Affirmed as Modified and Majority and Concurring Opinions =
filed=20
January 15, 2008.
In The
Fourteenth Court=20
of Appeals
____________
NO. 14-06-00364-CV
____________
JOSE=20
THOTTUMKAL AND SARAMMA THOTTUMKAL, =
Appellants
V.
LARRY=20
MCDOUGAL, =
Appellee
On Appeal from the =
268th District Court
Fort=20
Bend=20
County, Texas
Trial Court Cause =
No. 05-CV-142505
M A J O R=20
I T Y O P I N I O N
Appellants,=20
Jose and =
Saramma=20
Thottumkal (the AThottumkals@), appeal a money=20
judgment for sanctions and attorney=3Ds fees in favor of =
appellee,=20
Larry McDougal. We affirm the judgment as =
modified.
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; =
; =20
BACKGROUND
In January 2000, =
McDougal, a=20
licensed attorney, filed suit in county court against appellant =
Saramma=20
Thottumkal for stopping payment on a check written for legal =
services=20
rendered by McDougal. McDougal recovered a final judgment in =
his=20
favor. Thereafter, on May 4, 2005, the Thottumkals filed a =
separate=20
suit against McDougal in district court alleging that: (1) =
their=20
adult son wrote the check subject of the 2000 lawsuit without =
their=20
consent; (2) McDougal committed perjury in the 2000 lawsuit when =
he=20
testified that he provided legal services to Saramma Thottumkal, =
when in=20
fact such services were performed for the Thottumkals=3D adult son; and (3) =
McDougal=20
used scare tactics, coercion, and forceful means to pressure =
Saramma=20
Thottumkal to pay the check.
On May 16, 2005, =
McDougal wrote=20
a letter to the Thottumkals informing them that their lawsuit was=20
frivolous and time-barred and gave the Thottumkals ten days to =
withdraw=20
the lawsuit; otherwise McDougal would seek sanctions. The=20
Thottumkals did not respond to the letter. On May 25, 2005, =
McDougal=20
filed his answer, and two days later he filed a motion for =
sanctions=20
pursuant to Texas Rule of Civil Procedure 13 and sections 9 and 10 =
of the=20
Texas Civil Practice and Remedies Code. McDougal also filed =
a=20
no-evidence motion for summary judgment and requested =
attorney=3Ds fees for the =
preparation and=20
defense of the lawsuit. On August 11, 2005, the Thottumkals =
sent a=20
letter to the court requesting that their lawsuit be =
withdrawn.
The trial court =
subsequently=20
granted McDougal=3Ds motion for =
sanctions and=20
no-evidence motion for summary judgment. The judgment makes =
a single=20
award of $5,536.50 on two grounds: (1) relief sought in=20
defendant=3Ds motion for =
sanctions under=20
section 10 of the Texas Civil Practice and Remedies Code; and (2) =
relief=20
sought in defendant=3Ds motion for summary =
judgment=20
for defending against the instant lawsuit.
On appeal, the =
Thottumkals=20
argue that the trial court abused its discretion because (1) the =
evidence=20
is insufficient to support the imposition of sanctions under rule =
13 and=20
sections 9 and 10 of the Texas Civil Practice and Remedies Code =
and (2)=20
there is no legal basis to support the award of =
attorney=3Ds fees to McDougal =
for=20
defending against the lawsuit.
STANDARD=20
OF REVIEW
A trial =
court=3Ds ruling on a motion =
for=20
sanctions is reviewed under an abuse of discretion standard. =
Cire=20
v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). The test =
for =20
abuse of discretion is not whether, in the opinion of the =
reviewing court,=20
the facts present an appropriate case for the trial =
court=3Ds action, but whether =
the court=20
acted without reference to any guiding rules and principles. =
Id. at 838-39. When determining if the trial court =
abused its=20
discretion, we engage in a two-part inquiry. First, we must =
ensure=20
that the punishment was imposed on the true offender and tailored =
to=20
remedy any prejudice caused. Id. at 839; see also =
Save Our=20
Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist., 198 =
S.W.3d 300,=20
319 (Tex. App.CTexarkana 2006, pet.=20
denied). Second, we must make certain that less severe =
sanctions=20
would not have been sufficient. Cire, 134 S.W.3d at =
839;=20
Save Our Springs, 198 S.W.3d at 319-320.
ANALYSIS=20
Section 10=20
Sanctions
Though sanctions are =
available=20
under rule 13 of the Texas Rules of Civil Procedure and sections 9 =
and 10=20
of the Texas Civil Practice and Remedies Code, the judgment refers =
only to=20
section 10. Therefore, we confine our analysis to section =
10, which=20
states A[a] court that =
determines that=20
a person has signed a pleading or motion in violation of [s]ection =
10.001=20
may impose a sanction on the person, a party represented by the =
person, or=20
both.@ Tex. Civ. =
Prac. &=20
Rem. Code Ann. =
' 10.004(a) (Vernon =
2002). =20
Section 10.001 provides:
The signing of a pleading or motion as =
required by=20
the Texas Rules of Civil Procedure constitutes a certificate by =
the=20
signatory that to the signatory=3Ds best knowledge, information, and =
belief, formed=20
after reasonable inquiry:
(1) the pleading or motion is not being =
presented=20
for any improper purpose, including to harass or to cause =
unnecessary=20
delay or needless increase in the cost of litigation;=20
(2) each claim, defense, or other legal =
contention=20
in the pleading or motion is warranted by existing law or by a=20
nonfrivolous argument for the extension, modification, or reversal =
of=20
existing law or the establishment of new law;
(3) each allegation or other factual =
contention in=20
the pleading or motion has evidentiary support or, for a =
specifically=20
identified allegation or factual contention, is likely to have =
evidentiary=20
support after a reasonable opportunity for further investigation =
or=20
discovery; and
(4) each denial in the pleading or =
motion of a=20
factual contention is warranted on the evidence or, for a =
specifically=20
identified denial, is reasonably based on a lack of information or =
belief.
Id. at ' 10.001. =20
The trial court found =
that the=20
Thottumkals did not exercise due diligence and failed to make a =
reasonable=20
inquiry and examination Ainto the validity of =
their=20
claims@ and =
Aany potential =
bars@ including =
Astatute of =
limitations, res=20
judicata, and/or collateral estoppel.@ The =
Thottumkals do not=20
dispute that their claims were groundless, but only that it was=20
McDougal=3Ds burden, as the =
movant, to=20
prove their failure to make a reasonable inquiry and to exercise =
due=20
diligence before filing suit, neither of which they contend =
McDougal=20
proved. Courts must presume that pleadings are filed in good =
faith. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); =
see=20
also GTE Commc=3Dns Sys. Corp. v.=20
Tanner, 856=20
S.W.2d 725, 730 (Tex. 1993); Save Our Springs, 198 S.W.3d =
at=20
321. The party seeking sanctions bears the burden of =
overcoming the=20
presumption of good faith in the filing of pleadings. =
Save Our=20
Springs, 198 S.W.3d at 321. Though sanctions are =
available under=20
rule 13 and sections 9 and 10, only rule 13 and section 9 =
explicitly=20
presume that pleadings are filed in good faith. See =
Tex. R.=20
Civ. P. 13 (stating that courts shall presume pleadings, motions, =
and=20
other papers are filed in good faith); Tex. Civ. Prac. & Rem. =
Code=20
Ann. ' 9.003 (indicating =
that section=20
9 does not alter the Texas Rules of Civil Procedure). The =
Texas=20
Supreme Court and at least one court of appeals have analyzed =
section 10=20
sanctions under the same standards and presumptions as rule 13 and =
section=20
9. See Low, 221 S.W.3d at 614 (reviewing section 10 =
sanctions=20
under the same standard as Rule 13); Save Our Springs, 198 =
S.W.3d=20
at 319-321 (adopting the Rule 13 presumption and standard of =
review for=20
section 10 sanctions). Following Low and Save Our=20
Springs, we extend the presumption that pleadings are filed in =
good=20
faith to section 10 sanctions.
Jose Thottumkal =
admitted that=20
he filed the instant lawsuit based on his personal feelings about =
the=20
inequities of the 2000 lawsuit, rather than the validity of the =
claims and=20
any potential bars. Had the Thottumkals made a reasonable =
inquiry=20
before filing suit, they would have discovered that their claims =
were=20
barred by statute of limitations, res judicata, and/or collateral =
estoppel=20
from the 2000 lawsuit. McDougal also sent a letter to the=20
Thottumkals after being served with the lawsuit detailing legal =
bars to=20
their claims. However, the Thottumkals waited until after =
McDougal=20
filed an answer, motion for summary judgment, and motion for =
sanctions=20
before they dismissed the suit. McDougal produced adequate =
evidence=20
rebutting the presumption that the Thottumkals=3D petition was filed =
in good=20
faith. McDougal also produced sufficient evidence that the=20
Thottumkals failed to conduct a reasonable inquiry into the =
validity of=20
their claims prior to filing suit, which would have revealed that =
it was=20
groundless.
Applying the =
appropriate=20
standard of review, we hold that the monetary sanction was imposed =
on the=20
true offender, the Thottumkals, and tailored to remedy the =
prejudice=20
caused to McDougal. See Cire, 134 S.W.3d at =
839. =20
Furthermore, the award of $5,536.50 was proper as McDougal =
produced=20
evidence that the expenses incurred, including reasonable=20
attorney=3Ds fees, was $5,536.50 =
for the=20
Thottumkals=3D sanctionable =
conduct. =20
See Tex. Civ. Prac. & Rem. Code Ann. ' 10.004(c)(3) =
(stating that a=20
section 10 sanction may include reasonable attorney=3Ds fees =
incurred). No less=20
severe sanction would have been sufficient. We overrule the=20
Thottumkals=3D first issue. =20
Non-Sanction=20
Award
In their second =
issue, the=20
Thottumaks allege that the trial court abused its discretion in =
awarding=20
attorney=3Ds fees based on=20
McDougal=3Ds motion for summary =
judgment=20
for defending against the lawsuit because such award is =
unsupported by any=20
statute, rule, or contractual authority. We agree. =
Because=20
McDougal moved for attorney=3Ds fees in his summary =
judgment=20
motion under rule 166a(c), he has the burden to prove entitlement =
to those=20
fees as a matter of law. Garcia v. Nat=3Dl Eligibility Exp.,=20
Inc., 4 S.W.3d=20
887, 889 (Tex. App.CHouston [1st Dist.] =
1999, no=20
pet.). To recover statutory attorney=3Ds fees, McDougal must =
have=20
presented a claim to the opposing party. See Energen =
Resources=20
MAQ, Inc. v. Dalbosco, 23 S.W.3d 551, 559 (Tex. =
App.CHouston [1st Dist.] =
2000, pet.=20
denied). The Texas Civil Practice and Remedies Code does not =
provide=20
for the recovery of attorney=3Ds fees by a defendant =
who only=20
defends against a plaintiff=3Ds claim and presents =
no claim=20
of his own. Id.; see also American Airlines, Inc. =
v.=20
Swest, Inc., 707 S.W.2d 545, 547 (Tex. 1986) (holding that the =
defendant could not recover attorney=3Ds fees under section =
38.001=20
when it presented no contract claim of its own). No statute=20
authorized McDougal=3Ds recovery of=20
attorney=3Ds fees for defending =
against=20
the lawsuit. Because McDougal did not produce evidence of a =
contractual=20
right to attorney=3Ds fees, and there is =
no statute=20
authorizing attorney=3Ds fees for defending =
against a=20
claim, the trial court abused its discretion in awarding=20
attorney=3Ds fees to McDougal =
for=20
defending against the Thottumkals=3D=20
lawsuit.
While the award of=20
attorney=3Ds fees based on=20
McDougal=3Ds motion for summary =
judgment=20
for defending against the lawsuit is improper, the fee award for =
the=20
Thottumkals=3D sanctionable conduct =
under=20
section 10 is proper. See Tex. Civ. Prac. & Rem. =
Code=20
Ann. '' 10.001, 10.002, =
10.004. =20
The trial court=3Ds order does not =
clearly state=20
that it awarded attorney=3Ds fees only for the=20
sanctionable conduct; it potentially awards attorney=3Ds fees based on the =
summary=20
judgment motion. To the extent that the order does grant=20
attorney=3Ds fees on the summary =
judgment=20
motion, we sustain the Thottumkals=3D second =
issue. =20
Accordingly, we =
modify the=20
judgment to delete the award of attorney=3Ds fees as requested =
in=20
defendant=3Ds motion for summary =
judgment=20
for defending against this lawsuit and reflect that the award in =
the=20
amount of $5,536.50 is awarded to McDougal for sanctions under =
section=20
10.
We affirm the =
judgment as so=20
modified.
/s/ =20
Adele Hedges
Chief Justice
Judgment rendered and =
Majority=20
and Concurring Opinions filed January 15, 2008.
Panel consists of =
Chief Justice=20
Hedges, Justice Fowler, and Senior Justice Edelman.* (Edelman, J.=20
concurring).
Publish=20
C =
Tex. R. App. P.=20
47.2(b).
* Senior Justice =
Richard H.=20
Edelman sitting by=20
assignment. |