Paula Gaughan and Dean Sanders v. National Cutting Horse Association ( 2011 )


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  •                           COURT OF APPEALS
    SECOND DISTRICT OF TEXAS
    FORT WORTH
    NO. 02-09-00450-CV
    PAULA GAUGHAN AND DEAN                                                APPELLANTS
    SANDERS
    V.
    NATIONAL CUTTING HORSE                                                   APPELLEE
    ASSOCIATION
    ----------
    FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY
    ----------
    OPINION
    ----------
    I. Introduction
    Appellants Paula Gaughan and Dean Sanders (collectively, Gaughan) and
    Appellee National Cutting Horse Association (the NCHA) filed cross-motions for
    summary judgment in Gaughan‘s suit against the NCHA for a declaratory
    judgment that the NCHA‘s books and records that Gaughan sought to inspect
    and copy are not confidential. The trial court initially entered a protective order in
    favor of the NCHA that prohibited Gaughan from disseminating the NCHA‘s
    books and records to others. Later, the trial court granted the NCHA‘s motion for
    summary judgment, denied Gaughan‘s motion for summary judgment, and
    incorporated the protective order into the final judgment. Gaughan contends in
    three issues that the trial court erred by entering the protective order and thereby
    prohibiting her from disclosing documents designated as confidential by the
    NCHA, by granting summary judgment for the NCHA on the ground that the
    NCHA‘s records are entitled to confidential treatment under the law, by denying
    her motion, and by ruling that there are no genuine issues of material fact
    concerning the reasonableness and necessity of the NCHA‘s attorney‘s fees.
    We affirm.
    II. Factual and Procedural Background
    The NCHA is a non-profit corporation organized and existing under Texas
    law. Gaughan is a member in good standing of the NCHA.1 On April 21, 2008,
    Gaughan made a written request pursuant to article 1396-2.23 of the Texas Non-
    Profit Corporation Act to ―inspect the books and various financial records of the
    NCHA.‖2 Gaughan requested six categories of documents from the NCHA—
    1
    Sanders was originally a plaintiff in this lawsuit, but he withdrew from the
    lawsuit as a plaintiff. He is a party to this appeal because he and Gaughan are
    jointly and severally liable under the trial court‘s judgment for the NCHA‘s
    attorney‘s fees.
    2
    The written request actually cited Texas Business Organizations Code
    section 22.351, the successor to article 1396-2.23. See Tex. Bus. Org. Code
    2
    including employment contracts, bank statements, payroll records, and payments
    to vendors—for the stated purpose that Gaughan was ―genuinely interested in
    fostering increased participation in NCHA events by lowering the costs
    associated with that participation and making sure that the membership dues and
    other monies received by the NCHA are being spent with the best interests of the
    NCHA membership in mind.‖ The NCHA responded to Gaughan‘s letter on April
    28, 2008, enclosing audited financial statements for the years 2004 through
    2007, but it requested that Gaughan clarify her stated purpose, pay for staff and
    professional time necessary to respond to the request, and agree to maintain the
    confidentiality of certain information relating to third parties (such as employees
    and vendors) before the NCHA would produce the remaining requested records.
    Gaughan responded to the NCHA on May 9, 2008, disagreeing that her
    stated purpose was inadequate but also clarifying that she wished to review the
    financial records to confirm that the ―NCHA is not guilty of waste or
    mismanagement in its financial affairs and in the administration of the NCHA‘s
    business.‖   Gaughan declined to enter into a confidentiality agreement and
    objected to paying for staff or professional fees associated with the NCHA‘s
    compliance with her inspection request.       Gaughan also requested that all
    responsive documents be produced within one week.
    Ann. § 22.351 (West 2009). However, the parties agree that article 1396-2.23
    applies to this case.
    3
    The NCHA responded on May 13, 2008, again asserting the confidentiality
    of some of its records, specifically records relating to its employees, third-party
    vendors, and sponsors. The NCHA stated that the confidentiality of its records
    ―does not mean that you cannot have access to some or all of the information
    you desire[,] but it does mean that any access you may have must be in
    accordance with procedures which are in the best interest of [the NCHA] and
    include fulfilling [the NCHA]‘s obligation of confidentiality.‖
    Gaughan filed suit against the NCHA on May 20, 2008, seeking a judicial
    declaration that she is entitled to inspect and photocopy each of the categories of
    records identified in her April 21, 2008 letter. Gaughan also sought and obtained
    a temporary restraining order to prevent the NCHA from destroying or altering the
    records she sought to inspect and copy. The NCHA filed a motion to dissolve the
    temporary restraining order and offered to disclose all documents requested by
    Gaughan subject to entry of a protective order to prevent her disclosure of
    information the NCHA believed to be confidential. Following the hearing on the
    NCHA‘s motion, the trial court dissolved the temporary restraining order and
    granted the NCHA‘s request for entry of a protective order.
    The trial court then signed a protective order permitting the NCHA to
    designate certain documents that it had agreed to produce to Gaughan as
    confidential (by stamping ―Confidential‖ in a conspicuous manner on each page
    to be so designated) and prohibiting Gaughan from reproducing, disclosing, or
    disseminating those documents to anyone other than her counsel except upon
    4
    order of the trial court. The order stated that it was entered solely to facilitate
    review and provided that at any time after delivery of documents designated as
    confidential, counsel for Gaughan could challenge the designation by written
    notice to the NCHA and a motion to challenge the confidential nature of all or a
    portion of the information, in which event the NCHA would have the opportunity
    to establish that the disputed documents were entitled to confidential treatment.
    After entry of the protective order, the NCHA produced 89,214 pages of
    documents to Gaughan but designated 36,556 of those pages as confidential as
    permitted by the protective order. It is undisputed that Gaughan reviewed and
    copied all documents she requested from the NCHA, including the documents
    designated as confidential. The NCHA also counterclaimed against Gaughan,
    seeking recovery of its attorney‘s fees and a judicial declaration that it had ―acted
    reasonably and in accordance with the law in responding to [Gaughan‘s]
    requests to review the NCHA documents.‖
    Gaughan and the NCHA eventually filed cross-motions for summary
    judgment. In her motion, Gaughan requested, among other things, a judicial
    declaration that ―NCHA may not prevent [her] from disclosing to her fellow NCHA
    members or to other third parties the substance and form of all records reflecting
    the NCHA‘s financial activity.‖3   Gaughan argued that articles 1396-2.23 and
    3
    Gaughan sought three additional judicial declarations via summary
    judgment, but she does not assert on appeal that the trial court erred by denying
    her motion for summary judgment on those grounds. Thus, we do not address
    Gaughan‘s request for those three additional judicial declarations. See generally
    5
    1396-2.23A of the non-profit corporation act required the NCHA to make its
    books and records available to members and the general public alike, that the
    NCHA is therefore precluded from designating any of its financial records as
    confidential, and that the trial court should withdraw the protective order because
    it contravenes articles 1396-2.23 and 1396-2.23A. In addition, Gaughan‘s motion
    for summary judgment included the following alternative request for relief:
    Strictly in the alternative, and only because [the trial court‘s]
    Protective Order otherwise requires it and remains in force until it is
    withdrawn as requested hereinabove, Gaughan moves the Court to
    conduct an in camera inspection of the 36,556 pages of NCHA
    books and records that the NCHA has classified as confidential and,
    upon inspection of same, declare that they are not properly
    classified as confidential documents given the statutory mandate
    that they be made available to the NCHA members and the general
    public alike. [Emphasis added.]
    The NCHA‘s motion sought summary judgment on its claims for a judicial
    declaration and attorney‘s fees.     Within the motion, the NCHA argued that
    Gaughan did not need to file the lawsuit to obtain the requested documents; that
    Texas law supports the trial court‘s entry of the protective order; that the
    protective order provided a mechanism for Gaughan to challenge the NCHA‘s
    designation of any document as confidential; and that Gaughan had never
    challenged the NCHA‘s designation of any document as confidential—despite
    LeBlanc v. Riley, No. 02-08-00234-CV, 
    2009 WL 885953
    , at *3 (Tex. App.—Fort
    Worth Apr. 2, 2009, no pet.) (mem. op.) (holding that a general issue broadly
    challenging a summary judgment is permissible but requiring an appellant to
    present argument and legal authority on appeal to preserve error on a particular
    cause of action on which the trial court granted summary judgment).
    6
    having possession of the vast majority of the documents for months—but instead
    claimed that no information contained in the documents requested under art.
    1396-2.23 could be treated as confidential and that the protective order regarding
    the documents requested was contrary to law.
    In its final judgment granting the NCHA‘s motion for summary judgment
    and denying that of Gaughan, the trial court declared that the NCHA had fully
    complied with all of Gaughan‘s requests to review documents of the association
    and all legal requirements, that the NCHA had designated documents as
    confidential in accordance with the protective order, that Gaughan had taken no
    action to contest the designations, and that the documents designated as
    confidential by the NCHA were thus entitled to confidential treatment as a matter
    of law. The trial court further ordered Gaughan to return all records marked as
    ―Confidential‖ to the NCHA and to not disclose, disseminate, or reveal any of the
    ―Confidential‖ records or their contents to any third parties. This appeal followed.
    III. Standard of Review
    We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
    
    315 S.W.3d 860
    , 862 (Tex. 2010). We consider the evidence presented in the
    light most favorable to the nonmovant, crediting evidence favorable to the
    nonmovant if reasonable jurors could, and disregarding evidence contrary to the
    nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp
    Advisors, Inc. v. Fielding, 
    289 S.W.3d 844
    , 848 (Tex. 2009). We indulge every
    reasonable inference and resolve any doubts in the nonmovant‘s favor. 20801,
    7
    Inc. v. Parker, 
    249 S.W.3d 392
    , 399 (Tex. 2008). A defendant who conclusively
    negates at least one essential element of a cause of action is entitled to
    summary judgment on that claim. Frost Nat’l Bank v. Fernandez, 
    315 S.W.3d 494
    , 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). When both parties move
    for summary judgment and the trial court grants one motion and denies the other,
    the reviewing court should review both parties‘ summary judgment evidence and
    determine all questions presented. Mann 
    Frankfort, 289 S.W.3d at 848
    ; see
    Myrad Props., Inc. v. Lasalle Bank Nat’l Ass’n, 
    300 S.W.3d 746
    , 753 (Tex. 2009).
    The reviewing court should render the judgment that the trial court should have
    rendered. Mann 
    Frankfort, 289 S.W.3d at 848
    .
    IV. Discussion
    A. The Protective Order
    Gaughan contends in her first issue that the trial court erred by entering
    the protective order and declaring by summary judgment that any of the NCHA‘s
    records regarding its business transactions with sponsors, vendors, and
    employees are entitled to confidential treatment under the law. She contends the
    trial court‘s orders are contrary to the Texas statutes that require non-profit
    corporations to make their financial records open and available for inspection and
    copying by the general public. Specifically, Gaughan argues that because the
    NCHA is a non-profit corporation obligated by article 1396-2.23A to make its
    records, books, and annual reports available to the public for inspection and
    copying, it cannot shield those records behind a claim of confidentiality. The
    8
    NCHA responds that a member of a non-profit corporation may inspect ―a much
    broader spectrum of records‖ under article 1396-2.23 than the public is entitled to
    inspect under article 1396-2.23A and that protective orders are permissible under
    Texas law to ensure that confidential information provided to members pursuant
    to these or similar inspection statutes is protected from disclosure to others.
    1. Articles 1396-2.23 and 1396-2.23A
    Article 1396-2.23 of the Texas Non-Profit Corporation Act provides:
    A. Each corporation shall keep correct and complete books and
    records of account and shall keep minutes of the proceedings of its
    members, board of directors, and committees having any authority of
    the board of directors and shall keep at its registered office or
    principal office in this State a record of the names and addresses of
    its members entitled to vote.
    B. A member of a corporation, on written demand stating the
    purpose of the demand, has the right to examine and copy, in
    person or by agent, accountant, or attorney, at any reasonable time,
    for any proper purpose, the books and records of the corporation
    relevant to that purpose, at the expense of the member.
    Tex. Rev. Civ. Stat. Ann. art. 1396-2.23 (expired Jan. 2010). Similarly, but not
    identically, article 1396-2.23A provides, in relevant part:
    A. A corporation shall maintain current true and accurate financial
    records with full and correct entries made with respect to all financial
    transactions of the corporation, including all income and
    expenditures, in accordance with generally accepted accounting
    practices.
    B. Based on these records, the board of directors shall annually
    prepare or approve a report of the financial activity of the corporation
    for the preceding year. . . .
    C. All records, books, and annual reports of the financial activity of
    the corporation shall be kept at the registered office or principal
    9
    office of the corporation in this state for at least three years after the
    closing of each fiscal year and shall be available to the public for
    inspection and copying there during normal business hours. The
    corporation may charge for the reasonable expense of preparing a
    copy of a record or report.
    
    Id. art. 1396-2.23A
    (expired Jan. 2010) (emphasis added).
    2. Scope and Purpose of article 1396-2.23A (public’s right to inspect)
    Gaughan argues that, because article 1396-2.23A mandates public access
    to the financial records of a non-profit corporation, the protective order allowing
    the NCHA to shield its financial records from public disclosure by designating
    them as confidential is contrary to Texas law. However, Gaughan‘s argument is
    premised on the incorrect assumption that all of the records of a non-profit
    corporation that a member is entitled to inspect and copy are financial records
    available to the public generally. As is clear from article 1396-2.23(B), a member
    of a non-profit corporation may, following written demand stating a proper
    purpose, examine ―the books and records of [that] corporation relevant to that
    purpose.‖ 
    Id. art. 1396-2.23(B).
    Under article 1396-2.23A, however, a member
    of the public may only inspect the ―records, books, and annual reports of the
    financial activity of the corporation.‖ See 
    id. art. 1396-2.23A
    (emphasis added).
    Thus, the NCHA argues, a member of the public may only inspect financial
    records of a non-profit corporation while a member of the corporation may
    inspect all records of that corporation. See 
    id. arts. 1396-2.23,
    1396-2.23A.
    The records Gaughan received from the NCHA include both financial
    records available for inspection by the public and non-financial records not
    10
    available for inspection by the public. For example, Gaughan received vendor,
    sponsorship, and employment contracts and documents containing the
    addresses and Social Security Numbers of the NCHA‘s employees. Article 1396-
    2.23A, addressing the public‘s right of inspection, does not provide that the public
    has the right to inspect records that are not financial records.
    Moreover, article 1396-2.23, addressing the right of a member to inspect a
    broader spectrum of records than is allowed for the public, provides for neither a
    right of inspection by the public of such records nor a right by a member to
    publish such information to the public.4 Thus, the NCHA argues, and we agree,
    that Gaughan‘s theory that she is entitled to disseminate or share with the public
    all documents she received would engraft a right of inspection by the public onto
    article 1396-2.23, which speaks only to the right of inspection by members. If the
    legislature had intended that a member would have the right to disclose all books
    and records of a non-profit corporation to the public, there would have been no
    need for two separate statutes and no need to require a member to provide a
    written request stating a proper purpose.         Therefore, we decline to adopt
    Gaughan‘s interpretation of the two statutes by conflating them so as to provide a
    4
    When the legislature passes two separate statutes on the same general
    subject matter, it is presumed to have done so for a particular purpose, and
    meaning must be given to both statutes. See Aldine Indep. Sch. Dist. v. Ogg,
    
    122 S.W.3d 257
    , 270 (Tex. App.—Houston [1st Dist.] 2003, no pet.); Font v.
    Carr, 
    867 S.W.2d 873
    , 881 (Tex. App.—Houston [1st Dist.] 1993, writ dism‘d
    w.o.j.).
    11
    right of the public to inspect all books and records of a non-profit corporation,
    including records only available to members.
    The Texas Supreme Court has held that the phrase ―financial records‖ in
    article 1396-2.23A ―does not include the names of contributors or members‖ and
    that article 1396-2.23A ―does not require the blanket disclosure of contributors‘
    names for public inspection.‖ In re Bay Area Citizens Against Lawsuit Abuse,
    
    982 S.W.2d 371
    , 381–82 (Tex. 1998) (hereinafter BACALA). In so holding, the
    BACALA court looked to the legislative intent of that statute, observing that it
    appeared ―that article 1396-2.23A was intended to remedy a specific problem:
    the lack of accountability regarding a non-profit corporation‘s use of funds
    solicited from the public.‖ 
    Id. at 381
    (citing Texas Appellate Practice & Educ.
    Resource Ctr. v. Patterson, 
    902 S.W.2d 686
    , 689 (Tex. App.—Austin 1995, writ
    denied)). In that regard, the court quoted relevant background information from
    the bill analysis regarding article 1396-2.23A‘s purpose:
    During the last interim, the author attempted to conduct a study of a
    non-profit drug rehabilitation program in Houston. This program had
    been soliciting funds from the public and portrayed itself as a
    charitable endeavor. However, there were rumors that its funds
    were being used for investments in such businesses as nightclubs.
    During the six month investigation, the author of this bill was unable
    to determine how the program‘s funds were being used because the
    records were inadequate. A major recommendation from the study
    was that Texas law should be amended to require non-profit
    organizations soliciting funds from the public to keep adequate
    records showing how the funds were actually being used.
    
    Id. at 381
    (quoting Senate Comm. on Bus. & Indus. Bill Analysis, Tex. S.B. 857,
    65th Leg., R.S. (1977)). Thus, the BACALA court concluded the purpose of the
    12
    legislation was not to force non-profit corporations to identify the exact sources of
    their income but was instead designed ―to expose the nature of the expenditures
    of that money once received from the public and to make non-profit organizations
    accountable to their contributors for those expenditures.‖          
    Id. The court
    continued, ―[T]he seemingly broad scope of the statute‘s language is not
    matched by the legislative intent behind the statute.‖ Id.; see also 
    Patterson, 902 S.W.2d at 688
    –89 (concluding legislature designed art. 1396-2.23A as a
    mechanism for making non-profit corporations accountable for donations solicited
    from the public).
    It follows that, although amounts received from or paid to vendors,
    sponsors, or employees may constitute ―financial records,‖ the underlying
    contracts themselves (or the employees‘ addresses and social security numbers)
    are not financial records that the public is entitled to inspect. See 
    BACALA, 982 S.W.2d at 381
    –82. Thus, even assuming that the public is entitled by art. 1396-
    2.23A to inspect all financial documents of a non-profit corporation without regard
    to confidentiality, a question we are not called upon to decide, we must still
    determine whether documents Gaughan may inspect under art. 1396-2.23 (and
    which are not available to the public) may be subject to protection from
    disclosure to others because of confidentiality considerations.5
    5
    Because Gaughan is a member of the NCHA, the applicable statute in this
    case is article 1396-2.23(B), governing the right of a member of a non-profit
    corporation, not the right of the public under article 1396-2.23A.
    13
    3. Scope and Purpose of article 1396-2.23 (member’s right to inspect)
    Gaughan asserts that the scope of article 1396-2.23, which provides for
    the inspection rights of a member of a non-profit corporation, is absolute in
    prohibiting any record from being treated as confidential and does not allow a
    non-profit corporation to require a pledge or order of non-disclosure in order to
    inspect and copy its records. We disagree for reasons urged by the NCHA.
    Decisions under article 1396-2.23 recognize that the statute is not absolute
    in its disclosure requirements for members and that orders to protect confidential
    information are proper in requests made under that statute. In Citizens Ass’n for
    Sound Energy (CASE) v. Boltz, 
    886 S.W.2d 283
    , 285–86 (Tex. App.—Amarillo
    1994, writ denied), cert. denied, 
    516 U.S. 1029
    (1995), a member of CASE, a
    non-profit association, sought review of CASE‘s records under article 1396-2.23.
    CASE opposed the production of certain documents and challenged the
    constitutionality of the statute. 
    Id. at 286.
    The trial court entered a protective
    order addressing the confidential nature of the requested documents and ordered
    CASE to produce such documents under that protective order. 
    Id. at 287.
    On
    appeal by CASE, the court of appeals affirmed, holding that in view of the
    protective order which prohibited the member from disclosing the confidential
    information contained in such documents, CASE‘s challenges to the statute were
    without merit. 
    Id. In Professional
    Microfilming, Inc. v. Honorable Sam Houston, 
    661 S.W.2d 767
    , 768 (Tex. App.—Fort Worth 1983, orig. proceeding), a case in which
    14
    mismanagement of Professional Microfilming, Inc. (PMI) was alleged, this court
    considered a financial records request by a shareholder and former director of
    PMI. On mandamus, PMI complained of a discovery order by the trial court that
    would have allowed the shareholder, who had become a competitor of PMI, to
    review records containing PMI‘s sensitive customer, cost, and pricing information
    pursuant to a request made under business corporations act article 2.44.6 
    Id. at 768–69.
    PMI asserted that any such review of PMI‘s confidential information by
    the shareholder would be damaging to PMI. 
    Id. The trial
    court required PMI to
    produce the information but entered an order prohibiting the shareholder and
    former director from disclosing any of the contents of those records to third
    parties. 
    Id. at 769.
    In denying mandamus relief sought by PMI, this Court stated:
    We also hold that Judge Houston‘s discovery order adequately
    considered the sensitivity of the requested data, and the potential for
    misuse of that data by Hightower and Eikon. Judge Houston‘s order
    enjoined Hightower from disclosing the information or using it for
    purposes other than those connected with the litigation. The order
    also provided that the documents requested to be produced be
    sealed in envelopes and filed with the court, to be opened only by
    order of the court. Judge Houston thus set up a procedure which
    would allow him to examine each document before disclosing it to
    6
    Texas Business Corporations Act article 2.44 entitled directors and certain
    shareholders of a corporation to review the books and records of a corporation
    for any proper purpose. Tex. Rev. Civ. Stat. Ann. art. 2.44. (expired Jan. 2010);
    see also Tex. Bus. Org. Code Ann. § 21.218 (West 2009) (current version of
    expired article 2.44). That statute, which is applicable to for-profit corporations, is
    similar to article 1396.-2.23, which is applicable to non-profit corporations and at
    issue in this case. Texas courts have looked to precedent under article 2.44
    when dealing with issues presented under article 1396-2.23. See 
    CASE, 886 S.W.2d at 289
    .
    15
    Hightower, and impose even greater restrictions than the initial
    injunction if necessary.
    
    Id. at 770
    (emphasis added). Thus, we acknowledged in PMI that the need to
    protect certain confidential information from dissemination to others may exist
    even when a statutory right to inspection by the shareholder is invoked. Id.; see
    also Lewis v. Pa. Bar Ass’n, 
    701 A.2d 551
    , 555 (Pa. 1997) (holding documents
    otherwise accessible to members may be protected from disclosure to third
    parties by considerations of privacy, such as references to employee‘s health
    records; privilege, such as records protected by attorney-client privilege or work
    product doctrine; or confidentiality where both corporate purpose and public‘s
    interest are served by keeping information confidential); Stroud v. Grace, 
    606 A.2d 75
    , 89 (Del. 1992) (holding corporation‘s refusal to provide certain financial
    information to shareholder without confidentiality agreement signed by
    shareholders did not violate corporation‘s duty of disclosure); Pershing Square,
    L.P. v. Ceridian Corp., 
    923 A.2d 810
    , 819–20 (Del. Ch. 2007) (holding publication
    to others by shareholder may be limited where information is confidential and
    release would harm company); Disney v. The Walt Disney Co., 
    857 A.2d 444
    ,
    446 (Del. Ch. 2004) (holding that shareholder could not use right of inspection to
    publicly disseminate otherwise confidential records and that production was
    properly conditioned upon confidentiality agreement, subject to challenge of
    company‘s designation in court if parties could not resolve disagreements).
    16
    Gaughan relies upon Sharyland Water Supply Corp. v. Block, 
    755 F.2d 397
    (5th Cir. 1985), as the single case to support her position. Gaughan cites a
    statement from the opinion in that case for the proposition that article 1396-2.23
    neither forbids a member from disclosing books and records provided to him by a
    non-profit corporation nor requires the member to pledge non-disclosure to
    others in order to obtain the corporation‘s books and records. 
    Id. at 398.
    But
    Sharyland does not support the proposition that no restrictions on dissemination
    to others can be placed on an article 1396-2.23 request by a member of a non-
    profit corporation. That case did not deal with the right to inspect books and
    records under article 1396-2.23; rather, it involved a Freedom of Information Act
    request made to a third party to whom the corporation had provided information
    as part of a loan application. 
    Id. Moreover, Sharyland
    is distinguishable because
    it involved audited financial statements that a member of the public is entitled to
    inspect under article 1396-2.23A. 
    Id. at 399.
    The NCHA does not dispute that its
    audited financial reports are subject to disclosure under the Freedom of
    Information Act.
    In addition, a member‘s own right to inspect and copy books and records
    under article 1396-2.23 does not trump privileges or other rights to confidentiality
    provided for by Texas law. In Huie v. DeShazo, 
    922 S.W.2d 920
    , 923–25 (Tex.
    1996), the supreme court held that a trustee‘s duty of disclosure does not
    override the attorney-client privilege and expressly rejected a claim that the
    provisions of article 1396-2.23 overrode a claim of attorney-client privilege. In
    17
    analyzing an argument similar to the one made by Gaughan in this case, the
    Texas Supreme Court held as follows:
    [Real party in interest] Chenault relies on Burton v. Cravey, 
    759 S.W.2d 160
    (Tex. App.—Houston [1st Dist.] 1988, no writ), for the
    proposition that the attorney-client privilege does not apply where a
    party has a right to information independently of the rules of
    discovery. In Burton, condominium owners filed a trial court
    mandamus action against the condominium association to enforce
    their statutory right to inspect the association‘s books and records.
    See Tex. Prop. Code Ann. § 81.209; Tex. Rev. Civ. Stat. Ann. art.
    1396-2.23. The trial court allowed inspection of the records,
    including those in the possession of the association‘s attorney,
    finding as a factual matter that the attorney‘s records constituted part
    of the association‘s records. The court of appeals affirmed, holding
    that the attorney-client privilege did not apply in light of the owners‘
    unqualified right of 
    inspection. 759 S.W.2d at 162
    .
    It is unclear whether the records at issue in Burton were
    merely records of the association in the possession of the attorney,
    or whether they contained separate confidential attorney-client
    communications. To the extent that they consisted of the former, we
    agree that they were not protected. See [Nat’l Tank Co. v.]
    Brotherton, 851 S.W.2d [193,] 199 [(Tex. 1993)]. However, to the
    extent that the court held that the owners’ statutory right of
    inspection somehow trumped the privilege for confidential attorney-
    client communications, we disapprove of its holding, for the reasons
    previously discussed. We also disapprove of the court’s dicta that
    the trial court could, in its discretion decline to apply the attorney-
    client privilege even if all the elements of Rule 503 were met. 
    See 759 S.W.2d at 162
    .
    
    Id. at 924
    (emphasis added). Other jurisdictions agree. See Schein v. N. Rio
    Arriba Elec. Coop., Inc., 
    122 N.M. 800
    , 806 (N.M. 1997) (holding corporate
    documents subject to attorney-client privilege may be withheld from shareholders
    but upholding denial of protection for information examined by trial court in
    camera and found not to contain indicia of confidentiality); Nat’l Football League
    18
    Props., Inc. v. Superior Court, 
    75 Cal. Rptr. 2d 893
    , 898 (Cal. Ct. App. 1998)
    (holding shareholder status does not in and of itself entitle an individual to
    unfettered access to corporate confidences); Riser v. Genuine Parts Co., 
    150 Ga. App. 502
    , 504 (Ga. Ct. App. 1979) (holding trial court did not err by denying
    corporate information to shareholder that contained confidential management
    information, legal opinions, and personnel evaluation in absence of compelling
    reason); Morton v. Rogers, 
    20 Ariz. App. 581
    , 586 (Ariz. Ct. App. 1973) (holding
    right of director and shareholder to examine books and records does not extend
    to trade secrets); see also In re LTV Secs. Litig., 
    89 F.R.D. 595
    , 604 (N.D. Tex.
    1981) (applying federal law in securities fraud suit and recognizing shareholder‘s
    statutory or common law right to inspection could not overcome otherwise valid
    assertion of attorney-client privilege); 5A FLETCHER CYCLOPEDIA OF THE
    LAW OF CORPORATIONS § 2239.10 (2011) (collecting cases holding
    shareholders not entitled to trade secrets or confidential information contained in
    books and records of corporation unless such affects financial status of
    corporation or value of stock).7
    7
    Gaughan does not contend that she has been denied the opportunity to
    inspect confidential or attorney-client communications, but the broader principle
    revealed by BACALA, Huie, CASE, PMI, and similar opinions—that the scope of
    the right of inspection for members of a non-profit corporation may be limited by
    legitimate considerations of privilege, trade secrets, and confidentiality—as well
    as the differing access granted to members and the public under articles 1396-
    2.23 and 1396-2.23A, reveals that even members of a non-profit corporation do
    not have unfettered access to the non-profit‘s corporate records.
    19
    Moreover, by accepting and renewing her membership each year in the
    NCHA, Gaughan has agreed to abide by the rules, policies, and agreements
    made by the NCHA. Gaughan has not disputed that those rules include the
    Employee Handbook and the Financial Disclosure Policy and Procedure adopted
    by the executive committee of the NCHA in 2004, which contain the association‘s
    policies for treating employee and third party business information as
    confidential. By its Employee Handbook and the Disclosure Policy, the NCHA
    makes representations to its employees, vendors, sponsors, and other persons
    with whom it does business that it will maintain certain information as
    confidential.   Gaughan disputes that any employment contract or business
    agreement with vendors or sponsors produced to her by the NCHA contain
    confidentiality agreements, but the documents in question have not been made a
    part of the record on appeal. In any event, the Disclosure Policy limits the right of
    the NCHA and its members to further disseminate such information to others
    because the NCHA has an obligation to protect the information as confidential.
    Gaughan has not argued or cited any authority to the effect that she cannot
    contractually agree not to disseminate to the public or the press any confidential
    information provided to her as a member.
    That Gaughan may be entitled to review the requested records under the
    applicable statute as a member of the corporation does not mean that she can do
    so without maintaining the confidentiality of information contained in those
    documents as agreed by her and as ordered by the trial court.           The above-
    20
    referenced cases recognize that fact. The same type of prophylactic protective
    order afforded in both CASE and PMI was properly afforded by the trial court in
    this case; that is, Gaughan‘s receipt, inspection, and copying of the books and
    records of the NCHA was subject to the procedure outlined in the order
    prohibiting her from sharing with others the documents designated ―Confidential‖
    by the NCHA unless she challenged the confidential designation of specific
    documents or categories of documents, providing the NCHA the opportunity to
    furnish proof to support its designation of confidentiality.    We agree with the
    NCHA that this is the only way to balance and reconcile Gaughan‘s statutory
    right to review such documents and the NCHA‘s duty to maintain as confidential
    third party business information contained in those documents.
    4.     Confidentiality as to other members of the NCHA
    On appeal, Gaughan has argued that she only wishes to share the
    documents in question with her fellow members of the NCHA, not the general
    public, in order to enable the membership to make informed decisions as to their
    votes for officers and directors as well as to participate in governance by
    determining the most reasonable and prudent course for the future of the
    association. But we note that Gaughan requested in both the trial court and in
    this court that the protective order be set aside in its entirety, which would enable
    her to publish all of the information to the press and public as well as her fellow
    members.    Moreover, the NCHA is a national organization with over 20,000
    members. The NCHA acknowledges that other members have a right to review
    21
    its records upon written request for a proper purpose stated.          However, the
    Texas statutes make the NCHA the respository of its books and records. If other
    members request inspection, the NCHA is entitled to require those members to
    agree to abide by its disclosure policy or to enforce that policy as to confidential
    information just as it did as to Gaughan.     If Gaughan is allowed to disseminate
    those records to other members, the NCHA will be unable to track the
    dissemination or to require that those other members abide by its Disclosure
    Policy as to confidential information to ensure that the confidential information is
    protected.
    Because Gaughan received records from the NCHA that the public does
    not have the right to inspect under article 1396-2.23A, and because her right to
    inspect and copy those documents was subject to protection from further
    disclosure as confidential, the trial court did not err by entering the protective
    order or by declaring that the records produced to Gaughan were subject to
    confidential treatment prohibiting her from further disseminating them to others.
    Moreover, because it is undisputed that the NCHA produced to Gaughan all
    records that she requested, the trial court did not err by declaring that the NCHA
    ―fully complied with all legal requirements relating to [Gaughan‘s] requests to
    review records of the association.‖ We therefore overrule Gaughan‘s first issue. 8
    8
    Gaughan‘s first issue contends that the trial court erred by declaring that
    the NCHA‘s ―financial records‖ are entitled to confidential treatment, but it is clear
    from Gaughan‘s briefing on appeal and in the trial court that she contends that
    the trial court erred by entering the protective order concerning any of the records
    22
    B. Designation of Documents as Confidential Under Protective Order
    Gaughan argues in her second issue that the trial court erred by declaring
    that the NCHA‘s financial records are entitled to confidential treatment under the
    law because it did not examine the records in camera to determine whether the
    assertion of confidentiality was valid. The NCHA responds that Gaughan did not
    follow the terms of the protective order to challenge the designation of any
    records as confidential.
    After the trial court entered the protective order, the NCHA produced
    89,214 pages of documents to Gaughan and designated 36,556 of those pages
    as confidential. The protective order provided that ―any time after the delivery of
    Confidential Information, counsel for [Gaughan] may challenge the Confidential
    designation of all or any portion thereof by providing written notice thereof to
    counsel for the NCHA‖ and that if the parties could not reach an agreement,
    Gaughan could ―file a motion with the Court to challenge the confidential nature
    of all or a portion of the Confidential Information.‖ The trial court‘s judgment
    includes a declaration that Gaughan ―took no action pursuant to the terms of the
    [Protective] Order to contest the ‗Confidential‘ designation of records and,
    therefore, the documents designated as ‗Confidential‘ by the NCHA are therefore
    entitled to confidential treatment under the law.‖
    she requested from the NCHA. As discussed above, however, Gaughan
    requested and received records that a non-member may not inspect.
    23
    Gaughan argues that the trial court erred by making this declaration
    because she gave written notice to the NCHA‘s counsel on March 18, 2009, and
    included within her motion for summary judgment a global request for in camera
    review of the 36,556 pages of confidential documents. However, the March 18
    letter is not in the summary judgment record. While the NCHA‘s March 23 letter
    responding to the March 18 letter is in the summary judgment record, the March
    23 letter from the NCHA‘s counsel only mentions a general assertion by
    Gaughan that she ―has the right to keep and disseminate all information
    produced by the NCHA in this matter.‖ The March 23 letter does not mention or
    refute any contentions as to why all or part of the documents designated as
    confidential by the NCHA should not be designated as confidential, nor does it
    suggest that Gaughan sent the March 18 letter for the purpose of complying with
    the protective order.   Thus, contrary to Gaughan‘s contention, the summary
    judgment record does not contradict the trial court‘s declaration that Gaughan
    ―took no action pursuant to the terms of the [Protective] Order to contest the
    ‗Confidential‘ designation of records.‖ And because Gaughan did not present
    summary judgment evidence that she complied with the protective order, the trial
    court did not err by declaring that ―the documents designated as ‗Confidential‘ by
    the NCHA are therefore entitled to confidential treatment under the law.‖
    Under the unique facts and procedural posture of this case, we hold that
    the trial court did not err by declaring that Gaughan ―took no action pursuant to
    the terms of the [Protective] Order to contest the ‗Confidential‘ designation of
    24
    records‖ and that ―the documents designated as ‗Confidential‘ by the NCHA are
    therefore entitled to confidential treatment under the law.‖          We overrule
    Gaughan‘s second issue.9
    C. Attorney’s Fees
    Gaughan contends in her third issue that the trial court erred by granting
    summary judgment for the NCHA‘s attorney‘s fees because fact issues remain as
    to whether the fees were reasonable and necessary.
    ―While reasonableness of an attorney‘s fee award often presents a
    question of fact, an ‗affidavit filed by the movant‘s attorney that sets forth his
    qualifications, his opinion regarding reasonable attorney‘s fees, and the basis for
    his opinion will be sufficient to support summary judgment, if uncontroverted.‘‖
    Cammack the Cook, L.L.C. v. Eastburn, 
    296 S.W.3d 884
    , 894 (Tex. App.—
    Texarkana 2009, pet. denied) (quoting In re Estate of Tyner, 
    292 S.W.3d 179
    ,
    184 (Tex. App.—Tyler 2009, no pet.)); see Bocquet v. Herring, 
    972 S.W.2d 19
    ,
    21 (Tex. 1998) (―In general, ‗[t]he reasonableness of attorney‘s fees . . . is a
    question of fact for the jury‘s determination.‘‖) (quoting Trevino v. Am. Nat’l Ins.
    9
    We do not reach the issues of whether the NCHA met its burden of
    establishing confidentiality as to particular categories of records, or whether a
    non-member may disseminate to other non-members information received
    pursuant to article 1396-2.23A. Those issues are not before us given the unique
    procedural posture of this case and Gaughan‘s request that the trial court declare
    that all records produced by the NCHA are not confidential despite her receipt of
    documents to which a non-member does not have the right to inspect. See
    generally Timpte Indus., Inc. v. Gish, 
    286 S.W.3d 306
    , 310 (Tex. 2009) (―It is well
    settled that a trial court cannot grant a summary judgment motion on grounds not
    presented in the motion.‖).
    25
    Co., 
    140 Tex. 500
    , 
    168 S.W.2d 656
    , 660 (1943)). Texas courts consider eight
    factors when determining the reasonableness of attorney‘s fees:
    (1) the time and labor required, the novelty and difficulty of the
    questions involved, and the skill required to perform the legal service
    properly;
    (2) the likelihood . . . that the acceptance of the particular
    employment will preclude other employment by the lawyer;
    (3) the fee customarily charged in the locality for similar legal
    services;
    (4) the amount involved and the results obtained;
    (5) the time limitations imposed by the client or by the
    circumstances;
    (6) the nature and length of the professional relationship with the
    client;
    (7) the experience, reputation, and ability of the lawyer or lawyers
    performing the services; and
    (8) whether the fee is fixed or contingent on results obtained or
    uncertainty of collection before the legal services have been
    rendered.
    Arthur Andersen & Co. v. Perry Equip. Corp., 
    945 S.W.2d 812
    , 818 (Tex. 1997)
    (citing Tex. Disciplinary R. Prof. Conduct 1.04, reprinted in Tex. Gov‘t Code, tit. 2,
    subtit. G app. (State Bar Rules, art. X, § 9) (West 2005)).
    The NCHA offered an affidavit by its lead counsel as summary judgment
    evidence of the reasonableness and necessity of its attorney‘s fees.10 In the
    10
    The NCHA attached redacted fee statements and a summary of the rates
    and fees charged by the law firm to the affidavit.
    26
    affidavit, the NCHA‘s counsel outlined the work performed for the NCHA in the
    case and, among other things, testified (1) that he had been ―practicing law for
    over twenty two years in the State of Texas‖; (2) that he had been involved in
    ―numerous cases like this one in Tarrant County, Texas‖; (3) that he was ―familiar
    with the usual and customary fees for the work done on cases of this type in
    Tarrant County, Texas‖; (4) that the fees charged by his firm ranged from $100 to
    $300 per hour ―depending upon the person performing these services and their
    level of experience‖; (5) that the hourly rates were reasonable and necessary for
    the services performed; and (6) that ―based on the work done in the case, the
    amount of time spent, the nature of the tasks performed[,] and the amount in
    controversy,‖ it was his opinion that ―the reasonable and necessary attorneys‘
    fees incurred by the NCHA‖ were $84,243.             Gaughan did not file any
    controverting   summary    judgment      evidence.    Thus,   NCHA     presented
    uncontroverted summary judgment evidence of four of the Arthur Anderson
    factors. See 
    id. Gaughan argues
    that the trial court erred by granting summary judgment
    for the NCHA because the issues of reasonableness and necessity are questions
    of fact and because the fees that the NCHA‘s counsel testified were reasonable
    and necessary included $5,800 in fees charged before the lawsuit was filed, over
    $3,200 for services by an attorney not listed on the pleadings in the case for
    ―attention to file on pending issues,‖ and ―tens of thousands of dollars in
    attorneys‘ fees for the review and provision of the NCHA‘s financial records.‖
    27
    Gaughan argues that these charges ―represented fact issues that precluded the
    entry of summary judgment.‖
    First, while the reasonableness and necessity of attorney‘s fees is
    generally a question of fact, ―[a]n attorney‘s affidavit can sufficiently establish the
    reasonableness of attorney‘s fees for purposes of summary judgment.‖ Basin
    Credit Consultants, Inc. v. Obregon, 
    2 S.W.3d 372
    , 373 (Tex. App.—San Antonio
    1999, pet. denied); see Cammack the 
    Cook, 296 S.W.3d at 894
    ; see also
    
    Bocquet, 972 S.W.2d at 21
    (stating that ―in general,‖ reasonableness of
    attorney‘s fees is a question of fact).     Second, the NCHA sought more than
    $84,000 in attorney‘s fees, but the trial court awarded the NCHA $75,000 in
    attorney‘s fees. It therefore appears that the trial court did not award the NCHA
    the $5,800 in fees charged before the lawsuit or the approximately $3,200 for
    services by the attorney for ―attention to file on pending issues.‖ Even if it did,
    the applicable statute does not prohibit recovery of fees incurred before the
    lawsuit is filed or billed by an attorney not listed on the pleadings. See Tex. Civ.
    Prac. & Rem. Code Ann. § 37.009 (West 2008) (―In any proceeding under this
    chapter, the court may award costs and reasonable and necessary attorney‘s
    fees as are equitable and just.‖). Finally, we held above that, given the unique
    factual and procedural context of this case, the NCHA‘s records are entitled to
    confidential treatment.     Therefore, the services performed by the NCHA‘s
    attorneys in reviewing, designating, and producing records to Gaughan were not
    28
    rendered unreasonable or unnecessary based on Gaughan‘s contention that no
    NCHA records are entitled to confidential treatment.
    The NCHA‘s summary judgment established its entitlement to summary
    judgment as to the amount of attorney‘s fees, and Gaughan‘s arguments are
    mere criticisms of the amount sought without contradicting evidence. See Basin
    Credit 
    Consultants, 2 S.W.3d at 373
    , 374 (holding that opposing affidavit did not
    create fact issue for summary judgment purposes because it only criticized the
    amount of fees sought as excessive and did not ―set forth the affiant‘s
    qualifications or the basis for his opinion as to what a reasonable fee would be‖).
    We hold that the trial court did not err by granting summary judgment to the
    NCHA for $75,000 in attorney‘s fees, and we overrule Gaughan‘s third issue.
    V. Conclusion
    Having overruled each of Gaughan‘s three issues, we affirm the trial
    court‘s judgment.
    ANNE GARDNER
    JUSTICE
    PANEL: GARDNER and MCCOY, JJ.; and WILLIAM BRIGHAM (Senior Justice,
    Retired, Sitting by Assignment).
    DELIVERED: July 28, 2011
    29