clause requiring Willis to indemnify and hold harmless Lyda and the owner of the project including against property claims, arising out of Willis’s work.

Willis obtained a CGL insurance policy that identified Willis as the named insured, provided contractual liability coverage, and contained an endorsement naming Lyda as an additional insured.

The project owner later sued Lyda for allegedly failing to properly perform its work resulting in damages to the owner. The allegations included that the roof was affected by the deficient work and that Lyda’s negligence caused loss of use of the building and property damage separate and apart from Lyda’s scope of work under the contract documents.

Issue. Lyda requested that the CGL insurance carrier cover its defense against the lawsuit by the project owner, since Lyda was an additional insured under the CGL insurance policy. The carrier denied the request and another lawsuit ensued including between Lyda and the carrier.

Court’s holding. The United States 5th Circuit Court of Appeals held in the lawsuit between Lyda and the CGL insurance carrier that:

  1. The CGL insurance policy obligated the carrier to defend Lyda as an additional insured against the underlying lawsuit filed by the owner of the project.
  2. The carrier’s failure to tender a defense and pay for defense costs also would entitle Lyda to recover an 18% penalty against the carrier under the Texas Prompt Payment of Claims Act.
  3. If Lyda establishes that the carrier’s misrepresentations caused it to be deprived of a defense, Lyda can recover the defense costs under Chapter 541 of the Texas Insurance Code–without limitation from the independent-injury rule–which may also entitle Lyda to recover treble damages if the carrier knowingly violated the statute.

Is contractual privity required for an owner to sue a builder for defective workmanship?

Construction defect lawsuits often involve claims against multiple defendants since the typical construction project involves work performed for the owner by a general contractor who in turn hires multiple subcontractors to perform the work.  But what happens when the original owner of the property with the improvements subsequently sells the property?  Can the subsequent owner sue the original builder for defective workmanship?

Austin Court of Appeals–no privity required

Background. The Austin Court of Appeals recently addressed this question involving the construction of a home. Plaintiffs purchased the home at issue from a third-party relocation company that had purchased the home from its original owners.  After purchasing the home, the Plaintiffs allegedly discovered various construction defects.  The Plaintiffs sued the builder even though they did not have a contract with the builder to build the home.  Their claims against the builder included those for breach of implied warranty to perform in a workmanlike manner. The builder contended that the Plaintiffs did not have the legal capacity to sue the builder for breach of warranty because the builder did not have a contract with the Plaintiffs.  Rather, the builder’s contract was with former owners of the property.

Holding. The court held that the Plaintiffs had the right to sue the builder for breach of implied warranty even though the Plaintiffs did not have a contract with the builder. “The supreme court has held that a subsequent purchaser of a home may maintain a cause of action for breach of the implied warranties of habitability and good workmanship, which are implied by every contract for the construction of a home. See Gupta, 646 S.W.2d at 169 (“We hold that [the implied warranty of habitability and good workmanship] does cover latent defects not discoverable by a reasonably prudent inspection of the building at the time of [a subsequent] sale…. As between the builder and owner, it matters not whether there has been an intervening owner.”).”Maroney v. Chip Buerger Custom Homes, Inc., 03-17-00355-CV, 2018 WL 3041087, at *8 (Tex. App.—Austin June 20, 2018, pet. filed).

 

Contingent trust beneficiary. A contingent trust beneficiary is one who does not have the right to receive benefits under a specific trust until the occurrence of a future event.  Typically, a contingent beneficiary’s right to receive benefits under the trust would vest upon the death of one or more named beneficiaries. The question often arises as to what rights a contingent beneficiary has to protect his or her contingent rights.

Rights against trustee. In the recent case of Mayfield v. Peek, 446 S.W.3d 253 (Tex. App.—El Paso 2017, no pet. h.), the court held that the contingent beneficiary had standing to sue the Trustee of the trust.

Facts of case. This case arose out of a sister and brother—Mayfield and Bruce—fighting over an inheritance from their parents. The parents had created and placed several real properties and other assets into a revocable trust. Apparently, the parents became the vested beneficiaries of the trust upon its creation. Upon their death, the trust became irrevocable and Mayfield and Bruce would become the vested beneficiaries.  Ten years after the creation of the trust, Bruce became the Trustee.

After the parents died, Mayfield sued Bruce sued one another. Mayfield sued Bruce for breaching his fiduciary duties as Trustee.  The factual allegations included that, prior to the death of their parents, Mayfield and her brother Bruce had not spoken for 30 years. Bruce had managed to restrict his father’s access to Mayfield and others. Further, Bruce convinced the mentally impaired parents to transfer assets out of the trust for Bruce’s benefit and to terminate the trust.

Breach of fiduciary duty. Mayfield sued Bruce for breaching his fiduciary duties as Trustee by unduly influencing their mentally impaired parents into:

a. Wrongfully transferring assets out of the trust for Bruce’s benefit; and

b. Terminating the trust.

This apparently resulted in Mayfield receiving nothing from the trust after her parents died.

Jurisdictional issue. Bruce contended that Mayfield was only a contingent beneficiary of the revocable trust and as a contingent beneficiary she did not have standing to sue him. Thus, her claim should be dismissed.

Court’s holding. The appellate court held that under the Texas Trust Code both vested and contingent beneficiaries may have the right to sue a Trustee.  Under the facts of this case, the contingent beneficiary—Mayfield—had standing to sue the Trustee—Bruce—and was allowed to go forward with her claim.

The Texas legislature made numerous changes to state laws in the estate planning area including to statutory provisions that govern wills, trusts, probate, and financial powers of attorney. One substantive change to the Durable Power of Attorney Act limits the scope of the fiduciary duties owed by the appointed agent to his principal (person granting the power) under a financial power of attorney.

Continue Reading Texas Durable Power of Attorney Act Amended to Limit Agency Liability

In 2011, the Texas legislature passed a bill that provides an expedited dismissal remedy to citizens who are wrongfully sued for speaking out about matters of public concern regarding the government or a business. Testimony in support of the bill showed that SLAPP suits — strategic lawsuits against public participation — were often filed against these citizens to chill public debate. Apparently, this was becoming more pervasive in the age of the internet. The bill that was passed is now Texas Civil Practice & Remedies Code Chapter 27, known as the Texas Citizens Participation Act. Defendants who are successful under the Act are not only entitled to a dismissal of the claim for defamation but they are also entitled to recover costs and attorney fees.

Continue Reading Texas Supreme Court Dismisses Libel Claim Filed Against Citizen for Facebook Posting