Beaumont Court Affirms Denial of Anti-SLAPP Motion in TUFTA-Based Fraudulent Transfer Litigation
The Beaumont Court of Appeals affirmed denial of a TCPA motion to dismiss in litigation arising from a 2022 TUFTA petition alleging over $4 million in fraudulent intercompany transfers by Short OG III, Ltd. and its affiliates to render the entity insolvent. The appellants argued their TUFTA petition constituted protected communications in judicial proceedings, but the court found the subsequent 2024 claims for tortious interference, abuse of process, and civil conspiracy were not subject to anti-SLAPP dismissal.
Background and Procedural History
This interlocutory appeal arises from a complex dispute involving mineral interests in Tyler County, Texas. The controversy centers on two related lawsuits: a 2022 petition alleging violations of the Texas Uniform Fraudulent Transfer Act (TUFTA), and a 2024 lawsuit alleging tortious interference, abuse of process, and civil conspiracy based on the filing and use of that TUFTA petition.
The 2022 TUFTA Lawsuit
In 2022, Fort Apache Energy, Inc. filed a petition in Tyler County on behalf of itself and its assignees (collectively the "TUFTA Claimants"). The TUFTA Claimants alleged they discovered through discovery "millions of dollars in intercompany transfers between Short OG III, Ltd. and its affiliates, as well as other improper payments made at the direction of Michael F. Short." According to the petition, these transfers totaling over $4 million were made "for the express purpose of hindering, delaying or defrauding [the TUFTA Claimants] and/or were made or incurred without receiving reasonably equivalent value in exchange for each transfer or obligation," rendering Short OG III, Ltd. insolvent as of July or August 2017.
The 2024 Lawsuit and TCPA Motion
On June 5, 2024, the Short entities and Michael F. Short filed suit alleging that "Allan P. Bloxsom, Southern Star Exploration, and their co-conspirator Defendants and TUFTA Claimants sought to interfere with Plaintiffs['] business and business relationships by unlawfully leveraging their [TUFTA Lawsuit] pending in Tyler County to harm the Short Family's business dealings and extract concessions from the Short entities." The plaintiffs asserted claims for tortious interference, abuse of process, and civil conspiracy.
In response, the defendants filed a motion to dismiss under the Texas Citizens Participation Act (TCPA), arguing that each cause of action was predicated on their filing of the TUFTA petition and related notices, which constituted protected communications in judicial proceedings under the anti-SLAPP statute.
The Court's Decision
The Beaumont Court of Appeals affirmed the trial court's denial of the TCPA motion to dismiss. The defendants argued that because their TUFTA petition and Notice of Filing "are communications in a judicial proceeding, or at a minimum in connection with an issue under consideration or review by a judicial body," the TCPA applied and required dismissal. The court rejected this argument and upheld the trial court's determination that the claims were not subject to dismissal under the TCPA's anti-SLAPP provisions.