John Moore Services, Inc. and John Moore Renovation, LLC v. the Better Business Bureau of Metropolitan Houston Inc.

ACCEPTED

01-14-00906-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

4/20/2015 7:28:25 PM

CHRISTOPHER PRINE

CLERK

Cause No. 01-14-00906-CV

__________________________________

FILED IN

IN THE COURT OF APPEALS 1st COURT OF APPEALS

HOUSTON, TEXAS

FOR THE FIRST DISTRICT OF TEXAS

4/20/2015 7:28:25 PM

HOUSTON, TEXAS CHRISTOPHER A. PRINE

Clerk

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC,

Appellants,

v.

THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.,

Appellees.

Appeal from the 269th District Court of Harris County, Texas

Cause No. 2012-35162

BRIEF OF APPELLANTS

Douglas Pritchett, Jr.

Texas Bar No. 24007877

JOHNSON, TRENT, WEST & TAYLOR, L.L.P.

919 Milam Street, Suite 1700

Houston, Texas 77002

(713) 222-2323 (Telephone)

(713) 222-2226 (Facsimile)

BAKER, DONELSON, BEARMAN, CALDWELL

& BERKOWITZ, P.C.

Lori Hood

Texas Bar No. 09943430

1301 McKinney Street, Suite 3700

Houston, Texas 77010

(713) 650-9700 (Telephone)

(713) 650-9701 (Facsimile)

ATTORNEYS FOR APPELLANTS

JOHN MOORE SERVICES, INC. AND

JOHN MOORE RENOVATION, LLC

Oral Argument Requested

IDENTITY OF PARTIES AND COUNSEL

Pursuant to Texas Rule of Appellate Procedure 38.1(a), the following is a

list of all parties and the names and addresses of all counsel:

I. APPELLANTS:

John Moore Services, Inc.

John Moore Renovation, LLC

Counsel for Appellants:

Douglas Pritchett, Jr.

JOHNSON, TRENT, WEST & TAYLOR, L.L.P.

919 Milam Street, Suite 1700

Houston, Texas 77002

Telephone: (713) 222-2323

Facsimile: (713) 222-2226

Lori Hood

BAKER, DONELSON, BEARMAN, CALDWELL

& BERKOWITZ, P.C.

1301 McKinney Street, Suite 3700

Houston, Texas 77010

(713) 650-9700 (Telephone)

(713) 650-9701 (Facsimile)

i

II. APPELLEES:

The Better Business Bureau of Metropolitan Houston, Inc.

Counsel for Appellees:

Lauren B. Harris

Jeffrey R. Elkin

Susan K. Hellinger

M. Harris Stamey

PORTER HEDGES LLP

1000 Main Street, 36th Floor

Houston, Texas 77002

Telephone: (713) 226-6624

Facsimile: (713) 226-6224

ii

TABLE OF CONTENTS

Page

IDENTITY OF PARTIES AND COUNSEL .............................................................i

TABLE OF AUTHORITIES ..................................................................................... v

STATEMENT OF THE CASE ............................................................................... vii

ISSUES PRESENTED........................................................................................... viii

STATEMENT OF FACTS ........................................................................................ 1

SUMMARY OF THE ARGUMENT ........................................................................ 5

ARGUMENT AND AUTHORITIES ........................................................................ 6

I. THE HOUSTON BETTER BUSINESS BUREAU DID NOT

ESTABLISH ENTITLEMENT TO ATTORNEYS’ FEES

AND SANCTIONS ..................................................................................... 6

A. Except in the Most Simple of Cases,

Documentation Is the Only Practical Means

of Determining the Reasonableness of Fees ............................... 6

B. The Redactions and Bulk Billing in the

Houston BBB’s Invoices Result in Legally

Insufficient Evidence of Attorneys’ Fees ................................. 10

1. The Invoices Did Not Specifically

Identify the Services Performed ..................................... 11

2. The Invoices Did Not Specifically

Identify the Costs of Performing

Various Tasks ................................................................. 15

C. The Expert’s Ipse Dixit Is Not Legally

Sufficient Evidence of Necessity and

Reasonableness ......................................................................... 16

iii

II. THERE SHOULD BE A NEW TRIAL CONSIDERING THE

PROPRIETY OF ATTORNEYS’ FEES IN LIGHT OF JOHN

MOORE’S REMAINING CLAIMS ............................................................. 20

A. John Moore’s Antitrust Claims Should Have

Been Heard in the Same Proceeding as Its

Earlier Claims ........................................................................... 22

B. The Antitrust Claims Were (and Remain)

Legally Viable ........................................................................... 23

C. The Splitting of John Moore’s Claims

Creates in Unacceptable Risk of Inconsistent

Adjudications ............................................................................ 24

PRAYER ................................................................................................................26

CERTIFICATE OF COMPLIANCE ....................................................................... 28

CERTIFICATE OF SERVICE ................................................................................ 28

APPENDIX ..............................................................................................................29

iv

TABLE OF AUTHORITIES

Cases Page(s)

Burroughs Wellcome Co. v. Crye,

907 S.W.2d 497 (Tex. 1995) ........................................................................17, 18

Burrow v. Arce,

997 S.W.2d 229 (Tex. 1999) .............................................................................. 19

City of Laredo v. Montano,

414 S.W.3d 731 (Tex. 2013) ....................................................................8, 11, 15

City of San Antonio v. Pollack,

284 S.W.3d 809 (Tex. 2009) .............................................................................. 19

Coastal Transport Co., Inc. v. Crown Cent. Petroleum Corp.,

136 S.W.3d 227 (Tex. 2004) .............................................................................. 16

Downer v. Aquamarine Operators, Inc.,

701 S.W.2d 238 (Tex. 1985) ........................................................................20, 21

El Apple I, Ltd. v. Olivas,

370 S.W.3d 757 (Tex. 2012) ................................... 6, 7, 8, 10, 11, 12, 14, 15, 16

Elizondo v. Krist,

415 S.W.3d 259 (Tex. 2014) .............................................................................. 19

In re Ethyl Corp.,

975 S.W.2d 606 (Tex. 1998) .............................................................................. 22

Finger v. Southern Refrigeration Servs.,

881 S.W.2d 890 (Tex. App.—Houston [1st Dist.] 1994, writ

denied).................................................................................................................23

Lone Star Ford, Inc. v. McCormick,

838 S.W.2d 734 (Tex. App.—Houston [1st Dist.] 1992, writ

denied).................................................................................................................25

Lone Star Gas Co. v. The Rd. Comm’n of Tex.,

767 S.W.2d 709 (Tex. 1989) ................................................................................ 6

v

Long v. Griffin,

442 S.W.3d 253 (Tex. 2014) ........................................................................11, 12

Maritime Overseas Corp. v. Ellis,

971 S.W.2d 402 (Tex. 1998) .............................................................................. 16

Natural Gas Pipeline Co. of Am. v. Justiss,

397 S.W.3d 150 (Tex. 2012) .............................................................................. 16

Schaefer v. Tex. Empl. Ins. Ass’n,

612 S.W.2d 199 (Tex. 1980) ........................................................................16, 17

Van Dyke v. Boswell, O’Toole, Davis & Pickering,

697 S.W.2d 381 (Tex. 1985) .............................................................................. 23

Volkswagen of Am., Inc. v. Ramirez,

159 S.W.3d 897 (Tex. 2004) .............................................................................. 20

Statutes

TEX. CIV. PRAC. & REM. CODE § 27.005(a) .............................................................. 4

TEX. CIV. PRAC. & REM. CODE § 27.009(a) ............................................................. 24

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12) ........................................................ 4

TEX. CIV. PRAC. & REM. CODE § 51.014(b) (effective June 14, 2013) ................1, 23

Rules

TEX. R. APP. P. 43.3 ................................................................................................... 6

vi

STATEMENT OF THE CASE

Nature of the case: John Moore brought this case alleging

various torts and attempted to amend

its petition to add several additional

claims. CR4. This appeal arises out

of a judgment for attorneys’ fees

awarded to the Better Business

Bureau of Metropolitan Houston (the

“Houston BBB”). CR115.

Course of Proceedings: After the court of appeals reversed the

trial court’s denial of the Houston

BBB’s motion to dismiss, the

Houston BBB requested attorneys’

fees, costs, and sanctions. App. E;

Supp. CR _. The question was tried

to a jury, and the jury returned a

verdict in favor of the Houston BBB.

CR108; App.N.

Disposition: The trial court rendered judgment on

the jury’s verdict and awarded

sanctions against John Moore.

CR115; App.O.

vii

ISSUES PRESENTED

1. The Texas Supreme Court requires evidence of specific tasks and of

the time required to complete them in order to support a finding that

fees are reasonable and necessary. The Appellees’ evidence obscures

the tasks performed and the time required to perform them, requiring

the jury to rely on the ipse dixit of an interested witness as to

reasonableness and necessity. Is Appellees’ evidence legally

sufficient?

2. A finding that fees are reasonable and necessary depends on the

results obtained. Through the actions of the Appellees in opposing the

joinder of claims (either by amendment or by consolidation), the jury

was not presented with the entire dispute (namely, the antitrust

claims) and could not consider the ultimate results obtained. Must a

new trial be ordered to allow the jury to consider the measure of

overall success Appellee has enjoyed?

viii

STATEMENT OF FACTS

This is an appeal of the attorneys’ fees judgment in the first lawsuit (Cause

No. 12-35162) filed by John Moore. App. A; Supp. CR_ (Original Petition). 1 On

September 27, 2013, while the interlocutory appeal brought by The Better Business

Bureau of Metropolitan Houston, Inc. (the “Houston BBB”) was pending, John

Moore filed a first amended petition. CR4. The amended petition joined several

new parties and new claims (significantly, claims that the Houston BBB’s conduct

was a restraint on trade or an attempt to monopolize). Id. John Moore requested

and received leave to file this petition, which the Houston BBB opposed. App. B;

Supp. CR _ (Order of October 11, 2013). The order granting leave to file stated

that no further amendments were permitted absent leave of court. Id.

After the trial court granted leave to file, the Houston BBB moved to strike

the amended petition. CR43. The Houston BBB argued, for the first time, that an

amendment to the interlocutory appeal statute required that all proceedings be

stayed. CR43 (citing TEX. CIV. PRAC. & REM. CODE § 51.014(b) (effective

June 14, 2013)). On November 1, 2013, the trial court struck the amended petition

and signed an order staying proceedings. App. C; Supp. CR_ (Order of

November 1, 2013).

1

The district clerk has indicated that the Supplemental Record is expected to be completed in a

matter of days. In order to ensure the timely filing of its brief, John Moore has included key

items in the Appendix.

1

John Moore preserved its claims from the amended petition by filing a

second lawsuit (Cause No. 13-76215). App. M; Supp. CR_ (Order of August 11,

2014). John Moore requested that the second lawsuit be heard by the 269th

District Court, which was also the court with jurisdiction over the first lawsuit. Id.

This second lawsuit was also challenged by the Houston BBB under the Anti-

SLAPP statute. Id.

After the mandate issued on the interlocutory appeal, the Houston BBB filed

a motion seeking attorneys fees, costs, expenses and sanctions in the first lawsuit.

App. E; Supp. CR_ (Motion for Award of Attorneys’ Fees, Court Costs, Expenses

and Sanctions). The motion was supported by an affidavit by attorney Jeffrey

Elkin. Id.; Supp. CR_ (Exhibit C). After the hearing on the motion was set, John

Moore responded, arguing that it was entitled to a jury trial on the question of the

necessity and reasonableness of the fees. App. G, H; Supp. CR_ (Order of June 4,

2014), _ (Response and Objection to Defendant’s Motion). The response (which

was filed with leave of court) controverted the Houston BBB’s affidavit with an

affidavit by attorney Lori Hood. App. H; Supp. CR_ (Exhibit A); 2RR18. John

Moore also moved for consolidation, but the trial court did not rule as the issue had

not been set for hearing and was premature. 2RR30-31. The court requested that

John Moore raise the consolidation issue again after the court had ruled on the

merits of the motion to dismiss in the second lawsuit. 2RR31.

2

The attorneys’ fees were tried before a jury within a month of these rulings.

CR108. The Houston BBB offered several exhibits, which were admitted into

evidence, including a set of heavily redacted invoices and several summaries.

DX3 & 4-9. It also offered the expert testimony of Jeffrey Elkin, who opined that

the attorneys’ fee amounts in DX3 were reasonable and necessary based on his

review and knowledge of the specific details contained in the un-redacted invoices.

3RR165, 167-74, 183, 198.

The jury found attorneys fees in the following amounts:

a. For representation in the trial court before and during Houston BBB’s

original interlocutory appeal.

Answer: $106,369.28

b. For representation in the Court of Appeals for the original

interlocutory appeal.

Answer: $81,360.80

c. For representation at the petition for review stage to the Supreme

Court of Texas for the original interlocutory appeal.

Answer: $37,982.08

d. For representation in the trial court after the original interlocutory

appeal was decided.

Answer: $24,289.28

CR111-12; App.N.

3

The Houston BBB moved for judgment on August 4, 2014, and the motion

was heard four days later. App. J; Supp. CR_ (Motion for Entry of Final

Judgment); but see HARRIS CTY L. R. 3.3.3 (requiring 10 days notice). Meanwhile,

the motion to dismiss in the second lawsuit had been overruled by operation of

law. TEX. CIV. PRAC. & REM. CODE § 27.005(a) (30 days after June 27, 2014

hearing). Because John Moore believed that the motion to dismiss had been

denied, it included a motion to consolidate in the response to the motion for

judgment and set the motion for hearing at the same time as the Houston BBB’s

motion for judgment. App. K & L; Supp. CR_ (Motion to Consolidate), _ (Notice

of Hearing). John Moore also asked that the jury’s verdict be disregarded. Id.

The trial court refused to hear the motion to consolidate or the motion to

disregard. 5RR22. The judgment was signed at the hearing on Friday, August 8,

2014. CR115. Meanwhile, a notice of interlocutory appeal under TEX. CIV. PRAC.

& REM. CODE § 51.014(a)(12) was filed in the second lawsuit six days later, on

Thursday, August 14, 2014.

4

SUMMARY OF THE ARGUMENT

The Houston BBB seeks recovery of attorneys’ fees, which it cannot recover

for two alternative reasons: (1) its evidence is not legally sufficient to support the

verdict or judgment or (2) the issue should not have been presented to the jury

without consideration of all of John Moore’s claims.

The Texas Supreme Court has ruled that attorneys’ fees evidence in all but

the simplest of cases must be sufficiently detailed to allow the jury to meaningfully

evaluate the application. At a minimum, the evidence must identify the specific

tasks undertaken and quantify the time expended on those tasks. The Houston

BBB has obscured both of these essential elements and attempted to replace them

with generalized categorization of fees, which is an approach already rejected by

the Supreme Court. Furthermore, the expert opinion offered by the Houston BBB

is no evidence because it is based on the assumption that the invoices would show

that the fees were reasonable and necessary, an assumption not supported by the

evidence.

Alternatively, a new trial is necessary in which the jury will be presented

with the merits of John Moore’s antitrust claims as well as the Houston BBB’s

claim for attorneys’ fees on the claims that have been dismissed. Only then could

the jury and court determine whether the fees are reasonable and necessary as well

as just and equitable, respectively.

5

ARGUMENT AND AUTHORITIES

The standard of review in this case is one of legal sufficiency because John

Moore argued that there was no competent evidence to support the jury’s findings.

Therefore, the correct disposition would be for this Court to render the judgment

that the trial court should have rendered. TEX. R. APP. P. 43.3; Lone Star Gas Co.

v. The Rd. Comm’n of Tex., 767 S.W.2d 709, 710 (Tex. 1989) (when there is no

suggestion that the evidence is not fully developed in the trial court, a remand

would serve no purpose).

I. THE HOUSTON BETTER BUSINESS BUREAU DID NOT ESTABLISH

ENTITLEMENT TO ATTORNEYS’ FEES AND SANCTIONS.

The Houston BBB concedes that the jury could not determine whether the

Houston BBB attorneys’ fees were reasonable without looking at the invoices

submitted by Porter Hedges. 3RR165. Therefore, if the invoices are legally

inadequate, so too is the Houston BBB’s evidence.

A. Except in the Most Simple of Cases, Documentation Is the Only

Practical Means of Determining the Reasonableness of Fees.

The Houston BBB has the burden to document the hours spent on a task and

the value of those hours if it seeks to recover attorneys’ fees. El Apple I, Ltd. v.

Olivas, 370 S.W.3d 757, 761 (Tex. 2012). The Texas Supreme Court considered

whether detailed billing invoices are necessary to support an award of attorneys’

fees or whether an attorney’s affidavit containing general assurances that the fees

6

were reasonable and necessary may support an award of fees. Id. at 761-62.

Rejecting the plaintiff’s argument that his fees could be supported by a mere

affidavit, the Court stated that “a trial court should obtain sufficient information to

make a meaningful evaluation of the application for attorney’s fees.” Id. at 762.

The Court concluded that “[w]hile Texas courts have not routinely required

billing records or other documentary evidence to substantiate a claim for attorney’s

fees, the requirement has merit in contested cases under the lodestar

approach.” Id. (emphasis added). As the Houston BBB seeks attorneys’ fees in

this contested case, it should provide adequately detailed records to support its

claim.

Indeed, the Houston BBB concedes that the jury may best determine

reasonableness by studying the billing invoices.

Q: Where would be the best place for the jury to look to understand

exactly what work was done to incur those fees?

A: The invoices themselves. The monthly invoices would be the most

detailed, and then the summaries try to break it up to be a little more

easy to read and understand. But the detail is in the invoices.

3RR165 (referencing DX3). Thus, the only place to find what specific work the

Houston BBB’s attorneys performed would be in the billing invoices. The

affidavit and the summaries deal only with generalities. See infra p. 10.

Few attorneys have such a memory that they can retain the details of what

tasks were performed in even a routine case lasting more than a few days.

7

Therefore, it is necessary, “in all but the simplest cases,” to keep contemporaneous

records of the time spent in order to provide the required detail showing the nature

of the work, who performed it, the rates, when it was performed, and the amount of

time spent on the task. El Apple I, 370 S.W.3d at 763. This case certainly did not

qualify as the most simple of cases.

Here, the Houston BBB kept billing records, but excuses its heavy redaction

and the unintelligibility of those records based on privilege and confidentiality

concerns. 4RR9, 28; DX3. But attorneys redact substance from their invoices at

their own risk.

The Supreme Court admonished attorneys who expect to seek fees to

anticipate the need and “document their time much as they would for their own

clients.” El Apple I, 370 S.W.3d at 763 (emphasis added). The Houston BBB

should not expect its attorneys’ fees to be paid by John Moore with less

information than it has demanded from its attorneys. This is a goose gander

problem. Indeed, the Supreme Court requires that “[a] similar effort should be

made when an adversary is asked to pay instead of the client.” City of Laredo v.

Montano, 414 S.W.3d 731, 736 (Tex. 2013). Yet, an order requiring John Moore

to pay its fees on faith is precisely what the Houston BBB expects.

8

Indeed, good practice confirms the Supreme Court’s direction. Attorneys

who seek to recover fees avoid including privileged information in the entries from

the start.

It’s always been my practice to write my time so that I can show it to

anybody. I oftentimes ask jurors to reimburse me or reimburse my

client for attorneys’ fees, and I want them to be able to see what I’ve

done.

4RR60. The Houston BBB’s own attorneys would never expect their client to pay

an invoice that was redacted.

Mr. Elkin: Now, the invoice that went to the BBB didn’t have any

redactions. . . . The one to the BBB showed completely what the

work was done so they could review it and make sure that they

thought it was appropriate.

3RR134. Yet the Houston BBB expected the jury to “make sure” that the fees

were appropriate without this information.

The Houston BBB attempted to meet its burden of proof by providing billing

records whose meaning was obscured by heavy redaction. It attempted to make up

for the unintelligibility of the records by offering the testimony of the billing

attorney, who stated that he reviewed the un-redacted records and that the fees for

the tasks recorded on the invoices were reasonable and necessary. 3RR198. The

question here is whether legally insufficient invoices may be bolstered by the ipse

dixit of an expert witness. The answer is that they cannot. See infra pp. 14-17.

9

Good practice and the direction of the Supreme Court agree that attorneys

should anticipate the need to use their invoices as evidence. Therefore, they should

keep their time records in such a way that their meaning will not be obscured by

the redaction of substantive information in order to protect privilege. The Houston

BBB did not satisfy this standard.

B. The Redactions and Bulk Billing in the Houston BBB’s Invoices

Result in Legally Insufficient Evidence of Attorneys’ Fees.

A major problem that attorneys’ fees evidence may have is that it can lack

the “specificity” necessary to decide whether the fee is reasonable and necessary.

El Apple I, 370 S.W.3d at 763. The Supreme Court has defined the “minimum”

evidence necessary to support a finding that attorneys’ fees are reasonable and

necessary:

1. documentation of the services performed;

2. who performed them;

3. at what hourly rate;

4. when they were performed; and

5. how much time the work required.

Id. at 764. The Houston BBB’s redactions prevent the jury from evaluating what

specific tasks were performed (requirement #1). The Houston BBB’s bulk billing

prevent the jury from determining how much time was devoted to specific tasks

(requirement #5).

10

1. The Invoices Did Not Specifically Identify the Services

Performed.

One of the minimum requirements established by the Texas Supreme Court

for the recovery of attorneys’ fees is that there must be documentation of the

specific services that were performed. El Apple I, 370 S.W.3d at 764. The Court

emphasized that general statements are insufficient; the party “must provide

evidence of the time expended on specific tasks to enable the fact finder to

meaningfully review the fee application.” Long v. Griffin, 442 S.W.3d 253 (Tex.

2014) (emphasis added).

In Long v. Griffin, the plaintiff brought two claims that could support an

award of attorneys’ fees: a contract claim and a declaratory judgment action. Id. at

255. To support his claim for fees, the plaintiff presented affidavits that identified

various general tasks (discovery, hearings, motions, and a trial) and that identified

the total number of hours and the rates for the attorneys, but did not “inform the

trial court the time spent on specific tasks.” Id. at 255 (citing El Apple I, 370

S.W.3d at 764-65; City of Laredo v. Montano, 414 S.W.3d 731, 736-37 (Tex.

2013)). The Court held that the general categories identified by the evidence were

legally insufficient to support an award of attorneys’ fees. Id. at 254-55.

Here, the Houston BBB provides a general breakdown of the categories

under which its fees were billed. DX7; 8RR108. The fees are broken into general

categories: (a) Motion to Dismiss ($78,983.50); (b) Interlocutory Appeal (Court of

11

Appeals—$127,126.25, Texas Supreme Court—$43,902.00); (c) Written

Discovery ($59,347.10); (d) Enforcing Stay of Proceedings ($37,952.00);

(e) Mediation ($18,419.00). Id. This generic breakdown of categories is legally

insufficient evidence under the holding of Long. Long, 442 S.W.3d at 255 (“no

evidence accompanied the affidavit to inform the trial court the time spent on

specific tasks.”); see also El Apple I, 370 S.W.3d at 763. The summaries provided

in the defense exhibits are not legally sufficient evidence. DX6, 7, 8; 8RR107-10.

The Houston BBB also provided redacted copies of its attorneys’ invoices.

DX3; 8RR9-105. Before June 2013, the invoices contain bulk billing entries in

which it is impossible to know how much time was spent on any particular task.

DX3; 8RR9-71. These entries are legally insufficient for this reason alone, see

infra pp. 13-14, but the descriptions are also heavily redacted. The Houston BBB

agrees that the full detail of the invoices is not available to the jury.

Q. The full detail of what you did is not discernable by us as we

read this invoice, correct?

A. Correct.

3RR223.

For example, the first page of the invoices exhibit includes the task “draft

and revise [BLANK] letter” and “Communications with Ms. Christiansen

regarding [BLANK].” DX3; 8RR9. The second invoice bills to “meet with J.

Elkin to discuss issues identified in the Petition including [BLANK];” “review the

12

Original Petition and draft [BLANK] revise same and send to J. Elkin for review

and comment;” and “communication to Mr. Parsons and Ms. Christiansen

forwarding [BLANK].” DX3; 8RR11-12.

The redactions after June 2013 made the invoices, if anything, less

intelligible. First, the Houston BBB began to redact the name of the recipient of

the invoices. DX3; 8RR72. The jury cannot even tell who was billed. Further, the

tasks (despite the absence of bulk billing) become more obscure:

DX3; 8RR73. This excerpt is merely an example of the type of redaction that

occurs throughout the invoices. Some tasks were not redacted at all, but the jigsaw

13

puzzle presented by the ninety-six page exhibit leaves too many holes for a jury to

see the entire picture. Without all the data, the jury could not determine whether

the fees as a whole were reasonable and necessary. And the Houston BBB only

offered an opinion as to the fees as a whole. 3RR167-68, 174, 183. There are

simply too many missing pieces to make heads or tails of the work done on this

case.

The Houston BBB did not attempt to fill in these blanks with testimony.

Indeed, its witness had no recollection of what these tasks involved at the time he

testified.

A: Back in June 2012, you’re asking me today to tell you the time

I spent “finalizing and forwarding same.”

Q: You can’t do it, can you?

A: Sitting here today. I cannot do it.

3RR196. This is precisely the problem that the Supreme Court noted in El Apple.

With invoices that were deliberately redacted to remove the substantive

work that was done, the Houston BBB has not and cannot reconstruct the specific

tasks that were performed in this representation. Id. The Houston BBB concedes

that the invoices are the best place to find the details of the work performed, or

they would be, if they were complete. 3RR165. Without complete records, there

is no legally sufficient evidence that the fees were reasonable and necessary.

14

2. The Invoices Did Not Specifically Identify the Costs of

Performing Various Tasks.

Another minimum requirement for the recovery of attorneys’ fees is that

there must be a record of the time required to complete a specific task. El Apple I,

370 S.W.3d at 764. The Houston BBB claims that there is no requirement to

itemize the tasks, but its position is contrary to the established authority.

[A] lodestar calculation requires certain basic proof, including

itemizing specific tasks, the time required for those tasks, and the

rate charged by the person performing the work.

City of Laredo, 414 S.W.3d at 736 (emphasis added). The Houston BBB’s bulk

billing entries fail to itemize specific tasks or the time required for them. DX3;

8RR9-71.

The first entry on the first invoice contains at least five tasks and a single

time entry. DX3; 8RR9. Because of the redaction, it is impossible to exclude the

possibility that it contains six tasks, but the addition of one or more tasks does not

change the problem. There is no way to know how much time was spent on any of

the particular tasks. Id. This problem repeats itself throughout the invoices until

June 2013, when the invoices mostly stopped the practice of bulk billing. DX3;

8RR72. As more half of the invoices are structured in such a way that the jury

cannot determine the amount of time spent on specific tasks, the invoices are

legally insufficient evidence.

15

Without the ability to judge the case as a whole, the jury lacked the data

necessary “to make a meaningful evaluation of the application for attorney’s fees.”

El Apple I, 370 S.W.3d at 762. The invoices do not support the verdict or the

judgment.

C. The Expert’s Ipse Dixit Is Not Legally Sufficient Evidence of

Necessity and Reasonableness.

Generalities such as the number of pleadings filed, the amount of discovery

in the case, and the length of the case “provide[] none of the specificity needed for

the trial court to make a meaningful lodestar determination.” El Apple I, 370

S.W.3d at 763. But generalities and conclusory opinions are all the evidence the

Houston BBB offers to support the jury’s decision.

When an expert’s opinion is based on facts that are never established at trial,

the opinion is no evidence and is legally insufficient to support a verdict. Natural

Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 159 (Tex. 2012) (market value

opinion must be supported by a factual basis, offered into evidence); Schaefer v.

Tex. Empl. Ins. Ass’n, 612 S.W.2d 199, 205 (Tex. 1980). An expert’s bare opinion

that something is reasonable is not “some evidence.” Schaefer, 612 S.W.2d at 205.

Furthermore, the requirement that evidence be legally sufficient is over and above

the requirement that an expert’s opinion be reliable. Coastal Transport Co., Inc. v.

Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004); Maritime

Overseas Corp. v. Ellis, 971 S.W.2d 402, 412 (Tex. 1998).

16

In Schaefer, the expert stated that there was a reasonable probability that the

plaintiff had a certain disease caused by a bacteria that could be found in bird

droppings. Id. at 202-203. The evidence was that the plaintiff’s employment

frequently required him to be in contact with soil contaminated by bird droppings.

Id. at 203. However, the soil was never tested to confirm that the bacteria was, in

fact, present. Id. Because the expert assumed that the bacteria was present at the

plaintiff’s workplace but the evidence never established this fact, the expert

opinion was based on “possibility, speculation, and surmise.” Id. at 204.

Therefore, it was not legally sufficient evidence to support a finding in favor of the

plaintiff. Here, the legal expert assumes that the details of the invoices support his

conclusion that the specific tasks performed were reasonable and necessary.

In a similar case, the expert’s opinion that the plaintiff’s frostbite injury was

caused by the application of a spray antiseptic, assumed facts that were, in fact,

contradicted by the evidence. Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497,

499 (Tex. 1995). The expert explained that his opinion that the injury was caused

by frostbite was depended on his assumption that there was no redness of the skin

and that the plaintiff did not follow the directions for application. Id. The

uncontradicted evidence was that the plaintiff’s skin turned red and that she

followed the directions. Id. Because the expert’s assumptions were not supported

17

by any evidence, it had no “probative value and cannot support a verdict or

judgment.” Id.

Here, the Houston BBB’s expert on legal fees states that his review of the

information in the un-redacted invoices allowed him to conclude that the fees

billed were reasonable and necessary.

I would personally review each draft [invoice] in detail to make sure

that, in my opinion, the work that was done was necessary and the

time that was spent was reasonable and the amount charged was

reasonable.

3RR135. Significantly, the opinion offered by the expert that the totality of the

fees requested was reasonable and necessary is all or nothing.

Q. Mr. Elkin, as an expert on attorneys’ fees, what is your opinion

as to the reasonableness of the $375,000 that the BBB is

requesting today?

A. In my opinion, it’s reasonable.

...

The time spent as reflected in these invoices was reasonable.

Q. So taking into consideration these Andersen factors, is it your

opinion today that $375,000 is a reasonable fee for the services

that were provided by Porter Hedges to the BBB . . . in defense

of a SLAPP suit?

A. Yes. I believe so.

3RR167, 174, 83. The expert did not opine task by task, indeed, he admittedly

could not. 3RR196. Based on the expert’s opinion, the jury had to either accept

18

the entire amount or none of it. There was no guidance given to the jury in the

expert’s opinion that would guide it in finding some lesser amount.

The expert’s opinion as to this ultimate issue is based on the truth of the

specific task information contained in the un-redacted drafts. 3RR135. This

specific information was never put into evidence. The expert essentially told the

jurors that they should trust that he had reviewed the data supporting the total and

that he found it to be reasonable, therefore, they should too. This is precisely the

kind of ipse dixit that has been repeatedly criticized by the Texas appellate courts.

“Bare, baseless opinions will not support a judgment even if there is no objection

to their admission in evidence.” Elizondo v. Krist, 415 S.W.3d 259, 254 (Tex.

2014) (quoting City of San Antonio v. Pollack, 284 S.W.3d 809, 816 (Tex. 2009));

see also Burrow v. Arce, 997 S.W.2d 229, 235 (Tex. 1999) (“[I]t is the basis of the

witness’s opinion, and not the witness’s qualifications or his bare opinion alone,

that can settle an issue as a matter of law; a claim will not stand or fall on the mere

ipse dixit of a credentialed witness.”). The opinion should be rejected as no

evidence.

In short, when the jury is left with nothing more to rely on than the ipse dixit

of the expert because the underlying information is not put into evidence, the

opinion will not support a verdict or judgment. Elizondo, 415 S.W.3d at 266. As

now Chief Justice Hecht has said, it is “not enough” when “the only bridge

19

between [an expert’s] credentials, experience, and observations on one side, and

[the expert’s] opinions on the other, is [the expert’s] own veracity.” Volkswagen of

Am., Inc. v. Ramirez, 159 S.W.3d 897, 913 (Tex. 2004) (Hecht, J. concurring).

The Houston BBB’s evidence does nothing more than tell the jury, “trust our

expert, he has seen the un-redacted invoices,” but the Supreme Court says that this

is not enough.

II. THERE SHOULD BE A NEW TRIAL CONSIDERING THE PROPRIETY OF

ATTORNEYS’ FEES IN LIGHT OF JOHN MOORE’S REMAINING CLAIMS.

In the motion for new trial, John Moore presented the question of whether a

new trial was necessary based on “the amount involved and results obtained.”

CR129; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985)

(“A trial court’s plenary jurisdiction gives it not only the authority, but the

responsibility to review any pretrial order upon proper motion.”). The result in

question was whether the Houston BBB prevailed in seeking dismissal of John

Moore’s claims.

John Moore attempted to join new claims by amending its petition, and the

trial court erred by refusing to permit the amendment on motion by the Houston

BBB. CR43; App. C; Supp. CR_ (Order of November 1, 2013). Furthermore, in

responding to the motion for entry of judgment, John Moore argued that the

attorneys’ fees could be fairly determined only if the cases were consolidated and

the merits of all of John Moore’s claims could be considered at the same time.

20

App. H at 2, 9; Supp. CR_ (Response and Objections to Defendant’s Motion).

The trial court expressly considered and rejected these consolidation arguments

when rendering the judgment requested by the Houston BBB.

[T]o the extent parts of your motions that I have sustained objections

to also contain arguments that would be responsive to the request for a

judgment, I am going to go ahead and enter a final judgment today on

this.

5RR27. 2 The trial court considered and rejected John Moore’s position.

Finally, John Moore moved to consolidate the two lawsuits so that the merits

of all of its claims could be considered in determining the appropriate award of

attorneys’ fees. App. K; Supp. CR_ (Motion to Consolidate). The motion was

noticed for hearing. App. L; Supp. CR_ (Notice of Hearing). The trial court

improperly refused to hear the consolidation motion. 5RR22; Downer, 701 S.W.2d

at 241 (trial court has an obligation to reconsider pretrial rulings when presented

with a proper motion). The jury should have been permitted to consider the

success or failure of John Moore’s additional claims that are now pending in the

second lawsuit when deciding on the appropriate verdict.

A. John Moore’s Antitrust Claims Should Have Been Heard in the

Same Proceeding as Its Earlier Claims.

A court should not permit a claim to proceed to trial and judgment separately

from a related claim when doing so results in an injustice. In re Ethyl Corp., 975

2

The trial court sustained the Houston BBB’s objections to John Moore’s motion to consolidate. 5RR22.

21

S.W.2d 606, 610 (Tex. 1998). The Texas courts have looked to the Federal Rules

in determining the considerations governing consolidation. Id. at 611, n.1. Key

considerations are:

whether the specific risks of prejudice and possible confusion [are]

overborne by the risk of inconsistent adjudications of common factual

and legal issues, the burden on the parties, witnesses and available

judicial resources posed by multiple lawsuits, the length of time

required to conclude multiple suits as against a single one, and the

relative expense to all concerned of the single-trial, multiple-trial

alternatives.

Id. Thus, there are four basic considerations governing consolidation: (1) a

balancing of the risks and (2) the burden, (3) time, and (4) expense of multiple

trials.

The second, third, and fourth factors have already shown that consolidation

would have been much more efficient. The two lawsuits have been an

unnecessarily increased burden on the parties and the courts. The resolution of

these matters has been extended, and there has already been one trial, with the

certainty that another will follow. But this is all spilt milk for the most part. The

key consideration here is the harm to John Moore that may be caused by

inconsistent adjudications.

B. The Antitrust Claims Were (and Remain) Legally Viable.

As urged in the appeal of the second lawsuit (Cause No. 01-14-00687-CV),

res judicata does not apply here because John Moore’s attempts to bring these

22

claims in a single suit were frustrated as the Houston BBB repeatedly blocked the

efforts. See Finger v. Southern Refrigeration Servs., 881 S.W.2d 890, 895-96

(Tex. App.—Houston [1st Dist.] 1994, writ denied). John Moore first brought the

new claims in the first lawsuit by amendment. CR4. The Houston BBB objected

and the trial court struck the pleading based on a newly enacted stay provision that

applied by its own terms only to appeals filed after its effective date. CR43, 76;

App. C; Supp. CR_ (Order of November 1, 2013); TEX. CIV. PRAC. & REM. CODE

§ 51.014(b). As there was no automatic stay in effect under the terms of the

statute, the trial court erred in refusing to allow the joinder of claims.

Even if the Houston BBB were correct in its interpretation of the new

statute, it cannot cause a claim to be split at its own initiative and then seek to

apply res judicata. Id.; Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697

S.W.2d 381, 384 (Tex. 1985) (“the res judicata effects of an action cannot preclude

litigation of claims that a trial court explicitly separates or severs from that

action.”). For this and for the other reasons stated, John Moore’s claims for

antitrust violations are not barred by res judicata and were appropriately brought in

the original lawsuit.

John Moore’s antitrust claims are legally viable because it has provided

prima facie proof based on clear and specific evidence of each of the elements of

its claims. These arguments are detailed in the briefing in the appeal from the

23

second lawsuit (Cause No. 01-14-00687-CV). Thus, the Houston BBB has not

been and will not be entirely successful in obtaining a dismissal of John Moore’s

legal action. TEX. CIV. PRAC. & REM. CODE § 27.009(a). Its failure should be

considered by the jury at the very least, assuming that it is entitled to fees for a

partial success.

C. The Splitting of John Moore’s Claims Creates an Unacceptable

Risk of Inconsistent Adjudications.

The judgment for attorneys’ fees create a risk of inconsistent adjudication

against John Moore. The Houston BBB will receive attorneys’ fees and sanctions

as the prevailing party on a motion to dismiss under Chapter 27 for certain causes

of action, while remaining liable to John Moore for the same underlying conduct

with regard to other causes of action (namely, antitrust). Thus, John Moore would

be considered a non-prevailing party in the first lawsuit and a prevailing party in

the second, based on the same harmful conduct.

Most if not all of the fees incurred by the Houston BBB apply equally to

both lawsuits: the research into the Anti-SLAPP statute (at the trial court level and

on appeal), the discovery, the investigation of John Moore’s allegations, the

mediation. DX7, 8RR107. These tasks are intertwined as are the fees. The work

enforcing the stay provision created the split of the claims and exposed John

Moore to the inconsistent findings. DX7, 8RR109. It would be perverse to award

24

the Houston BBB attorneys’ fees for creating inefficiency in a statute intended to

make the process more efficient.

The Houston BBB cannot explain how it would be prejudiced or what

confusion would occur were these claims to be consolidated or heard as originally

pleaded in the amended petition. Lone Star Ford, Inc. v. McCormick, 838 S.W.2d

734, 738 (Tex. App.—Houston [1st Dist.] 1992, writ denied). Indeed, the

separation of the claims is more apt to cause confusion by suggesting to the jury

that the Houston BBB was entirely successful in its motion to dismiss. Thus, the

judgment forces John Moore to finance the Houston BBB’s defense of John

Moore’s valid claims even when it has shown that there is merit to its complaint

that the Houston BBB has violated the norms of conduct and caused harm.

Even if the Houston BBB had presented some evidence that its fees were

reasonable and necessary, John Moore would still be entitled to a new trial. The

trial court considered and rejected John Moore’s argument that the fees could not

be properly determined piecemeal. In other words, the Houston BBB’s fees

relating to its original motion to dismiss are excessive considering that John

Moore’s antitrust theories are valid and supportable. Furthermore, the amount of

fees is contrary to justice and equity for the same reason. Therefore, a new trial

should be granted in the alternative.

25

PRAYER

WHEREFORE, PREMISES CONSIDERED, John Moore Services, Inc. and

John Moore Renovation, LLC respectively request that this Court reverse the

judgment of the trial court and render judgment that Appellee take nothing. In the

alternative, John Moore requests that the Court reverse the judgment of the trial

court and remand for a new trial on attorneys’ fees and on John Moore’s claims in

the second lawsuit. John Moore also requests all such other and further relief, in

law or in equity, to which it may be justly entitled.

26

Respectfully submitted,

/s/ Douglas Pritchett, Jr.

Douglas Pritchett, Jr.

State Bar No. 24007877

dpritchett@johnsontrent.com

JOHNSON, TRENT, WEST & TAYLOR, L.L.P.

919 Milam Street, Suite 1700

Houston, Texas 77002

(713) 222-2323 (Telephone)

(713) 222-2226 (Facsimile)

BAKER, DONELSON, BEARMAN, CALDWELL

& BERKOWITZ, P.C.

Lori Hood

Texas Bar No. 09943430

lhood@bakerdonelson.com

1301 McKinney Street, Suite 3700

Houston, Texas 77010

(713) 650-9700 (Telephone)

(713) 650-9701 (Facsimile)

ATTORNEYS FOR APPELLANTS

JOHN MOORE SERVICES, INC. AND

JOHN MOORE RENOVATION, LLC

27

CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Texas Rule of

Appellate Procedure 9.4(i)(2)(B) because the brief contains 5,833 words, excluding

the parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1).

This brief complies with the typeface and type style requirements of Texas

Rule of Appellate Procedure 9.4(e) because this brief has been prepared in a

proportionally spaced typeface using Microsoft Word in 14-point Times New

Roman font for text in the body and 12-point Times New Roman font for

footnotes.

/s/ Douglas Pritchett, Jr.

Douglas Pritchett, Jr.

CERTIFICATE OF SERVICE

On this the 20th day of April 2015, the foregoing was served on the

following persons by electronic service:

Lauren B. Harris

Jeffrey R. Elkin

M. Harris Stamey

Porter Hedges LLP

1000 Main Street, 36th Floor

Houston, Texas 77002

Attorneys for Appellants

/s/ Douglas Pritchett, Jr.

Douglas Pritchett, Jr.

406233

28

Cause No. 01-14-00906-CV

__________________________________

IN THE COURT OF APPEALS

FOR THE FIRST DISTRICT OF TEXAS

HOUSTON, TEXAS

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC,

Appellants,

v.

THE BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC.,

Appellees.

APPENDIX

A. Original Petition (6-18-12)

B. Order Granting Motion for Continuance (10-11-13)

C. Notice of Hearing – Motion for Reconsideration (10-21-13)

D. Order Striking Amended Petition , Granting Motion for

Reconsideration (11-01-13)

E. Motion for Award of Attorneys’ Fees (4-11-14)

F. Second Amended Notice of Hearing – Motion for Award of

Attorneys’ Fees (5-27-14)

G. Order Setting Hearing on Award of Attorneys’ Fees (6-04-14)

H. Plaintiffs’ Response to Motion for Award of Attorneys’ Fees

(6-13-14)

I. Order Denying Defendant’s Motion for Award (6-19-14)

29

J. Defendant’s Motion for Entry of Judgment (8-04-14)

K. Plaintiffs’ Motion to Consolidate (8-07-14)

L. Notice of Hearing regarding Motion to Consolidate (8-07-14)

M. Order Granting Motion to Dismiss (8-11-14)

N. Charge of the Court (7-22-2014)

O. Final Judgment (8-8-2014)

30

Exhibit A

Filed 12 June 18 P2:54

Chris Daniel - District Clerk

Harris County

2012-35162 / Court: 269 ED101J016933517

By: Charleta Johnson

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF

JOHN MOORE RENOVATION, LLC §

§

v. §

§ HARRIS COUNTY, TEXAS

THE BETTER BUSINESS BUREAU OF §

METROPOLITAN HOUSTON, INC. §

§ JUDICIAL DISTRICT COURT

JOHN MOORE SERVICES, INC. AND JOHN MOORE RENOVATION, LLC's

ORIGINAL PETITION AND REQUEST FOR DISCLOSURE

TO THE HONORABLE JUDGE OF THIS COURT:

COME NOW, Plaintiffs, John Moore Services, Inc. and John Moore Renovation, LLC,

herein collectively referred to as "John Moore" or "Plaintiffs," in the above numbered and styled

cause, complaining of Defendant, The Better Business Bureau of Metropolitan Houston, Inc., herein

referred to as "Houston BBB" or "Defendant," and in support thereof would respectfully show the

Court as follows:

I. DISCOVERY LEVEL

Pursuant to Rule 190.4 of the Texas Rules of Civil Procedure, Plaintiffs request discovery

be conducted under Level 3.

CertifiedDocumentNumber:52536293-Page1of19

II. PARTIES

1. John Moore Services, Inc. is a for-profit corporation organized and existing under

the laws of the State of Texas, whose principal place of business is located in Harris County,

Texas.

2. John Moore Renovation, LLC is a limited liability company organized and

existing under the laws of the State of Texas, whose principal place of business is located in

Harris County, Texas.

3. The Better Business Bureau of Metropolitan Houston, Inc. is a nonprofit

corporation organized and existing under the laws of the State of Texas, whose principal place of

business is in Harris County, Texas. Defendant Better Business Bureau of Metropolitan

Houston, Inc. may be served with citation and process by and through its Registered Agent,

William Parsons, at 1333 West Loop South, Suite 1200, Houston, Texas. Service is requested at

this time.

III. JURISDICTION AND VENUE

4. This Court has jurisdiction over the claims stated herein in that the amount

claimed by Plaintiffs exceeds the minimum jurisdictional limits of the Court.

5. Venue of this cause of action is proper in Harris County, Texas since all or part of

the causes of action set forth herein arose in Harris County, Texas.

IV. BACKGROUND FACTS

6. To gain a commercial advantage for its members, Defendant has published false

statements on its website about Plaintiffs. Defendant is not a government agency or one working

for the good of consumers. Defendant is putatively run by a board (of its own members) but is

CertifiedDocumentNumber:52536293-Page2of19

really tightly controlled by its President, Dan Parsons ("Parsons"). The Defendant and Parsons

deem it appropriate to rate direct competitors (who are not members) without any quantifiable

standards or research. In this instance, Defendant has impugned the character and reputation of

John Moore's business in a number of ways including publishing on its website that, based on

Defendant's presumably "independent and unbiased" ratings, John Moore has "an F rating

2

currently at the BBB Houston and South Texas." This statement is false and directly impugns

John Moore's credibility, skill, professionalism, character, and reputation. Plaintiffs requested

Defendant remove the rating (for reasons detailed below). In response, Defendant changed its

website to indicate that John Moore has "No Rating," yet it maintains the "F" rating in the notes

section of the webpage and adds additional comments that wrongfully disparage Plaintiffs.

Defendant asserts a misguided claim of free speech, but Defendant's actions are commercial

speech, intended to obtain an economic benefit, and are false.

7. John Moore Services, Inc. ("John Moore") was formed in 1965 as a small

plumbing company. Today, it is one of Houston's largest family-owned and operated home

services company with over 500 employees, serving over a half million Texas homeowners. In

the past forty-seven (47) years, John Moore has grown from a modest Houston-based plumbing

company to a complete home services organization in the areas of Houston, Galveston, and

Bryan-College Station. John Moore specializes in air conditioning, heating, electrical, plumbing,

attic insulation, pest control, water damage restoration, custom windows and doors, home

security systems, lawn treatment systems and complete design/build services for home

remodeling.

8. Through the use of extensive advertising, John Moore has become a household

name in Houston and the surrounding areas. Over the years, John Moore has spent millions of

CertifiedDocumentNumber:52536293-Page3of19

dollars on advertisements, including advertising on the Internet, its company website, company

vehicles, radio, television, and print ads. John Moore's slogan, which is included in almost all of

its mediums of advertisements is, "Call John and Get Moore"-a catchphrase that John Moore

has turned into a memorable jingle in its radio and television advertisements.

3

9. Because the household services market is so saturated and competitive in Houston

and the surrounding areas, John Moore has had to spend a great deal of money on research and

development ("R&D") to increase its market share and business. As a result of this R&D, John

Moore has not only invested millions in advertising but has also spent money to become a

member of the Better Business Bureau of Metropolitan Houston, the Better Business Bureau of

Bryan-College Station, and a member of the Better Business Bureau of Dallas.

10. The Council of Better Business Bureaus ("CBBB") is the national organization

for Better Business Bureaus ("BBB") in the United States and Canada. The CBBB is a nonprofit

organization whose stated mission is to instill consumer confidence in businesses, to contribute

to a "trustworthy marketplace for all," and to develop and administer self-regulation programs in

advertisements for the business community.

11. The CBBB supports 116 independent BBBs across the United States. According

to its advertising, these independent BBBs are supposed to serve their local communities by

rating businesses in their communities for the benefit of local consumers. These BBBs are run

by their dues-paying members. The Houston BBB has a board but the organization is controlled

and run with an iron fist by its long time President, Dan Parsons. BBBs review/rate both

accredited and non-accredited businesses. BBBs around the country have been accused,

including by the Connecticut Attorney General, of using the rating system for the benefit of

CertifiedDocumentNumber:52536293-Page4of19

companies who pay for membership. This is commonly known as "pay to play."

12. Being an "accredited" business in a BBB is equivalent to saying that a business is

a "member" of that BBB. Accredited simply means that a company applied to become a

member, paid their fee to join, and is now a "member" of a BBB. BBBs take it upon themselves

to rate members as well as nonmembers. This is the ultimate in "pay to play" since members

4

rate nonmembers including those that are direct competitors under the theory that the BBB

knows best.

13. The Better Business Bureau of Metropolitan Houston, Inc. ("Houston BBB") is

one of the 116 BBBs supported by the CBBB. The Houston BBB provides services for its

member businesses located in Houston and the surrounding areas.

14. John Moore was a member in good standing of the Houston BBB for thirty-one

(31) years from 1971through2010. The CBBB implemented a new letter rating system in 2009.

John Moore was consistently rated an A+ Accredited Business and received the Better Business

Bureau Education Foundation's ("Education Foundation") Award for Excellence for eight (8)

consecutive years.

15. John Moore was the recipient of the Award of Excellence from the years 2003-

2010. Throughout all of the years that John Moore won the Award for Excellence, there were

never any restrictions on advertising the award, including no restriction for the length of time a

business could advertise the receipt of an Award ofExcellence. 1

16. In fact, during the years John Moore won the Award of Excellence, John Moore

was strongly encouraged by the Vice President of Marketing for the BBB and by the executive

director of the Education Foundation to prominently display the Award of Excellence name and

logo on all of John Moore's mediums of advertising. The Education Foundation encouraged

CertifiedDocumentNumber:52536293-Page5of19

award recipients to prominently advertise its name and logo in order to increase the interest of

local businesses and consumers in its awards competition. In fact, the Education Foundation

even provided the artwork needed for winners to advertise their success. Even after John Moore

1

In May of 2011, after John Moore had won its 2010 Award of Excellence, the Education Foundation began

imposing restrictions on the advertisement of the Award of Excellence. These restrictions were not in place at

anytime when John Moore won the award. In fact, discussions between the Education Foundation and the CBBB

concluded that the new restrictions could not be made retroactive.

5

parted ways with the Houston BBB, the Vice President of Marketing for the BBB and the

Education Foundation encouraged John Moore to continue advertising its awards. As a result,

John Moore spent millions of dollars advertising with the Awards of Excellence.

17. In its last three years as a member of the Houston BBB, John Moore was rated as

an A+ business, the highest rating possible, and in over thirty-one (31) years with the Houston

BBB, John Moore never had a single unresolved complaint. Between 2006 and 2009, John

Moore grew at an annual rate of 35%. This significant increase in business led to a proportional

increase in consumer complaints, all of which were settled by John Moore. For reasons not

related to the CBBB nationally prescribed formula for rating businesses, the Houston BBB on

two different occasions arbitrarily changed the "A+" rating for John Moore to "Not Rated" and

then back to "A+," effectively punishing John Moore for matters unrelated to its treatment of

customers. Plaintiffs complained about the matter to Parsons. Parsons refused to address the

matter. This rating change was in direct violation of the mathematical formula established by the

CBBB for published ratings of businesses.

18. After these arbitrary ratings were made, the Houston BBB Membership

Committee held a meeting to discuss the membership qualification of John Moore. 2 This

meeting included a discussion of the increase in the number of complaints filed against John

Moore-an increase in complaints that was proportional to John Moore's growth rate over the

CertifiedDocumentNumber:52536293-Page6of19

years, a factor the Houston BBB Membership Committee at the urging of Parsons did not take

into consideration, which was in violation of the rating scale established by the CBBB. The

Houston BBB Membership Committee meeting was conveniently led and steered by the owner

of a direct major competitor of John Moore. The Houston BBB Membership Committee decided

2

Defendant's webpage for John Moore admits that the Houston BBB was voting to revoke John Moore's

membership when John Moore resigned.

6

to end John Moore's membership status with the Houston BBB, but before this ruling was

referred to the full Executive Committee of the BBB and then to the full Board of Directors for a

proper vote and before John Moore could appeal the biased decision under CBBB regulations,

the Chairman of the Board of the Houston BBB and Parsons threatened John Moore that if John

Moore tried to appeal this decision and did not quickly accept the vote, John Moore would pay a

heavy price.

19. Rather than engage in a war with media darling Parsons, John Moore

involuntarily resigned from the Houston BBB on November 23, 2010. 3 John Moore then applied

for relocation of its headquarters for membership with the Bryan-College Station BBB. After

conferring with the Houston BBB, the Bryan-College Station BBB accepted and approved John

Moore's application to upgrade its regular membership to headquarter status. John Moore was a

member of the Bryan-College Station BBB with an A+ rating from November 2010 up until

April 20, 2012. At that time Houston BBB by and through Parsons interfered and John Moore's

Bryan-College Station headquarter status was revoked and sent back to the Houston BBB.

Throughout 2011, John Moore had an A+ rating with the Bryan-College Station BBB with no

complaints from the Houston BBB. John Moore was then accepted for membership April 10,

2012 to the Dallas BBB. John Moore's Dallas rating was an A+.

20. A full year after John Moore's involuntary resignation from the Houston BBB,

CertifiedDocumentNumber:52536293-Page7of19

and after a full year of A+ ratings from the Bryan-College Station BBB, the Houston BBB and

the Education Foundation filed a lawsuit in federal court against John Moore for, among other

things, trademark infringement. The lawsuit complains of John Moore's advertisements, which

display the Awards of Excellence logo received by John Moore.

3 Defendant John Moore Renovation, LLC was removed by the Houston BBB sometime after November 23, 2010.

7

21. After the filing of its federal complaint and during the time John Moore had been

an accredited A+ member of the Bryan-College Station BBB, the Houston BBB has continued to

maintain a listing for John Moore on its website. Instead of placing the "usual neutral" statement

on the website that John Moore is a business who is affiliated with the Bryan-College Station

BBB, the Houston BBB has written extensive libelous, disparaging, and untruthful commentary

under its John Moore listing. In effect, the Houston BBB has started a smear campaign against

John Moore.

22. First, the Houston BBB in bold and at the top of its John Moore listing page

states, "This Business is not BBB accredited," which is untrue, as John Moore is BBB accredited

with the Bryan-College Station BBB and the Dallas BBB. 4 John Moore went from being an

eight-time Awards of Excellence winner to no longer being an accredited business. The

statement that John Moore is not BBB accredited is inaccurate and misleading and has damaged

John Moore's reputation.

23. Even more suspect is the fact that John Moore went from being rated as an "A+"

business to an "F" rated business overnight and now to a "No Rating" business. In fact, the

Houston BBB does not even hide the reasoning for this sudden decline. Boldly listed on

Defendant's webpage for John Moore as one of the factors for the sudden and abrupt lowered

rating is the direct reference to the trademark litigation filed by Defendant in federal court

CertifiedDocumentNumber:52536293-Page8of19

against Plaintiffs. Specifically, Defendant complains in bold on the John Moore webpage of

John Moore's "ongoing and fraudulent use of its Awards For Excellence, service marks."

Defendant continues by admitting that "John Moore Services DID in fact participate, enter and

win the local awards that they display. However, this use of the marks for those awards is

4

Defendant now admits, in the notes section of its John Moore webpage, that John Moore is accredited in the

Bryan-College Station BBB, despite listing at the top of its John Moore page that "[t]his business is not BBB

accredited."

8

clearly laid out and may ONLY be used by CURRENT Accredited Businesses in the BBB

service area in which the awards were won. John Moore Services has continuously violated the

stated rules for this logo use." This issue of whether or not the rules for the advertisement of the

Awards of Excellence is "clearly laid out" and that the awards may "only be used by

CURRENT Accredited Businesses in the BBB service area" is a disputed fact in the federal

litigation. It is clear that the Defendant is using its website to slander and disparage John

Moore's business, by changing John Moore's "A+" rating to an "F" rating then to "No Rating,"

as a direct result of the Defendant's federal lawsuit filed against Plaintiffs.

24. In April of 2012, Houston BBB continued its vendetta against Plaintiffs by

internally strong arming the Plaintiffs' headquarters away from Bryan-College Station BBB.

Houston BBB did this in contradiction with the CBBB national standards. Houston BBB now

maintains that it is the only BBB that can rate Plaintiffs, which means other BBBs are now

forced to adopt the Houston BBB rating for John Moore. In addition, the Houston BBB asserts

that it is the only BBB that is permitted to address Plaintiffs' consumer complaints.

25. The Houston BBB took its vendetta against John Moore one step further by

making false and disparaging statements against John Moore through its consumer phone lines.

Now, when consumers call the Houston BBB phone lines inquiring about John Moore, they are

being told that John Moore is not an accredited business and in fact, would never be an

CertifiedDocumentNumber:52536293-Page9of19

accredited business, reflecting the "F" rating and "No Rating" of the business on the website.

These slanderous statements by Houston BBB employees have damaged the reputation of John

Moore and will continue to damage the business of John Moore until it is stopped.

26. The Houston BBB is allegedly an independent rating agency whose mission is to

set standards for marketplace trust and to instill consumer confidence through its ratings.

9

According to its website, the values of the BBB are to "[b]e honest and ethical in all of [their]

business activities;" "[t]reat everyone with integrity[,] . . . respect and dignity;" and

"communicate with honesty." The Houston BBB is not only in violation of state laws, but it is in

violation of its own mission statement and statement of values. The Houston BBB proudly

labels itself as the "guardian" of honesty and integrity in business practices while willfully

libeling and maligning John Moore who was an A+ rated business that has never had an

unresolved complaint with the Houston BBB.

27. Plaintiffs requested that the Houston BBB remove Plaintiffs from its website.

· Houston BBB refused.

28. Houston BBB's actions have caused and continue to cause irreparable damage to

the reputation of Plaintiffs.

V. CAUSES OF ACTION

A. TORTIOUS INTERFERENCE WITH EXISTING AND PROSPECTIVE BUSINESS RELATIONSHIPS

29. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

30. Defendant has intentionally tortiously interfered with the existing and prospective

business of Plaintiffs. Defendant is attempting to apply retroactive restrictions on Awards of

Excellence won by John Moore in the years 2003-2010 in an effort to force John Moore to

CertifiedDocumentNumber:52536293-Page10of19

remove its advertisements which display that John Moore was the winner of the Awards of

Excellence for those years. The removal of the Awards of Excellence from John Moore's

company website, vehicles, television, radio, and print advertisements will cost John Moore

millions of dollars and will reflect poorly on its existing and prospective business relationships.

31. Defendant has also intentionally tortiously interfered by attempting to force

Plaintiffs from advertising that they are BBB members, even though Plaintiffs are members of

10

other cities' BBBs. If Defendant is successful in forcing Plaintiffs to remove from their

company website, vehicles, television, radio, and print advertisements all references to Plaintiffs'

legitimate membership in the BBB, Plaintiffs will incur millions of dollars in expenses, and the

removal of the BBB name will reflect poorly on their existing and prospective business

relationships.

32. Further, Defendant has intentionally tortiously interfered by failing to adhere to

the CBBB's mathematical formula for determining John Moore's rating, which would have

taken, in fact, into account John Moore's compound annual growth rate of 35% between 2006

and 2010. Defendant took no standards into account when it gave Plaintiff an "F" rating and

"No Rating." Defendant has refused to adjust its formula, which if adjusted would reflect a

proportional increase in consumer complaints with the growth of John Moore, because

Defendant does not want John Moore's ratings to be high. In fact, overnight, John Moore went

from being an "A+" rated business to an "F" rated business to a "No Rated" business, all in

furtherance of Defendant's intent to tortiously interfere with Plaintiffs' existing and prospective

business relationships.

33. Similarly, Defendant has intentionally tortiously interfered by failing to adhere to

the CBBB's policy to exclude pricing complaints. Per the policies established by the CBBB, the

CertifiedDocumentNumber:52536293-Page11of19

Houston BBB is not supposed to include straight pricing complaints in a business' complaint

records, nor should it include pricing complaints in its overall rating of a business. However,

because of the Houston BBB' s desire to tortiously interfere with Plaintiffs' existing and

prospective business relationships, it has incorporated pricing complaints into its rating of John

Moore, thereby unfairly decreasing the rating of John Moore.

11

34. In that same regard, Defendant has intentionally tortiously interfered by

deceptively listing that there are 294 complaints against John Moore, implying 131 of those

complaints occurred in the last twelve months, when Defendant had previously indicated there

were only two (2) complaints against John Moore. Further, these 294 complaints make up

pricing complaints and past complaints against John Moore, which have already been resolved.

The listing of 294 more complaints on Defendant's website was not done until after Defendant

filed a lawsuit against Plaintiffs in federal court. In John Moore's over thirty-one (31) years as a

member of the Houston BBB, it never had a single unresolved complaint.

35. Defendant has intentionally tortiously interfered by enlisting a smear campaign

against Plaintiffs on the Houston BBB website by writing extensive libelous, disparaging, and

untruthful commentary under its John Moore listing.

36. Defendant has intentionally tortiously interfered by untruthfully writing on the

Houston BBB website that Plaintiffs are not members of a BBB when in fact Plaintiffs are

members of other BBBs.

37. Defendant has intentionally tortiously interfered by untruthfully telling consumers

who call the Houston BBB phone lines that Plaintiffs are not accredited businesses and that

Plaintiffs would never be accredited businesses with the BBB.

CertifiedDocumentNumber:52536293-Page12of19

38. Further, Defendant has intentionally tortiously interfered by unjustifiably and

maliciously changing John Moore's rating on its website from "A+" to "F" then to "No Rating"

in furtherance of Defendant's intent to tortiously interfere with Plaintiffs' existing and

prospective business relationships. The downgrade of John Moore's rating was predetermined

based on Defendant's federal lawsuit.

12

39. Defendant's conduct and communications reflect that it will continue to tortiously

interfere with Plaintiffs' business if not enjoined from doing so by this Court.

40. As a result of Defendant's tortious interference, Plaintiffs have already suffered

and will continue to suffer harm to their existing and prospective business relationships. If

Defendant's are not enjoined, Plaintiffs' harm will be irreparable both financially as well as to

their business reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs'

business in an amount which currently exceeds the minimal jurisdictional limits of this Court.

41. In addition, because the tortious acts were committed intentionally, willfully and

maliciously, Defendant should be held liable for exemplary damages.

B. FRAUD

42. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

43. Defendant, among other things, falsely represented to (1) John Moore that it could

continue advertising its receipt of the Awards of Excellence, even after John Moore was no

longer a member of the Houston BBB, by not placing any restrictions on the awards when they

were given to John Moore from 2003 through 2010; (2) Plaintiffs that Plaintiffs cannot advertise

with the BBB trademark(s), registered to the Council of Better Business Bureaus, Inc., since they

are no longer members of the Houston BBB; (3) Plaintiffs that the Houston BBB would not

CertifiedDocumentNumber:52536293-Page13of19

count price complaints in a business' complaint record nor would the Houston BBB factor price

complaints into the overall rating of a business; (4) Plaintiffs that the Houston BBB is an

independent and unbiased rating agency; and (5) Plaintiffs that the Houston BBB follows its

mission statement and values statement that claims the Houston BBB's goal is to "[b]e honest

and ethical in all of its business activities;" "[t]reat everyone with integrity[,] ... respect and

dignity;" and "communicate with honesty."

13

44. Defendant made these false representations to Plaintiffs knowingly and with the

intent to deceive Plaintiffs. Plaintiffs reasonably and justifiably relied on the representations

made by the Defendant to their detriment. As a direct and proximate result of their reasonable

and justifiable reliance on the representations made by Defendant, Plaintiffs have suffered and

will continue to suffer damages in an amount to be determined at trial.

C. BUSINESS DISPARAGEMENT

45. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

46. Defendant published disparaging words about Plaintiffs' economic interests that

were false. Specifically, Defendant published false statements on its website, including this

statement on John Moore's page: "This Business is not BBB accredited[,]" impugning the

character and reputation of John Moore's business. Defendant has also published on its website

that based on Defendant's presumably "independent and unbiased" ratings, John Moore has "an

F rating currently at the BBB Houston and South Texas." This statement is false and directly

impugns John Moore's credibility, skill, professionalism, character, and reputation.

47. Defendant maliciously published these statements and without privilege. These

false and malicious communications have played a substantial part in inducing existing and

prospective consumers from hiring Plaintiffs to perform their home services needs. The Better

CertifiedDocumentNumber:52536293-Page14of19

Business Bureau name is generally widely recognized and trusted. By falsely explaining on the

John Moore listing that John Moore is "F" rated, Defendant has effectively steered all consumers

away from hiring John Moore whose financial health depends on the services it provides to

consumers. Plaintiffs have been directly harmed and will continue to suffer damages in an

amount to be determined at trial.

14

D. DEFAMATION

1. Libel

48. Plaintiffs adopt by reference and incorporate herein all factual allegations above.

49. Defendant published false and defamatory statements of fact about Plaintiffs on

its website. Specifically, Defendant published the following false fact on the John Moore link on

their website: "This Business is not BBB accredited."

50. The statement is false because John Moore is a member ("accredited") in other

BBBs. John Moore may not be a member ("accredited") by the Houston BBB, but it is a

member ("accredited") by a BBB.

51. This statement is defamatory as libel because it is a written statement that injures

the reputation of John Moore by falsely informing the public that John Moore is not BBB

accredited. This statement, at a minimum, is defamatory on its face.

52. Defendant also published on its website that, based on Defendant's presumably

"independent and unbiased" ratings, John Moore has "an F rating currently at the BBB Houston

and South Texas."

53. This statement is false because Defendant's rating of John Moore was not based

on an independent and unbiased rating scale. In fact, Defendant directly disobeyed the

mathematical formula provided to it by the CBBB when rating John Moore with an "F" rating.

CertifiedDocumentNumber:52536293-Page15of19

The rating is supposed to be based on John Moore's services, not on Defendant's own vendetta

against Plaintiffs, which is evidenced by Defendant's federal complaint.

54. This statement is defamatory as libel because it is a written statement that injures

the reputation of John Moore by falsely informing the public that based on an unbiased rating

15

scale, John Moore went from being "A+" rated one day to "F" rated the next then to "No Rating"

the next. This statement, at a minimum, is defamatory on its face.

55. Defendant acted with actual malice and, at a minimum, with negligence in writing

these false and defamatory statements.

56. As a direct and proximate result of Defendant's words, Plaintiffs have been

injured, and their injuries will be irreparable both financially as well as to their business

reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs' businesses in

an amount which currently exceeds the minimal jurisdictional limits of this Court.

2. Slander

57. Plaintiffs re-allege and incorporate by reference all preceding paragraphs.

58. Defendant published through oral communication slanderous statements to

consumers, including existing and prospective customers of Plaintiffs. Specifically, Defendant's

employees, who received their information from Defendant, made and continue to make false

and disparaging statements about Plaintiffs to consumers who call the Defendant's phone lines.

When consumers call the Houston BBB phone lines inquiring about Plaintiffs, they are being

told by Defendant's employees that Plaintiffs are not accredited businesses and in fact, would

never be accredited businesses.

CertifiedDocumentNumber:52536293-Page16of19

59. These statements are false, as explained previously, because Plaintiffs are

members ("affiliates") of a BBB.

60. These statements are defamatory as slander because they are spoken to third

parties and injure the reputation of Plaintiffs by falsely informing the public that Plaintiffs are

not BBB accredited. These statements, at a minimum, are defamatory on their face.

16

61. Defendant acted with actual malice and, at a mm1mum, with negligence m

speaking these false and defamatory statements.

62. As a direct and proximate result of Defendant's words, Plaintiffs have been

injured, and their injuries will be irreparable both financially as well as to their business

reputations, including lost goodwill, lost revenues, and loss of value to Plaintiffs' businesses in

an amount which currently exceeds the minimal jurisdictional limits of this Court.

E. EQUITABLE REMEDIES

63. Plaintiffs re-allege and incorporate by reference all preceding paragraphs.

64. The acts of Defendant are not merely unfair, but represent a deliberate, calculated

and malicious course of action to unlawfully harm the business and goodwill of Plaintiffs.

Additionally, Defendant benefitted from Plaintiffs' extensive advertisement of the Award of

Excellence and the BBB organization. In fact, the Education Foundation encouraged award

recipients to prominently advertise its name and logo in order to increase the interest of local

businesses and consumers in its awards competition. Even after John Moore parted ways with

the Houston BBB, the Education Foundation encouraged John Moore to continue advertising its

awards to promote interest in the awards. In fact, during all the years that John Moore used the

awards logo in its advertising, participation in the awards competition has grown significantly

and steadily. The BBB Education Foundation has benefitted from John Moore's advertising of

CertifiedDocumentNumber:52536293-Page17of19

the awards through the logo.

65. On equitable grounds, Defendant should not be allowed to be unjustly enriched at

the expense of Plaintiffs. Plaintiffs are entitled to temporary and permanent relief, and to recover

their actual damages, including reasonable attorneys' fees, which are in excess of the minimum

jurisdictional limits of this Court.

17

VI. JURY DEMAND

66. Plaintiffs demand a jury trial and tender the appropriate fee with this Petition.

VII. CONDITIONS PRECEDENT

67. All conditions precedent to Plaintiffs' claims for relief have been performed or

have occurred.

VIII. REQUEST FOR DISCLOSURES

Pursuant to Texas Rule of Civil Procedure 194, you are requested to disclose, within

thirty (30) days of the service of this request, the information or material described in Rule

194.2.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs, JOHN MOORE SERVICES,

INC. and JOHN MOORE RENOVATION, LLC, respectfully request that the Court issue

citation for the Defendant, THE BETTER BUSINESS BUREAU OF METROPOLITAN

HOUSTON, INC., and that, upon final trial, Plaintiffs, JOHN MOORE SERVICES, INC. and

JOHN MOORE RENOVATION, LLC, have judgment against Defendant, THE BETTER

BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., for damages in excess of the

minimum jurisdictional limits of this Court, including actual and punitive damages, pre and post

judgment interest thereon at the highest legal rate allowed, together with costs of Court,

CertifiedDocumentNumber:52536293-Page18of19

reasonable attorneys' fees and for such other and further relief, both general and specific, at law

and in equity, to which Plaintiffs may show themselves justly entitled.

18

Respectfully submitted,

JOHNSON, TRENT, WEST & TAYLOR, LLP

By: Lod. M I ¥f?C,

Lori Hood I

State Bar No. 09943430

Brian P. Johnson

Texas Bar No. 10685700

919 Milam Street, Suite 1700

Houston, Texas 77002

(713) 222-2323

(713) 222-2226 (facsimile)

lhood@johnsontrent.com

bjohnson@johnsontrent.com

Attorneys for Plaintiffs, John Moore

Services, Inc. and John Moore

Renovation, LLC

CertifiedDocumentNumber:52536293-Page19of19

19

I, Chris Daniel, District Clerk of Harris

County, Texas certify that this is a true and

correct copy of the original record filed and or

recorded in my office, electronically or hard

copy, as it appears on this date.

Witness my official hand and seal of office

this April 20, 2015

Certified Document Number: 52536293 Total Pages: 19

Chris Daniel, DISTRICT CLERK

HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated

documents are valid. If there is a question regarding the validity of this document and or seal

please e-mail support@hcdistrictclerk.com

Exhibit B

Filed 13 October 04 A10:50

Chris Daniel - District Clerk

Harris County

~F~

ED101 J017752205

By: Jerri Coble

NO. 2012-35162 LFILX

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF

JOHN MOORE RENOVATION, LLC §

§

v. §

§ HARRIS COUNTY, TEXAS

THE BETTER BUSINESS BUREAU OF §

METROPOLITAN HOUSTON, INC., ET AL. §

§ 269th JUDICIAL DISTRICT COURT

ORDER

On this day came on to be heard Plaintiffs' Motion for Continuance and to Extend the

Deadlines in the Docket Control Order. After considering the motion and reviewing the

pleadings on file, the Court is of the opinion that the motion should be GRANTED. It is

therefore,

ORDERED, that this case be reset for trial on the two week trial docket beginning on

JUDGE PRESIDING

CertifiedDocumentNumber:57785942-Page1of1

256783

I, Chris Daniel, District Clerk of Harris

County, Texas certify that this is a true and

correct copy of the original record filed and or

recorded in my office, electronically or hard

copy, as it appears on this date.

Witness my official hand and seal of office

this April 20, 2015

Certified Document Number: 57785942 Total Pages: 1

Chris Daniel, DISTRICT CLERK

HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated

documents are valid. If there is a question regarding the validity of this document and or seal

please e-mail support@hcdistrictclerk.com

Exhibit C

Filed 13 October 21 P5:58

Chris Daniel - District Clerk

Harris County

ED101J017781339

By: Jerri L. Coble

CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF

JOHN MOORE RENOVATION, LLC §

§

V. § HARRIS COUNTY, TEXAS

§

THE BETTER BUSINESS BUREAU OF §

METROPOLITAN HOUSTON, INC. §

§ 269TH JUDICIAL DISTRICT COURT

NOTICE OF HEARING

Please take notice that Defendant The Better Business Bureau of Metropolitan Houston,

Inc.’s Motion for Reconsideration and to Vacate Prior Rulings, Strike Plaintiffs’ Amended

Petition, and Quash Discovery has been set for oral hearing before the 269th Judicial District

Court, Harris County, Texas, on Friday, November 1, 2013, at 10:00 a.m.

Dated: October 21, 2013.

Respectfully submitted,

PORTER HEDGES LLP

/s/ Jeffrey R. Elkin

By: Jeffrey R. Elkin

State Bar No. 06522180

jelkin@porterhedges.com

M. Harris Stamey

State Bar No. 24060650

hstamey@proterhedges.com

Jonna N. Summers

State Bar No. 24060649

jsummers@porterhedges.com

1000 Main Street, 36th Floor

CertifiedDocumentNumber:57898801-Page1of2

Houston, Texas 77002

(713) 226-6617 – Office

(713) 226-6217 – Fax

ATTORNEYS FOR DEFENDANT, THE BETTER

BUSINESS BUREAU OF METROPOLITAN

HOUSTON, INC.

1

3486979v1

CERTIFICATE OF SERVICE

I certify that a true and correct copy of foregoing document has been served upon all

counsel of record on the 21st day of October 2013, as follows:

Lori Hood ☐ By facsimile transmission

Tamara Madden ☒ By electronic transmission

919 Milam Street, Suite 1700 ☐ By deposit in the United States Mail

Houston, TX 77002

☒ By CMRRR

(713) 222-2323 (telephone)

(713) 222-2226 (facsimile) ☐ By hand-delivery

lhood@johnsontrent.com

tmadden@johnsontrent.com

Attorneys for Plaintiffs, John Moore

Services, Inc. and John Moore Renovation,

LLC

/s/ Jeffrey R. Elkin

Jeffrey R. Elkin

CertifiedDocumentNumber:57898801-Page2of2

2

3486979v1

I, Chris Daniel, District Clerk of Harris

County, Texas certify that this is a true and

correct copy of the original record filed and or

recorded in my office, electronically or hard

copy, as it appears on this date.

Witness my official hand and seal of office

this April 20, 2015

Certified Document Number: 57898801 Total Pages: 2

Chris Daniel, DISTRICT CLERK

HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated

documents are valid. If there is a question regarding the validity of this document and or seal

please e-mail support@hcdistrictclerk.com

Exhibit D

CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § ~THE DISTRICT COURT OF

JOHN MOORE RENOVATION, LLC

Plaintiffs, F 1hr!-'o!e1D

v. tl1trlct Clerk HARRIS COUNTY, TEXAS

THE BETTER BUSINESS BUREAU OF Ol Z0 ~V 13

METROPOLITAN HOUSTON, INfiroe: _....:~k~~:=:-----

Defendant. !:irris ooun·~~9if'H .JUQICIAL DISTRICT COURT

By B~pmy

ORDER GRANTING DEFENDANT'S MOTION FOR RECONSIDERATION AND TO

VACATE PRIOR RULINGS, STRIKE PLAINTIFFS' AMENDED PETITION. AND

QUASH DISCOVERY

Before the Court is Defendant The Better Business Bureau of Metropolitan Houston,

Inc.'s Motion for Reconsideration and to Vacate Prior Rulings, Strike Plaintiffs' Amended

Petition, and Quash Discovery ("the Motion"). Having considered the Motion, any response and

reply thereto, the pleadings, and the applicable law, the Court finds that the Motion should be,

and hereby is, GRANTED in its entirety. It is, therefore,

ORDERED'that Plaintiff's First Amended Original Petition is stricken in its entirety. It

is further,

ORDERED that the Order on Plaintiffs' Motion for Continuance and to Extend the

Deadlines in the Docket Control Order signed October 11, 2013, is hereby vacated. It is further,

CertifiedDocumentNumber:58115848-Page1of2

ORDERED that the Trial Preparation Order signed October 11, 2013, is hereby vacated.

It is further,

ORDERED that the Docket Control Order signed October 15, 2013, is hereby vacated. It

is further,

ORDERED that Defendant The Better Business Bureau of Metropolitan Houston, Inc. is

not required to respond or object to Plaintiffs' Second Request for Production to Defendant

1

Better Business Bureau of Metropolitan Houston, Inc. until further order of this Court, if any. It

is further,

ORDERED that Plaintiffs' Notice of Intention to Take Deposition on Written Questions

of American Residential Services a/k/a ARS Rescue Rooter ("ARS") and subpoena duces tecum

is hereby quashed in its entirety and that Plaintiffs are required to immediate Iy notify ARS of

same.

SIGNED this 1!!.__ day of ~~, 2013.

- ~

JUDGE PRESIDING

CertifiedDocumentNumber:58115848-Page2of2

2

3484638

I, Chris Daniel, District Clerk of Harris

County, Texas certify that this is a true and

correct copy of the original record filed and or

recorded in my office, electronically or hard

copy, as it appears on this date.

Witness my official hand and seal of office

this April 20, 2015

Certified Document Number: 58115848 Total Pages: 2

Chris Daniel, DISTRICT CLERK

HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated

documents are valid. If there is a question regarding the validity of this document and or seal

please e-mail support@hcdistrictclerk.com

Exhibit E

4/11/2014 7:27:14 PM

Chris Daniel - District Clerk Harris County

Envelope No. 978599

By: GAYLE FULLER

CAUSE NO. 2012-35162

JOHN MOORE SERVICES, INC. and § IN THE DISTRICT COURT OF

JOHN MOORE RENOVATION, LLC §

Plaintiffs, §

v. § HARRIS COUNTY, TEXAS

§

THE BETTER BUSINESS BUREAU OF §

METROPOLITAN HOUSTON, INC. §

Defendant. § 269TH JUDICIAL DISTRICT COURT

DEFENDANT THE BETTER BUSINESS BUREAU OF

METROPOLITAN HOUSTON, INC.'S MOTION FOR AWARD OF ATTORNEYS'

FEES, COURT COSTS, EXPENSES, AND SANCTIONS AND

FOR ENTRY OF FINAL JUDGMENT

Defendant The Better Business Bureau of Metropolitan Houston, Inc. ("Houston BBB")

files this Motion for Award of Attorneys' Fees, Court Costs, and Expenses, and Sanctions, and

for Entry of Final Judgment, and in support thereof would show the Court as follows:

I. THE HOUSTON BBB IS ENTITLED TO RECOVER ITS FEES, COURT COSTS, EXPENSES,

AND SANCTIONS UNDER CHAPTER 27.

Pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code ("Chapter 27"),

the Houston BBB moves to recover its reasonable and necessary attorneys' fees, court costs, and

expenses incurred in defending this legal action brought by Plaintiffs John Moore Services, Inc.

and John Moore Renovation, LLC (collectively "John Moore"). The Houston BBB also seeks at

CertifiedDocumentNumber:60397672-Page1of11

least $50,000 in sanctions to deter John Moore from bringing similar actions in the future.

Section 27.009(a) of the statute provides that "[i]f the court orders dismissal of a legal

action under this chapter, the court shall award to the moving party:

(1) court costs, reasonable attorney's fees, and other expenses incurred in

defending against the legal action as justice and equity may require;

1

3691198

(2) sanctions against the party who brought the legal action as the court

determines sufficient to deter the party who brought the legal action from

bringing similar actions described in this chapter."

TEX. Crv. PRAC. & REM. CODE ANN.§ 27.009(a) (West 2014) (emphasis added).

On July 16, 2013, the First Court of Appeals held that the Houston BBB "satisfied its

burden under [Chapter 27] to show that John Moore's claims against it are based on, relate to, or

are in response to, the exercise of [its] free speech rights," and that John Moore "failed to sustain

its burden to show, by clear and specific evidence, a prima facie case for each essential element

of its claims .... " The Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., No.

01-12-00990-CV, 2013 WL 3716693, *12 (Tex. App.-Houston [1st Dist.] 2013, pet. denied).

It "remand[ed] the case to the trial court for further proceedings" under Section 27.009(a) of

Chapter 27. Id. 1 Upon remand, the trial court is to grant the "motion[] to dismiss and award [the

defendant] reasonable attorney's fees and court costs in accordance with section 27.009(a)."

Fitzmaurice v. Jones, 417 S.W.3d 627, 634 (Tex. App.-Houston [14th Dist.] 2013, no pet.).

A. The Award of Fees, Costs, and Expenses to the Houston BBB is Mandatory,

Equitable, and Just.

It has been established that this legal action against the Houston BBB improper! y

interfered with the Houston BBB's exercise of its right to free speech, and that John Moore did

not have sufficient evidence to present even a prima facie case in support of its claims. John

CertifiedDocumentNumber:60397672-Page2of11

Moore Servs., Inc., 2013 WL 3716693 at *12. As a result, under Section 27.009(a), the award of

attorneys' fees, costs, and expenses to the Houston BBB is mandatory. TEX. Crv. PRAC. & REM.

CODE ANN. § 27.009(a); Sierra Club v. Andrews County, 418 S.W.3d 711, 720 (Tex. App.-El

Paso 2013, pet. filed) ("As the prevailing party, Sierra Club is entitled [under Chapter 27] to an

John Moore's petition for review to the Texas Supreme Court was denied on February 14, 2014, and mandate

issued from the First Court of Appeals on April 3, 2014. See Exhibit A, Mandate.

2

3691198

award of reasonable attorney's fees and costs established by the evidence."); Alphonso v.

Deshotel, 417 S.W.3d 194, 200 (Tex. App.-El Paso 2013, no pet.) ("[Chapter 27] mandates the

award of attorney's fees and costs to a successful movant."); see also Bocquet v. Herring, 972

S.W.2d 19, 20--21 (Tex. 1998) ("Statutes providing that a party 'may recover,' 'shall be

awarded', or 'is entitled to' attorney fees are not discretionary."). 2

Moreover, during the course of this legal action, John Moore refused to take reasonable

steps to limit the litigation costs; e.g., John Moore refused to agree to stay discovery during the

pendency of the Houston BBB's interlocutory appeal, John Moore served extensive written

discovery on the Houston BBB including seventy-six (76) separate requests for documents which

required the Houston BBB to review and produce over 5,000 pages of documents, and John

Moore attempted to add causes of action and defendants to the lawsuit even after the First Court

of Appeals ruled in favor of the Houston BBB and a mandatory statutory stay of all proceedings

was in place. 3 Given that the Houston BBB prevailed in the face of John Moore's conduct, the

award of fees, costs, and expenses is equitable and just under the circumstances.

B. The Attorneys' Fees, Court Costs, and Expenses Incurred by the Houston BBB are

Reasonable and Necessary.

The Houston BBB submits the affidavit of its attorney-in-charge, Jeffrey R. Elkin, along

with all of the invoices reflecting the legal work performed by Porter Hedges LLP ("Porter

CertifiedDocumentNumber:60397672-Page3of11

Hedges") on behalf of the Houston BBB in connection with this legal action as evidence of the

2

Citi1tg D.F. W. Christia1t Television, Inc. v. Thornton, 933 S.W.2d 488, 490 (Tex.1996) (applying TEX. C1v.

PRAC. & REM.CODE§ 38.001(8)); Arthur Anderse1t & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)

(discussing "reasonable and necessary attorneys' fees" under TEX. Bus. & COM. CODE§ 17.50(d)); Ragsdale v.

Progressive Voters League, 790 S.W.2d 77, 86 (Tex. App.-Dallas 1990), aff'd in part and rev'd in part Oil other

grounds, 801 S.W.2d 880 (Tex.1990) (applying former TEX. ELEC. CODE§ 251.008, recodified as§ 253.131).

3

Plaintiffs' First Amended Petition ("Amended Petition") was filed on September 27, 2013 (attached as Exhibit

B), two months after the July 16, 2013 decision by the First Court of Appeals (Ex. A, Mandate).

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reasonable and necessary attorneys' fees, court costs, and expenses incurred by the Houston

BBB. See Exhibit C, Affidavit of Jeffrey Elkin ("Elkin Aff."), with Invoices attached as Ex. 2.

Whether fees are reasonable and necessary is a question of fact. Bocquet, 972 S.W.2d at

20-21. The Texas Supreme Court has delineated the following factors courts must consider

when determining the reasonableness of a fee:

(a) the time and labor required, the novelty and difficulty of the questions

involved, and the skill required to perform the legal service properly;

(b) the likelihood ... that the acceptance of the particular employment will

preclude other employment by the lawyer;

(c) the fee customarily charged in the locality for similar legal services;

(d) the amount involved and the results obtained;

(e) the time limitations imposed by the client or by the circumstances;

(f) the nature and length of the professional relationship with the client;

(g) the experience, reputation, and ability of the lawyer or lawyers

performing the services; and

(h) whether the fee is fixed or contingent on results obtained or uncertainty

of collection before the legal services have been rendered.

Arthur Andersen & Co. v. Perry Equip. C01p., 945 S.W.2d 812, 818 (Tex. 1997) (citing TEX.

DISCIPLINARY R. OF PROF'L CONDUCT 1.04, reprinted in TEX. Gov'T CODE, tit. 2, subtit. G app.

(STATE BAR RULES art. X, § 9)). "A litigant need not present evidence on each of these factors.

CertifiedDocumentNumber:60397672-Page4of11

The trial court may also consider the entire record, the evidence presented on reasonableness, the

amount in controversy, the common knowledge of the participants as lawyers and judges, and the

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relative success of the parties." Weaver v. Jamar, 383 S.W.3d 805, 814 (Tex. App.-Houston

[14th Dist.] 2012, no pet.). 4

The reasonableness of a fee can be established as a matter of law where clear, direct, and

uncontroverted evidence is submitted and the opposing party fails to disprove the testimony

despite having had the opportunity to do so. Cleveland v. Taylor, 397 S.W.3d 683, 701 (Tex.

App.-Houston [1st Dist.] 2012, pet. denied). Since this action was filed on June 18, 2012, the

Houston BBB has incurred $390,858.35 in legal fees, $62.35 in court costs, and $6,237 .77 in

expenses defending against John Moore's claims. Ex. C, Elkin Aff. 1111 8, 11. The fees, costs,

and expenses are broken out on a monthly basis as follows:

Month/Year Fees Court Costs Expenses Monthly Totals

June 2012 $4,017.50 $0.00 $0.00 $4,017.50

July 2012 $11,224.50 $0.00 $132.01 $11,356.51

Au011st 2012 $37,314.50 $28.00 $155.80 $37,498.30

September 2012 $25,056.00 $0.00 $481.79 $25,537.79

October 2012 $7,017.00 $2.35 $40.80 $7,675.15

November 2012 $459.50 $0.00 $581.32 $1,040.82

December 2012 $4,109.00 $0.00 $70.64 $4,179.64

2012 Total $89,198.00 $30.35 $1,462.36 $91,305.71

January 2013 $29,035.00 $0.00 $235.48 $29,270.48

February 2013 $62,205.25 $0.00 $827.01 $63,032.26

March2013 $22,745.50 $19.00 $443.60 $23,208.10

April 2013 $41,732.10 $0.00 $1,474.92 $43,207.02

May2013 $34,886.00 $13.00 $251.26 $35,150.26

June 2013 $5,751.50 $0.00 $55.22 $5,806.72

July 2013 $12,927.50 $0.00 $0.00 $12,927.50

CertifiedDocumentNumber:60397672-Page5of11

AuQUst 2013 $3,727.50 $0.00 $0.00 $3,727.50

September 2013 $4,177.50 $0.00 $0.00 $4,177.50

October 2013 $46,198.50 $0.00 $268.17 $46,466.67

November 2013 $5,837.50 $0.00 $125.76 $5,963.26

December 2013 $11,553.00 $0.00 $595.42 $12,148.42

2013 Total $280,776.85 $32.00 $4,276.84 $285,085.69

January 2014 $13,348.50 $0.00 $498.57 $13,847.07

4

Citing Acad. Co1p. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex. App.-Houston

[14th Dist.] 2000, no pet.); Rapid Settlements, Ltd. v. Settlement Funding, LLC, 358 S.W.3d 777, 786 (Tex. App.-

Houston [14th Dist.] 2012, no pet.).

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Month/Year Fees Court Costs Exnenses Monthlv Totals

February 2014 $821.50 $0.00 $0.00 $821.50

March 2014 $6,713.50 $0.00 $0.00 $6,713.50

GRAND TOTAL $390,858.35 $62.35 $6,237.77 $397' 773.47

Id. A detailed description of the professional services performed by Porter Hedges for the

Houston BBB on a day-to-day basis in defending against Plaintiffs' legal action is contained in

the monthly invoices attached to Mr. Elkin's affidavit. Id. at~ 9, Ex. 2.

In addition to the foregoing fees and expenses, the Houston BBB expects to incur at least

$30,000 in legal fees after March 31, 2014 in connection with (i) finalizing this motion; (ii)

reviewing and responding to any response filed by Plaintiffs; and (iii) preparing for and attending

a hearing on the motion, if required. Id. at ~ 12. In the event of an appeal of the fee award, the

Houston BBB seeks $50,000 for fees, costs, and expenses to defend the award in the court of

appeals, and an additional $50,000 if a petition for review is filed in the Texas Supreme Court.

Id.

As explained in Mr. Elkin's affidavit, based on the knowledge and professional

experience he has gained as a commercial trial attorney practicing in Harris County, Texas for

the past 26 years, the circumstances of the case including the novelty and complexity of the

Chapter 27 motion practice, and the Arthur Andersen factors, the fees, expenses, and costs

CertifiedDocumentNumber:60397672-Page6of11

incurred by the Houston BBB in defending against John Moore's legal action are reasonable and

were necessary. Id. at~~ 13-31. It is also Mr. Elkin's professional opinion that the estimated

additional fees to be incurred in connection with this motion, any associated hearing, and an

appeal, if any, are reasonable based on the course and conduct of the litigation thus far and

should likewise be awarded by the Court in accordance with section 27.009(a). Id. at~~ 13-31.

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Because John Moore will be unable to offer any material evidence to the contrary, the Houston

BBB's fees, costs, and expenses should be awarded in full.

C

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