CYPRESS CREEK EMS v. DOLCEFINO, No. 01-16-00929-CV
(Tex.App. - [Houston [1st Dist.] April 3, 2018)
Wayne Dolcefino, formerly an investigative reporter for a local TV station, prevails in appeal of lawsuit based on wacky legal theory that he was guilty of having "converted" (stolen, sort of, in the tort sense of the term) photocopies of documents he had requested under the Public Information Act that were (allegedly) mailed to him inadvertently without prior redaction of sensitive information. The failure to blacken out sensitive information obviously wasn’t Dolcefino's fault, and he had stated that he had not even received the documents, apparently because they had been mailed to an old address. But he was forced to hire an attorney to defend himself and his consulting LLC against the entity whose attorney had committed the error and had then sued him and forced him to endure questioning under oath in a deposition.
Conversion is the unauthorized and unlawful assumption and exercise of dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights. Freezia v. IS Storage Venture, LLC, 474 S.W.3d 379, 386 (Tex. App.-Houston [14th Dist.] 2015, no pet.) (citing Waisath v. Lack's Stores, Inc.,474 S.W.2d 444, 446 (Tex. 1971)). The elements of a conversion claim are (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. Id. at 386-87; Stroud Prod., L.L.C. v. Hosford, 405 S.W.3d 794, 811 (Tex. App.-Houston [1st Dist.] 2013, pet. denied) (citing Khorshid, Inc. v. Christian, 257 S.W.3d 748, 759 (Tex. App.-Dallas 2008, no pet.)).
The summary judgment evidence indicated that CCEMS sent the documents in question to Dolcefino by regular mail. There is no evidence that Dolcefino actually received the package, and there is no evidence that Dolcefino ever had possession of the documents. CCEMS has presented no evidence that Dolcefino has asserted some right over the documents. See Robinson, 117 S.W.3d at 40. CCEMS has presented no evidence that Dolcefino engaged in any action that interfered with CCEMS's right to the property or control over the property as to deprive CCEMS of its free use and enjoyment. See Pierson, 829 S.W.2d at 314. Thus, CCEMS cannot establish that Dolcefino engaged in the unauthorized and unlawful assumption and exercise of dominion and control over the documents to the exclusion of, or inconsistent with, CCEMS's rights. See Freezia, 474 S.W.3d at 386.
[...]
CCEMS is essentially arguing that its own erroneous conduct—the inadvertent mailing of confidential documents—can be imputed as tortious conduct on Dolcefino's part. Neither the law supporting a presumption of receipt nor the law of conversion justifies such a conclusion.
CYPRESS CREEK EMS, Appellant/Cross-Appellee,
v.
WAYNE DOLCEFINO & WAYNE DOLCEFINO CONSULTING, Appellees/Cross-Appellants.
Court of Appeals of Texas, First District, Houston.
Christin L. Grant, George William Vie, III, Cristen David Feldman, for Wayne Dolcefino & Wayne Dolcefino Consulting, Appellee.
Jennifer Chang, Andrew Todd McKinney, IV, Kim A. Cooper, for Cypress Creek EMS, Appellant.
On Appeal from the 165th District Court, Harris County, Texas, Trial Court Case No. 2015-23275.
Panel consists of Justices Jennings, Keyes, and Higley.
OPINION
EVELYN V. KEYES, Justice.
Appellant and cross-appellee, Cypress Creek EMS (CCEMS), filed suit against appellees and cross-appellants, Wayne Dolcefino and Wayne Dolcefino Consulting (collectively, Dolcefino), alleging that counsel for CCEMS had accidentally mailed certain confidential documents to Dolcefino and asserting a cause of action for conversion against Dolcefino. CCEMS also sought an injunction preventing Dolcefino from disclosing any confidential information that he received in the accidentally-disclosed documents and requiring him to return the documents. Dolcefino denied ever receiving the documents and subsequently moved for dismissal of CCEMS's claims pursuant to Texas Rule of Civil Procedure 91a and for summary judgment on both the conversion claim and the request for a permanent injunction. Dolcefino also sought sanctions against CCEMS pursuant to Texas Rule of Civil Procedure 13 and Civil Practice and Remedies Code Chapter 10.
The trial court initially granted Dolcefino's Rule 91a motion to dismiss but later vacated that order and granted summary judgment in favor of Dolcefino on CCEMS's conversion claim and request for a permanent injunction. The trial court denied Dolcefino's request for sanctions.
In three issues, CCEMS argues that: (1) the trial court erred in granting summary judgment in favor of Dolcefino on CCEMS's conversion claim, in denying CCEMS a continuance for further discovery, and in denying its motion to compel Dolcefino's response to certain deposition questions; (2) the trial court erred in granting summary judgment in favor of Dolcefino on CCEMS's permanent injunction request; and (3) as a prevailing party on a Rule 91a motion to dismiss, CCEMS was entitled to reasonable and necessary attorney's fees, and the trial court's refusal to award it the full amount it had requested was erroneous.
Dolcefino asserts in his cross-appeal that the trial court abused its discretion in overruling his motion for sanctions pursuant to Rule 13 and Civil Practice and Remedies Code Chapter 10 and in denying his motion for reconsideration of the sanctions ruling by operation of law.
We affirm.
Background
CCEMS is a Texas nonprofit corporation doing business as a non-emergency ambulance service in Harris County. CCEMS also has a "tactical medical team" that is comprised of commissioned peace officers who also have training as emergency medical technicians and who provide emergency medical care in situations that would be unsafe for traditional EMTs. Dolcefino was hired by an unidentified third party to investigate CCEMS, and, specifically relevant here, he requested documents from the organization related to the tactical medical team. On March 30, 2015, Dolcefino sent a written request pursuant to the Texas Public Information Act (PIA)[1]seeking "documents detailing the use of any CCEMS credit card since June 1, 2015,[2] including the statement and all receipts"; "documents detailing expense reports, or any reimbursements from Brad England [a CCEMS employee] since June 1, 2015"; "documents detailing all expenses of the [CCEMS] tactical medical team since January 1, 2013, including . . . offense reports, documentation of involvement in any law enforcement operations, including, but not limited to any dispatch records request[ing] CCEMS tactical assistance"; and "documents detailing the payroll of the tactical team members." The letter also stated, following the specific request for expense reports for England, "You may redact information made confidential under state law."
In response to this request, CCEMS sought guidance from the Texas Attorney General regarding whether an exemption from its duty to respond to PIA requests applied to certain documents requested by Dolcefino, as provided for in the PIA.[3]CCEMS's counsel sent a letter setting out its argument for why the exemption applied to it under the circumstances, and it attached un-redacted copies of some of the information relevant to Dolcefino's request so that the Attorney General could review them. The statute also required that CCEMS notify Dolcefino. On April 20, 2015, CCEMS notified Dolcefino by mailing him a copy of the letter it had sent to the Attorney General. However, CCEMS's counsel soon came to believe that it had accidentally sent copies of the un-redacted sample documents it had provided to the Attorney General's office along with the copy of the letter it had sent.
After realizing what had occurred, CCEMS sought a temporary restraining order (TRO) on April 23, 2015, which the trial court granted. The trial court directed that Dolcefino return any documents he had received from CCEMS's attorney, not open any mail from CCEMS's attorney, and not discuss anything that he had received. On April 27, 2015, acting through his attorney, Dolcefino returned unopened a package he had received from CCEMS's counsel; however, CCEMS determined that this was not the package containing the confidential information it believed it had inadvertently sent him.
CCEMS filed the underlying suit on May 14, 2015, alleging a cause of action against Dolcefino for conversion of the documents and seeking a TRO, a temporary injunction, and a permanent injunction prohibiting Dolcefino from using or keeping the documents. Subsequently, on May 18, 2015, the trial court held a temporary injunction hearing. Kimberly Jessett, an attorney for CCEMS, testified that she prepared the letter to the Attorney General's office and attached sample documents containing "information with respect to when certain investigations were going to take place, persons of interest, people who were potentially going to be charged, their photos, their addresses," and other similar information. Jessett further testified that she sent a copy of that letter to Dolcefino at his business address in Katy, Texas—an address to which her firm had directed numerous previous communications. Jessett testified that, a few days later, she came to understand that un-redacted documents had been sent to Dolcefino along with the letter. She stated that she was preparing the confidential documents by redacting them so that they could be send to Dolcefino, but when she asked her assistant to send them to Dolcefino, the assistant informed her "that she had already sent a package out to Mr. Dolcefino." They both realized that they must have sent Dolcefino copies of the un-redacted documents.
Jessett further testified that she had a phone conversation with Dolcefino on April 23 after the underlying suit had been filed and the TRO entered, and after he received emailed notice of the TRO. According to Jessett, Dolcefino "said that he didn't know what I was talking about. He didn't know what the package was. He had not received it yet." Dolcefino told Jessett that he did not check the mail at the Katy address very often. He also represented that he would return the package to the law firm if he received it. Jessett also testified that Dolcefino initially seemed cooperative, but, over the course of the conversation, "his tone changed" and he ended the conversation by informing Jessett that he was going to contact his attorney.
Jessett testified that she had no firsthand knowledge regarding whether Dolcefino had the package in his possession, that she was not aware of any occasion on which Dolcefino had published or otherwise disseminated the information contained in the package, and that she had no knowledge of Dolcefino's publishing information that could have been considered confidential or privileged in the past. Jessett's administrative assistant also testified that she addressed the envelope containing the letter and confidential documents, put the correct postage on the envelope, and left the envelope in the mail bin so that it would be sent to Dolcefino. However, the assistant also testified that she had no personal knowledge regarding whether Dolcefino had actually obtained the package.
Dolcefino also testified at the hearing. He denied receiving the package, and he stated that he did not have it or any of the relevant documents in his possession. Dolcefino testified that, in addition to the post office box in Katy to which CCEMS's counsel mailed the package, he had moved into an office in Houston where he received mail. In February 2015, he began forwarding mail from the Katy address to his office in Houston. Dolcefino stated that he never received the package at his Houston office either.
Following the temporary injunction hearing, the trial court signed an "Agreed Confidentiality Order," in which the parties agreed to certain findings, signed by the trial court,[4] including findings that counsel for CCEMS had "inadvertently" sent the package containing the confidential documents to Dolcefino on April 20, 2015, by regular mail properly addressed to Dolcefino; that Dolcefino had not received the package and was not responsible for the mailing of the package; and that Dolcefino had "not contributed in any manner to any threatened harm complained of by CCEMS," even though there was still an "imminent harm caused by the inadvertent disclosure of alleged ongoing law enforcement activities contained in the letter package and the potential to cause irreparable injury to CCEMS." Dolcefino agreed not to open the package if he received it in the future and to return it to CCEMS's attorney.
Dolcefino then answered CCEMS's suit by filing a general denial. He also filed a motion to dismiss pursuant to Rule of 91a, and he filed a counterclaim for sanctions arguing that CCEMS's suit was "groundless" and "brought in bad faith or with a dishonest and/or malicious purpose."
The trial court originally granted the Rule 91a motion to dismiss and awarded Dolcefino $500 in attorney's fees. However, CCEMS moved to vacate the Rule 91a dismissal arguing, among other things, that the trial court's granting of the motion had been untimely. On October 26, 2015, Dolcefino opposed the motion to vacate and, in the alternative, moved for traditional and no-evidence summary judgment on CCEMS's conversion claim. Dolcefino argued that, as a matter of law, the purportedly confidential documents were not the type of personal property that could be the subject of a conversion claim. He also argued that CCEMS had no evidence to support the elements of a conversion claim, including that it had no evidence that he had "wrongfully exercised dominion or control over the property."
CCEMS moved for a continuance of the submission and hearing on Dolcefino's motion for summary judgment, arguing that it needed additional time to depose Dolcefino and to depose a postal service employee. Subject to this motion for continuance, CCEMS also responded to Dolcefino's summary judgment motion. The following day, CCEMS moved for attorney's fees pursuant to Rule 91a, in anticipation "that the Court will correctly vacate its previous dismissal order." CCEMS asserted that, following the trial court's decision to vacate its prior ruling, it would then be a prevailing party under the rule and was thus entitled to attorney's fees. It later supplemented its request, seeking a total of $23,897.50 in attorney's fees pursuant to Rule 91a, and it supported its request with affidavits and billing records.
On December 9, 2015, the trial court vacated its previous Rule 91a dismissal and, in the same order, denied Dolcefino's 91a motion to dismiss and continued the consideration of CCEMS's motion for attorney's fees to allow Dolcefino an opportunity to controvert CCEMS's attorney's fees evidence. Dolcefino responded by opposing CCEMS's request for attorney's fees, asserting various arguments that CCEMS was not entitled to any fees, that the fee request was "unconscionable," and that the amount requested was unreasonable and unnecessary.
The trial court also granted CCEMS's motion to continue consideration of Dolcefino's motion for summary judgment, specifically stating that it was granting a continuance to allow CCEMS an opportunity to depose Dolcefino and a postal worker.
CCEMS deposed Dolcefino. Among other topics, Dolcefino answered questions regarding whether he had received the package in question, the places where he was able to receive mail and his forwarding arrangement for mail sent to his old address in Katy, people who had access to the mailbox where CCEMS sent the package in question, and his intention to return the package if it were ever received. However, on the advice of counsel, he refused to answer other questions regarding issues such as the name of the person who hired him to investigate CCEMS and other mail that he had received in the past at the address where CCEMS had sent the documents.
After Dolcefino's deposition, CCEMS moved a second time for a continuance of submission of Dolcefino's motion for summary judgment on the conversion claim, and it also moved to compel deposition testimony from Dolcefino. In its motion for continuance, CCEMS argued that "Dolcefino refused to answer most of the questions posed by counsel for CCEMS, necessitating early suspension of the deposition and the filing of this motion." CCEMS asserted that Dolcefino's counsel had announced near the beginning of the deposition that it would be "limited to the terms of the Public Information Act." CCEMS complained that Dolcefino's counsel then instructed him not to answer multiple questions, identifying questions such as: "[W]hen you're retained to investigate for a client, do you typically charge by the hour?"; "[I]n the investigation that you're doing of [CCEMS], were you retained by someone—I'm not asking who—retained by someone to investigate [CCEMS]?"; and "Were you [sending PIA requests] on behalf of a third person and for compensation?" CCEMS complained that Dolcefino refused to answer questions regarding other mail that CCEMS had sent to Dolcefino at the Katy address and that Dolcefino had apparently received, questions regarding Dolcefino's system for following up on PIA requests, and questions related to CCEMS's efforts to discover circumstantial evidence that could establish that Dolcefino had received and improperly retained the disputed package.
The trial court denied this second motion for continuance, and it granted summary judgment in favor of Dolcefino on CCEMS's conversion claim. The trial court also awarded CCEMS $850 in attorney's fees in connection with the Rule 91a motion.
Dolcefino then moved for summary judgment on CCEMS's request for a permanent injunction. He argued, among other grounds, that because the trial court had granted summary judgment in favor of Dolcefino on the conversion claim, CCEMS could not establish the existence of a wrongful act—an essential element of CCEMS's request for a permanent injunction. The trial court granted summary judgment in favor of Dolcefino on this ground.
The trial court held a bench trial on Dolcefino's request for sanctions. Dolcefino offered evidence consisting of the parties' pleadings and other relevant documents. Counsel for CCEMS, Andrew McKinney, testified regarding the circumstances surrounding CCEMS's decision to file the underlying lawsuit, stating that he had a good faith basis for filing the suit and that CCEMS had a good faith argument for the extension or modification of existing law on its claims. The trial court ultimately denied Dolcefino's request for sanctions.
CCEMS's Appeal
Summary Judgment
In its first issue, CCEMS argues that the trial court erred in granting summary judgment in favor of Dolcefino on CCEMS's conversion claim and that the trial court erred in denying CCEMS's motion for continuance of the summary judgment hearing. In its second issue, CCEMS argues that the trial court erred in denying its request for a permanent injunction based on Dolcefino's motion for summary judgment.
A. Standard of Review
[..]
B. Summary Judgment on Conversion
Conversion is the unauthorized and unlawful assumption and exercise of dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights. Freezia v. IS Storage Venture, LLC, 474 S.W.3d 379, 386 (Tex. App.-Houston [14th Dist.] 2015, no pet.) (citing Waisath v. Lack's Stores, Inc.,474 S.W.2d 444, 446 (Tex. 1971)). The elements of a conversion claim are (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. Id. at 386-87; Stroud Prod., L.L.C. v. Hosford, 405 S.W.3d 794, 811 (Tex. App.-Houston [1st Dist.] 2013, pet. denied) (citing Khorshid, Inc. v. Christian, 257 S.W.3d 748, 759 (Tex. App.-Dallas 2008, no pet.)).
To be held liable, a conversion defendant must intend to assert some right in the property. Robinson v. Nat'l Autotech, Inc., 117 S.W.3d 37, 40 (Tex. App.-Dallas 2003, pet. denied); see also Dolenz v. Nat'l Bank of Tex. at Fort Worth, 649 S.W.2d 368, 370 (Tex. App.-Fort Worth 1983, writ ref'd n.r.e.) ("To constitute a conversion of property, there must be some repudiation of the owner's right or an exercise of dominion over the property, wrongfully and in denial of or inconsistent with that right; or there must be an illegal assumption of ownership."). "However, that intent need not be an intent to assert a right of ownership or title; it can be an intent to assert the right of possession." Robinson, 117 S.W.3d at 40. Stated another way, an act of conversion does not have to be an actual manual taking but merely an act that is such an active interference with the owner's right of property or control as to deprive him of its free use and enjoyment. Pierson v. GFH Fin. Servs. Corp., 829 S.W.2d 311, 314 (Tex. App.-Austin 1992, no writ) (citing Waisath, 474 S.W.2d at 447).
To recover for conversion, a plaintiff must also prove damages that are the proximate result of the defendant's conversion. MJS & Assocs., L.L.C. v. Master, 501 S.W.3d 751, 757 (Tex. App.-Tyler 2016, pet. denied) (citing United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147-48 (Tex. 1997) (per curiam)). "Generally, the measure of damages for conversion is the fair market value of the property at the time and place of the conversion." Deaton, 939 S.W.2d 146, 147-48.
Here, CCEMS asserts that Dolcefino converted personal property—in the form of copies of confidential documents that CCEMS's attorneys inadvertently mailed to Dolcefino—when it requested that he return the documents and he refused and wrongfully retained them. Dolcefino moved for summary judgment, arguing in part that CCEMS had no evidence of any element of its conversion claim. He argued that CCEMS had no evidence that he had "wrongfully exercised dominion or control over the property."
The summary judgment evidence indicated that CCEMS sent the documents in question to Dolcefino by regular mail. There is no evidence that Dolcefino actually received the package, and there is no evidence that Dolcefino ever had possession of the documents. CCEMS has presented no evidence that Dolcefino has asserted some right over the documents. See Robinson, 117 S.W.3d at 40. CCEMS has presented no evidence that Dolcefino engaged in any action that interfered with CCEMS's right to the property or control over the property as to deprive CCEMS of its free use and enjoyment. See Pierson, 829 S.W.2d at 314. Thus, CCEMS cannot establish that Dolcefino engaged in the unauthorized and unlawful assumption and exercise of dominion and control over the documents to the exclusion of, or inconsistent with, CCEMS's rights. See Freezia, 474 S.W.3d at 386.
CCEMS argues that it has raised a fact issue on this element. It argues that summary judgment evidence established that the "documents were properly addressed, sealed, and mailed to Dolcefino's business address via the U.S. Postal Service" and that this "raised a presumption that he received them." CCEMS further asserts that the presumption of receipt at least raises a fact question regarding whether Dolcefino actually received the documents and whether he has retained them improperly.
CCEMS cites Texaco, Inc v. Phan, 137 S.W.3d 763 (Tex. App.-Houston [1st Dist.] 2004, no pet.), to support its claim that the presumption of receipt raises a fact question here. In that case, Texaco challenged the trial court's default judgment against it and its finding regarding when deadlines for appealing from the default judgment began to run, arguing in part that "the evidence was legally and factually insufficient to support the trial court's finding under [Rule of Civil Procedure] 306a that it received actual knowledge of the default judgment on" a particular date. Id. at 766. In discussing the evidence regarding when Texaco received notice of the default judgment, this Court held that "[d]irect testimony that a letter was properly addressed, stamped, and mailed to the addressee raised a presumption that the letter was received by the addressee in due course." Id. at 767. We further held, "The mere denial of receipt is sufficient to rebut the presumption," but "the denial is not conclusive and merely presents a fact issue for the factfinder." Id. We stated, "The presumption of receipt is overcome conclusively only when `the evidence tending to support the contrary inference is conclusive, or so clear, positive, and disinterested that it would be unreasonable not to give effect to it as conclusive.'" Id. at 767-68 (quoting Employers' Nat. Life Ins. Co. of Dallas, Tex. v. Willits, 436 S.W.2d 918, 921 (Tex. App.-Amarillo 1968, writ ref'd n.r.e.)). This Court then concluded that the trial court properly considered the evidence—both the evidence giving rise to the presumption and Texaco's evidence rebutting it—in making a fact-finding regarding when Texaco received notice of the default judgment for purposes of its appellate deadlines. Id. at 768.
The present case is materially different from Texaco and similar cases cited by CCEMS. Here, the issue is not whether or when Dolcefino received some notice required by law to be sent to him—as was the case in Texaco—but rather whether there is any evidence that Dolcefino engaged in the unauthorized and unlawful assumption and exercise of dominion and control over the personal property of another to the exclusion of or inconsistent with the owner's rights. See Freezia, 474 S.W.3d at 386 (describing tort of conversion and setting out elements). CCEMS has not identified any case in which the presumption of receipt was considered as evidence establishing intentional, tortious conduct such as conversion, nor have we found any. CCEMS is essentially arguing that its own erroneous conduct—the inadvertent mailing of confidential documents—can be imputed as tortious conduct on Dolcefino's part. Neither the law supporting a presumption of receipt nor the law of conversion justifies such a conclusion.
At most, the evidence that CCEMS mailed the documents to Dolcefino raises a fact question regarding whether he received the documents in the mail. However, his mere receipt of the documents is no evidence that Dolcefino himself engaged in an act of conversion, and CCEMS has presented no evidence that Dolcefino improperly retained the documents or that he has used the documents in a way that was inconsistent with CCEMS's rights. See id. CCEMS asserts that Dolcefino is untrustworthy and could be lying about never having received the package, but such assertions are insufficient to raise a genuine issue of material fact regarding whether Dolcefino "wrongfully exercised dominion or control over the property" after CCEMS mailed the package to him. See Ridgway, 135 S.W.3d at 601 ("To raise a genuine issue of material fact . . . the evidence must transcend mere suspicion. Evidence that is so slight as to make any inference a guess is in legal effect no evidence."); Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983) ("When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence."); Fabian v. Cantwell, No. 03-16-00712-CV, 2017 WL 1833496, at *2 (Tex. App.-Austin May 3, 2017, no pet.) (mem. op.) ("The circumstantial evidence supporting the allegation that Cantwell exercised dominion and control over Fabian's property—that the mobile home was located on his property, that he and Fabian were involved in a dispute about unpaid rent, and that the property was taken by someone—simply does not exceed a scintilla and could lead to only a guess about who took the property.").
CCEMS failed to raise a genuine issue of material fact on an essential element of its conversion claim in response to Dolcefino's no-evidence motion for summary judgment, and, thus, the trial court could properly have granted summary judgment on this ground. See TEX. R. CIV. P. 166a(i); Hamilton, 249 S.W.3d at 426. Accordingly, we overrule CCEMS's challenge to the trial court's summary judgment ruling on its conversion claim. See Lightning Oil, 520 S.W.3d at 45 (holding that courts will affirm summary judgment ruling if any ground asserted in motion is meritorious).
