Motions for Rehearing Overruled as Moot; Opinion of August 11, 2016,
Withdrawn; Affirmed in Part, Reversed and Remanded in Part; and
Substitute Opinion filed November 22, 2016.




                                    In The

                   Fourteenth Court of Appeals

                             NO. 14-15-00550-CV

     JACK N. MCCRARY AND SUZANNE F. MCCRARY, Appellants
                                      V.

  WILLIAM A. HIGHTOWER, UBS FINANCIAL SERVICES, INC., B.B.
  TULEY, BRIAN DAVIDSON D/B/A PANORAMIC INVESTIGATIONS,
                         Appellees

                  On Appeal from the 152nd District Court
                           Harris County, Texas
                     Trial Court Cause No. 2014-40928

                   SUBSTITUTE OPINION


      Appellants Jack and Suzanne McCrary appeal from a series of judgments on
the pleadings in favor of appellees UBS Financial Services, Inc., Brian Davidson
d/b/a Panoramic Investigations, William A. Hightower, and B.B. Tuley.       We
previously issued an opinion affirming the judgment in favor of Davidson and
reversing the judgments in favor of UBS, Hightower, and Tuley. UBS, Hightower,
and Tuley filed motions for rehearing. We withdraw our original opinion and issue
this substitute opinion affirming the judgments in favor of UBS and Davidson and
reversing the judgments in favor of Hightower and Tuley.                       We overrule the
motions for rehearing as moot.

                          Factual and Procedural Background

       Appellants Jack and Suzanne McCrary filed an original petition asserting
claims of defamation, negligence, gross negligence, and civil conspiracy against
appellees William A. Hightower, UBS Financial Services, Inc., B.B. Tuley, and
Brian Davidson d/b/a Panoramic Investigations (hereafter, “Davidson”). In their
original petition, the McCrarys alleged that Hightower, Tuley, and Davidson had
engaged in a “smear campaign” to damage Jack’s reputation.1 The McCrarys
argued that, as Hightower’s then-employer, UBS was liable for Hightower’s
actions under a theory of respondeat superior.

       UBS responded to the McCrarys’ original petition with a “Motion to
Dismiss Pursuant to Chapter 27 and Motion for Judgment on the Pleadings.” In
the motions, UBS argued that trial court should either (1) dismiss the McCrarys’
                                                                                  2
suit pursuant to the Texas Citizens’ Participation Act (TCPA)                         or (2) grant
summary judgment “on the pleadings” based on the absolute judicial proceedings
privilege or the qualified privilege for communications among persons with a
common interest. The McCrarys subsequently filed their First Amended Petition,

       1
          The McCrarys’ petition acknowledges that Suzanne was not the subject of any
defamatory communications, but nonetheless alleges that Suzanne’s “good name and reputation
were clearly violated, and, as Mr. McCrary’s wife, she also sustained significant damages that
are cognizable under Texas law.”
       2
          “If a legal action is based on, relates to, or is in response to a party’s exercise of the
right to free speech, right to petition, or right of association, that party may file a motion to
dismiss the legal action.” Tex. Civ. Prac. & Rem. Code § 27.003(a) (West 2015).

                                                 2
which responded to the arguments in UBS’s motions. In their First Amended
Petition, the McCrarys alleged the following facts:

      William A. Hightower has spearheaded an effort to smear Jack
      McCrary’s name and reputation. On July 18, 2013, Hightower
      conducted a private meeting of some of his UBS wealth management
      clients who had, at his behest, invested in one or both of McCrary’s
      start-up companies, IST and/or Reproductive Research Technologies,
      L.P. [hereinafter “RRT”]. The meeting was held in the offices of
      Hightower’s counsel. These lawyers worked for Hightower, not vice
      versa. The attendees at the meeting were not yet clients of the law
      firm, and some never became clients. However, most, or all, of these
      investors purchased their IST interests through Hightower, after
      presentations in the UBS office space, and with other UBS employees
      present.
      At that private meeting, Hightower and Tuley published or
      republished the libelous Tuley Report described in Exhibit A. At the
      meeting, and at Hightower’s urging, Defendant Davidson – who had
      never even met Jack McCrary, branded him as “delusional.” At that
      meeting, Hightower and his confederates falsely told UBS investors
      that their money had been lost by McCrary and that their only hope
      was to institute a lawsuit against two university professors working
      with IST. This was said even though Tuley had projected potential
      revenues for the IST company in the hundreds of millions of dollars,
      and was in the process of finalizing a revised projection of more than
      one billion dollars. Hightower made these comments to other IST
      investors prior to this July 18th meeting.
      ...
      On information and belief, the Defendants and others, in an unlawful
      conspiracy with them, continued this campaign for many months after
      the initial July 18th meeting. On information and belief, one of them
      initiated false charges against McCrary that led to the federal
      government raid described in the IST pleading. On information and
      belief, one or more of them also filed an anonymous complaint with
      the National Institutes of Health that has caused problems with the
      grant.
      ...
      The smear campaign continued in a more formal way at a second
                                         3
      meeting of the UBS clients and possibly other limited partners on
      January 10, 2014. Many of the defamatory statements were
      republished at that meeting or in personal communications from
      Hightower or those non-lawyers acting in concert with him following
      that meeting.
      “Exhibit A,” which the McCrarys incorporated by reference, is a third-party
petition in which IST, Jack’s start-up, intervened in pending litigation between
Joanna Anderson, et. al, and Manfred and Rainer Fink. The petition describes in
further detail the “Tuley Report” and the alleged investor meetings of July 18,
2013 and January 10, 2014. The petition alleges, in relevant part:

      [The Tuley Report] was published by Hightower as a handout at the
      secret investors’ meeting on July 18, 2013. . . . The Tuley Report was
      published by Hightower to the UBS investors either at, or shortly
      before the July 18th meeting. It is libelous of McCrary, per se, and
      disparaging of IST. As the Court and a Jury will see, Tuley describes
      the $100,000 that Hightower received as a repayment of a “loan”; but
      makes no similar reference to the more than $100,000 that McCrary
      already had invested in or spent for the benefit of the company.
      Rather, all funds recouped by McCrary or his family partners – which
      were the actual seller of most of the IST units – were depicted as
      money distributed “for the benefit of Jack McCrary and family.” The
      picture portrayed is that 65% of the money was used to benefit
      McCrary personally. It made McCrary look like a thief.
      ...
      The representations in the Tuley Report were compounded by verbal
      slanders at the investor meeting. The investors were told that their
      money was gone and that their only hope was to hire Hightower’s
      lawyers to sue McCrary. They were also told that McCrary was a
      “delusional” and incompetent manager of IST’s business.
      ...
      [Hightower] called a second meeting of his UBS Wealth Management
      Investors. The meeting was held on January 10, 2014, once again at
      the office of his counsel. The main agenda was filing a lawsuit. Here,
      as in the first meeting in July, the investors were told that their
      investment was essentially “gone” and that their only option to
                                         4
      salvage something was to authorize the lawsuit.
      Two documents were prepared by Hightower’s lawyers, either at,
      before, or shortly after the meeting. One disclosed potential “conflicts
      of interest.” It candidly told the potential Plaintiffs that “facts may
      come to light that would give some or all of you a potential cause of
      action against Mr. Hightower.” It also advised that, not only would
      the law firm not investigate or pursue claims against Hightower, but
      that, IF the Plaintiffs subsequently decided to pursue such claims, the
      law firm would actually represent Hightower against them. . . . The
      engagement letter authorized the law firm to sue a number of different
      people, including Jack McCrary.

      After the McCrarys amended their petition, UBS filed a “Motion to Dismiss
First Amended Petition and Motion for Judgment on the Pleadings,” in which it
again argued that the trial court should dismiss the case under the TCPA and, in the
alternative, should grant summary judgment “on the pleadings” because the facts
pleaded by McCrary affirmatively demonstrated that any statements made by
Hightower were protected by the absolute judicial proceedings privilege or the
qualified common interest privilege. The trial court denied UBS’s motion to
dismiss under the TCPA, but granted “summary judgment on the pleadings”
without specifying on which basis.

      After the trial court granted summary judgment in favor of UBS, Davidson
also moved for “summary judgment on the pleadings” asserting that his alleged
statement—calling Jack “delusional”—was protected by the absolute judicial
proceedings privilege and the qualified common interest privilege. The trial court
granted the motion, but did not specify on which ground it did so. Hightower and
Tuley then moved jointly for “summary judgment on the pleadings” solely on the
ground that their alleged communications were protected by the absolute judicial
proceedings privilege. The trial court granted Hightower and Tuley’s motion.

      On the defendants’ joint motion, the trial court issued its final judgment

                                         5
disposing of all claims and parties. The McCrarys timely filed this appeal.

                                            Analysis

       The McCrarys present three issues: (1) whether the district court erred in
granting summary judgment without discovery; (2) whether the absolute privilege
that protects statements by lawyers and witnesses involved in judicial proceedings
extends to extrajudicial statements by non-lawyers; and (3) whether the anti-
SLAPP3 provisions of Chapter 274 justify the summary judgment in UBS’s favor.
For the purpose of our analysis, we combine the McCrarys’ first and second issues
to determine whether summary judgment was proper as to each party based on the
absolute privilege asserted.

       As an initial matter, we note that even though both UBS and Davidson
asserted two privileges in their motions for summary judgment—the absolute
judicial proceedings privilege and the qualified common interest privilege—the
McCrarys’ appellate briefing addressed only the absolute privilege.              The trial
court’s orders granting summary judgment in favor of UBS and Davidson did not
specify on which ground the summary judgments were rendered. “When there are
multiple grounds for summary judgment and the order does not specify the ground
on which the summary judgment was rendered, the appealing party must negate all
grounds on appeal.” Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894,
898 (Tex. App.—Houston [14th Dist.] 2002, no pet.). “If summary judgment may
have been rendered, properly or improperly, on a ground not challenged, the
judgment must be affirmed.” Id. Because McCrary fails to negate all grounds
asserted by UBS and Davidson in their motions for summary judgment, we must

       3
         “SLAPP” is an acronym for “Strategic Lawsuits Against Public Participation.” Jardin
v. Marklund, 431 S.W.3d 765, 769 (Tex. App.—Houston [14th Dist.] 2014, no pet.).
       4
           Tex. Civ. Prac. & Rem. Code § 27.001 et seq. (West 2015).

                                                6
affirm the trial court’s grants of summary judgment as to UBS and Davidson.

       Having affirmed the summary judgments in favor of UBS and Davidson, we
now determine whether the court erred in granting Hightower and Tuley’s
combined motion for summary judgment based on the absolute judicial
proceedings privilege.

Standard of review

       We review a grant of summary judgment de novo. Cantey Hanger, LLP v.
Byrd, 467 S.W.3d 447, 481 (Tex. 2015). Hightower and Tuley did not style their
motion as a “traditional” motion for summary judgment pursuant to Texas Rule of
Civil Procedure 166a(c), nor did they style their motion as a “no-evidence” motion
pursuant to Rule 166a(i). Rather, the defendants moved for summary judgment
“on the pleadings” based on the theory that the McCrarys had “pleaded
[themselves] out of court” with facts that affirmatively negated their causes of
action.    See Tex. Dept. of Corrections v. Herring, 513 S.W.2d 6, 9 (Tex. 1974);
Trail Enters. v. City of Houston, 957 S.W.2d 625, 632 (Tex. App.—Houston [14th
Dist.] 1997, pet. denied).5

       The motion was not explicitly characterized as a “no-evidence” motion for

       5
         We first note that appellees provide no authority for their assertion that summary
judgment on the pleadings, without preliminary special exceptions, is an appropriate procedural
vehicle in the context of the judicial proceedings privilege. Texas does not recognize general
demurrer and, therefore, summary judgment on the pleadings without a prior special exception is
proper in only the rarest cases. See Hon. David Hittner & Lynne Liberato, Summary Judgments
in Texas: State and Federal Practice, 52 Hous. L. Rev. 773, 793-95 (2015). One such case is
limitations; our court has held that a plaintiff may plead itself out of court by pleading facts
establishing limitations has run. See Trail Enterprises, Inc. v. City of Houston, 957 S.W.2d 625,
632 (Tex. App.—Houston [14th Dist.] 1997, pet. denied). However, this court also has held that
any complaint that the trial court improperly granted summary judgment on the pleadings must
be raised in the trial court. See Warwick Towers Council of Co-Owners ex rel. St. Paul Fire &
Marine Ins. Co. v. Park Warwick, L.P., 298 S.W.3d 436, 444 (Tex. App.—Houston [14th Dist.]
2009, no. pet.). As appellants did not challenge appellees’ motion for summary judgment on the
pleadings on this basis, we need not decide the question here.
                                               7
summary judgment under Rule 166a(i), and we conclude that it is a “traditional”
motion for summary judgment. Adams v. Reynolds Tile and Flooring, Inc., 120
S.W.3d 417, 420 (Tex. App.—Houston [14th Dist.] 2003, no pet.). A “traditional”
motion for summary judgment may be filed “at any time”; there is no requirement
that the motion be filed “after an adequate time for discovery.” Compare Tex. R.
Civ. P. 166a(c) with id. 166a(i). A party moving for summary judgment under
Rule 166a(c) “has the burden to prove that there is no genuine issue of material
fact and that it is entitled to judgment as a matter of law.” Byrd, 467 S.W.3d at
481; Tex. R. Civ. P. 166a(c).

The absolute privilege

       “Texas courts have long recognized that an absolute privilege extends to
publications made in the course of judicial and quasi-judicial proceedings—
meaning that any statement made in the trial of any case, by anyone, cannot
constitute the basis for a defamation action, or any other action.” Wilkinson v.
USAA Fed. Savs. Bank Trust Servs., No. 14-13-00111-CV, 2014 WL 3002400, at
*6 (Tex. App.—Houston [14th Dist.] July 1, 2014, pet. denied).          “Anyone”
includes judges, jurors, counsel, parties, or witnesses. Id. at *6. “The judicial
proceedings privilege is tantamount to immunity; where there is an absolute
privilege, no civil action or damages for oral or written communications will lie,
even though the language is false and uttered or published with express malice.”
Id. The privilege may also extend to communications made prior to the start of a
judicial proceeding; the test for whether the privilege extends to such a
communication “entails both subjective and objective components.” Shell Oil Co.
v. Writt, 464 S.W.3d 650, 655 (Tex. 2015). However, the privilege applies “only
when a communication has some relation to a proceeding that is actually
contemplated in good faith and under serious consideration by the witness or

                                        8
possible party to the proceeding.” RESTATEMENT (SECOND) OF TORTS § 588 cmt. e
(AM. LAW INST. 1977); Writt, 464 S.W.3d at 655. In determining whether the
statement at issue is within the bounds of the absolute privilege, we consider the
entire communication in its context. Fitzmaurice v. Jones, 417 S.W.3d 627, 633
(Tex. App.—Houston [14th Dist.] 2013, no pet.). We must extend the privilege to
any statement that bears some relation to the proceeding and must resolve all doubt
in favor of the privilege. Id.

The pleadings do not affirmatively demonstrate that the absolute privilege
applies.
      It is not evident from the face of the McCrarys’ live pleadings—their First
Amended Petition and Exhibit A—that the communications alleged are protected
by the absolute judicial proceedings privilege.     The pleadings are speculative
regarding what was said in the “secret investors’ meeting” and in Tuley’s “secret
report.” The pleadings contain no documentation of the 2013 or 2014 investor
meetings, transcripts of statements made at the meeting, or a copy of the report that
Tuley allegedly presented “at, or shortly before,” the 2013 meeting. Likewise, the
context of these “secret” communications is minimally developed.            Without
adequate context, the court cannot reasonably determine whether the
communications relate to a particular judicial proceeding. The McCrarys’ bare
allegation that the “main agenda” of one or both of the investor meetings was filing
a lawsuit does not affirmatively establish that the meetings—and any statements
made therein—bore any relation to a particular judicial proceeding that was under
“serious consideration at the time the communication was made.”           Writt, 464
S.W.3d at 665.      Several potential judicial proceedings are mentioned in the
McCrarys’ pleadings—a lawsuit against Jack, a lawsuit against Hightower, and a
lawsuit against two professors.      However, the pleadings do not anchor the
defamatory communications to any particular lawsuit. While it is apparent from

                                          9
the incorporation of IST’s third-party petition (Exhibit A) that the lawsuit against
the two professors—Manfred and Rainer Fink—was actually filed, the pleadings
do little to affirmatively establish any nexus between statements made by
Hightower or Tuley and that particular lawsuit.

      While it is possible that the privilege also may apply to statements related to
unrealized judicial proceedings, “the possibility of a proceeding must have been a
serious consideration at the time the communication was made.”           Writt, 464
S.W.3d at 655. The pleadings do not affirmatively establish that Hightower or
Tuley made any statements “in contemplation of [or] preliminary to” any nascent
lawsuits against Jack or Hightower.     Daystar Residential, Inc. v. Collmer, 176
S.W.3d 24, 27 (Tex. App.—Houston [1st Dist.] 2004, pet. denied). Because the
McCrarys’ pleadings do not affirmatively put any defamatory communications into
the context of a judicial proceeding either in progress or under serious
consideration, they cannot suffice to establish the application of the absolute
privilege.

      Despite the factual deficiency of McCrarys’ pleadings, Hightower and Tuley
urge us to apply a more relaxed absolute privilege that is “all-encompassing.” The
defendants cite cases that have expanded the absolute privilege to encompass
statements made by non-lawyers and statements made preliminary to judicial
proceedings that have yet to occur or never come to fruition. James v. Brown, 637
S.W.2d 914, 917 (Tex. 1982); Collmer, 176 S.W.3d at 28. Regardless of how all-
encompassing or expansive the privilege may be, it cannot support a summary
judgment when the relevant facts have not yet been established. In both James and
Collmer, the courts were able to connect specific statements to particular judicial
proceedings that were either in progress or were obviously under serious
contemplation. James involved a defamation lawsuit brought by a woman who

                                         10
was involuntarily hospitalized against the doctors who evaluated her and
recommended her hospitalization. 637 S.W.2d at 916. The doctors filed reports
with the probate court and wrote letters about the plaintiff as part of the statutory
mental health proceeding. Id. The trial court granted the doctors’ motion for
summary judgment in which they asserted that their statements were protected by
the absolute privilege. Id. The Texas Supreme Court affirmed the summary
judgment and held that the doctors’ letters were privileged witness statements
related to the mental health proceeding in probate court. Id. at 917. In Collmer, an
attorney was sued for business disparagement after he made comments in the
Houston Chronicle alleging wrongdoing on the part of a residential treatment home
and stating that evidence of that wrongdoing would “bolster[] a civil lawsuit he
plan[ned] to file in the near future.” 176 S.W.3d 26. The attorney asserted the
absolute privilege and moved for summary judgment, which the trial court granted.
Id. at 27. Our sister court affirmed the summary judgment and held that, because it
was “clear that a suit was being contemplated” and the attorney’s statement “bore
some relationship to the proposed litigation and furthered his representation of his
client,” the statements were absolutely privileged.        Id. at 28.    This case is
distinguishable. Here, we are not able to determine from the face of the McCrarys’
pleadings whether the content of any communications alleged are related to any
actual or contemplated judicial proceedings.

      Instead, we find Helfand v. Coane to be instructive. 12 S.W.3d 152 (Tex.
App.—Houston [1st Dist.] 2000, pet. denied).           In Helfand, the plaintiff, an
attorney, alleged that the defendant, a fellow attorney, had defamed him in a letter
that accused him, in part, of lying to several federal judges. Id. at 154. The
defendant moved for summary judgment. Id. at 155. The plaintiff filed a motion
for continuance, but the trial court ordered that discovery be stayed until it ruled on


                                          11
the defendant’s motion for summary judgment.                       Id.    Considering only the
pleadings, the trial court granted summary judgment on the ground that the
plaintiff’s defamation claim was barred by the absolute judicial proceedings
privilege. Id. The court of appeals concluded that summary judgment was granted
prematurely because the question of absolute privilege could not be answered
without further discovery to establish the context of the statements.6 This case is
similar. Even taking the McCrarys’ speculative pleadings as true, the absolute
privilege cannot be established without further factual development. The question
of whether the privilege applies, while a question of law, is ultimately fact-
intensive and dependent. Id. at 157. The McCrarys’ pleadings do not answer that
question in a manner that satisfies the summary judgment standard. Hightower and
Tuley did not conclusively prove entitlement to judgment as a matter of law based
on the absolute judicial proceedings privilege. Accordingly, the court erred in
granting summary judgment in favor of Hightower and Tuley.

       Because we affirm the trial court’s summary judgment in favor of UBS
based on McCrary’s failure to negate all summary-judgment grounds asserted by
UBS, we need not address the McCrarys’ third issue.7



       6
          Because the defamatory statements were made by an attorney, the court of appeals held
that discovery was needed in order to establish, pursuant to Russell v. Clark, 620 S.W.2d 865,
869 (Tex. App.—Dallas 1981, writ ref’d n.r.e.), “(1) that the act to which the privilege applied
must bear some relationship (2) to a judicial proceeding in which the attorney is employed, and
(3) the act must be in furtherance of that representation.” Helfand, 12 S.W.3d at 157.
       7
         The McCrarys’ third issue speculates that the anti-SLAPP provisions of the TCPA may
have influenced the trial court to grant summary judgment in UBS’s favor. However, the TCPA
does not authorize trial courts to grant summary judgment. Rather, it provides a unique
mechanism for dismissal based on certain statutory criteria. Tex. Civ. Prac. & Rem. Code
§ 27.003(a) (“If a legal action is based on, relates to, or is in response to a party’s exercise of the
right to free speech, right to petition, or right of association, that party may file a motion to
dismiss the legal action.”). Moreover, the trial court expressly denied UBS’s Chapter 27 motion
to dismiss, which we assume disposed of UBS’s assertion of Chapter 27 protection.

                                                  12
                                   Conclusion

      We affirm the trial court’s grants of summary judgment in favor of UBS
Financial Services, Inc. and in favor of Brian Davidson d/b/a Panoramic
Investigations. We reverse the trial court’s grant of summary judgment in favor of
Hightower and Tuley and remand for further proceedings.




                                     /s/    Marc W. Brown
                                            Justice



Panel consists of Chief Justice Frost and Justices McCally and Brown.




                                       13
