Barbara Soules Young and Amy Ganci v. Robert and Hollie Krantz ( 2014 )

Reversed, Rendered and Remanded; Opinion Filed May 28, 2014
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-00853-CV
BARBARA SOULES YOUNG AND AMY GANCI, Appellants
V.
ROBERT AND HOLLIE KRANTZ, Appellees
On Appeal from the 68th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-13-04768
OPINION
Before Justices Bridges, Fillmore, and Lewis
Opinion by Justice Bridges
Appellants Barbara Soules Young (“Young”) and Amy Ganci (“Ganci”) appeal from the
trial court’s denial of their motion to dismiss. In a single issue, appellants contend the trial court
should have granted their motion to dismiss pursuant to chapter 27 of the Texas civil practice and
remedies code, the Texas Citizens Participation Act (“TCPA”). For the reasons expressed in this
opinion, we reverse the trial court’s order, render judgment granting appellants’ motion to
dismiss pursuant to the TCPA, and remand this case to the trial court for further proceedings
consistent with section 27.009(a) of the Texas civil practice and remedies code.
Background
In 2010, Young hired an architect to design an outdoor living space as an addition to her
home. Young then contacted Perennial Properties GC, LLC (“Perennial”) to obtain a quote to
build the outdoor living space. Young met with appellee Robert Krantz (“Krantz”), who
indicated he was the owner of Perennial. In June of 2011, Young and Krantz, on behalf of
Perennial, entered into the “Contract Home Deck Addition,” which outlined the construction to
be performed by Perennial and the payments to be made by Young.
Appellants allege Perennial failed to comply with the agreed-upon plans. For example,
they contend: (a) Perennial did not perform the services timely; (b) Krantz or his workers left
materials on Young’s property and her neighbor’s property; (c) the materials used were of poor
quality; (d) Perennial failed to obtain the proper permits; and (e) Perennial abandoned the job
before completion.
On September 15, 2011, Young received a letter from McKinney Lumber Company
(“MLC”), stating Perennial failed to pay MLC $9,779.90 for lumber that was delivered to
Young’s address in July and August 2011. On October 14, 2011, MLC filed a lien affidavit and
claim for mechanic’s and materialman’s lien against Young’s property, which is alleged to have
had a negative impact on Young’s credit.
On October 12, 2012, MLC filed a lawsuit (“Underlying Lawsuit”) against Perennial and
Young, seeking payment for lumber and materials purchased by Perennial for Young’s outdoor
addition. Appellant Ganci is the attorney representing Young in the Underlying Lawsuit. On
December 19, 2012, Young filed counterclaims against MLC, Perennial, Krantz and Hollie
Krantz, alleging, in part, that Perennial’s work was substandard.
On January 30, 2013, Young, with the assistance of Ganci, prepared an Angie’s List
review (“Review”) regarding Young’s experience with appellees and Perennial. The Review,
titled “Outdoor Living Space Nightmare−Shoddy Untimely Work and Failure to Pay Materials,”
gave Perennial an overall grade of “F.” In response to the Review, appellees filed a petition in
intervention in the Underlying Lawsuit asserting claims against appellants for defamation and
intentional infliction of emotional distress.
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Pursuant to the TCPA, on March 22, 2013, appellants filed a motion to dismiss the claims
asserted against them by appellees. After a hearing on April 22, 2013, the trial court denied
appellants’ motion to dismiss and severed the claims filed by appellees against appellants from
the Underlying Lawsuit.
Analysis
In their sole issue on appeal, appellants argue the trial court erred by denying their motion
to dismiss under the TCPA, because they were exercising their right to free speech in posting the
Review. Appellees respond that the TCPA does not apply to the Review because the Review was
defamatory per se.
Standard of Review
The issue in this case is whether the TCPA applies to appellants’ Review on Angie’s List.
We review questions of statutory construction de novo. Molinet v. Kimbrell, 356 S.W.3d 407,
411 (Tex. 2011). When construing a statute, our primary objective is to ascertain and give effect
to the legislature’s intent. TEX. GOV’T CODE ANN. §312.005 (West 2005); Molinet, 356 S.W.3d
at 411. “We look first to the statute’s language to determine that intent, as we consider it ‘a fair
assumption that the Legislature tries to say what it means, and therefore the words it chooses
should be the surest guide to legislative intent.’” Leland v. Brandal, 257 S.W.3d 204, 206 (Tex.
2008) (quoting Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex.
1999)); see also Molinet, 356 S.W.3d at 411. We consider the statute as a whole rather than
focusing upon individual provisions. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432,
439 (Tex. 2011). If a statute is unambiguous, we adopt the interpretation supported by its plain
language unless such an interpretation would lead to absurd results. Id. (citing Tex. Dep’t of
Protective and Regulatory Servs. v. Mega Child Care, 145 S.W.3d 170, 177 (Tex. 2004)).
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Applicable Law
The purpose of the TCPA 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; see
also TEX. CONST. Art. 1, §8 (“Every person shall be at liberty to speak, write or publish his
opinions on any subject. . . .”). The TCPA is to be “construed liberally to effectuate its purpose
and intent fully.” Id. at §27.011(b).
The TCPA provides a means for a defendant, early in the course of a lawsuit, to seek
dismissal of certain claims identified in the TCPA, including a legal action based on, relating to,
or in response to a party’s exercise of the right to free speech. Id. at §27.003(a). “Exercise of the
right of free speech” is defined as “a communication made in connection with a matter of public
concern.” Id. at §27.001(3). “Matter of public concern” includes an issue related to (1) health or
safety; (2) environmental, economic, or community well-being; (3) the government; (4) a public
official or public figure; or (5) a good, product, or service in the marketplace. Id. at §27.001(7).
When a court orders dismissal of a legal action under the TCPA, the court shall award to
the moving party (1) court costs, reasonable attorney’s fees, and other expenses incurred in
defending against the legal action as justice and equity may require, and (2) sanctions against the
party who brought the legal action as the court determines sufficient to deter the party who
brought the legal action from bringing similar actions. Id. at §27.009(a).
Applicability of the TCPA to the Angie’s List Review
To be entitled to a dismissal under the TCPA, appellants were required to establish by a
preponderance of the evidence that appellees’ defamation and intentional infliction of emotional
distress claims are based on, relate to, or are in response to appellants’ exercise of the right of
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free speech. Better Bus. Bureau of Metropolitan Dallas v. BH DFW, Inc., 402 S.W.3d 299, 307
(Tex. App.−Dallas 2013, pet. denied). Specifically, appellants were required to establish by a
preponderance of the evidence that the Review was a communication made in connection with a
good, product, or service in the marketplace. TEX. CIV. PRAC. & REM. CODE ANN. §§27.001(3),
27.001(7)(E).
The evidence before us shows that on January 20, 2013, Young, with the assistance of
Ganci, posted the Review on Angie’s List, which expressed Young’s opinion regarding her
experience with Perennial and appellees. As noted above, the Review gave Perennial an overall
rating of “F” and the comments section of the Review stated as follows:
Homeowner hired this company through Robert Krantz, its principal, to construct
an exterior deck living space onto a residential homestead. Krantz bid the job at
$33,684.00 and the parties entered into a written contract in June 2011. Krantz
promised to complete the deck by August, 2011 and agreed to build the deck
according to plans that the homeowner had paid an architect and engineer to
design. Krantz took the homeowner’s money and ordered the wrong materials for
the project, but had the framer construct a structure anyway, failing to connect
columns and beams in a safe fashion or as designed by the engineer. The framer
reports that he was told by Krantz not to do the connections as designed because it
was too expensive. Krantz would disappear for weeks at a time and would try and
satisfy the homeowner by sending over an undocumented worker, Walter, to slap
paint around and act like work was being performed. Krantz used substandard
materials not specified in the plans and failed to credit the homeowner for the
significant difference in value of the products−particularly roof, railing and
skylight materials. Krantz did not supply workers with a port-a-potty as required
in the parties contract and the homeowner was forced to allow strange
workers−many believed to be undocumented −into her home to use bathroom
facilities, as opposed to having them urinate. etc. outdoors on her property.
Krantz failed to keep the property cleaned up during the project and even allowed
lumber to sit on a neighbor’s driveway until the homeowner paid to have it
moved. Krantz was paid through framing although he failed to obtain a framing
inspection as agreed. The homeowner then learned he had only obtained a permit
from the City of Dallas for a $6,000.00 deck addition and not the $33,684.00
outdoor living space contracted for. After paying according to the contract
through the framing, the homeowner received a Notice of Intent to File Lien from
McKinney Lumber Company, LLC, which claimed Perennial had ordered lumber
in July and not paid the July invoice in accordance with Texas prompt pay laws
and statutes governing use of construction trust funds. Despite promises and
misrepresentations by Hollie Krantz that they “always paid their bills” and that
this was simply a form letter, McKinney Lumber was not paid by Krantz and did
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put a lien on the homeowner’s residential homestead and has since sued Perennial
and the homeowner for payment. The homeowner has determined that Krantz
over ordered lumber−there was actually only approximately $6,000.00 in lumber
used on her project, but the McKinney Lumber lien is for over $9,800.00. The
homeowner then learned that instead of embedding the huge support columns into
the concrete piers as called for in the plans, they had been nailed onto an untreated
piece of wood resting on the concrete. Instead of one single support beam across
the columns as called for in the plans and agreement, Krantz pieced together 2x10
lumber that appears to have been left over from another job, leaving exposed
joints on the top of the support columns. Krantz then used heavy iron brackets at
these joints, but instead of running through bolts to stabilize the heavy structure,
he used small lag bolts and drove most of them into the joints as opposed to the
wood. The homeowner spent thousands extra to have her architect and engineer
design a solution and had to hire another contractor to finish the work.
The homeowner has learned that contrary to Texas law, which requires that a
contractor maintain a separate construction account if he contracts with the owner
of a residential homestead and is contracting for more than $10,000, Krantz
commingled the homeowner’s construction payments into a general account and
never maintained an account record for her project−all in violation of the Texas
Property Code, Chapter 162 which creates a fiduciary relationship between the
subs, vendors. homeowner and contractor and requires the contractor to not divert
construction money paid which are considered trust funds. Krantz abused the
monies paid to him by the homeowner, was always away on vacation and when
he did come to the property, would leave his truck running and stay only
moments. From check records received from Perennial, Krantz was using the
homeowner’s money to pay for work on other jobs. Subs on the project report
that Krantz owes them money−this includes the concrete supplier, the gutter
company, and the framer−and of course McKinney Lumber which was not paid a
penny even though lumber was the primary material used in constructing the deck
and was advanced by the homeowner under the terms of the payment schedule in
the contract. The homeowner has been told by certain subs that Hollie and Robert
Krantz were building a home on Lake Texoma and pilfering materials and labor
from jobs. One check Krantz claims was paid for work on the homeowner’s
property shows him reimbursing an undocumented worker almost $50 for gas and
making loans from homeowner’s construction funds−why would a sub need to be
reimbursed for gas on a residential construction project in Dallas?
The project has been a complete nightmare for the homeowner, who has been
sued by McKinney Lumber and had her impeccable credit ruined. When she paid
the concrete supplier directly because he complained to her he had not been paid,
Hollie Krantz wrote her an email accusing “I did not know you were in bed with
Don Phillips.” This was very troubling and shocking to the 72 year old
homeowner. The lack of care and shoddy construction of the huge deck structure
continues to be a nightmare for the homeowner who will never enjoy the living
space she paid to have so meticulously designed and engineered. When Krantz
had interviewed for the job, the homeowner had made clear that safety was the
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primary goal because a good friend’s daughter had died in Chicago in the deck
collapse in 2003 in Lincoln Park.
In the early phases of the construction, the Krantzs duped the homeowner into
believing they were such good Christian people, asking if their children could tour
the homeowners pretty gardens and excusing lateness by saying “I was playing
Jesus in the summer bible school program.” Sickening!
Watch out for the contract−Krantz’s contract did not contain the mandatory notice
about the Residential Construction Liability Act (“RCLA”). When the
homeowner hired a lawyer and tried to get Krantz to come fix the defective and
cheap work, he instead hired a lawyer who said “Gottcha”−you did not send us
your demand by “certified mail, return receipt requested.” The homeowner had no
idea about the RCLA. But regardless, still has a lien on her homestead!
This couple is very capable of sucking you in! They do not come off as crooks,
but they will take your money and misrepresent the facts about their subs and
your job. Robert Krantz knows nothing about construction and was completely
dumbfounded when meeting with the architect and engineer to try and fix the
damage caused by not following the plans−like a deer in the headlights−he had no
clue. The homeowner has learned he didn’t even show the plans to most of the
subs who worked on the project. The Krantzs never did anything on time and sent
invoices knowing work had not been performed as agreed and that they had used
substandard and cheaper materials than bid. It would be a shame if they subjected
anyone else to this horrid nightmare.
In their amended response to the motion to dismiss, appellees specifically cited the trial court to
the last paragraph of the comments section of the Review as being defamatory.
Here, appellants established by a preponderance of the evidence that they were exercising
their right to free speech by communicating to the public their Review of Perennial and
appellees. See Better Bus. Bureau, 402 S.W.3d at 308 (concluding the BBB was exercising its
right to free speech by communicating to the public its business review of BH DFW, including
an “F” rating). We conclude the Review related to a good, product, or service in the marketplace
and, therefore, under the statutory definition, related to matter of public concern; we also
conclude the communication of the Review was an exercise of appellants’ right to free speech as
defined by the TCPA. See id. (citing Avila v. Larrea, 394 S.W.3d 646, 657 (Tex. App.−Dallas
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2012, pet. denied); Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living Ltd., 416 S.W.3d
71, 81 (Tex. App.−Houston [1st Dist.] 2013, pet. denied)).
Further, in their petition in intervention, appellees stated their claims for defamation and
intentional infliction of emotion distress were filed as a result of appellants’ “false statements
posted on Angie’s List.” Therefore, the claims were filed in response to appellants’ exercise of
the right to free speech as required by the TCPA. See TEX. CIV. PRAC. & REM. CODE ANN.
§27.003(a).
Burden Shift
Because appellants established the Review fell within the scope of the TCPA, the burden
then shifted to appellees to establish by clear and specific evidence a prima facie case for each
essential element of their claims. TEX. CIV. PRAC. & REM. CODE ANN. §27.005(c). The TCPA
provides no guidance as to the quantum of proof necessary to constitute clear and specific
evidence of a prima facie case for each essential element of a claim. See id.; Better Bus. Bureau,
402 S.W.3d at 309. The legislature’s use of the term “prima facie case” implies a minimal
factual burden for the plaintiff: “[a] prima facie case represents the minimum quantity of
evidence necessary to support a rational inference that the allegation of fact is true.” See
Newspaper Holdings, 2013 WL 1867104, at *6. However, the Act requires the proof offered
address and support each element of each and every claim asserted with clear and specific
evidence. See TEX. CIV. PRAC. & REM. CODE ANN. §27.005(b), (c). See also Farias v. Garza,
No. 04-13-00094-CV, 2014 WL 300983, at *2 (Tex. App.−San Antonio Jan. 29, 2014, pet.
filed). Further, the statute does require the trial court to “consider the pleadings and supporting
and opposing affidavits stating the facts on which the liability or defense is based.” TEX. CIV.
PRAC. & REM. CODE ANN. §27.006(a). The purposeful inclusion of a “clear and specific
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evidence” requirement, therefore, indicates that the non-movant must satisfy an elevated
evidentiary standard under section 27.005(c). See Farias, 2014 WL 300983, at *2.
1. Defamation
Applying this standard, we first turn to appellees’ defamation claim. To maintain a
defamation cause of action against appellants, appellees were required to prove appellants (1)
published a false statement; (2) that was defamatory; (3) while acting with negligence regarding
the truth of the statement. See Avila, 394 S.W.3d at 657. A statement is “defamatory” if it
“tends to injure a living person’s reputation” and results in financial injury to that person. See
TEX. CIV. PRAC. & REM. CODE ANN. §73.001. A statement may be false, abusive, unpleasant, or
objectionable without being defamatory in light of the surrounding circumstances. Double
Diamond, Inc. v. Van Tyne, 109 S.W.3d 848, 854 (Tex. App.−2003, no pet.). Whether a
statement is capable of a defamatory meaning is initially a question of law for the court. See
Gumpert v. ABP Freight Sys., Inc., 293 S.W.3d 256, 264 (Tex. App.−Dallas, 2009, pet. denied).
Appellees’ sole argument in their brief contends they “[do] not have to prove that they
suffered damage to their reputation or any monetary loss,” because the Review is defamatory per
se.1 “Historically, defamation per se has involved statements that are so obviously hurtful to a
plaintiff’s reputation that the jury may presume general damages, including for loss of reputation
and mental anguish.” Hancock v. Variyam, 400 S.W.3d 59, 63 (Tex. 2013). Even in a
defamation per se claim between private parties over a matter of private concern, “there must
still be some showing of fault.” See id.; Farias, 2014 WL 300983, at *4. If the plaintiff is a
private figure, the appropriate showing of fault is negligence. See Hancock, 400 S.W.3d at 65 n.
7. Under this standard, the plaintiff must show the defendant knew or should have known the
1
At the conclusion of their brief, appellees make brief allegations that the Review referenced their financial records in violation of a
protective order and that the Review makes claims of fraud and uncharged criminal activity. However, appellees fail to point out to this Court
where these references purportedly are made or provide any further explanation or argument. Therefore, we need not address them in this
opinion. See TEX. R. APP. P. 38.1.
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defamatory statement was false. French v. French, 385 S.W.3d 61, 73 (Tex. App.−Waco 2012,
pet. denied).
Only statements alleging facts, rather than opinions, can properly be the subject of a
defamation action. See Farias, 2014 WL 300983, at *8; Avila, 394 S.W.3d at 658. An
expression of opinion is protected free speech. See Yiamouyjannis v. Thompson, 764 S.W.2d
338, 340 (Tex. App.−San Antonio, 1988, writ denied). Moreover, to be actionable, a statement
must assert an objectively verifiable fact rather than an opinion. See Main v. Royall, 348 S.W.3d
381, 389 (Tex. App.−Dallas 2011, no pet.). We classify a statement as fact or opinion based
upon the statement’s verifiability and the entire context in which the statement was made.
Bentley v. Bunton, 94 S.W.3d 561, 581 (Tex. 2002). Whether a statement is a fact or opinion is
also a question of law. Robertson v. Sw. Bell Yellow Pages, Inc., 190 S.W.3d 899, 903 (Tex.
App.−Dallas 2006, no pet.). In Young’s affidavit attached to appellants’ motion to dismiss, she
states: “I posted a review on Angie’s List that describes my experience with the Krantzes and
Perennial.” (emphasis added). She then attached a copy of the Review for the trial court.
But more importantly, in their amended response to the motion to dismiss, appellees only
attempted to present evidence, through their affidavits, as to why the statements made in the
Review were false. They did not present evidence as to the second and third prongs of
defamation (i.e., that the false statement was defamatory and appellants acted with negligence
regarding the truth of the statement). See Avila, 394 S.W.3d at 657. Appellees have, therefore,
failed to meet their burden of establishing by clear and specific evidence a prima facie case for
each essential element of their claim for defamation.2 See TEX. CIV. PRAC. & REM. CODE ANN.
§27.005(c) (emphasis added).
2
In their amended response to the motion to dismiss, appellees argue Ganci was negligent regarding her statements in the Review because
the appellees never provided any work to her. We conclude this argument is without merit, since it is clear from the record that Ganci was acting
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2. Intentional Infliction of Emotional Distress
We next turn to appellees’ claim for intentional infliction of emotional distress. To
recover for intentional infliction of emotional distress (“IIED”), a plaintiff must prove that (1)
the defendant acted intentionally or recklessly; (2) the defendant’s conduct was extreme and
outrageous; (3) the defendant’s actions caused the plaintiff emotional distress; and (4) the
emotional distress suffered by the plaintiff was severe. See Randall’s Food Markets, Inc. v.
Johnson, 891 S.W.2d 640, 644 (Tex. 1995). However, the tort of IIED is a “gap-filler” tort
which was created for the “limited purpose of allowing recovery in those rare instances in which
a defendant intentionally inflicts severe emotional distress in a manner so unusual that the victim
has no other recognized theory of redress.” Hoffman-La Roche, Inc. v. Zeltwanger, 144 S.W.3d
438, 447 (Tex. 2004); Rico v. L-3 Commc’n Corp., 420 S.W.3d 431, 441 (Tex. App.−Dallas
2014, no pet.). The tort’s clear purpose is to supplement existing forms of recovery by providing
a cause of action for egregious conduct that might otherwise go unremedied. See id. The tort of
IIED simply has no application when the actor intends to invade some other legally protected
interest, even if emotional distress results. See id. Thus, where the gravamen of a complaint is
another tort, IIED is not available as a cause of action. See Moser v. Roberts, 185 S.W.3d 912,
915 (Tex. App.−Corpus Christi 2006, no pet.) (citing Hoffman, 144 S.W.3d at 447-48).
Here, the facts that form the basis of the claim for IIED are the same as those that form
the basis for appellees’ defamation claim. Appellees do not refer this Court to additional,
unrelated facts in the record that support an independent claim for IIED. Because we have
already determined appellees have failed to meet their burden of establishing by clear and
as an agent on behalf of Young when assisting Young in the preparation of the Review. See In re George, 28 S.W.3d 511, 515 (Tex. 2000) (the
attorney is the agent of the client).
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specific evidence a prima facie case for each essential element of their claim for defamation,
appellees’ claim for IIED must likewise fail. See Hoffman, 144 S.W.3d at 447.
Conclusion
Because the TCPA applied to appellees’ claims against appellants and because appellees
failed to establish by clear and specific evidence a prima facie case for each essential element of
their claims for defamation and intentional infliction of emotional distress, the trial court erred
by denying appellants’ motion to dismiss under the TCPA. See TEX. CIV. PRAC. & REM. CODE
ANN. §27.005(c); Better Bus. Bureau, 402 S.W.3d at 312. We, therefore, reverse the trial court’s
order, render judgment dismissing this case pursuant to the TCPA, and remand this case to the
trial court for further proceedings consistent with section 27.009(a) of the civil practice and
remedies code. See id. at §27.009(a).
/David L. Bridges/
130853F.P05 DAVID L. BRIDGES
JUSTICE
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
BARBARA SOULES YOUNG AND AMY On Appeal from the 68th Judicial District
GANCI, Appellants Court, Dallas County, Texas
Trial Court Cause No. DC-13-04768.
No. 05-13-00853-CV V. Opinion delivered by Justice Bridges.
Justices Fillmore and Lewis participating.
ROBERT AND HOLLIE KRANTZ,
Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED and judgment is RENDERED that appellants' motion to dismiss pursuant to the
TCPA is granted. We REMAND to the trial court for further proceedings consistent with
section 27.009(a) of the Texas civil practices and remedies code.
It is ORDERED that appellants BARBARA SOULES YOUNG AND AMY GANCI
recover their costs of this appeal from appellees ROBERT AND HOLLIE KRANTZ.
Judgment entered May 28, 2014
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE
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