In a topic also addressed on 600Camp today, the interplay of criminal proceedings and civil litigation can be challenging. The conclusion of Dunne v. Brinker Texas, Inc. summarizes one potential result: “Under the particular facts of this case, the only possible remedial measure that could have protected Dunne’s Fifth Amendment privilege was an abatement. But an abatement could not cure the prejudice Chili’s had already suffered from being unable to identify fact witnesses for the more than a year that had passed since it first requested that information. In addition, there was no indication how long the case might sit in limbo, when trial might be, and whether Dunne would continue to assert his Fifth Amendment rights in the event of an appeal. We conclude the trial court did not abuse its discretion in striking Dunne’s pleadings and therefore affirm.” No. 05-16-00496-CV (Aug. 10, 2017).
In some detail, the district court ordered Altesse Healthcare not to deplete the assets of a business, whereupon: “Altesses’s actions in failing to comply with the TRO resulted in destroying the value of the company over which the lawsuit was based. In essence, Altesse took over running the company and then failed to make the scheduled payments when due, leaving the Wilsons without the company or payment. After the trial court ordered Altesse to return the company to the Wilsons, Altesse delayed and by the time it returned the necessary assets to run the business, there was little left to run.” The Fifth Court affirmed the trial court’s detailed order awarding “death penalty” sanctions and other penalties, including contempt. Altesse Healthcare Solutions v. Wilson, No. 05-15-00906-CV (Aug. 23, 2016) (mem. op.)
Last Friday, blog publisher David Coale spoke about recent federal cases on sanctions and professional responsibility issues; for some ethics CLE self-study, here is the handout that he used.
Tunnell sued Archer for negligence after a truck accident involving Archer’s cattle. The trial court declined to dismiss Tunnell’s claim for failure to file an expert report under a statute related to claims against health care providers (Archer was a doctor), and Archer appealed that denial. After a Texas Supreme Court opinion clarified the underlying statute,Tunnell contended that Archer’s appeal not only no longer had merit, but had become frivolous and sanctionable.
After Archer continued with the appeal on other grounds, the Fifth Court agreed with Tunnell and sanctioned Archer and his counsel for the costs of the motion to dismiss: “After the supreme court’s opinion in Ross, there were no reasonable grounds for an advocate to believe the case could be reversed. However, appellants did not dismiss this frivolous appeal. Instead, appellants’ counsel filed a brief on the merits asserting ERISA preemption based on non-existent orders that this Court lacked jurisdiction to consider. No reasonable counsel could believe the ERISA-preemption argument was a reasonable ground for reversal in this case when there was no written order on a motion asserting the argument and no statute permits an interlocutory appeal from such an order. In these circumstances, we conclude that appellants and their counsel’s actions are so egregious as to warrant the award to Tunnell of just damages from appellants and their counsel for their pursuit of this frivolous appeal.” Archer v. Tunnell, No. 05-15-00459-CV (Feb. 9, 2016) (mem. op.)
After a deadly 18-wheeler accident, the trucking company “decided to have the remains of the tractor and part of the trailer cut in half and crushed.” The district court allowed a spoliation instruction in the subsequent litigation, and the Fifth Court affirmed, noting: “the severity of the crash, [the CEO’s] years of experience in the industry, his previous dealings with obtaining police reports, and his awareness to preserve the [electronic control mechanism].” That said, particularly given the company’s protection by the workers’ compensation statutes, the death penalty sanctions entered by the district court did not have a “direct relationship” to that destruction. In re: J. H. Walker Inc., No. 05-14-01497-CV (Jan. 15, 2016) (mem. op.) This opinion presents a thoughtful application of the Texas Supreme Court’s recent analysis of spoliation in Brookshire Brothers, Ltd. v. Aldridge, 438 S.W.2d 9 (Tex. 2014).
After the second mediation of a wrongful death case failed to yield a settlement, the trial judge ordered the Chief Claims Officer (a resident of Alabama not otherwise involved in the case) of the defendant’s carrier (a nonparty) to appear at a show cause hearing. The Fifth Court granted a mandamus petition about that order: “[W]e conclude the judge lacked jurisdiction to order Thomas, a non-party who did not attend either mediation and who lives outside the trial court’s subpoena range, to appear and explain why ProAssurance should not be sanctioned.” In re ProAssurance Ins. Co., No. 05-15-01256-CV (Jan. 4, 2016) mem. op.)
A long-running suit over a 1999 contract for the sale of a house resulted in a mistrial, followed by cross-motions for death penalty sanctions. The seller sought sanctions for discovery abuse and fraud, while the buyer claimed the seller had testified falsely at trial. The trial court granted both motions, striking everyone’s pleadings. Both sides appealed, and the Court of Appeals reversed and remanded. As to the buyer, the trial court had not considered the availability of lesser sanctions, and the fabrication of one construction estimate did not give rise to a presumption that other claims not based on that document were meritless. As to the seller, the death penalty sanction was disproportionate to the seriousness of the offense. The seller had testified that she paid a property tax bill with a credit card when records showed it was actually paid with cash and a check. Although the trial court found that misstatement was intentional, the Court of Appeals did not consider the discrepancy to be material enough to warrant the striking of her entire case.
Kim v. Hendrickson, No. 05-13-01024-CV
In this post-judgment litigation, the plaintiff sought to collect on a judgment against the defendant. During the course of the litigation, the plaintiff filed pleadings and made assertions that the defendant felt were false. Consequently, the defendant successfully moved for sanctions under Chapter 10 of the Texas Civil Practice and Remedies Code.
The plaintiff appealed and raised nearly every possible argument for overturning the sanctions award, but the Court of Appeals rejected them all, affirming the award.
The defendant in this private jet interior decoration case pleaded a series of affirmative defenses. After the defendant’s counsel objected to requests for production asking for documents related to these affirmative defenses and then instructed its corporate representative not to answer depositions questions about them, the trial court struck the affirmative defenses in their entirety as a sanction. The defendant later lost at trial and appealed the trial court’s sanction.
The Court of Appeals reversed, holding that striking the defendant’s affirmative defenses amounted to a “death penalty” sanction that went too far. Because the trial court had not adequately considered other remedies (such as assessing deposition costs or awarding attorneys’ fees), the sanction was unwarranted. The Court explained that “case determinative sanctions may be imposed in the first instance only in exceptional cases when they are clearly justified and it is fully apparent that no lesser sanctions would promote compliance with the rules.”
Following up on an opinion issued last month that ruled an interlocutory appeal from the denial of a special appearance was frivolous, the Court of Appeals has now awarded the appellee sanctions of $9,650 in attorney fees and $191.25 in expenses as damages from the frivolous appeal. The Court shaved off $2,325 from the appellee’s fee application because some of her attorney’s billing entries either did not relate to the appeal or consisted of block billing that contained a mix of appellate and non-appellate activities.
Estate of Ardyce Deuel-Nash, Deceased (II), No 05-14-00128-CV