Sanctions Payable Prior to Final Judgment Abuse of Discretion

Posted on August 30, 2010 by Byron Henry

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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The inherent power to sanction...

Posted on March 12, 2010 by Mike Northrup

Practitioners will want to take note of this recent opinion from the Dallas Court of Appeals.

In a split decision in Davis v. Rupe, the court affirmed a sanctions order against an attorney based upon the trial court's inherent power to sanction.  Because the trial court did not issue findings of fact to support its order (an omission that the dissenting judge looked on with disfavor), the court had to consider all grounds on which the trial court might have based its decision.   The majority recited three grounds, each of which provides some interesting dynamics.

The first ground relates to an alleged misrepresentation by defense counsel as to post-verdict discussions with jurors.  The defendant filed a motion for new trial that sought a new trial based upon a series of questions by Plaintiffs' counsel during the trial that injected racial prejudices into the trial.  At the hearing on the new trial motion, the trial judge turned his attention to the post-verdict contacts by defense counsel with the jurors.  According to the majority opinion (found at this link), defense counsel misrepresented to the trial court whether she had asked one juror if the reference to Koon Kreek Klub played a factor in the deliberations.  The dissenting opinion (found at this link) quotes the exchanges between the court and counsel verbatim and reaches a different conclusion.   You can compare the discussions and reach your own conclusions as to this ground.

The second ground relates to a disagreement over whether the defendant's motion for summary judgment put the Plaintiffs on notice that the defendants were asserting a lack of capacity.    The majority finds that the defense counsel's arguments about how the pleading should be interpreted for purposes of notice are misleading and support the sanctions order.  Practitioners should take note of this holding.  I'm not sure how you avoid a sanctions order in a similar scenario, but the holding is one that should not be taken lightly.

The final ground discussed relates to a representation by defense counsel to the court that a particular document had been produced.  Three days after the representation, defense counsel determined that the document had not in fact been produced, and she sent a letter to the trial court and opposing counsel in accordance with her ethical duty to correct her representation.  All to no avail.  The majority characterizes this last circumstance as part of a "pattern of misstating facts."

One question not addressed in either opinion, which may be the elephant in the room, is what happened to the motion for new trial and Plaintiff's counsel's elicitation of the racially charged testimony.  From what I can tell, it appears that a separately docketed appeal is pending in the court of appeals which may yet answer that question.
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Pay for Play An Abuse of Discretion

Posted on January 9, 2010 by Byron Henry

The Houston (Fourteenth) Court of Appeals recently held that a trial court abuses its discretion if it conditions a trial setting on the payment of sanctions.  Here, after a plaintiff and his attorney were sanctioned $45,000 and $5,000, respectively, they challenged the sanctions order by mandamus.  In its memorandum opinion, the court of appeals began by holding that because the plaintiff and his attorney did not claim that the sanctions threatened their ability to continue the litigation, they had an adequate remedy by appeal and, thus, were not entitled to mandamus relief with respect to the sanctions.

In addition to awarding sanctions, however, the order set the trial for the "next available trial date following payment of the fees in full as ordered herein."  Citing precedent, the court held that "[a] sanctions award that impedes the prosecution of the case warrants extraordinary relief."  Accordingly, the court of appeals conditionally granted mandamus and ordered the trial court to delete the language in the sanctions order that conditioned the trial setting on the payment of sanctions.  The court's opinion in In re Gawlikowski can be found here. 

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En Banc San Antonio Court of Appeals Affirms Chapter 10 Sanction

Posted on September 30, 2008 by Byron Henry

A divided en banc Fourth Court of Appeals held that a court may award sanctions for both expenses and attorney's fees as well as for inconvenience and harassment and order them paid to the moving party.  Applying the Texas Supreme Court's recent opinion in Low v. Henry, the majority held the trial court had broad discretion to deter future misconduct and that the list of sanctions in section10.004(c) was not exclusive.  The dissents disagreed and argued that the additional sanction for inconvenience was improper and that the list of availble sanctions did not include payment of a penalty to the opposing party.  The majority opinion in Unifund CCR Partners v. Villa can be found here.  The dissenting opinions are here and here.

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