Enterprise Crude GP LLC and Enterprise Crude Pipeline, LLC v. Sealy Partners, LLC and Sealy Partners No. 3, LP ( 2020 )

Affirmed in Part, Reversed in Part, Remanded, and Opinion filed November
17, 2020.
In The
Fourteenth Court of Appeals
NO. 14-19-00818-CV
ENTERPRISE CRUDE GP LLC AND
ENTERPRISE CRUDE PIPELINE, LLC, Appellants
V.
SEALY PARTNERS, LLC AND SEALY PARTNERS NO. 3, LP, Appellees
On Appeal from the 155th District Court
Austin County, Texas
Trial Court Cause No. 2019V-0027
OPINION
This interlocutory appeal under the Texas Citizens Participation Act
(“TCPA”) arises from a dispute between two owners of adjacent real property.
The construction of crude storage tanks by the owner of one tract has allegedly
diminished if not destroyed the opportunity of the neighboring owner, plaintiffs-
appellees, to commercially develop the adjacent tract due to a potential “blast
zone” associated with the newly built tanks. The plaintiffs sued, alleging
intentional and negligent nuisance, fraudulent misrepresentation, tortious
interference with prospective contracts, promissory estoppel, trespass, and civil
conspiracy. The defendants jointly moved to dismiss all claims under the TCPA,
which the trial court denied.1
For reasons detailed below, we hold:
1) The trial court did not err in denying the motion to dismiss the claim
against appellant Enterprise Crude Pipeline, LLC (“Enterprise”) for negligent
nuisance because the TCPA applies to that claim, and appellees established a prima
facie case for each element of that claim. However, the trial court erred in denying
the motion to dismiss the claims against Enterprise for intentional nuisance,
fraudulent misrepresentation, tortious interference, and conspiracy, because the
TCPA applies to those claims, but appellees failed to establish a prima facie case
for each element of those claims.
2) The trial court did not err in denying the motion to dismiss the claim
against appellant Enterprise Crude GP LLC (“ECGP”) for trespass, because the
TCPA does not apply to that claim. However, the trial court erred in denying the
motion to dismiss the claims against ECGP for intentional and negligent nuisance,
tortious interference, fraudulent misrepresentation, promissory estoppel, and
conspiracy, because the TCPA applies to those claims, but appellees failed to
establish a prima facie case for each element of those claims.
We affirm in part, reverse in part, and remand for further proceedings.
1
See Tex. Civ. Prac. & Rem. Code §§ 27.001-.011 (West 2015). The TCPA was
amended in 2019. See Act of May 17, 2019, 86th Leg., R.S., ch. 378, 2019 Tex. Gen. Laws 684.
The 2019 amendments do not apply to this case, which was filed on March 8, 2019. See id.§§ 11-12, 2019 Tex. Gen. Laws at 687 (providing that amendments apply to actions filed on or
after September 1, 2019). We refer to the TCPA version applicable to this dispute.
2
Background
Appellees Sealy Partners, LLC and Sealy Partners No. 3, LP (collectively,
“Sealy Partners”) own real property in Sealy, Texas, and planned to develop it for
commercial use. When Sealy Partners acquired the property, at least four large,
above-ground crude storage tanks stood on an adjacent tract, which is now owned
by Enterprise. According to Sealy Partners, the existing tanks would not have
interfered with its plans to commercially develop its property.
Sealy Partners alleges that, in 2015 Enterprise approached it about relocating
a drainage easement and retention pond. Sealy Partners owned the easement and
pond, which bisected Enterprise’s property. Enterprise wanted to relocate the
retention pond to an area immediately adjacent to Sealy Partners’ property, thereby
eliminating the need for the easement.
In January 2016, a meeting allegedly occurred between representatives of
Sealy Partners, the City of Sealy, Enterprise, and ECGP, to discuss the easement
relocation. At the meeting, according to Sealy Partners, “a process was outlined to
complete that project” once Sealy Partners agreed to the drainage easement
agreement. Also, Enterprise and ECGP representatives indicated an intent to
construct additional storage tanks on Enterprise’s tract. Sealy Partners “expressed
concern to the Enterprise representatives regarding the prospect of Enterprise
expanding its operation, if [Sealy Partners] granted them the authority to relocate
the retention pond, such that new tanks would be built on the property line and
create an impact zone that would affect the use of [Sealy Partners’] land.” In
response, Enterprise and ECGP allegedly represented that they “would research the
required setback between the proposed oil tanks and [Sealy Partners’] property,
communicate this information with the City and [Sealy Partners], and provide all
parties with any plans to construct additional tanks so as not to interfere with
3
[Sealy Partners’] development.” Allegedly on “the strength of those
representations,” Sealy Partners “did [its] part and executed the Drainage Easement
Agreement.”
Sealy Partners’ plans for its property included construction of an apartment
complex, a hotel, a restaurant, and a convenience store, for which it claims to have
secured “HUD-assisted” funding.2 HUD regulations provide that “[t]he
Department will not approve an application for assistance for a proposed project
located at less than the acceptable separation distance from a hazard, as defined in
§ 51.201, unless appropriate mitigating measures, as defined in § 51.205, are
implemented, or unless mitigating measures are already in place.” 24 C.F.R.
§ 51.202(a). “Acceptable separation distance” means the distance beyond which
the explosion or combustion of a hazard is not likely to cause structures or
individuals to be subjected to blast overpressure or thermal radiation flux levels in
excess of promulgated safety standards. Id. § 51.201. “Hazard” includes any
stationary container which stores hazardous substances of an explosive or fire-
prone nature, like Enterprise’s crude storage tanks. Id.
In March 2016, Enterprise applied to the City of Sealy for land disturbance
and building permits to allow construction of an expansion to the existing crude oil
storage terminal. Enterprise requested permits to construct: “5 new API storage
tanks; pumps; [an] electrical building; [and] associated mechanical, civil,
structural, electrical infrastructure.” In December 2016, the City of Sealy
approved the applications and issued permits to Enterprise to conduct land
preparation work and begin building the additional tanks “per submitted plans.”
2
According to Sealy Partners, “‘HUD assisted’ loans are insured by the Department of
Housing and Urban Development (HUD), but the money is not provided by the Federal
Government.”
4
Construction of the five new tanks began the following year. According to
Sealy Partners, its project financier demanded that an environmental study be
commissioned regarding the “blast zone” around the additional storage tanks,
because the financier would not fund Sealy Partners’ project if the storage tanks
were too close to the proposed development. The blast zone study concluded that
“no portion of [Sealy Partners’] parcel is capable of being built upon without being
affected by the impact zones of the Enterprise tanks.” The financier ultimately left
the project, and Sealy Partners contends that the proximity of the new tanks to
Sealy Partners’ land prevented it from obtaining any alternative financing.
Sealy Partners sued Enterprise, ECGP, and Enterprise Products, LLC.3
Sealy Partners asserted identical claims against each defendant: intentional and
negligent nuisance, fraudulent misrepresentation, tortious interference with a
prospective business relationship, promissory estoppel, and trespass. Sealy
Partners also alleged that the defendants conspired to undermine Sealy Partners’
planned development. In support of its claims and theories, Sealy Partners pleaded
the following:
• Nuisance. Enterprise and ECGP intentionally and negligently created a
permanent nuisance by constructing storage tanks that had a blast zone
encompassing part of Sealy Partners’ property, thereby causing damage
through the inability to develop, lease, or sell all or a portion of the property.
• Fraudulent misrepresentation. Enterprise and ECGP representatives
misrepresented that they would research the separation distance required for
Sealy Partners’ intended development and provide Sealy Partners with any
3
Appellants assert that they have no knowledge of “Enterprise Products, LLC” or its
legal status. We do not address the status of that entity, or its involvement here, because the only
appellants before us are Enterprise and ECGP. Based on our record, Enterprise Products, LLC,
did not respond in the trial court and did not file a notice of appeal.
5
plans for the construction of new oil tanks to respect Sealy Partners’
intended use of its land. These misrepresentations allegedly caused Sealy
Partners to suffer injury, including the loss of future development, rent
collection, and potential sale. The misrepresentations also allegedly caused
a decrease in market value.
• Tortious interference with a prospective business relationship. Sealy
Partners alleged that a business relationship among Sealy Partners, its
financiers, and the City of Sealy to secure a loan for the project was
reasonably certain to occur; that profits from a future sale or lease were
reasonably certain to occur; and that Enterprise and ECGP knew of the
impending development and began construction of the tanks to prevent the
development from occurring and to reap financial benefit for themselves.
• Promissory estoppel. Enterprise and ECGP promised to research the
required separation distance between Sealy Partners’ planned development
and the additional tanks and to provide this information to Sealy Partners,
the city, and the respective engineers before beginning construction. Sealy
Partners relied on these promises to its detriment by moving forward with its
development plans, at significant financial expense.
• Trespass. Enterprise and ECGP trespassed on Sealy Partners’ land by
removing Sealy Partners’ existing wooden fence and installing a new chain-
link fence with razor wire, without prior notice or consent.
• Civil conspiracy. Enterprise and ECGP agreed to prevent by unlawful
means Sealy Partners’ development of its land.
Regarding damages, Sealy Partners alleged that construction of the five
additional tanks created a surrounding “blast zone” that caused Sealy Partners’
6
financier to withdraw and precluded substitute funding, thus materially devaluing
the property. Sealy Partners sought actual damages for lost market value, lost
profit, loss of the use and enjoyment of the land, and destruction of the existing
fence, as well as punitive damages.
Enterprise and ECGP filed a joint motion to dismiss all of Sealy Partners’
claims under the TCPA. See Tex. Civ. Prac. & Rem. Code § 27.003(a). They
argued that: (1) the TCPA applies to each of Sealy Partners’ claims because the
claims are based on, related to, or in response to, appellants’ exercise of the right
of free speech, the right to petition, or the right of association; (2) Sealy Partners
could not meet its prima facie burden to present clear and specific evidence
supporting each essential element of its claims; and (3) appellants had valid legal
defenses to Sealy Partners’ claims. In response, Sealy Partners disputed that the
TCPA applies to any of its claims. Sealy Partners also submitted several affidavits
in support of its prima facie evidentiary burden.
After a hearing, the trial court denied appellants’ motions to dismiss.
Enterprise and ECGP perfected this interlocutory appeal.4
Analysis
A. Applicable Law and Standard of Review
The TCPA contemplates an expedited dismissal procedure applicable to
claims brought to intimidate or silence a defendant’s exercise of the rights
enumerated in the Act. Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591
S.W.3d 127, 132 (Tex. 2019); ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d
895, 898 (Tex. 2016) (per curiam). The party invoking the TCPA may file a
motion to dismiss the “legal action” and must show by a preponderance of the
4
See Tex. Civ. Prac. & Rem. Code § 51.014(a)(12) (a person may appeal from an
interlocutory order that denies a motion to dismiss under section 27.003).
7
evidence that the action is “based on, relates to, or is in response to” that party’s
exercise of the right of free speech, right to petition, or right of association. Tex.
Civ. Prac. & Rem. Code §§ 27.003(a); 27.005(b); see also Coleman, 512 S.W.3d at
898. If the movant satisfies this burden, the trial court must dismiss the lawsuit
unless the nonmovant “establishes by clear and specific evidence a prima facie
case for each essential element of the claim in question.” Tex. Civ. Prac. & Rem.
Code § 27.005(c); see also Coleman, 512 S.W.3d at 899. The movant can still
obtain dismissal, however, if it establishes “by a preponderance of the evidence
each essential element of a valid defense to the nonmovant’s claim.” Tex. Civ.
Prac. & Rem. Code § 27.005(d).
We construe the TCPA liberally to effectuate its purpose and intent fully.
See Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018);
Coleman, 512 S.W.3d at 899; Cox Media Grp., LLC v. Joselevitz, 524 S.W.3d 850,
859 (Tex. App.—Houston [14th Dist.] 2017, no pet.); Tex. Civ. Prac. & Rem.
Code § 27.011(b). A court’s determination of whether claims fall within the
TCPA’s framework is subject to a de novo standard of review. See Adams, 547
S.W.3d at 894. Under that standard, we “make an independent determination and
apply the same standard used by the trial court in the first instance.” Joselevitz,
524 S.W.3d at 859. We must consider the relevant pleadings and any supporting
or opposing affidavits “stating the facts on which the liability or defense is based.”
Tex. Civ. Prac. & Rem. Code § 27.006(a). We review these materials in the light
most favorable to the nonmovant. See Brugger v. Swinford, No. 14-16-00069-CV,
2016 WL 4444036, at *2 (Tex. App.—Houston [14th Dist.] Aug. 23, 2016, no pet.)
(mem. op.).
8
B. Does the TCPA apply to Sealy Partners’ claims?
1. Sealy Partners’ claims against Enterprise
Enterprise argues that Sealy Partners’ claims against it for nuisance,
fraudulent misrepresentation, tortious interference, promissory estoppel, and
conspiracy are based on, related to, or in response to Enterprise’s exercise of one
or more of the TCPA’s enumerated rights: the right of free speech, the right of
association, or the right to petition.5 As Enterprise contends, the fundamental basis
for each of Sealy Partners’ claims is that appellants were allegedly engaged in a
calculated scheme to undermine Sealy Partners’ intended use of its property and, in
the process, materially and severely devalued Sealy Partners’ property by
preventing significant commercial development, for which financing was already
confirmed. Appellants allegedly executed this scheme by petitioning the City of
Sealy for construction permits when appellants were aware of Sealy Partners’
development plans, making false representations and promises in connection with
their plans to construct additional tanks (purportedly a matter of public concern),
and completing construction of additional above-ground storage tanks on the
adjacent property.
a. Right to petition
We begin with Enterprise’s contention that Sealy Partners’ claims are based
on, related to, or in response to its right to petition. Under the TCPA’s former
version, applicable here, “exercise of the right to petition” is defined broadly to
include among other things: “a communication in connection with an issue under
consideration or review by a legislative, executive, judicial, or other governmental
body or in another governmental or official proceeding,” Tex. Civ. Prac. & Rem.
5
Enterprise does not challenge the trial court’s refusal to dismiss the trespass claim.
9
Code § 27.001(4)(B); and “a communication that is reasonably likely to encourage
consideration or review of an issue by a legislative, executive, judicial, or other
governmental body or in another governmental or official proceeding,” id.
§ 27.001(4)(C). “Governmental proceeding” means “a proceeding, other than a
judicial proceeding, by an officer, official, or body of this state or a political
subdivision of this state, including a board or commission. . . .” Id. § 27.001(5).
For all of the rights protected under the TCPA, a “‘[c]ommunication’ includes the
making or submitting of a statement or document in any form or medium,
including oral, visual, written, audiovisual, or electronic.” Id. § 27.001(1). The
Supreme Court of Texas has held that the Act may protect both public and private
communications. See Coleman, 512 S.W.3d at 899 (discussing Lippincott v.
Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam)).
Considering the relevant pleadings and the supporting or opposing affidavits
“stating the facts on which the liability or defense is based,” Tex. Civ. Prac. &
Rem. Code § 27.006(a), we must determine whether Enterprise met its initial
burden by a preponderance of the evidence. Id. § 27.005(b). We have summarized
Sealy Partners’ pleadings above. Enterprise also attached evidence to its TCPA
motion, including copies of the permit applications and the issued permits. These
documents show that Enterprise owns the tract adjacent to Sealy Partners’
property, that Enterprise submitted applications for land disturbance and building
permits to the City of Sealy, and that the city approved and issued the permits to
Enterprise. We agree that Enterprise’s applications for land disturbance and
building permits from the City of Sealy to construct the additional tanks are
“communications” in “connection with an issue under consideration or review by a
. . . governmental body or in another governmental or official proceeding.” Id.
§ 27.001(4)(B). Enterprise’s permit applications and plans to expand its tank field
10
were issues “under consideration or review” by the City of Sealy, a “governmental
body” and a political subdivision of this state. The applications also qualify as
communications “reasonably likely to encourage consideration or review of an
issue by a . . . governmental body or in another governmental or official
proceeding.” Id. § 27.001(4)(C). Therefore, the permit applications constitute an
exercise of Enterprise’s right to petition. Id. § 27.001(4)(B), (C).
Additionally, Sealy Partners alleged that Enterprise made false
representations and promises to advance appellants’ alleged scheme to undermine
Sealy Partners’ planned use of its property. According to Sealy Partners’ amended
petition, during the January 2016 meeting when the respective parties’ plans were
under discussion with the city, Enterprise falsely promised to research the required
setback between the additional tanks and Sealy Partners’ property and provide
Sealy Partners with any plans for the construction of new oil tanks to respect Sealy
Partners’ intended use of its land. Sealy Partners contends that Enterprise
promised to provide the results of its setback research before beginning
construction. Like the permit applications, Enterprise’s alleged false
representations and promises constitute “communications” under the TCPA.
Moreover, as alleged, they were made “in connection with an issue under
consideration or review by a . . . governmental body or in another governmental or
official proceeding,” or were “reasonably likely to encourage consideration or
review of an issue by a . . . governmental body or in another governmental or
official proceeding.” Id. § 27.001(4)(B), (C).6
6
Enterprise did not submit evidence addressing the misrepresentation allegations, but if
the pleading on its face shows that the claims are based on, related to, or are in response to the
movant’s right to petition, then the TCPA applies and the movant need not present further
evidence. See Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017) (“When it is clear from the
plaintiff’s pleadings that the action is covered by the Act, the defendant need show no more.”).
11
We find the First Court of Appeals’ discussion of the right to petition in
Schimmel v. McGregor, 438 S.W.3d 847 (Tex. App.—Houston [1st Dist.] 2014,
pet. denied), instructive on this point. In that case, a group of homeowners sued a
lawyer representing the homeowners’ neighborhood association, asserting a claim
for tortious interference with prospective business relations, specifically the sale of
their respective beachfront properties to the City of Galveston under a buy-out
proposal following Hurricane Ike. Id. at 849-50. The homeowners alleged that the
lawyer made several misrepresentations that interfered with the city’s likely
purchase of their properties. Id. at 850. The lawyer moved to dismiss the
homeowners’ tortious interference claim under the TCPA, arguing that the TCPA
applied because the claim was based on, related to, or in response to his exercise of
the right to petition. Id. at 851-52. The court of appeals agreed that the TCPA
applied, holding that: all of the alleged statements forming the basis of the
homeowners’ tortious interference claim “concerned or were related to the City’s
plan to purchase the [homeowners’] properties;” the statements therefore “were
made ‘in connection with an issue under consideration or review’ by the City of
Galveston and the Texas Department of Public Safety, both of which are
governmental bodies;” and thus the homeowners’ claim was based on, related to,
or in response to the lawyer’s exercise of the right to petition. Id. at 858 (quoting
Tex. Civ. Prac. & Rem. Code § 27.001(4)(B) (defining “exercise of the right to
petition”)).
Similarly, here, the alleged misrepresentations Enterprise made during the
January 2016 meeting concerned in part the plan to construct new tanks and
whether the potential impact zone would affect Sealy Partners’ property.7 The
alleged false statements therefore were made in connection with an issue under
7
We note that Sealy Partners’ evidence submitted with its response confirms that these
matters were under consideration by the city at the January 2016 meeting.
12
consideration or review by the City of Sealy. See id. Thus, we conclude that
Enterprise’s alleged misstatements and promises, given their context, also qualify
as an exercise of Enterprise’s right to petition.
b. “Based on, relates to, or in response to”
Having concluded that the pleaded communications generally qualify as an
exercise of the right to petition under the TCPA, we next decide whether Sealy
Partners’ claims against Enterprise are “based on, relate[d] to, or in response to”
those communications. Tex. Civ. Prac. & Rem. Code § 27.003(a); 27.005(b).8
Neither the phrase as a whole nor its individual terms are defined in the Act. This
court and others have stated that the TCPA at least requires that the claims be
“factually predicated” on the exercise of TCPA rights. See, e.g., TN CPA, P.C. v.
Nguyen, No. 14-19-00677-CV, 2020 WL 5415593, at *4 (Tex. App.—Houston
[14th Dist.] Sept. 10, 2020, no pet. h.) (mem. op.); Porter-Garcia v. Travis Law
Firm, P.C., 564 S.W.3d 75, 85 (Tex. App.—Houston [1st Dist.] 2018, pet. denied)
(“The TCPA’s ‘is based on, relates to, or is in response to’ language captures, at a
minimum, a ‘legal action’ that is factually predicated upon or relates to alleged
conduct that would fall within the TCPA’s definition of exercise of [a protected
right].”); Cavin v. Abbott, 545 S.W.3d 47, 69 (Tex. App.—Austin 2017, no pet.).
The factual predicate for the fraudulent misrepresentation and promissory
estoppel claims is that Enterprise falsely promised to research the required setback
between the additional tanks and Sealy Partners’ property and provide Sealy
Partners with any plans for the construction of new oil tanks before construction
was to begin. As we have stated, the alleged misrepresentations and promises by
8
The legislature recently deleted the phrase “relates to” from the statute, which now
permits a party to file a motion to dismiss a legal action if it is “based on or is in response to” the
party’s exercise of a TCPA-protected right. See Act of May 17, 2019, 86th Leg., R.S., ch. 378,
§ 2; Tex. Civ. Prac. & Rem. Code §§ 27.003(a), 27.005(b) (West 2019).
13
Enterprise attendant to the proposed construction were an exercise of Enterprise’s
right to petition as defined by the TCPA. We can say comfortably that Sealy
Partners’ fraudulent misrepresentation and promissory estoppel claims directly
challenging those communications are factually predicated on, and thus based on,
Enterprise’s exercise of the right to petition. See Schimmel, 438 S.W.3d at 858.
Less straightforward is whether the nuisance and tortious interference claims
are based on, related to, or in response to Enterprise’s right to petition. As to those
claims, we place particular attention on the Act’s phrase “relates to” because it
casts the widest net, and if Sealy Partners’ nuisance and tortious interference
claims are “related to” Enterprise’s exercise of its right to petition then the TCPA
applies to those claims. As with any statutory term the legislature leaves
undefined, we look to the word’s common meaning. See Tex. Gov’t Code
§ 311.011(a); CHRISTUS Health Gulf Coast v. Carswell, 505 S.W.3d 528, 535-36
(Tex. 2016). “Related” is commonly defined as “[c]onnected in some way; having
relationship to or with something else.” CHRISTUS Health, 505 S.W.3d at 535-36
(quoting Black’s Law Dictionary 1479 (10th ed. 2014)). The phrase “relates to”
has been defined as “to have a connection with, to refer to, or to concern.” Tex.
Dep’t of Pub. Safety v. Abbott, 310 S.W.3d 670, 674-75 (Tex. App.—Austin 2010,
no pet.). Applying these common understandings here, a plaintiff’s claims are
“related to” a protected communication when there exists “some sort of
connection, reference, or relationship between them.” Cavin, 545 S.W.3d at 69;
see also Reeves v. Harbor Am. Cent., Inc., --- S.W.3d ---, 2020 WL 2026527, at
*6-7 (Tex. App.—Houston [14th Dist.] 2020, pet. filed) (claim was at least “related
to” the exercise of TCPA-protected right when it was “closely and necessarily”
intertwined with allegations that constituted the exercise of a TCPA-protected
right); Abatecola v. 2 Savages Concrete Pumping, LLC, No. 14-17-00678-CV,
14
2018 WL 3118601, at *8 (Tex. App.—Houston [14th Dist.] June 26, 2018, pet.
denied) (mem. op.). Courts have described this nexus as quite broad. E.g., Fla.
Metal Prods., Inc. v. Kreder, No. 10-18-00383-CV, 2020 WL 6071698, at *3 (Tex.
App.—Waco Oct. 14, 2020, no pet. h.) (mem. op.); Grant v. Pivot Tech. Sols., Inc.,
556 S.W.3d 865, 880 (Tex. App.—Austin 2018, pet. denied). We presume that the
legislature intended to narrow the Act’s reach by removing the “relates to”
language during the last legislative session, but the Act’s prior version applies
here.
Although Sealy Partners does not complain about statements made in the
permit applications, the applications necessarily go hand in hand with the
construction process because Enterprise applied for the construction permits from
the City of Sealy and could not have constructed the tanks without the permits.9
The nuisance and tortious interference claims are predicated on the construction of
the additional tanks, and we conclude those claims at least “have a connection
with, refer to, or concern” Enterprise’s permit applications because those
communications resulted in the creation of a condition that Sealy Partners contends
is a nuisance and tortiously interfered with their prospective contractual
relationships. See, e.g., Reeves, 2020 WL 2026527, at *6-7 (claim was “related to”
exercise of TCPA-protected right when it was “closely and necessarily”
intertwined with other allegations that constituted the exercise of a TCPA-
protected right; defendant could not have engaged in the challenged conduct
without also engaging in protected communication) (citing Abatecola, 2018 WL
3118601, at *7); see also Grant, 556 S.W.3d at 880 (“[B]ased on the ordinary
meaning of the terms, a plaintiff’s claims are ‘related’ to a protected
9
In the factual background section of its live pleading, Sealy Partners asserted that
“Defendants signed the permit application for the construction of five above ground storage
tanks, designed to store enormous amounts of combustible and hazardous petroleum products.”
15
communication when there is ‘some sort of connection, reference, or relationship
between them.’”) (quoting Cavin, 545 S.W.3d at 69).
Additionally, the nuisance and tortious interference claims relate to the
alleged misrepresentations made during the January 2016 meeting. Both claims
have a connection with, refer to, or concern the communications because the
statements allegedly were made in furtherance of the plans to construct the
additional tanks. Moreover, the tortious interference claim is related to the
communications because Sealy Partners alleges the statements were made falsely
to prevent Sealy Partners’ development from occurring and to reap financial
benefits for Enterprise by constructing the new tanks. Thus, Sealy Partners’
nuisance and tortious interference claims are related to Enterprise’s exercise of the
right to petition.
Finally, all the communications underlie the conspiracy allegation. So that
theory is based on, related to, or in response to Enterprise’s exercise of the right to
petition as well.
For these reasons, we hold that Enterprise proved by a preponderance of the
evidence that Sealy Partners’ nuisance, fraudulent misrepresentation, tortious
interference, promissory estoppel, and civil conspiracy claims against it are based
on, related to, or in response to, Enterprise’s exercise of the right to petition. See
Tex. Civ. Prac. & Rem. Code §§ 27.003(a), 27.005(b); Cavin, 545 S.W.3d at 69
(noting that under the plaintiffs’ theory of the case, all of the defendants’
complained-of acts, even those not factually predicated on communications, were
portrayed as related components of other TCPA-protected communications). The
TCPA applies to these claims.
16
2. Sealy Partners’ claims against ECGP
Sealy Partners asserted against ECGP the same claims it asserted against
Enterprise. Regarding the fraudulent misrepresentation, promissory estoppel, and
conspiracy claims, Sealy Partners alleged that ECGP representatives made the
same misrepresentations as Enterprise did at the January 2016 meeting. As we
have explained, the alleged statements—whether made by ECGP or Enterprise—
constitute communications allegedly made “in connection with an issue under
consideration or review by a . . . governmental body or in another governmental or
official proceeding,” or were “reasonably likely to encourage consideration or
review of an issue by a . . . governmental body or in another governmental or
official proceeding.” Tex. Civ. Prac. & Rem. Code § 27.001(4)(B), (C). Thus,
ECGP’s alleged statements qualify as an exercise of the right to petition. See
Schimmel, 438 S.W.3d at 858.
Moreover, as we have concluded regarding identical claims against
Enterprise, Sealy Partners’ claims against ECGP for nuisance, tortious
interference, fraudulent misrepresentation, promissory estoppel, and conspiracy, at
least have a connection to, refer to, or concern ECGP’s alleged misstatements and
false promises regarding construction of the tanks. Therefore, those claims are
related to ECGP’s exercise of its right to petition, and the TCPA applies to them.
Insofar as the claims against ECGP are concerned, we do not base any part
of our analysis on communications contained in the permit applications. The
evidence shows conclusively that Enterprise—not ECGP—applied for and
received the permits. Thus, the permit applications were not “communications” by
ECGP and hence not an exercise of the right to petition by ECGP. For purposes of
step one of the TCPA analysis regarding Sealy Partners’ claims against ECGP, we
rely solely on the alleged communications made during the January 2016 meeting.
17
Sealy Partners’ final claim is for trespass. Unlike Enterprise, ECGP
challenges on appeal the trial court’s refusal to dismiss the trespass claim. ECGP
argues that the trespass claim should be dismissed because Sealy Partners did not
meet its prima facie burden in support of that claim. But we would reach that issue
only if the TCPA applies. ECGP does not argue that the TCPA applies to the
trespass claim, and we conclude it does not. The factual predicate for the trespass
claim is that ECGP removed Sealy Partners’ existing wooden fence and installed a
new chain-link fence with razor wire, without prior notice or consent. There is no
allegation or evidence as to when this occurred or that the alleged trespass was
related to the construction of the additional tanks, as opposed to merely enhancing
security around Enterprise’s property. There is no allegation of a
“communication” made by ECGP in connection with the trespass claim. We
cannot say on this record that Sealy Partners’ trespass claim is based on, related to,
or in response to ECGP’s exercise of any TCPA-enumerated right, and therefore
the TCPA does not apply to the trespass claim.
* * *
In sum, we hold the following regarding the first step in the TCPA analysis.
Enterprise and ECGP proved by a preponderance of the evidence that the TCPA
applies to the nuisance, fraudulent misrepresentation, tortious interference,
promissory estoppel, and civil conspiracy claims asserted against them. But ECGP
did not prove by a preponderance of the evidence that the TCPA applies to the
trespass claim asserted against it.
Thus, the trial court did not err in denying ECGP’s TCPA motion to dismiss
the trespass claim against ECGP because the TCPA does not apply to that claim.
Before we can decide whether the trial court erred in refusing to dismiss the
18
remaining claims against both appellants, we must proceed to the second step
under the TCPA framework as to those claims.
C. Did Sealy Partners meet its burden to establish a prima facie case for
each claim to which the TCPA applies?
We must now determine whether Sealy Partners met its burden to establish
by clear and specific evidence a prima facie case for each essential element of their
claims against Enterprise and ECGP to which the TCPA applies. Tex. Civ. Prac.
& Rem. Code § 27.005(c). “A prima facie case is the ‘minimum quantum of
evidence necessary to support a rational inference that the allegation of fact is
true.’” KBMT Operating Co. v. Toledo, 492 S.W.3d 710, 721 (Tex. 2016) (quoting
Lipsky, 460 S.W.3d at 590). We address each claim in turn.
1. Nuisance
As the Supreme Court of Texas has recently reiterated, “[a] ‘nuisance’ is a
condition that substantially interferes with the use and enjoyment of land by
causing unreasonable discomfort or annoyance to persons of ordinary sensibilities
attempting to use and enjoy it.” Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505
S.W.3d 580, 600 (Tex. 2016) (internal quotation omitted). The term “nuisance”
refers not to a cause of action or to a defendant’s conduct but to the legal injury
that the conduct causes and that gives rise to the cause of action. Id. at 604. To
establish a cause of action for which the law provides a right to relief, at least in
the absence of circumstances giving rise to strict liability, “there must not only be
an injury or loss but it must have been occasioned by the commission of a legal
wrong, that is, violation of legal right and a breach of legal duty.” Id. at 601.
Nuisance liability, moreover, does not depend on whether the defendant “acted or
used its property illegally or unlawfully.” Id. Historically, the “goal of private-
nuisance law is to identify whether and when the law will prohibit an owner’s
19
lawful use, or require the owner to bear the legal cost of such use, because that
lawful use causes a legal injury to another. Id. at 601 & n.12 (emphasis in
original).
Whether a defendant may be held liable for causing a nuisance depends on
(1) the culpability of the defendant’s conduct, (2) whether the interference is a
nuisance, and (3) whether the interference caused loss or damage. Id. at 601, 604-
07. Enterprise and ECGP argue that Sealy Partners failed to establish by clear and
specific evidence a prima facie case for each element.
a. Sealy Partners presented a minimum quantity of evidence that a
nuisance exists.
The most hotly contested issue regarding the nuisance claim is whether a
nuisance exists at all, and we address that element first. An interference, or legal
injury, constitutes a nuisance only if it is “substantial” and causes “discomfort or
annoyance” that is “unreasonable.” Id. at 595-99. Concerning unreasonableness, a
plaintiff must establish that the effects of the substantial interference are
unreasonable, not that the defendant’s conduct or land use was unreasonable. Id. at
597. Additionally, whether the effects of interference are unreasonable is governed
by an objective standard, accounting for numerous circumstance-based factors. Id.
at 599-601.10 The determination is generally one of fact. See id. at 600, 609. A
10
These factors include, among others:
• the character and nature of the neighborhood, each party’s land usage, and social
expectations;
• the location of each party’s land and the nature of that locality;
• the extent to which others in the vicinity are engaging in similar conduct in the use of
their land;
• the social utility of each property’s usage;
• the tendency or likelihood that the defendant’s conduct will cause interference with
the plaintiff’s use and enjoyment of their land;
• the magnitude, extent, degree, frequency, or duration of the interference and resulting
harm;
20
court may decide these issues as a matter of law only if the underlying facts are
undisputed or, if in light of all the evidence, “reasonable minds cannot differ.” Id.
at 609.
Appellants argue that today’s case is just the sort where reasonable minds
cannot differ because a potential “blast zone” resulting from the construction of the
new tanks and encircling most of Sealy Partners’ property does not constitute a
nuisance as a matter of law. According to appellants, Sealy Partners cannot
recover under a nuisance theory because it is seeking damages for “emotional
harm,” which, appellants say, is not permissible. Their banner case is Maranatha
Temple, Inc. v. Enterprise Products Co., 893 S.W.2d 92 (Tex. App.—Houston [1st
Dist.] 1994, writ denied), where the court stated that the plaintiff had no viable
claim for nuisance against the owners or operators of petrochemical or
hydrocarbon facilities or pipelines that were part of a nearby underground storage
facility. Id. at 95. There, the court held that a nuisance claim is not allowed when
the only alleged injury is “fear, apprehension, or other emotional reaction that
results from the lawful operation of industries in Texas.” Id. at 100. “Persons who
are apprehensive that one day in the future an industrial accident will harm them or
their property” could not sue for their apprehension alone. Id. The court was
concerned about a “torrent of litigation” if those who have “not been harmed in
their land or body” were allowed nuisance recovery from Texas energy-industry
owners who have not used their land unlawfully. Id.
• the relative capacity of each party to bear the burden of ceasing or mitigating the
usage of their land;
• the timing of each party’s conduct or usage that creates the conflict;
• the defendant’s motive in causing the interference; and
• the interests of the community and the public at large.
See Crosstex, 505 S.W.3d at 600. All of these factors must be “thrown into the scale,” and the
decision must be made on the basis of what is reasonable under the circumstances. Id.
21
Unlike the claimant in Maranatha Temple, however, Sealy Partners’ alleged
injury is not limited to emotional harm or apprehension alone. Not only does Sealy
Partners disavow any desire to recover for emotional harm, it seeks economic
damages for lost market value of its property and lost profit. Sealy Partners
contends that the blast zone resulting from the construction, as calculated by its
retained engineer, encompasses its land and has depreciated the land’s property
value to the point where the property can no longer be developed commercially.
Recovery for similar harm has long been allowed in Texas under a nuisance
theory. Crosstex, 505 S.W.3d at 610-11 (describing nuisance remedies, including
lost rent and lost market value) (citing cases); Comminge v. Stevenson, 13 S.W.
556, 557 (Tex. 1890) (property owner could recover for lost rent and property
depreciation caused by nuisance); Burditt v. Swenson, 17 Tex. 489, 504 (1856)
(recovery allowed when nuisance impairs value of neighboring property).
Contrary to appellants’ view, moreover, recovery for economic harm in nuisance is
available even absent invasion of, or trespass onto, another’s property. See
Comminge, 13 S.W. at 557; McMahan v. City of Abilene, 261 S.W. 455, 456 (Tex.
App.—El Paso 1924) (op. on reh’g), writ dism’d, 292 S.W. 525 (Tex. 1927).
As these cases illustrate, conditions such as the one at issue can constitute a
nuisance depending on the relevant circumstances. See Crosstex, 505 S.W.3d at
600. Courts have held, for example, that a horse stable,11 an earthen dam,12 a gun-
powder magazine,13 a cemetery,14 and, significantly, oil storage tanks15 can be a
11
Burditt, 17 Tex. at 504.
12
McMahan, 261 S.W. at 456.
13
Comminge, 13 S.W. at 557.
14
Dunn v. City of Austin, 11 S.W. 1125, 1127 (Tex. 1889).
15
Boren v. Magnolia Petroleum Co., 266 S.W. 623, 624 (Tex. App.—Texarkana 1924,
no writ).
22
nuisance to nearby property owners. In Boren, the court rejected the claimant’s
right to enjoin the construction of two large oil storage tanks, but noted that the
storage of oils may nevertheless constitute a nuisance in certain circumstances if
“danger from fire or explosion therefrom is continuous and imminent or liable to
occur and with consequent injury to the residences . . . , or greatly interfering with,
if not entirely destroying, the proper enjoyment of such dwelling houses.” Boren,
266 S.W. at 624. In Burditt, the court acknowledged that a horse stable is not
inherently a nuisance but may become so if by proximity it impairs the value of
nearby property. Burditt, 17 Tex. at 504.
In another notable case, the owner of a gun-powder magazine argued, like
appellants argue here, that the condition it created was not a nuisance as a matter of
law. Comminge, 13 S.W. at 557. The plaintiff sued his neighbor, the Dupont
Powder Company, for nuisance resulting from the maintenance of a gunpowder
magazine, consisting of thousands of pounds of powder, located “between three
and four hundred feet from plaintiff’s residence, on the prairie, uninclosed [sic],
and surrounded by a growth of weeds, grass, and other vegetation indigenous to
such outlying lands.” Id. The plaintiff testified that before the magazine was
placed there, he had rented his property for $75 and $100 per month, but he had
not been able to rent it at any price since. Id. Other witnesses testified “to the
depreciation in value of the property, and of its use, because of the proximity of the
magazine.” The supreme court held that the magazine and its contents constituted
a private nuisance. Id. Comminge and like cases squarely refute Enterprise’s
argument.
Reference to the relevant factors outlined in Crosstex supports Sealy
Partners’ argument that the storage tanks can be objectively viewed as
unreasonably affecting Sealy Partners’ property. For example, Sealy Partners
23
planned to develop its property for both commercial and residential uses. Sealy
Partners attached a letter from the City of Sealy, in which the city stated its opinion
“that the City of Sealy is in need of additional multi-family units” and told Sealy
Partners that its “project would help fulfill the need for multi-family housing in the
City of Sealy.” This letter is some evidence of the “social utility” of the planned
use of its land, as well as evidence of the “interests of the community and the
public at large.” Crosstex, 505 S.W.3d at 600 (discussing substantial-interference
and unreasonable-effects factors); see also supra note 10. Further, Sealy Partners
alleged, and attached a letter supporting a reasonable inference, that appellants
knew of Sealy Partners’ planned development before construction began, which is
evidence of the “timing of each party’s conduct or usage that creates the conflict.”
Crosstex, 505 S.W.3d at 600. The opinion from Sealy Partners’ engineer that “no
portion of the Sealy parcel is capable of being built upon without being affected by
the impact zones of the Enterprise tanks” is some evidence of the “tendency or
likelihood” that the conduct will cause interference with Sealy Partners’ use and
enjoyment of its land, as well as of the “magnitude, extent, degree, frequency, or
duration of the interference and resulting harm.” Id.
We therefore disagree with appellants that the effect of the conduct at issue
is not a nuisance as a matter of law. For purposes of the threshold testing of Sealy
Partners’ claims under the TCPA rubric, we conclude that Sealy Partners presented
clear and specific evidence to support a rational inference that the conduct created
the kind of substantial interference and unreasonable effects that may constitute a
nuisance. See Crosstex, 505 S.W.3d at 595; Comminge, 13 S.W. at 557; see also
Boren, 266 S.W. at 624.
24
b. Sealy Partners presented evidence of Enterprise’s, but not
ECGP’s, negligent culpability.
There are three categories of culpable conduct for which an actor may be
liable in nuisance: intentional nuisance, negligent nuisance, and strict-liability
nuisance. Id. at 604-08. Sealy Partners alleged that Enterprise and ECGP are
liable under intentional and negligent standards.
i. Intentional nuisance
A defendant may be liable for intentionally causing a nuisance based on
proof that the actor intentionally created or maintained a condition that
substantially interferes with the claimant’s use and enjoyment of land by causing
unreasonable discomfort or annoyance to persons of ordinary sensibilities
attempting to use and enjoy it. Id. at 604-05. “Intent” in this context, as in most
legal contexts, means that “the actor desires to cause [the] consequences of his act,
or that he believes that the consequences are substantially certain to result from it.”
Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985) (internal quotation
omitted). A defendant intentionally causes a nuisance “if the defendant ‘acts for
the purpose of causing’ the interference or ‘knows that [the interference] is
resulting or is substantially certain to result’ from the defendant’s conduct.”
Crosstex, 505 S.W.3d at 605 (quoting Restatement (Second) of Torts § 825).
Thus, a plaintiff may establish intent with proof that the defendant acted with a
specific intent to inflict injury, a malicious desire to do harm by causing the
actionable interference, or a belief that the interference was substantially certain to
result from the defendant’s conduct. Id. Importantly, intent is measured by a
subjective standard, meaning that whether a defendant reasonably should have
known that the interference would result is not sufficient. Id.
25
In its response to appellants’ motions to dismiss, Sealy Partners presented no
argument or evidence that Enterprise or ECGP intentionally caused interference
with Sealy Partners’ use and enjoyment of its land, or subjectively believed that
interference was substantially certain to result from its conduct. Thus, Sealy
Partners failed to make a prima facie case supporting its intentional nuisance claim,
and appellants are entitled to dismissal of that claim.
ii. Negligent nuisance
A defendant can be liable for negligently causing a nuisance. Id. at 607.
Culpability under a negligent nuisance theory is governed by ordinary negligence
principles. Id. The elements the plaintiff must prove are “the existence of a legal
duty, a breach of that duty, and damages proximately caused by the breach.” Id.;
IHS Cedars Treatment Ctr., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). To
establish a breach, the plaintiff must prove that the defendant’s conduct constituted
negligence, which is “simply doing or failing to do what a person of ordinary
prudence in the same or similar circumstances would have not done or done.”
Crosstex, 505 S.W.3d at 607. A nuisance may result from “a failure to take
precautions against a risk apparent to a reasonable man.” Id.
We address duty first. The existence of a duty generally is a legal question.
St. Anthony’s Minor Emergency Ctr., L.L.C. v. Ross Nicholson 2000 Separate
Prop. Tr., 567 S.W.3d 792, 799 (Tex. App.—Houston [14th Dist.] 2018, pet.
denied). Enterprise’s duty to Sealy Partners is not seriously disputed here, as
Texas law has long imposed on all persons, in the use of one’s property, a duty to
exercise ordinary care to avoid injury or damage to the property of others.
Crosstex, 505 S.W.3d at 614; see also Elliff v. Texon Drilling Co., 210 S.W.2d
558, 563 (Tex. 1948). Here, Enterprise, a landowner, owed a duty to Sealy
Partners, an adjoining landowner.
26
Next, Sealy Partners had to present clear and specific evidence that
Enterprise did or failed to do what a person of ordinary prudence would have done
in the same or similar circumstances. Crosstex, 505 S.W.3d at 614. Whether a
defendant negligently created a nuisance generally presents a question of fact for a
jury to decide. Id. at 609. Sealy Partners presented evidence showing that
Enterprise constructed additional storage tanks resulting in a surrounding blast
zone that encompassed the majority of Sealy Partners’ property, which, according
to evidence discussed below, resulted in a loss of property value and future profit.
Evidence exists that when Enterprise requested the permits and began construction,
it was aware that Sealy Partners owned the adjoining tract and planned to develop
it for commercial use. There is also evidence that Sealy Partners agreed to relocate
an easement and retention pond after Enterprise represented that it would research
“setback” issues and not begin construction until communicating further with
Sealy Partners regarding its research. Based on this proof, we conclude Sealy
Partners presented a sufficient quantum of evidence necessary to support a rational
inference that Enterprise’s conduct in constructing the additional tanks was
unreasonable, and thus Enterprise negligently created a nuisance. See id.
Appellants also argue that Sealy Partners’ evidence fails as to the nuisance
claim against ECGP because there is no evidence that ECGP constructed or owns
the tanks or the property where the tanks are located. We agree. The evidence
shows that Enterprise owns the land and applied for the building permits. Sealy
Partners presented no evidence supporting a rational inference that ECGP had an
ownership interest in the property or that it actually constructed the storage tanks.
Thus, we conclude that Sealy Partners failed to present clear and specific evidence
supporting a duty on ECGP’s part, or that ECGP engaged in any conduct allegedly
creating a nuisance.
27
c. Sealy Partners presented evidence of damages.
In its TCPA response, Sealy Partners asserted that it provided “clear and
specific evidence that the market value of their land was reduced substantially as a
result of [Enterprise’s] breach of duty. Exhibit 3; Exhibit 4.”
A claimant who prevails on a private-nuisance claim may recover damages.
Crosstex, 505 S.W.3d at 610. If a nuisance is permanent, the owner may recover
lost market value—a figure that reflects all losses from the injury, including lost
rents expected in the future. Id. The value “‘should be ascertained at the date of
trial, and it should be the market value of the property for any use to which it might
be appropriated.’” Id. at 611 (quoting Sherman Gas & Elec. Co. v. Belden, 123
S.W. 119, 121 (Tex. 1909)). That is, “‘the jury is permitted to consider all of the
uses to which the property is reasonably adaptable and for which it is, or in all
reasonable probability will become, available within the foreseeable future.’” Id.(quoting State v. Windham, 837 S.W.2d 73, 77 (Tex. 1992)). However, a jury may
not consider “purely speculative uses.” Id.Exhibit 3 is an affidavit from Wayne Dalcin, a real estate broker, who
offered “a broker’s opinion regarding the loss suffered by Sealy Partners, LLC as a
result of not being able to complete the project planned due to the scope of a blast
zone related to above ground storage tanks on property adjacent” to Sealy Partners’
land. Dalcin opined that Sealy Partners suffered a loss as a result of not being able
to develop its parcel in the manner intended, although it is unclear from Dalcin’s
report precisely what Dalcin calculated the lost market value to be.16
16
Other evidence attached to Sealy Partners’ response indicates that Sealy Partners
projected its revenue from the project, as would-be completed, to equal $11,075,708, compared
to a land value of $5,201,036.
28
Exhibit 4 is an affidavit from Lucky Srinivasan, a broker involved in Sealy
Partners’ efforts to obtain financing for its planned development. Srinivasan
testified that it was his “strongly held opinion that the Sealy Partners property
would have gone forward to completion had it not been for the construction of
Enterprise’s ASTs with blast zones that consumed the 16 acre parcel” and that he
was “confident that no traditional lender will ever touch any development of this
parcel rendering it completely unusable for development purposes.” After
Enterprise argued at the TCPA hearing that Sealy Partners’ evidence did not show
that it could not obtain any funding, whether HUD-assisted or not, Sealy Partners
submitted a second affidavit from Srinivasan, who testified that he, on behalf of
Sealy Partners, attempted to obtain non-HUD-insured financing for the
development of the property but that his “attempts to obtain this financing at a rate
anywhere close to what would be required to make the Sealy Partners’ intended
development economically feasible were not successful.”
Sealy Partners presented clear and specific evidence that “no portion of the
Sealy parcel is capable of being built upon without being affected by the impact
zones of the Enterprise tanks.” Like in Comminge, this evidence suffices to show
that the construction of the tanks and the resulting blast zone is “a thing that
worketh hurt, inconvenience, and damage” to Sealy Partners’ property.
Comminge, 13 S.W. at 557 (internal quotation omitted).
Enterprise globally contends that Sealy Partners’ damages evidence is
insufficient because Sealy Partners has not provided clear and specific evidence of
its alleged inability to obtain financing, HUD-assisted or otherwise. Enterprise
argues that all of Sealy Partners’ affidavits are conclusory:
The record is completely devoid of any applications for financing,
HUD-assisted or otherwise; documents that were submitted to a
financial institution in support of financing; correspondence or emails
29
with financial institutions regarding financing; rejections or denial of
financing; and testimony from personnel at any financial institution
that Sealy Partners allegedly approached regarding financing.
Sealy Partners’ prima facie burden is not as demanding as Enterprise asserts.
The quantum of evidence required is no more than that which is “necessary to
support a rational inference that the allegation of fact is true.” Lipsky, 460 S.W.3d
at 590. Sealy Partners has met this burden by providing some clear and specific
evidence that it cannot develop its property as planned due to an inability to obtain
any economically feasible financing, and a resulting loss in market value and
future lost rents. Contrary to Enterprise’s assertion, Srinivasan’s testimony that his
“attempts to obtain this financing . . . were not successful” is not conclusory.
Enterprise may attempt to rebut, contradict, or otherwise impeach Sealy Partners’
evidence of damages at a later date, but Sealy Partners is not required to marshal
all of its evidence in this TCPA proceeding. Sealy Partners has provided sufficient
evidence to support a rational inference of damages for its negligent nuisance
claim. See Lipsky, 460 S.W.3d at 592-93; see also Price v. Buschemeyer, No. 12-
17-00180-CV, 2018 WL 1569856, at *14 (Tex. App.—Tyler Mar. 29, 2018, pet.
denied) (mem. op.) (“[The plaintiff] need show only how Appellants caused his
damages, and that he in fact suffered damages, not the specific amounts of losses
with exactitude.”) (citing Deuell v. Tex. Right to Life Comm., Inc., 508 S.W.3d
679, 689 (Tex. App.—Houston [1st Dist.] 2016, pet. denied)).
For these reasons, we conclude that the trial court did not err in refusing to
dismiss the negligent nuisance claim against Enterprise, but the court erred in
refusing to dismiss the negligent nuisance claim against ECGP.
30
2. Fraudulent misrepresentation
A plaintiff asserting a claim for fraudulent misrepresentation must prove the
following elements: (1) a material representation was made; (2) the representation
was false; (3) when the representation was made, the speaker knew it was false or
made it recklessly without any knowledge of the truth and as a positive assertion;
(4) the speaker made the representation with the intent that the plaintiff act upon it;
(5) the plaintiff acted in reliance on the representation; and (6) the plaintiff thereby
suffered injury. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,
341 S.W.3d 323, 337 (Tex. 2011). When, as here, the representation at issue
“‘involves a promise to do an act in the future,’ the plaintiff also has to prove that,
at the time the defendant made the promise, the defendant ‘had no intention of
performing the act.’” Spencer v. GC Servs. Ltd. P’ship, No. 01-12-00159-CV,
2013 WL 1908160, at *7 (Tex. App.—Houston [1st Dist.] May 7, 2013, pet.
denied) (mem. op.) (quoting T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d
218, 222 (Tex. 1992)).
In response to appellants’ motions to dismiss, Sealy Partners asserted that
the basis for its fraudulent misrepresentation claim was Enterprise’s and ECGP’s
promise that they “would research the required separation distance between the
parties’ developments, communicate that information with [Sealy Partners], and
provide [Sealy Partners] with construction plans before [appellants] began their
development.” According to Sealy Partners, it relied on those promises by
enlisting a team of experts to assist in planning the new development, and
appellants’ misrepresentations damaged Sealy Partners “in the form of lost profits,
both in the sale of [its] property and in the lost revenues expected from the
businesses which would be developed thereon.”
31
However, Sealy Partners did not present any evidence that at the time
appellants purportedly promised to research the required separation distance,
communicate that information, or provide construction plans, they had no intention
of performing the promised acts, or that they knew the representation was false or
made recklessly, or that they made the promise with the intent for Sealy Partners to
act on it. See, e.g., Porter-Garcia v. Travis Law Firm, P.C., 564 S.W.3d 75, 89-91
(Tex. App.—Houston [1st Dist.] 2018, pet. denied) (because evidence was silent
about whether movants knew, at the time, that their alleged promises to perform in
the future were false, court held that movants were entitled to dismissal of
nonmovant’s fraud claim under the TCPA); see also Spencer, 2013 WL 1908160,
at *7 (holding that plaintiff did not raise a fact issue, for summary judgment
purposes, when he never presented any evidence to the trial court concerning
defendant’s intent not to perform, nor did he make any argument for why the
evidence that he did present constituted evidence of intent not to perform). We
hold that Sealy Partners failed to present clear and specific evidence for each
essential element of its fraudulent misrepresentation claim against both Enterprise
and ECGP. Thus, Enterprise and ECGP are entitled to dismissal of those claims.
3. Tortious interference
A party asserting a claim for tortious interference with a prospective
business relationship must prove: (1) a reasonable probability that there would
have been a contractual relationship; (2) an “independently tortious or unlawful”
act by the interfering party that prevented the relationship from occurring; (3) the
interfering party did such act with a conscious desire to prevent the relationship
from occurring or knew that the interference was certain or substantially certain to
occur as a result of his conduct; and (4) the claimant suffered actual harm or
damage proximately caused by the interference. Wal-Mart Stores, Inc. v. Sturges,
32
52 S.W.3d 711, 726 (Tex. 2001); Faucette v. Chantos, 322 S.W.3d 901, 914 (Tex.
App.—Houston [14th Dist.] 2010, no pet.). “Conduct that is merely ‘sharp’ or
unfair is not actionable and cannot be the basis for an action for tortious
interference with prospective relations . . . .” Sturges, 52 S.W.3d at 726.
Regarding the third element pertaining to appellants’ knowledge or intent,
Sealy Partners argued in its TCPA response that “there is circumstantial evidence
of this fact by virtue of [appellants’] status as a large oil and gas company that
regularly engages in these types of negotiations with land owners.” Not only did
Sealy Partners not submit any evidence in support of this assertion, but the
proposition is conclusory at best. Conclusory statements are not probative
evidence and accordingly will not suffice to establish a prima facie case. Better
Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345,
355 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); see also Lipsky, 460
S.W.3d at 592 (explaining that “bare, baseless opinions” are not “a sufficient
substitute for the clear and specific evidence required to establish a prima facie
case under the TCPA”).
We conclude that Sealy Partners failed to present clear and specific evidence
for each essential element of its tortious interference claim against Enterprise and
ECGP.
4. Promissory estoppel
Although promissory estoppel is generally used as a defensive theory, it may
be asserted as an affirmative claim for damages. See Boales v. Brighton Builders,
Inc., 29 S.W.3d 159, 166 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).
The elements of a promissory estoppel claim are a promise, the promisor
foreseeing that the promisee will rely on the promise, and detrimental reliance by
the promisee. Simulis, LLC. v. Gen. Elec. Capital Corp., No. 14-06-00701-CV,
33
2008 WL 1747483, at *2 (Tex. App.—Houston [14th Dist.] Apr. 17, 2008, no.
pet.) (mem. op.) (citing English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983);
Sandel v. ATP Oil & Gas Corp., 243 S.W.3d 749, 753 (Tex. App.—Houston [14th
Dist.] 2007, no pet.)). To show detrimental reliance, the plaintiff must show that
he materially changed his position in reliance on the promise. English, 660 S.W.2d
at 524.
In the section of its TCPA response addressing the prima facie case for its
promissory estoppel claim, Sealy Partners did not address the claim’s third element
by explaining how its reliance was detrimental or by directing the court to evidence
establishing detrimental reliance. However, in another section of its response
Sealy Partners asserted it “relied on [appellants’] representations . . . by moving
forward with their development plans . . . [and] enlist[ing] architects, engineers, a
general contractor, a property management company, and a title company to create
development plans and obtain financing for the project. Those individuals do not
work for free.” In support, Sealy Partners cited Srinivasan’s affidavit, in which he
testified that he “assembled a team of HUD qualified experts,” although he did not
state how much, if anything, each expert was paid.
Srinivasan’s affidavit does not present clear and specific evidence that Sealy
Partners materially changed its position in reliance on appellants’ promises. Sealy
Partners’ live pleading establishes that it had already planned to develop its
property before appellants made the alleged promises at the January 2016 meeting.
See Hernandez v. Gallardo, 594 S.W.3d 341, 349 (Tex. App.—El Paso 2014, pet.
denied) (summary judgment proper on promissory estoppel claim when plaintiff
failed to present evidence that she materially changed her position in reliance on
promise). Sealy Partners presented no evidence that, had appellants not made the
alleged promises, Sealy Partners would not have incurred expenses in hiring “HUD
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qualified experts.” See English, 660 S.W.2d at 524 (no promissory estoppel when
plaintiff could not show that he would not have taken his detrimental actions if
defendant had not made promise); Sandel v. ATP Oil & Gas Corp., 243 S.W.3d
749, 753-54 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (failure to seek
another job was insufficient to show detrimental reliance on employer’s stock
option letter; employee required to show that, but for the letter, he would have
stopped working for employer). Nor does Sealy Partners’ evidence show that
because of the alleged false representations it took some concrete action that it
would not otherwise have taken. Because Sealy Partners presented no argument or
evidence that it materially changed its position in reliance upon appellants’ alleged
promises, we conclude that Sealy Partners did not present a prima facie case for its
promissory estoppel claims.
5. Civil conspiracy
Civil conspiracy is a theory to secure joint and several liability against a
member of a conspiracy for the harm caused by any one member of the conspiracy.
Cooper v. Trent, 551 S.W.3d 325, 335 (Tex. App.—Houston [14th Dist.] 2018,
pet. denied); see also Energy Maint. Servs. Grp. I, LLC v. Sandt, 401 S.W.3d 204,
220 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). Defined as a
combination of two or more persons to accomplish an unlawful purpose, or to
accomplish a lawful purpose by unlawful means, civil conspiracy is not a “stand
alone” tort but rather derives from independent, underlying tortious conduct.
Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). A defendant’s liability for
conspiracy depends on participation in some underlying tort for which the plaintiff
seeks to hold at least one of the named defendants liable. Cooper, 551 S.W.3d at
335.
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The elements of civil conspiracy are: (1) two or more persons; (2) an object
to be accomplished; (3) a meeting of minds on the object or course of action;
(4) one or more unlawful, overt acts; and (5) damages as the proximate result.
PAS, Inc. v. Engel, 350 S.W.3d 602, 616 (Tex. App.—Houston [14th Dist.] 2011,
no pet.) (citing Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005)).
To the extent that the allegedly unlawful, overt acts underlying Sealy
Partners’ civil conspiracy claim are the alleged misrepresentations or false
promises, the conspiracy allegation necessarily fails because we have already
concluded that Sealy Partners failed to present a prima facie case for these alleged
torts.17 See, e.g., Jones v. Rabson & Broocks, L.L.C., No. 01-01-01210-CV, 2003
WL 302439, at *4 (Tex. App.—Houston [1st Dist.] Feb. 13, 2003, no pet.) (mem.
op.) (affirming summary judgment dismissing civil conspiracy claim, because
court previously held that there was no theft and thus plaintiff could not show that
there was an overt, unlawful act upon which a conspiracy could have rested).
Moreover, to the extent Sealy Partners alleges that Enterprise and ECGP
conspired to create a nuisance to prevent the development of Sealy Partners’ land,
Sealy Partners presented no clear and specific evidence that two or more persons
reached a meeting of the minds to accomplish that object.
Sealy Partners contends that Enterprise and ECGP were conspirators based
at least on the factual allegation that representatives from both entities were present
at the January 2016 meeting. Throughout its First Amended Petition, Sealy
Partners refers to Enterprise and ECGP collectively as “Defendants” and does not
17
According to Sealy Partners’ TCPA response, Gene Svoboda’s affidavit satisfied the
element of an unlawful act, because his testimony established that appellants made false
representations during the January 2016 meeting regarding researching the separation distance
and providing construction plans. This is the same factual basis for Sealy Partners’ fraudulent
misrepresentation and promissory estoppel claims.
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distinguish between them. Sealy Partners’ evidence in response to the motion to
dismiss, however, does not identify any ECGP representative who attended the
meeting. Gene Svoboda, Sealy Partners’ representative, named two attendees, Joe
Cunningham and Thomas Goolsby, as representatives of “Enterprise.” In an
attached email from the city engineer that lists the meeting attendees, Cunningham
is identified as representing “Enterprise Crude Pipeline (ECP),” while Goolsby is
said to be of “Percheron – Rep. for Enterprise.” In another affidavit in the record,
Goolsby describes himself as a custodian of records for “Enterprise Crude Pipeline
LLC.” Thus, the only evidence of Cunningham’s and Goolsby’s affiliation is that
they are representatives of Enterprise Crude Pipeline LLC, which is appellant
Enterprise. Sealy Partners does not dispute these descriptions and indeed relies on
the city engineer’s email. Moreover, throughout its responsive evidence, Sealy
Partners asserts that “Enterprise” owns the property, signed the permit
applications, and constructed the tanks. As we have explained, the permit
applications identify appellant Enterprise Crude Pipeline, LLC as the applicant and
the property owner. We have reviewed the record thoroughly and none of the
evidence attached to Sealy Partners’ response mentions ECGP, states the
relationship between Enterprise and ECGP, or identifies any representative of
ECGP who participated in any of the complained-of conduct, whether occurring
during the January 2016 meeting or at any other time.
Among other elements, a civil conspiracy requires a meeting of the minds
between two or more persons. See Transport Ins. Co. v. Faircloth, 898 S.W.2d
269, 278 (Tex. 1995). A single person or entity cannot conspire with itself. See
Crouch v. Trinque, 262 S.W.3d 417, 426-27 (Tex. App.—Eastland 2008, no pet.)
(discussing principle that corporation cannot conspire with itself); Atlantic
Richfield Co. v. Misty Prods., 820 S.W.2d 414, 420-21 (Tex. App.—Houston [14th
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Dist.] 1991, writ denied) (citing Wilhite v. H.E. Butt Co., 812 S.W.2d 1, 5 (Tex.
App.—Corpus Christi 1991, no writ) (holding that, as a matter of law, a
corporation cannot conspire with itself), abrogated on other grounds by Cain v.
Hearst Corp., 878 S.W.2d 577 (Tex. 1994)). Sealy Partners has presented clear
and specific evidence that Enterprise representatives attended the meeting that
forms the basis of its conspiracy claim, but it has not presented evidence that any
other defendant also attended. Nor has Sealy Partners offered any proof that
ECGP was otherwise involved in any of the challenged conduct to any extent that
would support an inference that a meeting of the minds occurred between
Enterprise and ECGP. See, e.g., Alford v. Thornburg, 113 S.W.3d 575, 588 (Tex.
App.—Texarkana 2003, no pet.); Kemp v. Harrison, 431 S.W.2d 900, 905 (Tex.
App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) (civil conspiracy may be shown
by circumstantial evidence). Therefore, we conclude that Sealy Partners offered no
clear and specific evidence that two or more persons reached a meeting of the
minds to accomplish the asserted object of conspiring to create a nuisance.
Accordingly, Sealy Partners did not present a prima facie case for its
conspiracy allegation, and appellants are entitled to dismissal of that allegation.
Conclusion
In sum, we hold that the TCPA applies to the claims against Enterprise for
nuisance, fraudulent misrepresentation, tortious interference, promissory estoppel,
and civil conspiracy. Sealy Partners presented prima facie evidence in support of
its negligent nuisance claim; thus, the trial court did not err in denying Enterprise’s
motion to dismiss that claim. Sealy Partners failed to present prima facie evidence
to support its intentional nuisance, fraudulent misrepresentation, tortious
interference, promissory estoppel, and civil conspiracy claims. Enterprise is
entitled to dismissal of those claims, its costs and reasonable and necessary
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attorney’s fees incurred as to those claims, and sanctions, if any. See Tex. Civ.
Prac. & Rem. Code § 27.009(a); see also O’Hern v. Mughrabi, 579 S.W.3d 594,
606 (Tex. App.—Houston [14th Dist.] 2019, no pet.). Because Enterprise does not
challenge the trial court’s order as to the trespass claim, we leave undisturbed the
trial court’s refusal to dismiss that claim. On remand, Sealy Partners’ remaining
live claims against Enterprise are negligent nuisance and trespass.
Regarding ECGP, the trial court did not err in denying ECGP’s TCPA
motion to dismiss the trespass claim because the TCPA does not apply to that
claim. We hold that the TCPA applies to the remainder of Sealy Partners’ claims
against ECGP but that Sealy Partners failed to present prima facie evidence to
support its nuisance, tortious interference, fraudulent misrepresentation,
promissory estoppel, and civil conspiracy claims against ECGP. ECGP is entitled
to dismissal of those claims, its costs and reasonable and necessary attorney’s fees
incurred as to those claims, and sanctions, if any. See Tex. Civ. Prac. & Rem.
Code § 27.009(a). On remand, Sealy Partners’ only remaining live claim against
ECGP is for trespass.
The trial court’s order is affirmed in part and reversed in part as set forth
above. We remand the cause to the trial court for further proceedings consistent
with this opinion.
/s/ Kevin Jewell
Justice
Panel consists of Justices Christopher, Jewell, and Hassan.
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