Legal Document: DEWEY M. MOORE, Jr vs. WINSTEAD, P.C.

On September 27, 2019 a DEFT-MOTION TO DISMISS-TX CITIZENS ACT - MOTION HEARING was filed involving a dispute between Moore, Dewey M., Jr, and Winstead, P.C., for PROFESSIONAL LIABILITY in the District Court of Dallas County.

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FILED
DALLAS COUNTY
PM
11/1 2/2019 2:41
FELICIA PITRE
DISTRICT CLERK
Dorothy Strogen

CAUSE NO. DC-19-15858

DEWEY M. MOORE, JR., § IN THE DISTRICT COURT
§
Plaintiff, §
§

V 44th JUDICIAL DISTRICT
g
§
§
WINSTEAD PC, §
§
Defendant. § DALLAS COUNTY, TEXAS

WINSTEAD PC’S MOTION TO DISMISS UNDER THE TEXAS CITIZENS
PARTICIPATION ACT

TO THE HONORABLE COURT:
Defendant Winstead PC (”Winstead”) moves to dismiss with prejudice all causes

0f action asserted by Plaintiff Dewey M. Moore, IL, (”Moore”) in Plaintiff’s Original

Petition (the ”Petition”), pursuant to the Texas Citizens Participation Act (”TCPA”).

INTRODUCTION
Winstead formerly represented the Institute for Wealth Holdings, Inc. (”IWH”)

in connection with proposed securities offerings. Plaintiff is a former officer and

director 0f IWH. He was not Winstead's client. Plaintiff has nevertheless sued

Winstead, arguing that he was owed a duty 0f care in his capacity as officer and

director 0f Winstead’s client IWH.

Plaintiff’s claims are barred by the attorney immunity doctrine. Under that

doctrine, a non—client such as Plaintiff may not sue an attorney—under any theory—for

conduct within the scope 0f the attorney’s representation of a client. Further, and in the

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alternative, there is no evidence—much less clear and specific evidence—to establish a

prima facie case for each essential element of each of Plaintiff’s causes of action.

Pursuant to the TCPA, Winstead is entitled to immediate dismissal of Plaintiff’s claims.

The TCPA applies because Plaintiff alleges misconduct by Winstead in the

preparation of a Reg A offering statement for submission to the Securities and Exchange

Commission (“SEC”). The submission of a Reg A offering statement for review by the

SEC is an exercise of the right to petition under the TCPA because it is “a

communication in connection with an issue under consideration or review by a . . .

governmental body.” Tex. Civ. Prac. & Rem. Code § 27.001(4)(B). Plaintiff’s legal action

is therefore based on or in response to Winstead’s exercise of the right to petition,

entitling Winstead to immediate relief under the TCPA.

ALLEGATIONS AND EVIDENCE

A. Plaintiff’s allegations.

Plaintiff alleges he is the former Chairman, CEO and President and a former

Director of Institute for Wealth Holdings, Inc. (“IWH”). Plaintiff also alleges he is the

former President and Chief Compliance Officer for two subsidiaries of IWH (“IWA”

and “IWC”). Petition at ¶¶ 8, 10.

Plaintiff alleges that in October 2017 Winstead prepared a Private Placement

Memorandum for IWH pursuant to Regulation D of the Securities Act. Id. ¶ 11.

Plaintiff also alleges on January 22, 2018 Winstead issued an Opinion Letter to IWH.

Id. ¶ 12. Finally, Plaintiff alleges that in February 2018 Winstead completed an Offering

Circular for IWH pursuant to Regulation A of the Securities Act. Id. ¶ 13. Winstead’s

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work for IWH regarding the 2017 Reg D Offering, the 2018 Opinion Letter, and the 2018

Reg A Offering is referred to below as the “IWH Representation.”

Plaintiff does not contend that Winstead represented Plaintiff in his individual

capacity. To the contrary, Plaintiff alleges that he relied on Winstead’s IWH

Representation “as Chief Compliance Office of IWA and IWC, and as CEO and

Chairman of IWH, and [as] a majority shareholder of IWH.” Id. ¶ 14.

Plaintiff does not identify what Winstead allegedly did wrong, other than to

allege that Winstead “failed to competently perform” the IWH Representation. Id. ¶ 15.

Plaintiff claims Winstead’s alleged failure led to Plaintiff being “required to resign”

from his positions at IWA and IWH, but Plaintiff offers no explanation of the

relationship between Winstead’s IWH Representation and his resignation. Id. ¶¶ 17-21.

Plaintiff also claims that an amended U5 form filed by IWA caused Plaintiff injury, but

does not allege that Winstead was involved in the filing of any U5 form. Id. ¶¶22-23.

Plaintiff asserts three causes of action:

1. Legal malpractice,

2. Negligent misrepresentation, and

3. “Equitable indemnification.”

B. Declaration of Christopher D. Williams.

In addition to the admissions in Plaintiff’s Petition, Winstead relies on the

Declaration of Christopher D. Williams attached hereto (“Williams Declaration”). The

Williams Declaration states, in summary:

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1. Williams was the Winstead shareholder in charge of the IWH

Representation. Williams Declaration at ¶¶ 2, 5.

2. Winstead’s only client in the IWH Representation was IWH. Winstead

did not represent Plaintiff individually. Id. at ¶¶ 6, 7.

3. IWH’s engagement of Winstead was memorialized in a written

engagement letter between Winstead and IWH dated May 31, 2017 (the “IWH

Engagement Letter,” Exhibit A to the Williams Declaration). The IWH Engagement

Letter expressly identifies IWH as the client. The reference field of the letter states

“Engagement of Winstead PC (the “Firm”) by Institute for Wealth Holdings, Inc.

(“You” or “you”).” Paragraph 4 of the IWH Engagement Letter provides “The person

or party whom we represent in the Matter is limited to the person or party specifically

identified above and does not include any affiliates or other persons or parties.” Id. at

¶¶ 8, 9.

4. The IWH Engagement Letter described the IWH Representation as

follows: “(a) a private placement of a to-be-created class of preferred securities to

accredited investors, and (b) a Tier II Regulation A+ offering of preferred securities.” Id.

at Exhibit A.

5. Pursuant to the IWH Engagement Letter, Winstead assisted IWH in the

preparation of a 2017 Reg D Offering (a private placement) and a 2018 Reg A Offering (a

public offering). The factual and financial information contained in IWH’s offering

statements was provided by IWH, Lanier Securities, LLC, IWH’s placement agent, or by

an independent company IWH had hired to supervise and coordinate preparation of

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the offering statements. IWH did not ask Winstead to investigate the accuracy of the

factual or financial information provided by IWH, and Winstead did not agree to do so.

Id. at ¶ 10.

6. Winstead issued a January 28, 2018 Opinion Letter to IWH in connection

with the Reg A Offering (Exhibit B to the Williams Declaration). The opinions

expressed in the Opinion Letter are strictly limited to the due authorization and

issuance by IWH of the shares of preferred stock in the Reg A Offering, as well as their

status as fully paid and nonassessable shares of stock. The Opinion Letter did not

vouch for the accuracy of the factual or financial information provided by IWH in any

offering document. To the contrary, the Opinion Letter expressly provides that “we

render no opinion, whether by implication or otherwise, as to any other matters relating

to the Company, the Shares or the Offering Statement.” No one, including the

Securities and Exchange Commission (“SEC”), has ever contended the opinions in the

Opinion Letter were inaccurate. Id. at ¶ 11.

7. In connection with a Reg A Offering, a prospective securities issuer must

submit certain materials to the SEC for review. These include a registration statement

on Form 1-A and the associated proposed offering statement, as well as various exhibits

to the Form 1-A which are required by applicable SEC rules and regulations. After

submission of the Form 1-A and proposed offering statement, the SEC reviews the

proposed offering and will typically offer comments on the submission. Under

applicable SEC rules, the proposed offering statement must be declared “qualified” by

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the SEC through a “notice of qualification” before the prospective issuer may issue the

subject securities. Id. at ¶ 12.

8. IWH initially filed its Form 1-A for the Reg A Offering on November 9,

2017 and received comments from the SEC on December 6, 2017. IWH, through

Winstead, responded to these comments on December 21, 2017 and IWH filed an

amended Form 1-A on December 22, 2017. IWH received an additional comment letter

from the SEC on January 5, 2018 and responded to such comments, through

correspondence from Winstead, on January 22, 2018. Following an additional comment

letter on February 5, 2018 and response on February 8, 2018, IWH filed amendments to

its Form 1-A on February 8 and February 15, 2018. On February 21, 2018, IWH

requested qualification of the Reg A Offering, which was granted by the SEC on

February 26, 2018. Id. at ¶ 13.

9. Even though IWH obtained SEC qualification for the 2018 Reg A Offering,

IWH decided not to go forward with the offering. Id. at ¶ 14.

10. As an investment advisory firm, IWH and its affiliates were subject to

periodic SEC compliance examinations. The SEC communicated the results of its 2018

compliance examination of IWH by letter dated August 28, 2018 (the “Exam Report”).

Id. at ¶ 15.

11. Plaintiff’s Petition alleges that the Exam Report accused IWH of making

material misstatements in connection with the 2017 Reg D Offering and the 2018 Reg A

Offering. Additionally, the Exam Report alleged that IWH had made material

misstatements connection with an August 2016 Investor Presentation for the Senior

WINSTEAD PC’S MOTION TO DISMISS UNDER THE TCPA—Page 6 of 23
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Secured 8% Notes and Warrants Offering (the “2016 Offering”). The 2016 Offering

preceded Winstead’s representation of IWH and Winstead had no involvement in it. Id.

at ¶ 16.

12. The alleged offering statement misstatements cited in the Exam Report

pertain to information provided entirely by IWH or by affiliates. The alleged offering

statement misstatements cited in the Exam Report relate to factual and financial matters

that were exclusively within IWH’s knowledge. Id. at ¶ 17.

13. Winstead was not involved in Plaintiff’s resignation from IWH or IWH’s

affiliates. Id. at ¶ 18.

14. Winstead was not involved in the filing of an original or amended U5

form relating to Plaintiff. Id. at ¶ 19.

15. All of Winstead’s activities in connection with the IWH Representation

were performed as part of the normal course of representation of IWH, Winstead’s

client. Winstead’s activities in connection with the IWH Representation were not

foreign to the duties of lawyers; to the contrary, Winstead’s work for IWH consisted of

normal legal services typically provided by lawyers to clients such as IWH who seek to

raise funds through the sale of securities. Id. at ¶ 20.

ARGUMENT & AUTHORITIES

A. The TCPA framework.

In 2011, the Texas Legislature passed the Texas Citizens Participation Act,

Texas’s version of an Anti-SLAPP statute. Tex. Civ. Prac. & Rem. Code § 27.001 et seq.

(the “TCPA”). The TCPA is to be “construed liberally to effectuate its purpose and

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intent fully.” Id. § 27.011. To effectuate the statute's purpose, the Legislature has

provided a two-step procedure. Id. § 27.003.

For the first step, Winstead bears the burden to show that the TCPA applies; that

is, to show by a preponderance of the evidence that Plaintiff’s claim is “based on or is in

response to” the exercise of one of the rights defined in the TCPA. Id. § 27.003(a); In re

Lipsky, 460 S.W.3d 579, 591 (Tex. 2015). If the movant shows that the TCPA applies, the

second step requires the non-movant to establish “by clear and specific evidence a

prima facie case for each essential element of the claim in question.” Tex. Civ. Prac. &

Rem. Code § 27.005. If the non-movant cannot meet this burden, the Court “shall”

dismiss the claim. Id. § 27.005(b), (c). Even if the non-movant meets its burden, the

Court “shall” dismiss the claim if the movant establishes an affirmative defense or other

grounds on which the moving party is entitled to judgment as a matter of law. Id.

§ 27.005(d).

B. The TCPA applies to Plaintiff’s claims against Winstead.

The TCPA applies if the defendant shows “by a preponderance of the evidence

that the legal action is based on or is in response to” the defendant’s: (1) exercise of the

right of free speech, (2) exercise of the right to petition, or (3) exercise of the right of

association, as those rights are defined in the TCPA. Tex. Civ. Prac. & Rem. Code

§ 27.005(b). Here, Plaintiff’s claims relate to Winstead’s exercise of the right to petition.

The TCPA defines the “exercise of the right to petition” as including “a

communication in connection with an issue under consideration or review by a .. .

governmental body.” Id. § 27.001(4)(B). The exercise of the right to petition also

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includes “a communication that is reasonably likely to encourage consideration or

review of an issue by a . . . governmental body or in another governmental or official

proceeding.” Id. § 27.001(4)(C). Although the exercise of the First Amendment’s right

to petition is a subcategory of the definition of “right to petition” in the TCPA, the TCPA

is not limited to rights guaranteed by the First Amendment. As the Texas Supreme

Court held in Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018):

It does not follow from the fact that the TCPA professes to safeguard the
exercise of certain First Amendment rights that it should only apply to
constitutionally guaranteed activities. Because the Legislature explicitly
defined the term “exercise of the right to petition,” injecting such a
requirement into the TCPA would be disloyal to its enacted text. Whether
that definition maps perfectly onto the external constitutional rights it
aims to protect is irrelevant; we are bound by the statutory definition for
the purposes of the TCPA.

A lawsuit need only be based on or in response to the exercise of a TCPA-

protected right for the TCPA to apply. Id. § 27.003(a). See Riggs & Ray, P.C. v. State, 05-

17-00973-CV, 2019 WL 4200009, at *4 (Tex. App.—Dallas Sept. 5, 2019, no pet. h.) (TCPA

applies if claim is factually predicated on alleged conduct that falls within the scope of

TCPA's definition of exercise of the right of free speech, petition, or association).

Here, Plaintiff’s Petition establishes on its face that Plaintiff’s claims against

Winstead are based on the exercise of the right to petition, as defined in the TCPA.

Plaintiff alleges that Winstead failed to competently perform legal services in

connection with a Reg A Offering for IWH. Under Reg A, an offering statement must

be submitted to the SEC and “qualified” by the SEC before the applicant may sell the

securities. See REGULATION A—CONDITIONAL SMALL ISSUES EXEMPTION, 17 CFR

WINSTEAD PC’S MOTION TO DISMISS UNDER THE TCPA—Page 9 of 23
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§§ 230.251(d)(2)(A), 230.252(e). Because the SEC’S review is an essential part of the

process, the submission of materials to the SEC in connection with a Reg A offeringl

constitute the ”exercise 0f the right t0 petition" under two alternative TCPA definition:

communications ”in connection with an issue under consideration 0r review by a . ..

governmental body,” and communications ”reasonably likely to encourage

consideration 0r review of an issue by a . . . governmental body or in another

governmental 0r official proceeding.” Tex. CiV. Prac. & Rem. Code § 27.001(4)(B), (C).

Any claim that Winstead's submissions regarding IWH's Reg A Offering were

deficient, inaccurate or otherwise defective is therefore within the scope 0f the TCPA.

See Brown Sims, P.C. v. LW Matteson, Ina, 04-18-00596-CV, 2019 WL 4739439, at *3 (Tex.

App. —San Antonio Sept. 30, 2019, no pet. h.) (allegation that lawyer failed t0 plead an

affirmative defense was claim relating t0 exercise of right to petition because it

tantamount t0 a claim that the answer the attorney had filed With court was deficient).

C. All of Plaintiff’s claims against Winstead are barred by the attorney
immunity defense.

Once the movant has shown that the TCPA applies, the Court ”shall” dismiss the

claim if the movant establishes an affirmative defense or other grounds 0n which the

moving party is entitled to judgment as a matter of law. Tex. Civ. Prac. & Rem. Code

1
Communications with the SEC in connection With a Reg A offering include a registration statement 0n
Form l-A and the associated proposed offering statement, as well as various exhibits to the Form l-A
Which are required by applicable SEC rules and regulations, as well as SEC comments, amendments t0
offering statements in response t0 SEC cements, and other correspondence with the SEC. See Williams
Declaration at 11
12-13.

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§ 27.005(d). Winstead is entitled to dismissal because all of Plaintiff’s claims are barred

by its affirmative defense of attorney immunity.

Texas law is clear that an attorney is absolutely immune from liability to non-

clients for conduct within the scope of his representation of his clients. Cantey Hanger,

LLP v. Byrd, 467 S.W.3d at 481 (Tex. 2015). The attorney immunity defense “exists to

promote ‘loyal, faithful, and aggressive representation’ by attorneys, which it achieves,

essentially, by removing the fear of personal liability.” Youngkin v. Hines, 546 S.W.3d

675, 681 (Tex. 2018) (quoting Cantey Hanger, LLP v. Byrd, 467 S.W.3d at 481). In the

words of the Youngkin v. Hines Court:

[A]n attorney may be liable to nonclients only for conduct outside the
scope of his representation of his client or for conduct foreign to the duties
of a lawyer. We also clarified in Cantey Hanger that the above inquiry
correctly focuses on the kind of conduct at issue rather than the alleged
wrongfulness of said conduct.

Id. (emphasis in original, citations omitted).

The trial court is to decide the attorney immunity defense as a question of law,

based on only two considerations:

The only facts required to support an attorney-immunity defense are the
type of conduct at issue and the existence of an attorney–client
relationship at the time. A court would then decide the legal question of
whether said conduct was within the scope of representation.

Id. at 683. Here, Plaintiff complains of Winstead’s acts and omissions in its

representation of IWH. Plaintiff was a non-client. As a result, the attorney immunity

doctrine bars Plaintiff’s claims if Winstead’s alleged conduct was “within the scope of

the representation” and was not “conduct foreign to the duties of a lawyer.”

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The preparation of securities offering statements and opinion letters and the

provision 0f related advice is quintessential conduct within the scope 0f a lawyer's

representation 0f a securities issuer. Plaintiff alleges nothing more. The attorney

immunity defense therefore applies as a matter of law, and bars all 0f Plaintiff’s claims.

See Diaz v. Monnig, 04-15-00670-CV, 2017 WL 2351095, at *5 (Tex. App.—San Antonio

May 31, 2017, no pet.) (negligence and negligent misrepresentation); Santiago v. Mackie

Wolf Zientz 8 Mann, P.C., 05-16-00394-CV, 2017 WL 944027, at *3-4 (Tex. App.—Dallas

Mar. 10, 2017, n0 pet.) (negligent misrepresentation); see also Ironshore Europe DAC v.

Schiﬂ Hardin, L.L.P., 912 F.3d 759, 766-67 (5th Cir. 2019) (negligent misrepresentation

claim against attorney barred by attorney immunity doctrine); Oﬂ'icial Stanford Inv'rs

Comm. v. Greenberg Traurig, LLP, 3:12-CV—4641-N, 2017 WL 6761765, at *1 (ND. Tex.

Dec. 5, 2017), aﬂ’d sub nom. Troice v. Greenberg Traurig, L.L.P., 921 F.3d 501 (5th Cir. 2019)

(holding attorney immunity doctrine barred claims against lawyers Who allegedly

conspired in the Stanford Ponzi scheme by corresponding With federal and state

regulators, representing Stanford in SEC inquiry, advising Stanford 0n registration

issues and representing Stanford in multimillion dollar projects).

Winstead has established its affirmative defense 0f attorney immunity as a

matter of law. Tex. Civ. Prac. & Rem. Code § 27.005(d) requires dismissal.

D. Plaintiff cannot meet his burden to establish, by clear and specific
evidence, a prima facie case for each essential element of his claims.

In addition t0 the attorney immunity doctrine, the Court should dismiss

Plaintiff’s claims for failure to meet the burden 0f proof under the TCPA. Once a

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defendant establishes that the non-movant’s claim is based 0n, relates t0, 0r is in

response t0, the movant’s exercise 0f a TCPA-protected right, the Court ”shall” dismiss

the action unless the non—movant ”establishes by clear and specific evidence a prima

facie case for each essential element of the claim in question." Tex. Civ. Prac. 8t Rem.

Code § 27.005. Plaintiff cannot meet his burden.

In the TCPA context, ”clear” means ”unambiguous, sure, 0r free from doubt,”

and ”specific” means ”explicit 0r relating t0 a particular named thing.” In re Lipsky, 460

S.W.3d 579, 589 (Tex. 2015). ”Prima facie case” means evidence that is legally sufficient

t0 establish a claim as factually true if it isnot countered. Id. The ”evidence” the trial

court ”shall consider" in these inquiries expressly includes ”the pleadings and

supporting and opposing affidavits stating the facts on which the liability is based.”

Tex. Civ. Prac. & Rem. Code § 27.006(a). ”Clear and specific evidence means that the

’plaintiff must provide enough detail t0 show the factual basis for its claim.” Bedford v.

Spassoﬂ, 520 S.W.3d 901, 904 (Tex. 2017) (quoting In re Lipsky, 460 S.W.3d 579, 591 (Tex.

2015)). ”Under the Act, more than mere notice pleading is required t0 establish a

plaintiff’s prima facie case.” Id.

A plaintiff’s conclusory allegations or statements as to the elements 0f a claim

cannot defeat a motion t0 dismiss under the TCPA. In re Lipsky, 460 S.W.3d at 592—593

(business disparagement claim should have been dismissed under TCPA because

conclusory allegations 0f lost profits, reputation, and goodwill was insufficient 0n

required element of special damages); Fawcett v. Grosu, 498 S.W.3d 650, 657-658 (Tex.

App.—Houston [14th Dist] 2016, pet. denied) (conclusory allegation 0f failure t0

WINSTEAD PC’s MOTION T0 DISMIss UNDER THE TCPA—Page 13 of 23
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investigate before accusing claimant of racial discrimination was insufficient and

required dismissal of that portion of defamation claim).

As shown below, Plaintiff cannot meet his burden as to any of the three causes of

action he has asserted.

1. First Cause of Action—Legal Malpractice.

Elements. “To prevail on a legal malpractice claim, a plaintiff must show ‘that

(1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the

breach proximately caused the plaintiff’s injuries, and (4) damages occurred.’”

Alexander v. Turtur & Associates, Inc., 146 S.W.3d 113, 117 (Tex. 2004).

Winstead did not owe a duty of care to Plaintiff. “Texas common law is well

settled that an attorney does not owe a professional duty of care to third parties who are

damaged by the attorney's negligent representation of a client.” Cantey Hanger, LLP v.

Byrd, 467 S.W.3d 477, 481 (Tex. 2015). As a result, a non-client may not sue a lawyer for

legal malpractice or professional negligence. Barcelo v. Elliott, 923 S.W.2d 575, 578 (Tex.

1996); Swank v. Cunningham, 258 S.W.3d 647, 666 (Tex. App.—Eastland 2008, pet.

denied).

Plaintiff does not allege that he was Winstead’s client, nor could he do so in good

faith. The IWH Engagement Letter expressly identifies IWH as the client. The reference

field of the letter states “Engagement of Winstead PC (the “Firm”) by Institute for

Wealth Holdings, Inc. (“You” or “you”).” Paragraph 4 of the IWH Engagement Letter

provides “The person or party whom we represent in the Matter is limited to the person

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or party specifically identified above and does not include any affiliates or other

persons or parties.”

Unable to allege that he was Winstead’s client, Plaintiff instead alleges that

“Winstead owed a duty of care to Plaintiff as Chief Compliance Officer of IWA and IWC,

and as President and CEO of IWH, (Petition at ¶ 14, emphasis added). But the law is clear

that a lawyer for a corporation does not thereby owe a duty of care to the corporation’s

officers, director or shareholders. Goeth v. Craig, Terrill & Hale, L.L.P., 03-03-00125-CV,

2005 WL 850349, at *6 (Tex. App.—Austin Apr. 14, 2005, no pet.) (“rendering legal

services to a corporation does not, by itself, create privity between the attorney and the

corporation's investors, its officers and directors, or its shareholders”); see also Avery

Pharm., Inc. v. Haynes & Boone, L.L.P., 2-07-317-CV, 2009 WL 279334, at *5 (Tex. App.—

Fort Worth Feb. 5, 2009, no pet.); Swank v. Cunningham, 258 S.W.3d 647, 662 (Tex.

App.—Eastland 2008, pet. denied); Gamboa v. Shaw, 956 S.W.2d 662, 665 (Tex. App.—

San Antonio 1997, no pet.). Because as a matter of law Winstead did not owe Plaintiff a

duty of care, Plaintiff’s legal malpractice claim fails on the very first element.

There was no breach. “Attorneys owe their clients the duty to act with ordinary

care—i.e., in a manner consistent with the standard of care that would be expected to be

exercised by a reasonably prudent attorney.” Beck v. Law Offices of Edwin J. (Ted) Terry,

Jr., P.C., 284 S.W.3d 416, 426 (Tex. App.—Austin 2009, no pet.). “If an attorney makes a

decision which a reasonably prudent attorney could make in the same or similar

circumstance, it is not an act of negligence even if the result is undesirable.” Cosgrove v.

Grimes, 774 S.W.2d 662, 665 (Tex. 1989).

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Here, there is no allegation that identifies what Winstead allegedly did wrong,

much less “clear and specific evidence” of a prima facie case establishing a breach of

duty. Merely alleging that “Winstead failed to competently perform the due diligence

and other legal work necessary to ensure the [work] was in full compliance with

applicable SEC and other laws and regulations” (Petition at ¶ 15) does not satisfy a

“notice pleading” standard, much less the more exacting standard of proof required by

the TCPA. A plaintiff’s conclusory allegations or statements as to the elements of a

claim cannot defeat a motion to dismiss under the TCPA. In re Lipsky, 460 S.W.3d at

592–593.

There is no proximate cause. Moreover, Plaintiff cannot show that any act or

omission of Winstead proximately caused injury to Plaintiff. Even if one assumes,

contrary to fact, that (1) Winstead owed a duty of care to Plaintiff, and (2) Winstead

breached a duty of care in the representation of IWH, Plaintiff must prove with

competent, specific and non-speculative evidence that Winstead’s negligence

proximately caused injury to Plaintiff.

Breach of a duty proximately causes an injury if the breach is a cause in
fact of the harm and the injury was foreseeable. Cause in fact requires
“proof that (1) the negligent act or omission was a substantial factor in
bringing about the harm at issue, and (2) absent the negligent act or
omission (‘but for’ the act or omission), the harm would not have
occurred.” If a negligent act or omission “merely creat[es] the condition
that makes the harm possible,” it is not a substantial factor in causing the
harm as a matter of law. A plaintiff proves foreseeability of the injury by
establishing that “a person of ordinary intelligence should have
anticipated the danger created by a negligent act or omission.”
Conjecture, guess, and speculation are insufficient to prove cause in fact
and foreseeability.

WINSTEAD PC’S MOTION TO DISMISS UNDER THE TCPA—Page 16 of 23
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Stanﬁeld v. Neubaum, 494 S.W.3d 90, 97 (Tex. 2016) (internal citations omitted).

Plaintiff offers no more than the illogical, conclusory allegation that, due t0

Winstead, Plaintiff was required t0 resign his positions with the IWH companies. But

there is no evidence of any causal connection between anything Winstead did (0r failed

to do) and Plaintiff’s resignation. The Williams Declaration, at 1H 18-19, establishes that

Winstead had n0 involvement in Plaintiff’s ”forced resignation” or the filing 0f original

0r amended U5 forms regarding Plaintiff. Nor is there evidence that Plaintiff’s alleged

injury was reasonably foreseeable.

There is no evidence of actual damages. Plaintiff cannot show any actual

damages resulting from Winstead's representation 0f IWH. As noted, if Winstead did

commit legal malpractice, which itdenies, any resulting damages belong t0 Winstead’s

client, IWH. ”This is because a corporation is a legal entity separate and apart from the

persons who compose it, and a cause 0f action against one Who has injured the

corporation belongs to the corporation and not to the shareholders.” Avery Pharm., Inc.

v. Haynes 8 Boone, L.L.P., 2—07-317-CV, 2009 WL 279334, at *5 (Tex. App.—Fort Worth

Feb. 5, 2009, n0 pet).

Further, although direct evidence 0f damages is not required t0 survive a TCPA

motion t0 dismiss, a non-movant must present ”evidence sufficient to allow a rational

inference that some damages naturally flowed from the defendant's conduct.” S ff S

Emergency Training 5015., Inc. v. Elliott, 564 S.W.3d 843, 847 (Tex. 2018) (evidence 0f

damages was sufficient because non—movant presented m showing lost revenues due

t0 termination 0f agreement that were calculable with reasonable certainty); see In re

WINSTEAD PC’s MOTION T0 DISMIss UNDER T

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GOLDSTEIN, BONNIE LEE Track Judge’s New Case

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January 03, 2020

Case Filing Date

September 27, 2019

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Document for DEWEY M. MOORE, Jr vs. WINSTEAD, P.C.

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