Francis Campone and Sai Temple of Spiritual Healing, Inc. v. Steven Kline and Phaedra Kline Appeal from 98th District Court of Travis County (memorandum opinion)

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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-21-00406-CV Francis Campone and Sai Temple of Spiritual Healing, Inc., Appellants v. Steven Kline and Phaedra Kline, Appellees FROM THE 98TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-15-004361, THE HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING MEMORANDUM OPINION Francis Campone (Francis) and Sai Temple of Spiritual Healing, Inc. (the Temple) appeal from the district court’s judgment awarding Steven Kline (Steven) and Phaedra Kline (Phaedra) attorneys’ fees, costs, and expenses pursuant to section 27.009 of the Texas Citizens Participation Act (TCPA). See Tex. Civ. Prac. & Rem. Code § 27.009 (providing for mandatory award of attorneys’ fees when motion to dismiss pursuant to TCPA is granted). 1 We will affirm. In 2019, the Legislature amended the TCPA, but expressly stated that the amendments apply only to an action filed on or after September 1, 2019, and that any action filed before that date is governed by the law in effect immediately before that date. See Act of May 17, 2019, 86th Leg., R.S., ch. 378, § 11, 2019 Tex. Gen. Laws 684, 687. This appeal is governed by the prior law and, unless otherwise indicated, any quoted section of the statute is from the prior version. 1 BACKGROUND Francis is a spiritualist minister and healer. 2 He founded and led the Temple, which provided its members free healing sessions as well as “intensive” healing sessions in exchange for donations. Steven and Phaedra became Temple followers and attended healing sessions. Steven became very involved as a volunteer and eventually donated money to help Francis purchase land intended to be used as a farm and for Temple meetings and healing sessions. Over time, Phaedra became skeptical of Francis’s healing abilities and expressed her doubts to Steven. Steven continued to have confidence in Francis until one of Steven and Phaedra’s friends told them that three women had confided in her that Francis had behaved “inappropriately” with them. Steven discussed the issue with nine or ten other people who were all current or former members of the Temple community and who were also having misgivings about Francis. Ultimately, Steven severed his connections with Francis and the Temple in 2013. In September 2015, Francis sued Steven for defamation. In his September 2015 original petition, Francis alleged that Steven had made defamatory statements about Francis during a January 2015 conversation with Charlotte Michelson (the Michelson conversation). In August 2016, Francis filed a second amended petition that added Phaedra as a defendant and alleged that, in addition to the Michelson conversation, Steven had made defamatory statements about Francis to other people and that Phaedra had also made defamatory statements about Francis. Steven and Phaedra filed a TCPA motion to dismiss all Francis’s claims, which the trial court granted. On appeal, this Court affirmed the dismissal order except for the claims against Steven related to the Michelson conversation. This Court concluded that the TCPA motion was The background information is set forth in more detail in this Court’s opinion in Campone v. Kline, No. 03-16-00854-CV, 2018 WL 3652231, at *2-4 (Tex. App.—Austin Aug. 2, 2018, no pet.) (mem. op.). 2 2 untimely as to the claims arising out of the Michelson conversation and remanded those claims for further proceedings. See Campone v. Kline, No. 03-16-00854-CV, 2018 WL 3652231, at *1 (Tex. App.—Austin Aug. 2, 2018, no pet.) (mem. op.). On remand, Steven and Phaedra filed a traditional and no-evidence motion for summary judgment. The trial court granted the motion without specifying the grounds on which its determination was based, and Francis and the Temple perfected an appeal. See Campone v. Kline, No. 03-19-00908-CV, 2020 WL 7640040, at *1 (Tex. App.—Austin Dec. 22, 2020, no pet.) (mem. op.). On appeal, this Court reversed the summary judgment as to Francis’s defamation claims arising out of the Michelson conversation and also reversed the trial court’s summary judgment on Steven and Phaedra’s claim for an award of attorneys’ fees pursuant to TCPA section 27.009 based on their successful TCPA motion to dismiss Francis’s defamation claims that did not arise out of the Michelson conversation. This Court concluded that the summary judgment evidence on attorneys’ fees presented a fact issue as to the reasonableness and necessity of the fees Steven and Phaedra sought, precluding summary judgment. See id. at *6-7. The cause was remanded to the trial court for further proceedings on Francis’s defamation claim arising from the Michelson conversation and on Steven and Phaedra’s claim for attorneys’ fees under the TCPA. On remand, the trial court held a bench trial and rendered judgment that Francis take nothing on his claims against Steven and Phaedra arising out of the Michelson conversation. The court awarded Steven and Phaedra reasonable and necessary attorneys’ fees in the amount of $19,603.50, expenses of $1,597.87, and costs of $16.65 pursuant to the TCPA’s mandate that a successful motion to dismiss under the TCPA entitles the moving party to reasonable fees, costs, and expenses incurred in “defending against the legal action as justice and equity may require.” 3 See Tex. Civ. Prac. & Rem. Code § 27.009(a)(1). The court also awarded Steven and Phaedra $5,000 as sanctions pursuant to the TCPA. See id. § 27.009(a)(2) (providing that court “shall award to the moving party” sanctions against the party who brought legal action as court determines sufficient to deter party who brought legal action from bringing similar actions described in TCPA). Francis and the Temple perfected this appeal, asserting in one issue that the trial court’s attorneys’ fee award was improper because it included fees for legal services provided before Francis amended his petition to add the claims that were ultimately dismissed pursuant to the TCPA. Francis and the Temple maintain that the fees Steven and Phaedra incurred before Francis amended the petition were not related to defending any claims dismissed as a result of Steven and Phaedra’s TCPA motion and, therefore, were not recoverable under the TCPA. DISCUSSION We review a trial court’s award of attorneys’ fees under TCPA section 27.009(a)(1) for abuse of discretion. Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016). A trial court does not abuse its discretion merely because the appellate court would have ruled differently in the same circumstances. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.3d 549, 558 (Tex. 1995); see also Low v. Henry, 221 S.W.3d 609, 620 (Tex. 2007). Instead, the appropriate inquiry is whether the court acted without reference to any guiding principles, that is, whether the trial court’s act was arbitrary or unreasonable. Low, 221 S.W.3d at 614. A successful motion to dismiss under the TCPA entitles the moving party to an award of “court costs, reasonable attorney’s fees, and other expenses incurred in defending against the legal action as justice and equity may require.” Tex. Civ. Prac. & Rem. Code 4 § 27.009(a)(1); see also Hawxhurst v. Austin’s Boat Tours, 550 S.W.3d 220, 232 (Tex. App.— Austin 2018, no pet.). A party seeking attorneys’ fees must prove the amount and reasonableness of the fees sought. El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762-63 (Tex. 2012). Such proof “includes, at a minimum, documentation of the services performed, who performed them and at what hourly rate, when they were performed, and how much time the work required.” Id. at 764. The proof must be sufficient to permit a court “to perform a meaningful review of the fee application.” Id. A “reasonable” attorneys’ fee “is not excessive or extreme, but rather moderate or fair.” Sullivan, 488 S.W.3d at 299. The reasonableness of a fee award rests within the trial court’s discretion. Id. Whether attorneys’ fees are reasonable is generally a question of fact. See Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010). A trial court does not abuse its discretion when its ruling is based on conflicting evidence and some evidence of substantive and probative character supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009). An abuse of discretion does occur, however, when the trial court’s ruling is not supported by any evidence. Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex. 2012). Findings of fact entered in a case tried to the court have the same force and dignity as a jury’s answers to jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). The trial court’s findings of fact are reviewable for legal and factual sufficiency of the evidence to support them by the same standards that are applied in reviewing evidence supporting a jury’s answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). A party challenging the legal sufficiency of the evidence supporting a finding on which it did not have the burden of proof must demonstrate “that there is no evidence to support the finding.” Gordon v. Martin, No. 03-19-00241-CV, 5 2020 WL 1908316, at *4 (Tex. App.—Austin Apr. 17, 2020, no pet.) (mem. op.). Evidence is legally sufficient if it would enable reasonable and fair-minded people to reach the verdict under review. Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215 (Tex. 2011). We credit favorable evidence if a reasonable factfinder could do so and disregard contrary evidence unless a reasonable factfinder could not. Id. We sustain a no-evidence challenge only if: (1) the record reveals a complete absence of evidence of a vital fact; (2) we are barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810, 822 (Tex. 2005). The trial court’s judgment awarded Steven and Phaedra $19,603.50 in attorneys’ fees pursuant to TCPA section 27.009(a)(1). The trial court expressly found that these fees were reasonable and necessary fees incurred “related to defending against [Francis and the Temple’s] claims that were dismissed by the Court pursuant to the [TCPA].” On appeal, Francis argues that there “is absolutely no conceivable way” that work done by Steven and Phaedra’s attorney before Francis amended his petition could have “anything in the world to do with” the claims that were dismissed pursuant to the TCPA. We construe this as a challenge to the legal sufficiency of the evidence supporting the trial court’s finding that fees incurred before Francis amended his petition were related to defending against the claims that were dismissed on Steve and Phaedra’s TCPA motion. As a corollary to his assertion that the trial court could not award fees for services performed before Francis amended his petition, Francis also asserts that Steven and Phaedra were required to segregate their fees and distinguish between fees related to claims for which fees are recoverable and fees related to claims for which fees are not recoverable. 6 See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006) (“Accordingly, we reaffirm the rule that if any attorney’s fees relate solely to a claim for which such fees are unrecoverable, a claimant must segregate recoverable from unrecoverable fees.”). Steven and Phaedra’s evidence supporting their claim for attorneys’ fees clearly identifies whether the fee was incurred before or after the date Francis amended his petition. The question, then, is not whether Steven and Phaedra’s evidence segregates fees for services performed before or after Francis amended his petition—it clearly does—but, rather, whether Francis is correct in his assertion that there is legally insufficient evidence to support the trial court’s finding that services performed before Francis amended his petition aided in the defense of the claims dismissed under the TCPA. See id. at 313 (holding that certain tasks may be necessary to defend against recoverable claim and non-recoverable claim and that “to the extent such services would have been incurred on a recoverable claim alone, they are not disallowed simply because they do double service”); State Farm Lloyds v. Hanson, 500 S.W.3d 84, 102 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (attorney’s testimony that legal services and time expended would have been necessary even if claim with unrecoverable fees had not been asserted is sufficient to satisfy segregation requirement). At the hearing on Steven and Phaedra’s request for attorneys’ fees, they presented their attorney’s detailed billing records. Steven and Phaedra’s attorney testified that the fees he incurred were for “preparing and filing an answer, propounding discovery, depositions, various calls with counsel, attending mediation, and so on.” The trial court also admitted into evidence a detailed worksheet in which Steven and Phaedra’s attorney identified each task performed and assigned to the fee associated with the task a percentage that reflected the extent to which the task was related to the claims dismissed pursuant to the TCPA motion. For example, Steven and 7 Phaedra did not include in their fee request any fees related to the deposition of Charlotte Michelson, as the claims related to the Michelson conversation were not dismissed pursuant to the TCPA. The trial court could reasonably have determined that tasks performed before Francis filed his amended petition would have been necessary to defend against the later added defamation claims including filing an answer, preparing for Francis’s deposition, preparing for and attending mediation, working on witness statements, and meeting with clients. The trial court could reasonably have concluded that these tasks were related to Steven and Phaedra’s defense of Francis’s dismissed defamation claims regardless of whether they were performed before or after Francis amended his petition to allege defamation claims in addition to those arising out of the Michelson conversation. In Chapa, the Texas Supreme Court stated: Many of the services involved in preparing a contract or DTPA claim for trial must still be incurred if tort claims are appended to it; adding the latter claims does not render the former services unrecoverable. Requests for standard disclosures, proof of background facts, depositions of the primary actors, discovery motions and hearings, voir dire of the jury, and a host of other services may be necessary whether a claim is filed alone or with others. To the extent such services would have been incurred on a recoverable claim alone, they are not disallowed simply because they do double service. Chapa 212 S.W.3d at 313. The court in Chapa recognized that attorneys’ fees that advance both a recoverable claim and a nonrecoverable claim are still recoverable. Likewise, services that were incurred when only a nonrecoverable claim was pending may still be found to have advanced the defense of a later added recoverable claim. We do not agree with Francis that fees incurred before a recoverable claim has been added to a lawsuit are categorically unrelated to and cannot advance the defense of the recoverable claim. Here, there was legally sufficient evidence supporting the trial court’s finding that fees incurred before Francis amended his 8 petition in August 2016 were related to defending against the defamation claims ultimately dismissed by the trial court pursuant to the TCPA. We conclude that the trial court did not abuse its discretion in awarding attorneys’ fees of $19,603.50. We overrule Francis and the Temple’s sole appellate issue. CONCLUSION Having overruled the sole issue on appeal, we affirm the trial court’s judgment. __________________________________________ Thomas J. Baker, Justice Before Justices Baker, Kelly, and Smith Affirmed Filed: December 22, 2022 9

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