HOUSTON -- The Texas First District Court of Appeals weighed in Aug. 20 on a case where hundreds of people accused companies of filing illegal liens on their homesteads. The appellate panel remanded the case back to the lower court.
David Gordon Schmidt, doing business as ABC Bonding Company, and Greenbrier Equities, LLC, faced the lawsuit for allegedly getting the plaintiffs to sign the deeds of trust concerning their homes as security for bail bond loans, but then illegally changing the deeds to up the amount they were in debt.
They defendants then allegedly issued the deeds into Harris County’s property records, putting illegal and fraudulent liens on the plaintiffs’ homesteads. The plaintiffs requested $10,000 for each illegal lien as well as a quiet title and a declaration the liens are irrelevant. The defendants moved to dismiss via the Citizens Participation Act but Harris County District Court denied the motion, stating the act was invalid. But the appeals court affirmed in part the ruling, reversed it in part and remanded back to the lower court.
Chief Justice Sherry Radack
The appeals court first ruled that Schmidt and Greenbrier did not waive their arguments concerning the act for any of the claims, despite what the plaintiffs argued. Ultimately, the plaintiffs said the defendants forfeited the opportunity to get dismissal when the defendants didn’t address the claims separately in the appellate brief.
The appeals court said this is not how the matter works. It noted that Schmidt and Greenbrier wanted the entire lawsuit dismissed, using the same allegations for all of the plaintiffs’ claims. But the plaintiffs mistakenly thought the act could be implemented, but failed to detail how it could actually apply to some of their claims.
The appeals court then determined if the defendants’ filings are considered free speech under the act. Schmidt and Greenbrier argued the filings are free speech because they are “a communication made in connection with a matter of public concern,” considering they concern financial statements, according to the lawsuit. But the appeals court disagreed.
“The deeds of trust filed by Schmidt and Greenbrier do not have any apparent bearing on economic well-being,” the appeals court ruled. Instead, the plaintiffs said that the filing actually injures them, as opposed to taking on a protective state for economic well-being.
Still, the appeals court also added that the plaintiffs failed to establish a prima facie case that back each of their claims. Schmidt and Greenbrier, on the other hand, have proven their speech is protected by the act.
The appeals court added, “The allegations of the petition are inconsistent with the plaintiffs’ position on appeal that they were the intended audience of Schmidt and Greenbrier’s communications. The plaintiffs’ petition therefore negates the applicability of commercial-speech exemption.”
Justice Gordon Goodman wrote the opinion. Chief Justice Sherry Radack dissented in part. Justice Julie Countiss also dissented in part and concurred in judgment only in part.
Justice Julie Countiss determined in a separate opinion that the plaintiffs are included in the intended audience. She said if she had her way, she would affirm the lower court’s ruling that denied the motion to dismiss. She concurred in the outcome only.
Chief Justice Sherry Radack dissented and wrote that Article XVI, Section 50 of the Texas Constitution does not give the plaintiffs’ quiet-title and declaratory allegations beyond the act. She said the case should be dismissed in its entirety. “Because they did not prove homestead status, I would dismiss all the plaintiffs’ claims, even their constitutional claims,” Radack wrote in her dissent.