Sanctions for Claims Based on Rejected Legal Theory
August 29, 2012James Owen did not have a winning case. In fact, the lawsuit he filed on behalf of Rhonda Krisle against Rusty Wallis Volkswagen asserted the precise claim (under the Texas Finance Code) that the Court of Appeals had rejected several years earlier. What’s more, Owen knew about this earlier case because he had been counsel for the losing appellant. Despite this, Owen still brought suit. After motion practice, which ended in a non-suit of all claims by Krisle, Rusty Wallis moved for sanctions. Not surprisingly, the trial court sanctioned Owen to the tune of $20,000.
Owen appealed. The Court of Appeals, however, was equally unimpressed was Owen’s reasons why he should not be sanctioned, which included the claim that the decisions by the Court of Appeals do not have binding precedential value unless they are explicitly approved by the Texas Supreme Court. Among other things, the Court found that, based on the explicit precedent rejecting Krisle’s claim, as well as Owen’s clear awareness of this precedent, the trial court did not abuse its discretion in sanctioning Owen. After rejecting the rest of Owen’s arguments against sanctions, the Court then concluded that Owen’s appeal was “objectively frivolous” and cited him for an additional $7,500.
