Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

The Fort Worth Court of Appeals recently held that an order directing that sanctions be paid prior to final judgment is an abuse of discretion unless the court makes express findings as to why the sanctions do not preclude the sanctioned party from continuing the lawsuit.  In this case, the trial court awarded over $19,000 in sanctions against the plaintiff for discovery abuse payable within thirty days.  The plaintiff filed a writ of mandamus arguing that the sanctions were unwarranted and, even if proper, the sanction should not have been payable within thirty days.  The court of appeals deferred ruling on the discovery issues and amount of the sanctions but held that the order to pay within thirty days was an abuse of discretion because the sanction threatened the plaintiff's ability to continue the lawsuit.  The Court stated:

If a litigant contends that a monetary sanction precludes access to the court, the district judge must either (1) provide that the sanction is payable only at a date that coincides with or follows entry of a final order terminating the litigation; or (2) make express written findings, after a prompt hearing, as to why the award does not have such a preclusive effect.

The Court denied the plaintiff's request for mandamus as to the propriety of the sanctions, but granted the petition and ordered the trial court to modify the sanctions order to provide that the sanctions be payable upon termination of the litigation.  The Court's opinion in In re Spence can be found at this link.

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Sometimes when a party gets a default judgment against another party, there's a rush to make the judgment final.  But as American Express Centurion Bank and American Express Bank found out in In re Daredia, you've got to be careful about what you ask for because there are consequences.

In the trial court, the American Express entities sued two defendants, Pervez Daredia and Map Wireless, Inc.  Map Wireless did not answer, while Daredia did.  American Express took a default judgment that contained language reciting that the "judgment disposes of all parties and all claims in this cause of action and is therefore FINAL."  Oops.  Apparently, American Express forgot that there was another party--Daredia.

American Express realized its mistake only too late--after the trial court's plenary jurisdiction had expired.  At that time, American Express tried to correct the judgment with a motion for judgment nunc pro tunc.  The trial court granted the motion. 

On Petition for Writ of Mandamus, the Texas Supreme Court, in reliance on its opinion in Lehmann v. Har-Con Corp., pointed out that Lehmann did not require that you use the exact language suggested in that opinion--only that the judgment reflect on its face an intent to make it final.  And the court held that this judgment did just that.   The court also reiterated the differences between errors made in entering a judgment, which are clerical, and errors made in rendering a judgment, which are judicial.  All too often state practitioners carelessly mix these concepts, but here we have a prime example of where the distinction is all the difference.  Here, the error was in the rendition of the judgment because the trial court rendered (signed) precisely the judgment American Express asked the trial court to render.

Because Daredia had no adequate remedy by appeal once the trial court set aside the final judgment, the Supreme Court held that mandamus relief was available.  The court's opinion may be found here.

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