MEMORANDUM OPINION

No. 04-23-00109-CV

NEC NETWORKS, LLC d/b/a CaptureRx, Appellant v. Brooke GILMARTIN, Independent Court Administrator of the Estate of J. Edward Charles Gilmartin, Deceased, Appellee

From the Probate Court No. 1, Bexar County, Texas Trial Court No. 2018PC3985 Honorable Oscar J. Kazen, Judge Presiding

Opinion by: Beth Watkins, Justice

Sitting: Rebeca C. Martinez, Chief Justice Beth Watkins, Justice Lori I. Valenzuela, Justice

Delivered and Filed: November 29, 2023

AFFIRMED IN PART; REVERSED AND RENDERED IN PART; REMANDED

Appellant NEC Networks, LLC d/b/a CaptureRx challenges the trial court’s denial of its

motion to dismiss under the Texas Citizens’ Participation Act. We affirm the trial court’s order in part, reverse it in part, and render judgment dismissing appellee Brooke Gilmartin’s counterclaim

for intentional infliction of emotional distress. We remand this cause for a determination of CaptureRx’s court costs and reasonable attorney’s fees incurred in defending against Brooke’s intentional infliction counterclaim.

04-23-00109-CV

BACKGROUND

In 2000, Edward “Jake” Gilmartin and Christopher Hotchkiss co-founded CaptureRx. In 2016, Jake married Brooke. In 2018, Jake died from a self-inflicted gunshot wound. Brooke was eventually appointed independent administrator of Jake’s estate.

This dispute revolves around the parties’ competing claims to Jake’s interest in CaptureRx.

After Jake died, CaptureRx contended that a 2012 “Company Agreement” he had signed entitled it to purchase his interest in the company. CaptureRx valued Jake’s interest at $356,764.20 under

the terms of the Company Agreement, and it made an offer in that amount to Jake’s estate. Brooke, as the independent administrator of Jake’s estate, declined CaptureRx’s offer because she believed it did not fairly value Jake’s interest.

At some point after it made the initial offer, CaptureRx discovered a 2014 “Profits Interests

Agreement Letter” that Jake purportedly signed and which CaptureRx contended was relevant to the valuation. Both CaptureRx and Jake’s estate subsequently hired their own valuation appraisers to review the relevant documents. CaptureRx’s valuation appraiser concluded that under the terms of the Profits Interests Agreement Letter and the Company Agreement, Jake’s interest had no

monetary worth. Based on this valuation, CaptureRx offered Jake’s estate $10,000 “in a gesture of goodwill[.]” The valuation appraiser hired by Jake’s estate also considered both the Company

Agreement and the Profits Interests Agreement Letter, but he concluded Jake’s interest was worth between $19,157,000 and $33,900,000.

During the valuation dispute, Hotchkiss—who was CaptureRx’s CEO at that time—openly

denigrated Brooke in front of CaptureRx’s employees and executives. He referred to her as “a slut, a cunt, a prostitute, a bitch,” expressed a desire to do physical harm to her, and asked CaptureRx’s then-general counsel, Jose Padilla, “to find someone . . . that could rape” her. Hotchkiss told 04-23-00109-CV

“everyone” at CaptureRx that he “wanted to make sure that [Brooke] got nothing” from Jake’s interest in the company.

On August 12, 2019, the board of CaptureRx accepted Hotchkiss’s resignation, and Padilla

and another individual took over as co-CEOs of the company. Two weeks later, on August 26, 2019, CaptureRx sued Brooke in her individual capacity for breach of contract, money had and received, and claims under the Theft Liability Act. CaptureRx also asserted the same claims against Brooke “as assignee” of Jake’s interest. CaptureRx filed its claims against Brooke in Kerr

County district court.

In her capacity as independent administrator of Jake’s estate, Brooke filed her own lawsuit against CaptureRx in Bexar County statutory probate court. CaptureRx’s Kerr County claims were eventually transferred by agreement to the Bexar County probate court, and the lawsuits were

consolidated. Multiple discovery disputes that are not directly relevant to this appeal ensued, and CaptureRx changed attorneys several times. At some point during this litigation, Hotchkiss rejoined CaptureRx as CEO, and he made representations on CaptureRx’s behalf during a June

2022 hearing before the probate court.

On August 15, 2022, Brooke, acting “individually and allegedly as assignee,” sought

sanctions against CaptureRx. Brooke alleged CaptureRx’s lawsuit against her “ha[d] no basis in fact or law [and] was brought in bad faith, for an improper purpose and maliciously[.]” In her

individual capacity, she also filed a counterclaim against CaptureRx for intentional infliction of emotional distress. In support of both claims, Brooke argued that CaptureRx initiated litigation against her while she “was in a vulnerable and fragile mental state” after Jake’s suicide because it wanted to intimidate her into selling Jake’s interest for an unfairly low price. Shortly after Brooke

filed her counterclaim, CaptureRx voluntarily non-suited the claims it had asserted against her in her individual capacity.

04-23-00109-CV

On October 14, 2022, CaptureRx filed a motion under the TCPA to dismiss Brooke’s counterclaim and request for sanctions. After a hearing, the trial court denied the TCPA motion by operation of law. CaptureRx then timely filed this appeal.

ANALYSIS

In six issues we construe as three, CaptureRx argues the trial court erred by denying its

TCPA motion because: (1) the TCPA applied to Brooke’s claims; (2) Brooke did not present prima

facie evidence to support her claims; and (3) CaptureRx was entitled to judgment as a matter of law on Brooke’s claims.

Did CaptureRx Bring Its Appeal Against the Wrong Party?

Before turning to the merits of the trial court’s ruling on CaptureRx’s TCPA motion, we consider Brooke’s assertion that CaptureRx brought its appeal against the wrong party. Brooke notes that CaptureRx’s docketing statement, motions for extension of time, and brief identified

“Brooke Gilmartin as the Independent Administrator of the Estate of Edward J. Gilmartin” as the appellee in this dispute. She further notes that none of CaptureRx’s appellate filings identify her as a party in her individual capacity. Because “[t]he errors asserted by CaptureRx in this appeal could only impact” her in her individual capacity, Brooke argues this appeal “should be summarily dismissed[.]” We decline to interpret our jurisdiction so narrowly.

“The filing of a notice of appeal by any party invokes the appellate court’s jurisdiction over all parties to the trial court’s judgment or order appealed from.” TEX. R. APP. P. 25.1. It is undisputed that Brooke was a party to the “order appealed from” in her individual capacity—

CaptureRx appealed the order denying its motion to dismiss the counterclaims Brooke asserted against it in her individual capacity. CaptureRx’s notice of appeal was therefore effective to invoke this court’s jurisdiction over her in that capacity. See id. Accordingly, we decline to dismiss this appeal.

04-23-00109-CV

CaptureRx’s TCPA Motion

Standard of Review and Applicable Law

We review a trial court’s denial of a TCPA motion to dismiss de novo. Robert B. James, DDS, Inc. v. Elkins, 553 S.W.3d 596, 603 (Tex. App.—San Antonio 2018, pet. denied). In reviewing a ruling on a TCPA motion, “[w]e view the pleadings and evidence in the light most favorable to the nonmovant.” Id.

A motion to dismiss under the TCPA is subject to a three-part analysis. First, the movant must demonstrate that the respondent’s “legal action is based on or is in response to [the movant’s]

exercise of the right of free speech, right to petition, or right of association[.]” TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a). “When it is clear from the plaintiff’s pleadings that the action is covered by the [TCPA], the defendant need show no more.” Hersh v. Tatum, 526 S.W.3d 462, 467

(Tex. 2017). If the movant shows the TCPA applies, the burden shifts to the respondent to

“establish[] by clear and specific evidence a prima facie case for each essential element of the claim in question.” TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c). If the respondent establishes

its prima facie case, the burden shifts back to the movant to “establish[] an affirmative defense or other grounds on which the moving party is entitled to judgment as a matter of law.” Id.

§ 27.005(d).

Application

A. Brooke’s intentional infliction of emotional distress counterclaim

The TCPA’s definition of “legal action” expressly includes counterclaims. TEX. CIV. PRAC.

& REM. CODE ANN. § 27.001(6). Brooke’s live petition alleged that her intentional infliction of emotional distress counterclaim arose from CaptureRx’s filing of a lawsuit against her. Because filing a lawsuit involves “a communication in or pertaining to . . . a judicial proceeding,” that action falls within the TCPA’s definition of “[e]xercise of the right to petition.” See id.

04-23-00109-CV

§ 27.001(4)(A)(i). Brooke’s live petition therefore showed on its face that her counterclaim was

“based on” or “in response to” CaptureRx’s exercise of a right protected by the TCPA. See TEX.

CIV. PRAC. & REM. CODE § 27.003(a); Hersh, 526 S.W.3d at 467. Accordingly, CaptureRx met its burden under the first prong of the TCPA analysis as to that claim.

The second prong of the TCPA analysis asks whether Brooke established “by clear and specific evidence a prima facie case for each essential element of” her counterclaim. See TEX. CIV. PRAC. & REM. CODE § 27.005(c). The TCPA does not define “clear and specific evidence.” See id.; In re Lipsky, 460 S.W.3d 579, 588 (Tex. 2015). However, this evidentiary standard neither

“impose[s] a higher burden of proof than that required of the plaintiff at trial” nor “require[s] direct evidence of each essential element of the underlying claim to avoid dismissal.” In re Lipsky, 460

S.W.3d at 591. “Instead, a plaintiff must provide enough detail to show the factual basis for its claim.” Id. The TCPA also does not define “prima facie case,” but that term “has a traditional legal

meaning.” Id. at 590. A TCPA respondent establishes a prima facie case by presenting “the minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true.” Id. (internal quotation marks omitted).

“To recover damages for intentional infliction of emotional distress, a plaintiff must establish 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 resulting emotional distress was severe.” Hoffmann-La Roche Inc. v. Zeltwanger, 144

S.W.3d 438, 445 (Tex. 2004). To satisfy the required elements of an intentional infliction of emotional distress claim, the conduct in question must be “so outrageous in character, and so

extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” See Brewerton v. Dalrymple, 997 S.W.2d 212, 215–16 (Tex. 1999) (internal quotation marks omitted); see also Elkins, 553 S.W.3d at 609–10.

04-23-00109-CV

The Texas Supreme Court has described the required elements of an intentional infliction claim as “exacting.” Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 815 (Tex. 2005). “Meritorious claims for intentional infliction of emotional distress are relatively rare because ‘most human

conduct, even that which causes injury to others, cannot be fairly characterized as extreme and outrageous.’” Walgreens v. McKenzie, 676 S.W.3d 170, 178 (Tex. App.—Houston [14th Dist.]

2023, no pet. h.) (quoting Kroger Tex. L.P. v. Suberu, 216 S.W.3d 788, 796 (Tex. 2006)). Conduct may be “callous, meddlesome, mean-spirited, officious, overbearing, and vindictive” and still fall short of the high threshold required to support a claim for intentional infliction of emotional distress. See Creditwatch, 157 S.W.3d at 817–18.

Here, Brooke argued that CaptureRx’s decision to sue her in her individual capacity was extreme and outrageous because: (1) CaptureRx sued her less than a year after Jake’s suicide; (2) the lawsuit was part of a scheme to take advantage of her vulnerable state to intimidate her into selling Jake’s 20% interest for an unfairly low price; and (3) CaptureRx knew there was no legal or factual basis to assert its claims against her individually. She further argued that CaptureRx’s decision to sue her in her individual capacity must be viewed in light of Hotchkiss’s “extreme animosity” toward her, and she presented evidence of that animosity.

We are required to view the pleadings and evidence in the light most favorable to Brooke.

See, e.g., Elkins, 553 S.W.3d at 603. We note, however, that Brooke has not argued that

CaptureRx’s claims against her in her representative capacity—which were identical to the claims it asserted against her individually—were tortious or otherwise procedurally wrongful. ^[1] Stated differently, Brooke has not disputed that she was a proper defendant in her representative capacity.

Furthermore, while Brooke argued that Padilla “had a plan to ensure that CaptureRx paid Brooke 04-23-00109-CV the lowest amount possible,” she has not argued or presented any evidence that this plan involved suing Brooke in her individual capacity. Under these unique circumstances, even if we assume

CaptureRx’s initial choice to sue Brooke in her individual capacity instead of in her representative capacity was wrongful, we do not believe a reasonable factfinder could conclude that choice was so extreme and outrageous “as to go beyond all possible bounds of decency.” See Brewerton, 997

S.W.2d at 215–16; see also Creditwatch, 157 S.W.3d at 818 (noting that even “heinous” acts “will rarely have merit as intentional infliction claims”); Elkins, 553 S.W.3d at 609. Accordingly, we must conclude that Brooke did not establish a prima facie case for this essential element of her intentional infliction counterclaim. See TEX. CIV. PRAC. & REM. CODE § 27.005(c); In re Lipsky, 460 S.W.3d at 590.

For these reasons, we reverse the trial court’s order as to Brooke’s intentional infliction of emotional distress counterclaim and render judgment dismissing that counterclaim. We also remand this cause for a determination of CaptureRx’s “court costs and reasonable attorney’s fees incurred in defending against” that counterclaim. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.009(a)(1). Based on our resolution of this issue, we need not consider CaptureRx’s contention that it satisfied its burden on the third prong of the TCPA analysis. See TEX. R. APP. P. 47.1.

B. Brooke’s request for sanctions 04-23-00109-CV

§§ 27.001(4)(A)(i), 27.003(a). CaptureRx therefore met its burden to show the TCPA applied to that request. See Hersh, 526 S.W.3d at 467.

04-23-00109-CV a signatory to the Company Agreement or the Profits Interests Agreement Letter in any capacity.

This evidence, if uncontroverted, would support a rational inference that CaptureRx’s breach of contract claim against Brooke in her individual capacity had no basis in law or fact and was therefore groundless as that term is defined by Rule 13. See TEX. R. CIV. P. 13; Van Dyke, 565

S.W.3d at 342; see also In re Lipsky, 460 S.W.3d at 590. Accordingly, the trial court did not err by concluding Brooke satisfied her prima facie burden on the first element of her Rule 13 sanctions claim.

On the second prong of her Rule 13 claim—that CaptureRx sued her in her individual capacity in bad faith or for the purpose of harassment—Brooke alleged that CaptureRx asserted meritless claims against her to intimidate her into selling Jake’s interest for less than its fair value.

She also alleged that CaptureRx “authorized, acquiesced in and/or ratified” the actions of its on- again off-again CEO, Hotchkiss. See TEX. CIV. PRAC. & REM. CODE § 27.006(a) (“In determining whether a legal action is subject to or should be dismissed under [the TCPA], the court shall

consider the pleadings[.]”); In re Lipsky, 460 S.W.3d at 587 (same). As evidentiary support, Brooke presented deposition testimony from Padilla, who was CaptureRx’s general counsel and co-CEO when it filed suit against her individually and was one of the people who authorized the filing of the lawsuit. Padilla testified that Hotchkiss repeatedly and openly vilified Brooke in front

of Padilla and other CaptureRx executives, blamed Brooke for Jake’s death, and “told everyone, make sure [Brooke] gets nothing” from Jake’s interest in the company. See In re Estate of Aguilar, 492 S.W.3d at 814 (“[H]arassment focuses on the pleader’s intent to annoy, alarm, and abuse another person through the pleadings.”) (internal quotation marks omitted). Padilla also explained that he and others at CaptureRx, including the outside counsel who signed the petition asserting claims against Brooke in her individual capacity, were “scared” of Hotchkiss due to his erratic