SCOTx: A Motion for Sanctions Is Not a “Legal Action” Subject to the TCPA

Ferchichi v. Whataburger Restaurants LLC

Supreme Court of Texas, Nos. 23-0568 & 23-0993 (May 9, 2025) 

Opinion by Justice Lehrmann (linked here)


Resolving a disagreement among the State’s courts of appeals, the Supreme Court of Texas holds that “a motion to compel and for sanctions does not present a substantive underlying claim for relief and therefore is not a ‘legal action’ subject to dismissal under the TCPA.” 

Under the TCPA, a party may move to dismiss a “legal action” that “is based on or is in response to” a TCPA-protected right or that “arises from” certain protected communications or conduct. TCPRC § 27.003(a). “The TCPA defines ‘legal action’ as ‘a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal, declaratory, or equitable relief.’” Id. § 27.001(6). 

The Supreme Court acknowledged that the catch-all phrase at the end of § 27.001(6)—“any other judicial pleading or filing that requests legal, declaratory, or equitable relief”—is  “undeniably broad.” “But,” the Court said, “broad is not limitless.”

Applying the doctrine of ejusdem generis—i.e., that “when ‘more specific items are followed by a catchall “other,” ... the latter must be limited to things like the former’”—the Court concluded that “the catch-all phrase … should be limited to filings that are ‘like’” the specific items listed in the statute—“a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim.” It  explained that the specifically enumerated filings “are connected by their function of commencing (or materially amending) a proceeding on a substantive legal claim—e.g., negligence, fraud, or deceptive trade practices—against another party.” By contrast, the Court said, motions to compel and for sanctions “are not remotely ‘like’ a ‘lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim.’ Rather, they are ‘based on conduct ancillary to the substantive claims in the case’ and cannot stand on their own.” The fact that motions for sanctions seek monetary relief does not alter that analysis. Consequently, the Supreme Court held, a “motion to compel and for sanctions … is not a ‘legal action’ subject to dismissal under the TCPA.”  

SCOTx: Trial Court Can Reconsider and Grant TCPA Motion to Dismiss after that Motion Has Been Denied by Operation of Law

First Sabrepoint Capital Management, L.P. v. Farmland Partners Inc. 

Supreme Court of Texas, No. 23-0634 (April 24, 2025) 

Opinion by Justice Huddle (linked here)



Applying and extending its ruling in In re Panchakarla, 602 S.W.3d 536 (Tex. 2020), the Supreme Court of Texas holds that a trial court retains jurisdiction to grant a motion to dismiss under the TCPA even after that motion has been denied by operation of law, per statute.

Sabrepoint moved to dismiss Farmland’s claims under the TCPA, which requires the trial court to rule not later than 30 days after the hearing on such a motion. TCPRC § 27.005(a). The trial court didn’t rule before the 30-day deadline expired, and so the motion was deemed to have been denied by operation of law pursuant to TCPRC § 27.008(a). Five days after that deadline, however, the trial court issued an order granting the TCPA motion to dismiss. Farmland appealed, and the court of appeals held the trial court’s order granting the TCPA motion was void because it was issued after the statutory deadline and after the motion was deemed to have been denied by operation of law. TCPRC §§ 27.005(a) & .008(a). 

The Supreme Court disagreed, however. Referencing its decision in Panchakarla, the Court explained that “the expiration of the deadline for a trial court to rule on a TCPA motion does not extinguish the court’s plenary power to later reconsider that ruling.” And the text of TCPRC § 27.008(a), providing that motions not ruled on within 30 days after hearing are denied by operation of law, does not change that. The Court noted that when the trial court issued its order granting Sabrepoint’s TCPA motion, five days after the deadline, no appeal had been taken and there was no final judgment. “Under those circumstances,” the Court said, “nothing in the TCPA extinguished the trial court’s plenary power to reconsider the TCPA motion’s merits”—which, in practical effect, is what happened here. The Supreme Court therefore reversed and remanded for the court of appeals to reconsider the TCPA dismissal on the merits.  


Can a Defendant Appeal When the Trial Court Orally Denies a TCPA Motion to Dismiss, But Doesn’t Sign an Order?

Eichner v. Ocwen Financial Corp.

Dallas Court of Appeals, No. 05-23-00623-CV (February 27, 2025)

Justices Goldstein, Kennedy (Opinion, linked here), and Clinton

Ken Carroll

Adding to an existing split among Texas Courts of Appeals, the Dallas Court holds that when a trial court orally denies a TCPA motion to dismiss but never signs an order to that effect, the movant can appeal, treating the motion as having been overruled by operation of law. 

Ocwen and others sued Eichner, alleging he had breached an employment separation agreement and release. Eichner moved to dismiss under the TCPA. The trial court held a timely hearing, as required by TCPA § 27.004, at which it orally denied Eichner’s motion to dismiss. But the trial court never signed an order denying the motion to dismiss. 

Eichner appealed. Ocwen moved to dismiss, arguing TCPRC § 51.014(a)(12) authorizes an interlocutory appeal only from an “order … that … denies a motion to dismiss filed under [the TCPA],” and that Eichner could not appeal because the trial court had issued no such “order” in this case. 

Despite the wording of § 51.014(a)(12), the Dallas Court of Appeals denied Ocwen’s motion to dismiss and held that Eichner could appeal. The Court noted that, while a party ordinarily may bring an interlocutory appeal only from a written order, TCPA § 27.008(a) provides an exception to that rule: “If a court does not rule on a [TCPA] motion to dismiss … in the time prescribed by [TCPA § 27.005], the motion is considered to have been denied by operation of law and the moving party may appeal.” The Dallas Court went on to hold that “by not signing a written order the trial judge did not ‘rule’ on Eichner’s motion to dismiss within the meaning of [TCPA §] 27.008(a), which means that the motion was overruled by operation of law, and that [there is] appellate jurisdiction under [TCPA §] 27.008(a).” 

In so ruling, Dallas followed the Fourteenth Court, which had explained that, “The purpose of the TCPA is to encourage and safeguard constitutional rights [and t]hat purpose would be thwarted if a trial court could insulate its decision from appellate review by refusing to sign a written order and choosing instead to orally deny a motion that should have been granted.” Simmons v. Taylor, 651 S.W.3d 499, 503 (Tex. App.—Houston [14th Dist.] 2022, no pet.). The Dallas Court rejected decisions by the Houston 1st District and Beaumont Courts of Appeals, which had held to the contrary. Casillas v. M & S Concrete, No. 01-19-00145-CV, 2020 WL 2026367, at *3-4 (Tex. App.—Houston [1st Dist.] Apr. 28, 2020, no pet.); Clark v. Paddington British Priv. Sch., Inc., No. 09-19-00056-CV, 2016 WL 4247963, at *2-3 (Tex. App.—Beaumont Aug. 11, 2016, no pet.).

Res Judicata Bars Dec Action Asserting Limitations to Prevent Foreclosure

Castaneda v. Abacus Funding Group, LLC

Dallas Court of Appeals, No. 05-23-00623-CV (February 4, 2025)

Justices Smith, Miskel (Opinion, linked here), and Breedlove


A cautionary tale about the scope of res judicata: Final judgment on the merits bars not just claims actually litigated, but also other claims arising from the same transaction or subject matter that were not asserted but could have been. And that’s true even with respect to a claim for declaratory relief that anticipates an affirmative defense.

The Castanedas purchased a house in 1997 using seller-financing. In 2018, a dispute arose about the mortgage; the Castanedas believed it was paid off, but the sellers contended a significant balance remained unpaid. With that dispute unresolved, the sellers sold the mortgage to Abacus. Abacus then sent the Castanedas a notice of non-judicial foreclosure. The Castanedas responded by suing the sellers and Abacus, arguing generally that the loan was paid in full and asserting that Abacus had committed statutory real estate fraud by sending them a proposed “Modification and Extension Agreement” even though it knew, or should have known, that they had already paid the note in full. Abacus secured a summary judgment denying the Castanedas’ statutory fraud claim against it, as well as an order severing Abacus from the remainder of the case, resulting in a final take-nothing judgment for Abacus. 

Abacus then served the Castanedas with another notice of non-judicial foreclosure. Again, the Castanedas filed a declaratory judgment action to prevent the foreclosure, arguing both that the note was paid in full—as they had in the first lawsuit—and, for the first time, that limitations barred Abacus from enforcing the mortgage lien. Abacus responded with another summary judgment motion, arguing that the Castanedas’ declaratory claims were barred by res judicata, based on the first judgment. The trial court granted that motion, and the Dallas Court of Appeals affirmed. 

The Castanedas argued that res judicata could not bar their claim for declaratory relief based on limitations, which they had not asserted in the first lawsuit. The Court of Appeals disagreed, explaining that “Texas follows the transactional approach to res judicata, under which ‘a subsequent suit is barred if it arises out of the same subject matter as the prior suit, and that subject matter could have been litigated in the prior suit,’” quoting Citizens Ins. Co. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007). “[A] final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the action arose,” regardless of the specific claims asserted in either case. The appeals court concluded that the “First and Second Lawsuits arise out of the same facts and are based on the same subject matter,” and that “the Castanedas could have asserted their limitations claim in the First Lawsuit.” It rejected the Castanedas’ argument that they should not be expected to have “preemptively file[d] an affirmative defense of limitations” to a claim that Abacus had not yet asserted. But, of course, they did just that in the second lawsuit—filing suit and asserting their claim for declaratory relief based on limitations before Abacus filed any counterclaim of its own. 

SCOTx: Separation of Powers Bars Disciplinary Commission’s “Collateral” Review of Attorney Conduct by AG’s Office

Webster v. Commission for Lawyer Discipline

Supreme Court of Texas, No. 23-0694 (December 31, 2024) 

Opinion by Justice Young (linked here); Dissent by Justice Boyd (linked here)


Unwilling to abide the results of the 2020 presidential election, the State of Texas tried to invoke the original jurisdiction of the United States Supreme Court to challenge the election processes and results in Pennsylvania, Georgia, Michigan, and Wisconsin. The bill of complaint and other filings were signed by Ken Paxton as Texas Attorney General and also listed Brent Webster, his First Assistant, as counsel of record.

Four days after Texas filed, the Supreme Court dismissed for lack of standing. Soon thereafter, various individuals filed grievances against Paxton and Webster with the Commission for Lawyer Discipline, alleging they had violated Disciplinary Rule 8.04(a)(3)—which prohibits Texas lawyers from “engag[ing] in conduct involving dishonesty, fraud, deceit, or misrepresentation”—by making false statements in the Supreme Court filings. The Commission then filed a disciplinary petition against Webster in state district court in Williamson County. Webster responded with a plea to the jurisdiction, arguing the Commission’s petition was barred by the separation-of-powers doctrine and by sovereign immunity. The district court ruled that separation of powers deprived it of subject-matter jurisdiction, but the El Paso Court of Appeals (to which the case had been transferred for docket-equalization purposes) reversed. 

The Supreme Court, however, agreed with the trial court and ordered the case dismissed for lack of jurisdiction. “The separation-of-powers problem in this case involves two specific powers, both of which are valid,” the Court said: “[1] the judiciary’s authority to regulate the practice of law and [2] the attorney general’s exclusive authority to determine the arguments and assess the evidence that warrant bringing suit on behalf of the State.” Seeking to reconcile these competing powers, the Court drew a distinction between review and sanctions by a court in which alleged misrepresentations are made—what the Court characterized as “direct scrutiny”—and a challenge by the Commission in a separate proceeding and a different court—which the Court labeled “purely collateral review.” The Court held that in “the narrow circumstances before [it],” attacks on allegations in initial pleadings, “direct scrutiny by a court to whom representations are made wholly accommodates the legitimate interests of all branches of government,” while “collateral attacks like the Commission’s lawsuit … would improperly invade the executive branch’s prerogatives and risk the politicization and thus the independence of the judiciary.” 

Justice Boyd, joined by Justice Lehrmann, dissented. While the “disciplinary proceeding against … Webster could easily fail for many reasons,” Justice Boyd said, “separation of powers is not one of them.” He argued the majority’s “freshly minted direct/collateral distinction is unheard of in separation-of-powers jurisprudence” and “lacks both legal support and logical sense.” “If the United States Supreme Court had decided to sanction Webster for filing the pleading at issue here (as the [majority] concedes it could have done without violating the separation of powers),” Justice Boyd explained, “its actions would have interfered with Webster’s attempt to discharge his duties at least as significantly as this ‘collateral’ disciplinary proceeding.”

On a related note, a parallel disciplinary proceeding against Paxton is pending review before the Texas Supreme Court on similar issues. Paxton v. Commission for Lawyer Discipline, No. 24-0452 (Tex.). It’s a fair bet that matter will soon be summarily disposed of in the same manner as the Webster case.  

Deadlines After Untimely Notice of Judgment: Follow Rule 306a(5) Very Carefully

Leal v. Besfki

Dallas Court of Appeals, No. 05-23-00117-CV (November 20, 2024)

Justices Partida-Kipness (Opinion, linked here), Goldstein, and Miskel



Ordinarily, a notice of appeal must be filed no later than 30 days after a judgment is signed, unless that deadline is extended by the filing of a qualifying post-trial motion in that same 30-day period. When a party and his or her attorney don’t receive timely notice that a judgment has been signed, however, Rule of Civil Procedure 306a(4) allows the deadline for filing an appeal or post-judgment motion to be calculated from the date the party or attorney does receive notice or gain actual knowledge that a judgment has been signed. See also Tex. R. App. P. 4.2.

Rule 306a(5) provides that, to invoke the grace period of Rule 306a(4), “the party adversely affected [by the judgment] is required to prove in the trial court, on sworn motion and notice, the date on which the party or his attorney first either received a notice of the judgment or acquired actual knowledge of the signing ….” The Dallas Court of Appeals and others have construed this to mean the movant must prove and include in its sworn motion both “(1) the specific date the party first either (a) received the clerk’s notice of the judgment, or (b) acquired actual knowledge of the judgment; and (2) the specific date the party’s attorney [did so].“

Leal’s counsel did not receive timely notice of an adverse, take-nothing judgment. When counsel discovered the problem, he sought to invoke the Rule 306a(4) extension for post-judgment motions or the notice of appeal. But Leal’s sworn Rule 306a(5) motion established only the dates when his attorney received notice and learned of the judgment. It did not say when Leal, himself, got notice or first knew of the judgment. The Dallas Court of Appeals held that omission to be fatal and dismissed Leal’s appeal for want of jurisdiction, as untimely filed.

“Actual Knowledge” Standard for Owner’s Liability to Contractor’s Employee Sets Lower Bar than “Actual, Subjective Awareness” Requirement for Exemplary Damages

Paniagua v. Weekley Homes, LLC

Dallas Court of Appeals, No. 05-19-00439-CV (October 29, 2024)

Justices Molberg, Carlyle (Opinion, linked here), and Smith 


Weekley Homes hired Leobardo Maravilla as an independent contractor to install siding on townhomes in Dallas. Leobardo’s crew included his brother, Jose Maravilla, and John Paniagua. On May 31, 2016, rain had been falling intermittently in the area and there had been lightning strikes nearby. Weekley’s builder, Holmes, allegedly told Leobardo that he needed to move aluminum scaffolding while it was raining. While moving the scaffolding on a rain-soaked driveway, Jose was electrocuted to death and Paniagua was injured by electric shock. Paniagua and the representatives of Jose’s estate sued Weekley.

Texas Civil Practice & Remedies Code § 95.003 provides that a property owner is not liable for the personal injury or death of a construction contractor or subcontractor’s employee unless (1) the owner either exercises or retains control over the work, and (2) as relevant here, the owner “had actual knowledge of the danger or condition resulting in the personal injury, death, or property damage and failed to adequately warn.” The trial court granted Weekley’s no-evidence motion for summary judgment, and the plaintiffs appealed.

The Dallas Court of Appeals twice reversed the trial court’s grant of summary judgment. Twice, the Supreme Court of Texas reversed the court of appeals in per curiam opinions and remanded for further proceedings. 

In the most recent remand, the court of appeals addressed whether the trial court properly granted summary judgment on § 95.003’s “actual knowledge” requirement. In the first opinion issued by the court of appeals, although the court reversed summary judgment on the plaintiffs’ negligence claim, it affirmed summary judgment against the plaintiffs’ gross negligence claim. Per Civil Practice & Remedies Code § 41.001(11)(B), a plaintiff alleging gross negligence must prove, among other things, that a defendant had “actual, subjective awareness of the risk involved, but nevertheless proceed[ed] with conscious indifference to the rights, safety, or welfare of others.” In the first opinion, the court of appeals held that plaintiffs presented no evidence showing Weekley had “actual, subjective awareness” of the lightning. So, on the most recent remand, the court of appeals considered whether its holding on “actual, subjective awareness” for Chapter 41 was law of the case, which would govern the question of “actual knowledge” under Chapter 95.

The court of appeals answered this question in the negative. It noted that the Legislature adopted Chapters 41 and 95 in the same legislative session but chose to use different phrasing. “Actual, subjective awareness,” in the court’s view, set a higher bar than “actual knowledge.” Therefore, the law of the case doctrine did not preclude the court of appeals from examining whether the plaintiffs had created a fact issue on Chapter 95’s “actual knowledge” requirement.
 
Nevertheless, the court of appeals affirmed summary judgment. It explained that it stood by its statement in its prior opinion that Weekley was not aware of the thunder and lightning strikes in the area. It pointed to the fact that Weekley’s builder Holmes left before the electrocution and no evidence showed that he perceived anything other than rain. 


Fair Notice of Pleadings

Hyde v. GACP Finance Co., LLC 

Dallas Court of Appeals, No. 05-23-00873-CV

Justices Reichek, Nowell (Opinion, available here), and Wright

Kelli Hinson

The “fair notice of pleadings” doctrine requires that the parties’ pleadings give adverse parties notice of their claims and defenses, as well as notice of the relief sought. Plaintiff GACP learned that lesson the hard way when the Dallas Court of Appeals reversed a $1.8 million judgment in its favor and rendered judgment for the Defendants. 

The GACP sued Defendants Hyde and Winspear alleging fraud in connection with a Credit Agreement. The parties to the Credit Agreement were Excel as the borrower, GACP as the “administrative agent and collateral agent,” and GACP, L.P. (“GACP Lender”). GACP alleged that Defendants, who were principals of Excel, paid themselves deferred compensation in violation of the Credit Agreement. On the third day of trial, Defendants argued that GACP did not have capacity to seek its requested damages. GACP admitted that the damages alleged were suffered by GACP Lender, but it argued it was pursuing those damages “as the agent on behalf of the lender.”  The trial court asked where that was stated in the Petition, and GACP was at a loss. It pointed to one reference in the Factual Allegations section to its capacity “as agent for various Lenders.” Although the trial court recognized this was a case-dispositive issue, it allowed the trial to continue and ultimately entered a judgment in favor of GACP for more than $1.8 million.

The Court of Appeals reversed and rendered. Texas Rule of Civil Procedure 301 requires the trial court’s judgment to be supported by the pleadings. This “fair notice” pleading standard “looks to whether the opposing party can ascertain from the pleading the nature and basic issues of the controversy and what testimony will be relevant.” The Court of Appeals held that GACP’s “passing reference” to its role as agent was not sufficient to give Defendants notice it was seeking damages on behalf of GACP Lender as its agent. Defendants were not required to raise this issue before trial through special exceptions or a verified denial because they were entitled to rely on GACP’s pleading asserting it was seeking its own damages. Because GACP admitted it had not suffered any damages of its own, it did not have standing to pursue claims against the Defendants.  

Insurer’s Proposed Permissive Interlocutory Appeal Rejected: Won’t Materially Advance Ultimate Termination of Litigation

Zurich Am. Ins. Co. v. MB2 Dental Solutions, LLC

Dallas Court of Appeals, No. 05-24-00288-CV (September 20, 2024)

Justices Molberg (Opinion, linked here), Pedersen, III, and Carlyle 


After Zurich denied coverage under three insuring agreements for MB2’s losses arising from COVID-19 pandemic government orders, MB2 sued Zurich, asserting breach-of-contract and extra-contractual claims. Three years into the suit, the parties filed cross-motions for partial summary judgment on one of the insuring agreements, which covered interruption-by-communicable-disease (“ICD”). After briefing, a hearing, and more briefing, the trial court issued an omnibus order granting and denying in part each party’s motion, ruling that civil-authority orders triggered coverage by prohibiting access to MB2’s locations only in a subset of the implicated states and localities. Zurich sought leave to pursue a permissive appeal, which the trial court granted.

The court of appeals denied the petition, however, ruling Zurich had not satisfied the requirements for permissive interlocutory appeal under section 51.014(d) of the Texas Civil Practice and Remedies Code. Section 51.014(d) provides that a trial court may permit an appeal from an interlocutory order if: “(1) the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion; and (2) an immediate appeal from the order may materially advance the ultimate termination of the litigation.” Then, the court of appeals may accept the appeal if the appealing party timely files “an application for interlocutory appeal explaining why an appeal is warranted under Subsection (d).” 

In Texas, appeals generally are limited to final judgments. Statutes providing for interlocutory appeal are strictly construed. Applying these rules, the court concluded that Zurich failed to establish an appeal from the partial summary judgment order would materially advance the ultimate termination of the litigation. The court pointed out that the appeal could only determine contractual liability for one of the three coverage grants in dispute. MB2’s breach-of-contract claims under the other two coverage provisions would remain pending, as would its extra-contractual claims. The outcome of the proposed interlocutory appeal would not affect any of these remaining claims. While a party seeking interlocutory appeal under section 51.014(d) need not establish that such an appeal would completely resolve the litigation, it must show that an appeal “may materially advance” termination of the litigation. Here, because issues and claims would remain unresolved and unaffected by resolution of ICD coverage alone on appeal, an interlocutory appeal would not materially advance the ultimate termination of the litigation.



Arbitration and Not-So-Evident Partiality

Aspen Strategic Holdings, LLC v. Transitus Capital, L.L.C.

Dallas Court of Appeals, No. 05-23-00249-CV (August 27, 2024)

Justices Partida-Kipness (Opinion, here), Pedersen III, and Carlyle


A court will vacate an arbitration award where there is “evident partiality” of the arbitrator. See, e.g., Tex. Civ. Prac. & Rem. Code § 171.088(a)(2)(A). The Supreme Court of Texas has explained that a “neutral arbitrator … exhibits evident partiality if he or she does not disclose facts which might, to an objective observer, create a reasonable impression of the arbitrator’s partiality.” Burlington Northern Railroad Co. v. TUCO, Inc., 960 S.W.2d 629, 636 (Tex. 1997). Further, “evident partiality is established from the nondisclosure itself, regardless of whether the nondisclosed information necessarily establishes partiality or bias.” Id. But according to the Dallas Court of Appeals, that test isn’t quite as simple as it may seem.

Aspen secured an arbitration award against Transitus and sought to have that award confirmed by a district court. Transitus, however, moved to vacate because (a) it discovered that one of Aspen’s attorneys in the arbitration had appeared before the arbitrator in another arbitration several years earlier, and (b) the arbitrator had not disclosed that prior appearance as required by the applicable AAA rules. The trial court granted the motion to vacate based solely on that nondisclosure. 

But the appeals court reversed, ruling that the trial court had “stopped too soon.” Although the facts of the prior appearance and the arbitrator’s nondisclosure were not contested, analysis under the TUCO standard does not end there, the Court explained. Instead, “the proper question then becomes whether the undisclosed facts might, to [an] objective observer, create a reasonable impression of the arbitrator’s partiality. …  Only by evaluating the facts of the specific case can the trial court conclude that the undisclosed facts were sufficiently material to meet the evident impartiality [sic] standard.” The appeals court therefore reversed and remanded for the trial court to revisit the motion to vacate under that second prong of the TUCO standard. It also overturned the trial court’s order quashing Aspen’s “subpoena calling for the arbitrator to testify concerning the circumstances or reasons for the nondisclosure.” The appeals court considered that testimony (a) to be potentially important to determining “whether an objective observer might form a reasonable impression that the arbitrator was partial,” and (b) not to be forbidden by “either AAA rules or the Civil Practice and Remedies Code.”



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