MEMORANDUM OPINION

HARVEY BROWN, Justice.

Kim Brasch and Maria Floudas appeal a traditional summary judgment finding them liable for fraudulently filing a notice of lis pendens. Kirk Lane and Daniel Kirk sued Brasch and Floudas for damages under section 12.002 of the Civil Practice and Remedies Code alleging they knowingly and intentionally filed the fraudulent lis pendens. The trial court granted Lane and Kirk's traditional motion for summary judgment. On appeal, Brasch and Floudas raise two issues. First, they contend Lane and Kirk did not conclusively prove all the elements of their claims under section 12.002. They also contend that an absolute judicial privilege protects the filing of their lis pendens and bars Lane and Kirk's claims for damages.

We reverse and remand for further proceedings.

Background

In an earlier lawsuit, Brasch, Floudas, and the company they owned sued Kirk, Lane, and several of their companies on multiple grounds arising from past business dealings. A jury found all defendants liable and the trial court rendered a money judgment against all defendants, Kirk, Lane, and the corporate defendants. The trial court later granted a motion to disregard a portion of the jury's verdict and issued an amended final judgment in November 2007. Big Dog Logistics, Inc. v. Strategic Impact Corp., 312 S.W.3d 122, 130 (Tex. App.-Houston [14th Dist.] 2010, pet. denied). The trial court held the corporate defendants liable to Brasch and Floudas for breach of contract, but Kirk and Lane were not individually liable. Id. The trial court ordered that Brasch and Floudas take nothing on their fraud and conspiracy claims. Id. The corporate defendants and Brasch and Floudas filed cross-appeals to the amended final judgment.

On February 4, 2008, while the appeal was pending, Brasch and Floudas filed a lis pendens in the Harris County Clerk's records asserting that the first suit might affect the title to Kirk and Lane's personal homes. The notice states that "The purpose of the lawsuit is to resolve business disputes which may relate to ownership rights of the real property." Nothing in the record indicates that Brasch and Floudas served Kirk and Lane with notice of the lis pendens.

Kirk discovered the lis pendens in April 2008 while attempting to close on the sale of the home listed in that notice. Kirk and Lane sent a letter to the attorney representing Brasch and Floudas stating that the underlying lawsuit did not affect an interest in the homes and demanding that the lis pendens be released within 24 hours. The letter stated that the lis pendens caused "delays and other issues" with Kirk's closing and that further delays might result in a different interest rate or other damages. Kirk and Lane received no response to their letter.

In May 2008, Kirk and Lane filed a second lawsuit which forms the basis of this appeal. They asserted claims under chapter 12 of the Civil Practice and Remedies Code and section 32.49 of the Texas Penal Code for damages resulting from Brasch and Floudas's knowingly and intentionally filing a fraudulent lis pendens. Brasch and Floudas filed an answer asserting that Kirk and Lane fraudulently transferred money into their homes from the companies named in the first suit's amended final judgment to prevent Brasch and Floudas from collecting on the amended judgment. They also filed counterclaims against Kirk, Lane, and their attorney that were later nonsuited. A hearing was held on December 11, 2008 during which, according to the docket sheet, "The pro se defendants could not provide any valid basis in support of filing the lis pendis [sic] which is the subject of suit to set aside the l/p. Defendants given opportunity to seek legal advice." Brash and Floudas filed a release of the lis pendens the next day on December 12, 2008. Thus, the lis pendens was on file for less than 11 months.

Weeks later, Kirk and Lane filed a traditional summary judgment motion seeking to recover damages and attorney's fees incurred as a result of the fraudulent lis pendens. They asserted that their homes were not part of the first lawsuit cited by the lis pendens and that the judgment was not against Kirk or Lane individually, but instead was against their respective corporations. They further asserted that Brasch and Floudas intended the lis pendens to cause them harm because they failed to release the notice after receiving the demand letter. As summary judgment evidence they relied on the judgment from the first lawsuit, the lis pendens and release, the demand letter, Brasch and Floudas's answer and counterclaim, and an affidavit from their attorney swearing to the authenticity of the documents and testifying to attorney's fees.

In response, Brasch and Floudas asserted that Kirk and Lane "denuded" the judgment debtor companies of any monetary value and that the lis pendens was rightfully filed. As summary judgment evidence, they relied on a diagram demonstrating what they allege to be "Financial Oddities," an appraisal list from Kirk's unrelated divorce proceeding, and various excerpts of deposition and trial testimony from the first suit demonstrating that Kirk and Lane bought homes within a year of trial in the first suit. They also relied on statements by the trial court at a post-trial hearing in the first lawsuit that the court believed the judgment-debtor companies had a net worth of zero and that Kirk and Lane "intentionally created that zero balance for purposes of this lawsuit."

The trial court granted summary judgment for Kirk and Lane. Brasch and Floudas filed a motion for new trial challenging summary judgment on several grounds and raised the issue for the first time that their lis pendens falls within an absolute judicial privilege and cannot be the basis of a suit for damages. The trial court overruled the motion by operation of law and Brasch and Floudas timely appealed.

Summary Judgment

Brasch and Floudas contend that the trial court erred in granting summary judgment because Kirk and Lane failed to prove all the elements conclusively to recover under section 12.002 and an absolute judicial privilege protects their lis pendens. See TEX. CIV. PRAC. REM. CODE ANN. § 12.002 (West Supp. 2010).

A. Standard of Review

We review a trial court's summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Under the traditional standard for summary judgment, the movant has the burden to show that no genuine issue of material fact exists and the trial court should grant judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). The motion must state the specific grounds relied upon for summary judgment. See TEX. R. CIV. P. 166a(c). When reviewing a summary judgment motion, we must (1) take as true all evidence favorable to the nonmovant, and (2) indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).

B. Lis Pendens

A lis pendens is a notice recorded in the chain of title that warns all persons that certain real property is the subject matter of litigation. See TEX. PROP. CODE ANN. § 12.007 (West Supp. 2010). "The purpose of a notice of lis pendens [is] to put those interested in a particular tract of land on inquiry about facts and issues involved in the suit and to put prospective buyers on notice that they acquire any interest subject to the outcome of the pending litigation." Countrywide Home Loans, Inc. v. Howard, 240 S.W.3d 1, 3 (Tex. App.-Austin 2007, pet. denied). "A party may file a lis pendens during the pendency of an action involving: 1) title to real property, 2) the establishment of an interest in real property, or 3) the enforcement of an encumbrance against real property." Flores v. Haberman, 915 S.W.2d 477, 478 (Tex. 1995) (orig. proceeding) (citing TEX. PROP. CODE ANN. § 12.007(a)). The suit underlying a lis pendens must "claim a direct interest in real property, not a collateral one. In other words, the property against which the lis pendens is filed must be the subject matter of the underlying lawsuit." Long Beach Mortg. Co. v. Evans, 284 S.W.3d 406, 414 (Tex. App.-Dallas 2009, pet. denied) (holding lis pendens valid in action for constructive trust when seeking rescission of sale of real property); compare with Countrywide Home Loans, 240 S.W.3d at 6-7 (holding lis pendens invalid because underlying suit concerned fraudulently obtained corporate funds and not the property bought with those funds).

C. Liability Under Civil Practice Remedies Code Section 12.002

In their first issue, Brasch and Floudas contend the trial court erred in granting the summary judgment motion because Kirk and Lane failed to prove all the elements of section 12.002 conclusively. See TEX. CIV. PRAC. REM. CODE ANN. § 12.002. Section 12.002(a) provides:

(a) A person may not make, present, or use a document or other record with:

(1) knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property;

(2) intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01, Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and

(3) intent to cause another person to suffer:

(A) physical injury;

(B) financial injury; or

(C) mental anguish or emotional distress.

Id. § 12.002(a). Kirk and Lane bore the burden to show all of the above elements as the summary judgment movants and the parties asserting a claim under section 12.002. See Aland v. Martin, 271 S.W.3d 424, 430 (Tex. App.-Dallas 2008, no pet.). A party who satisfies the section 12.002(a) requirements may recover $10,000 or the actual damages caused by the violation, whichever is greater, in addition to court costs, attorney's fees, and exemplary damages. See TEX. CIV. PRAC. REM. CODE ANN. § 12.002(b).

Brasch and Floudas assert that Kirk and Lane failed to prove conclusively several elements under section 12.002. Specifically, they assert Kirk and Lane failed to establish whether: (1) the lis pendens was a court record, lien, or claim against or interest in real property as defined by section 12.002(a); (2) the lis pendens was fraudulent; (3) Brasch and Floudas knew the lis pendens to be fraudulent; (4) they intended the document to be given the same legal effect as a valid claim; and (5) they intended to cause physical, financial, or emotional injury. Assuming without deciding that Kirk and Lane conclusively proved the other elements of 12.002, we examine the evidence supporting the intent to cause injury.

The Texas courts of appeals that have considered the intent to cause injury element under section 12.002 have rarely held the evidence to be sufficient to prove the element as a matter of law. In Preston Gate, LP v. Bukaty, 248 S.W.3d 892, 897 (Tex. App.-Dallas 2008, no pet), the Dallas Court of Appeals rejected the idea that the intent to cause harm was "self-evident" from the filing of a fraudulent claim under section 12.002. The defendants in Preston filed an abstract of judgment that listed several parties that had not been included in the final judgment and sought a lien against property of the parties incorrectly listed in the abstract. Preston Gate, 248 S.W.3d at 895. The plaintiffs demanded the lien be removed, informing the defendants that the entities listed in the abstract were separate and distinct, and later sued under section 12.002 for filing a fraudulent lien. Id. The trial court granted the defendants' no-evidence summary judgment, and the Dallas Court affirmed stating that the evidence established only that the lien had been filed and was incorrect, not that the defendants intended to cause injury. Id. at 897.

The Dallas Court issued a similar holding in Aland v. Martin, a divorce action tried to the bench. 271 S.W.3d at 426. In Aland, the evidence demonstrated that the party had suffered an injury as a result of a fraudulent lien and that the injured party had made numerous requests to remove the lien. Id. at 431 n. 3. Otherwise, the only evidence was the failure to remove the fraudulent lien. See id. The Dallas Court stated that "We are guided by the pronouncement of the Texas Supreme Court that `[w]hen the circumstances are equally consistent with either of two facts, neither fact may be inferred.'" Id. at 433 (citing City of Keller v. Wilson, 168 S.W.3d 802, 813 (Tex. 2005)). The court explained that the record led to two equal inferences, intent to cause injury and lack of intent. Therefore, the evidence was legally insufficient to support the trial court's finding of intent to cause injury under section 12.002. Id.

Kirk and Lane rely on their demand letter to satisfy their burden of proof as movants and attempt to distinguish Preston and Aland. They assert that in contrast to the parties in Preston and Aland who only demanded that the fraudulent liens be removed, Kirk and Lane expressly informed Brasch and Floudas that they had suffered an injury and would continue to suffer injury without the removal of the lis pendens. Brasch and Floudas never responded to the demand letter and Kirk and Lane filed this suit a month after sending the letter.

The failure to remove the notice does not amount to proof of intent to cause injury. See Aland, 271 S.W.3d at 433; see also Preston, 248 S.W.3d at 897. Kirk and Lane, therefore, rely largely on their demand letter. But the demand letter is not conclusive evidence of an intent to cause injury for several reasons. First, despite Kirk and Lane's attempts to distinguish the cases, Preston and Aland do not provide details of the substance of the demands made by the injured parties in those cases. Preston does say the attorney indicated the entity wrongfully included on the abstract of judgment were separate entities, but provides no further details as to the contents of the demand. Distinguishing Aland and Preston on this ground is therefore tenuous.

Second, the injured party sent the demand letter in this case. Wrongful intent is much easier to read into a party's own words rather than to read such intent into a failure to respond to a letter from the injured party. See Taylor Elec. Srvcs., Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 531-32 (Tex. App.-Fort Worth 2005, no pet.). The demand letter in Taylor originated with the party accused of violating section 12.002 and, in their own words, acknowledged the possibility of harm as a result of filing a fraudulent lien. See Taylor, 167 S.W.3d at 531. In contrast, a party may simply disbelieve claims of an opposing party. We cannot read something Kirk and Lane wrote to find conclusively that Brasch and Floudas intended to cause injury to Kirk and Lane.

Finally, Aland directs us to consider whether intent to cause injury existed at the time of the filing of the lis pendens. See Aland, 271 S.W.3d at 431-32. The demand letter was sent over two months after the lien was filed. While not dispositive, the timing further undermines Kirk and Lane's reliance on the demand letter. See Walker Assocs. Surveying, Inc. v. Roberts, 306 S.W.3d 839, 849 (Tex. App.-Texarkana 2010, no pet.) (holding that evidence of filing party's awareness that affidavits were inaccurate and fraudulent under section 12.002 at their deposition did not equate to knowledge and intent to injure at the time of filing).

In addition to the demand letter, Kirk and Lane rely on evidence suggesting that Brasch and Floudas knew that the lis pendens was improperly filed against property not the subject of the underlying suit. The final judgment in the underlying suit concerned the corporate entities of both sides rather than Kirk and Lane individually. They assert that the lis pendens read in conjunction with the judgment indicates that Brasch and Floudas intended to include Kirk and Lane's personal real property in the litigation, even though the underlying litigation concerned business disputes and did not concern the real property. The filing of an improper lis pendens alone, however, would not support a finding of intent to injure. See Aland, 271 S.W.3d at 433; Preston Gate, 248 S.W.3d at 897.

Kirk and Lane also rely on the fact that Brasch and Floudas did not give them notice of the lis pendens as required by statute to prove the intent to cause harm element. See TEX. PROP. CODE ANN. § 12.007(d) (requiring party filing lis pendens to give notice within three days to all parties to underlying lawsuit with interest in real property). They assert that the failure to give proper notice indicates secrecy. See Dimas v. Vanderbilt Mortg. Fin., Inc., No. C-10-68, 2010 WL 3342216, at *5 (S.D. Tex. Aug. 25, 2010) (denying motion to dismiss section 12.002 action because secretive filing of fraudulent lien raised a fact issue on intent to injure nonmovant). The failure to give notice, however, raises a fact issue on intent to cause injury rather than conclusively proving the element. See Walker, 306 S.W.3d at 849; see also Dimas, 2010 WL 3342216, at *5.

Further, Brasch and Floudas filed the lis pendens as a result of what they believed to be wrongful conduct by Kirk and Lane. Though not evidence, they cite to statements by the trial court at a post-trial hearing that "I am convinced that the net worth of the companies in question may be considered to be zero and I'm further convinced that [Kirk and Lane] have intentionally created that zero balance for purposes of this lawsuit." While these statements are not evidence, they suggest that Brasch and Floudas' believed that their interest was threatened and that they were merely protecting their rights and not affirmatively attempting to harm Kirk and Lane.

We conclude a fact issue exists whether Brasch and Floudas intended to injure Kirk and Lane by filing the notice of lis pendens. Because a fact issue exists on one element under section 12.002, we need not address the remaining elements. We sustain Brasch and Floudas's first issue.

Judicial Privilege

We do not address the second issue raised by Brasch and Floudas, that an absolute judicial privilege bars an independent right to recover because a lis pendens is part of a judicial proceeding. They raised this issue for the first time in their motion for new trial. Therefore, they failed to present the issue to the trial court as a ground to deny the summary judgment motion and failed to preserve the issue as a ground for reversing the summary judgment. See Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 467 (Tex. 1998); see also City of Lancaster v. Clopton, 246 S.W.3d 837, 839 (Tex. App.-Dallas 2008, no pet.).

We overrule Brasch and Floudas's second issue.

Conclusion

Because Kirk and Lane failed to prove the intent to injure element under their section 12.002 claim, we hold the trial court improperly granted their summary judgment motion. We reverse and remand this case to the trial court for further proceedings.