Texas Homeowners Ask Court To Rethink Claims Against Attorney

Texas Homeowners Ask Court To Rethink Claims Against Attorney

Law360, New York (October 1, 2014, 4:10 PM EDT) — A group of Galveston, Texas, homeowners — including well-known attorney Carol Severance, who was heavily involved with the area after Hurricane Ike — asked a state appeals court Tuesday to reconsider its July dismissal of their suit against a Galveston lawyer for allegedly interfering with their property sale.

The homeowners argue Bruce I. Schimmel’s right to petition and right of free speech shouldn’t be protected under the Texas Citizens Participation Act — a law aimed at blocking so-called “strategic lawsuits against public participation” — because he was acting on behalf of and being paid by the homeowners association for the neighborhood where a handful of heavily damaged homes were located, which the city of Galveston had planned to buy.

In July, the First Court of Appeals ruled that the comments Schimmel gave the Houston Chronicle opposing the purchase — which purportedly caused Galveston to back out of the deal to buy the damaged homes through a Federal Emergency Management Agency grant program — were made in connection with a “matter of public concern” and therefore protected under the TCPA. But the homeowners disagree.

“We do not think the Texas Anti-SLAPP statute applies and that we are exempted from it by the verbiage of the exemption in Chapter 27,” Wayne Paris, attorney for the homeowners who filed the motion, told Law360 on Wednesday.

Daniel J. Goldberg, attorney for Schimmel, told Law360 that he and his client completely agree with the First Court of Appeals’ decisions to date.

“They fully appreciate the issues, arguments, and what’s at stake,” Goldberg said. “The appellees’ position aren’t supported in fact or law. There’s no reason for an en banc hearing as the appellees bring forth no new information or arguments.”

Paris said the district court agreed with them on the position that the statute didn’t apply to the facts in this case, adding that the appeals court reversed that finding.

“It is difficult for me to understand how anyone accused of misrepresentations and being involved in an unlawful boycott that tortuously interferes with a sale of the complaining party’s real estate and prevents the sale by preventing the compliance with a condition of the signed contract can just have the claim against him thrown out because he says his constitutional rights of free speech and to petition prevent such a claim,” Paris said.

The appeals court also found that allegedly inaccurate statements Schimmel made to city officials and the Sands of Kahala Beach homeowners association were given in the context of petitioning the government on behalf of his client and therefore qualified them for coverage under the TCPA.

It also said that because Galveston and the Texas Department of Public Safety decided to not move forward with the purchase independent of Schimmel’s advocacy, the homeowners had failed to prove the attorney interfered with the contract.

The underlying dispute has its beginnings in 2009, when the homeowners struck a deal with Galveston officials to buy five homes in the Sands of Kahala Beach subdivision, which had been decimated by Hurricane Ike a year earlier.

Galveston planned to buy the homes under a Hazard Mitigation Grant Program sponsored by FEMA, as a part of a larger effort to remove damaged buildings that were within close proximity to the public beach. Generally, properties that were at least 50 percent damaged and lay seaward of the line of vegetation bordering the beach qualified for the program.

But neighboring homeowners and the homeowners association opposed the deal, arguing that Galveston intended to convert the properties into public property, which would result in a loss of association revenue and cause the remaining homes in the upscale neighborhood to decline in value.

As the dispute intensified, Schimmel was hired, who allegedly advised the association to refuse to sign a release from future homeowners’ assessments that Galveston was demanding before it would close on the buyouts.

The homeowners said Schimmel also told the Houston Chronicle, in response to an article about the proposed buyouts, that the homes at issue likely could be repaired for less than 50 percent of their value and that they were not located on the public beach, rendering them ineligible for participation under the grant program.

Galveston and federal officials began to investigate, and by the time the dust settled, the homeowners’ eligibility under the grant program had expired, and the city refused to go forward with the purchase of their homes, prompting the lawsuit.

Schimmel is represented by Daniel J. Goldberg of Goldberg Law Office PLLC.

The homeowners group is represented by Wayne H. Paris of Paris Law Group PLLC.

The case is Schimmel v. McGregor et al., case number 01-13-00721-CV, in the First Court of Appeals of the State of Texas.

–Additional reporting by Jeremy Heallen. Editing by Edrienne Su.

For a reprint of this article, please contact reprints@law360.com.

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