Bosch v. Armstrong
(Tex.App.- Houston [1st Dist.] Jun. 11, 2009)(Jennings) (judicial communications privilege, immunity
to civil liability for statements made in course of judicial proceedings, sanctions for frivolous suit)
AFFIRM TC JUDGMENT:
Before Justices Jennings, Alcala and Higley. Opinion by Justice Terry Jennings
01-08-00847-CV
Yigal Bosch v. Mark S. Armstrong and Paul Bailiff and Squire, Sanders & Dempsey L.L.C.
Appeal from 280th District Court of Harris County
Trial Court Judge: The Honorable Tony Lindsay
http://www.1stcoa.courts.state.tx.us/opinions/case.asp?FilingID=91823
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Opinion issued June 11, 2009
In The
Court of Appeals
For The
First District of Texas
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NO. 01-08-00847-CV
_________
YIGAL BOSCH, Appellant
V.
MARK S. ARMSTRONG, PAUL BAILIFF, AND SQUIRE, SANDERS & DEMPSEY L.L.P., Appellees
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On Appeal from the 280th District Court
Harris County, Texas
Trial Court Cause No. 2008-17963
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MEMORANDUM OPINION
Appellant, Yigal Bosch, proceeding pro se, (1)
challenges the trial court's rendition of summary judgment in favor of appellees, Mark S. Armstrong,
Paul Bailiff, and Squires, Sanders & Dempsey, L.L.P. ("SSD"), in Bosch's suit against appellees for
misrepresentation, "abuse of process and interfering in free commerce," malicious prosecution,
defamation, and fraud. In eight issues, Bosch contends that the trial court erred in "overruling [his]
motion for a new trial by operation of law," granting appellees' summary judgment motion based upon
their affirmative defense of privilege, and in sanctioning him in the amount of $5,000 under Texas
Rules of Civil Procedure 13 and 215.2(b) based upon findings that he had "improperly attempted to
gain advantage" and had filed a groundless pleading in bad faith and for purposes of harassment.
We affirm.
Factual and Procedural Background
In his petition, filed on March 24, 2008, Bosch, a real estate investor, alleged that on September 19,
2007, appellees, on behalf of their client, Toni Scott, who was a business associate of
Bosch,"fraudulently filed a petition against [Bosch] and three other entities" for damages resulting
from the sale of a property in Corpus Christi. Bosch alleged that appellees, in this related lawsuit,
"intentionally presented untrue facts" in Scott's petition, harassed the purchaser of the property by
requesting documents, and ruined his reputation. Bosch further alleged that appellees had
"submitted fraudulent statements" to obtain a temporary restraining order in the related lawsuit.
In support of his misrepresentation claim, Bosch asserted that appellees had obtained the temporary
restraining order with a "false and perjuries [sic] affidavit" and had filed the related lawsuit without any
"investigation or study" "for the purpose of receiving legal fees." In support of his "abuse of process
and interfering in free commerce" claim, Bosch asserted that appellees had "institute[d] an obstacle
to future purchasers of real estate and abused federal laws." In support of his malicious prosecution,
defamation, and fraud claims, Bosch asserted that appellees had attempted to extort money from him
by filing the related lawsuit and wrongfully accusing Bosch of theft.
Appellees filed an answer, in which they generally denied Bosch's allegations and asserted the
affirmative defense of privilege on the ground that the statements upon which Bosch based his claims
"were made in the course of a judicial proceeding." Appellees then filed their summary judgment
motion, asserting that the statements made in Scott's petition were privileged and true. In their
summary judgment motion, appellees explained that, prior to their filing of Scott's lawsuit, Scott
retained Armstrong, an attorney with the law firm of SSD. Armstrong, on behalf of Scott, who was the
largest holder of membership interests in a limited liability company or companies that Bosch
managed, sent Bosch a notice of breach and a demand letter, claiming that Bosch had breached an
operating agreement by selling the company's property without the consent of the members and
retaining the proceeds of this sale. After Bosch failed to respond to the demand, Armstrong filed
Scott's petition, setting forth these allegations. Appellees explained that, after filing Scott's lawsuit,
Armstrong also served, on behalf of Scott, a notice of the related lawsuit upon the purchaser of the
property to alert it that Scott would be subpoenaing it for the purchase documents. Armstrong also
filed, on behalf of Scott, an application for a temporary restraining order, seeking orders prohibiting
Bosch from selling or otherwise encumbering the assets of Bosch's limited liability companies and
diluting or reducing Scott's membership interests. The trial court granted Scott's application in this
related lawsuit, and the parties subsequently entered into three agreed extensions of this restraining
order. Appellees attached to their summary judgment motion all of these documents from Scott's
lawsuit.
Appellees argued in their summary judgment motion that all of Bosch's claims in Scott's lawsuit were
barred by the affirmative defense of privilege because these claims arose from statements "made in
the court papers filed in the course of a judicial proceeding." Specifically, appellees asserted that the
privilege applied to the demand letters, pleadings, affidavits, temporary restraining order, and other
papers filed in Scott's lawsuit, including those served in connection with the case. Appellees also
challenged the factual basis of Bosch's claims by attaching evidence to show that the property in
question had been sold prior to the filing of Scott's lawsuit. Appellees argued that Bailiff, who was
another attorney at SSD, was entitled to summary judgment because his only connection with Scott's
lawsuit was the inclusion of his name in the signature block of the pleadings. Appellees asserted that
Armstrong was the attorney-in-charge of Scott's lawsuit and was solely responsible for the pleadings
and other documents filed in Scott's lawsuit. Finally, appellees sought sanctions on the ground that
Bosch's claims against them were groundless.
Bosch filed a response, asserting that appellees had filed Scott's lawsuit without any investigation into
or familiarity with the relevant statutory provisions with the motive to "increase litigation fees." In their
reply, appellees asserted that Bosch had not provided any summary judgment evidence that
appellees had made any representations outside of the related lawsuit or that Bailiff or SSD had
committed any of the conduct at issue.
The trial court granted appellees' summary judgment motion and dismissed Bosch's claims. The trial
court found that, in violation of Texas Rule of Civil Procedure 13, Bosch's claims against appellees
were groundless and were not warranted by a good-faith argument for the extension of existing law.
The trial court found that, in violation of rule 13, Bosch had "improperly attempted to gain an
advantage" in Scott's lawsuit by filing the instant lawsuit. The trial court sanctioned Bosch in the
amount of $5,000 for filing a groundless pleading in violation of rule 13. In its findings of fact and
conclusions of law, the trial court found that Bosch had filed a groundless pleading for the purpose of
harassment and in bad faith in violation of rule 13 and concluded that $5,000 was a reasonable
sanction.
Summary Judgment Hearing and New Trial Motion
In his first issue, Bosch argues that the trial court "abused its discretion by overruling [his] motion for
a new trial by operation of law" because it did not conduct a summary judgment hearing and "
prevented [him] from having his day in court and due process." We construe Bosch's brief to include
a complaint that the trial court abused its discretion in not setting a hearing on his new trial motion.
It is purely within a trial judge's discretion as to whether to hold an oral hearing on a summary
judgment motion. See Whiteside v. Ford Motor Credit Co., 220 S.W.3d 191, 194 (Tex. App.--Dallas
2007, no pet.); Retzlaff v. Texas Dept. of Criminal Justice, 135 S.W.3d 731, 745 (Tex. App.--Houston
[1st Dist.] 2003, no pet.). Here, the trial court considered appellees' summary judgment motion under
submission without an oral hearing. Bosch's due process rights were satisfied as long as he received
a reasonable opportunity to present his written response and evidence. See Whiteside, 220 S.W.3d
at 194-95. Bosch does not complain that he did not receive proper notice of the hearing, nor does he
complain that he was denied the opportunity to respond to and present evidence in regard to the
summary judgment motion. Accordingly, we hold that the trial court did not abuse its discretion in not
holding an oral hearing. See id.
In regard to the new trial motion, there is nothing in the record before us that indicates that Bosch
ever timely requested a hearing on his new trial motion or that the trial court denied any such
request. Although Bosch complained in his new trial motion about the trial court's consideration of the
summary judgment issues by submission, Bosch specifically requested that the trial court simply
"read" the new trial motion. Bosch only requested an oral hearing on his new trial motion after the trial
court had lost plenary power over the case. Moreover, Bosch does not assert that the failure of the
trial court to conduct a hearing on his new trial motion precluded him from presenting evidence
necessary to support any of the grounds asserted for the new trial. See Tex. R. Civ. P. 324(b)(1). We
hold that Bosch waived any request for a hearing on his new trial motion and that the trial court did
not err in overruling his motion by operation of law. See Tex. R. Civ. P. 329b(c).
We overrule Bosch's first issue.
Summary Judgment
In his second issue, Bosch contends that the trial court erred in granting appellees' summary
judgment motion. Other than setting forth the general summary judgment standard of review, Bosch
provides the following, very limited briefing on this issue:
The [Appellees] in the [related lawsuit] raised the issue of defamation, but ignored the other causes
of actions, the interference in the general commerce, the TRO, the misrepresentations of facts, the
violations of the LLCA's rules and the loss of sale, all of which preclude summary judgment.
Defendants used the defense of absolute privilege, which is not a defense for violating the rules.
. . . .
[Appellees] moved on the cause of action for defamation only. Ignoring the rules of and law's
violations. [sic]
Bosch provides no authority in his briefing of this issue related to appellees' assertion of privilege. He
also does not provide any specific discussion as to how the defense of privilege applies or does not
apply to his claims.
In his eighth issue, which is related to his second, Bosch contends that the trial court erred in finding
that appellees' defense of privilege applied to bar his claims. In his briefing in support of this issue,
Bosch primarily attacks the merits of Scott's claims in the related lawsuit. For example, Bosch states
that Scott's related lawsuit "was barred by law" and that the timing of the related lawsuit was
"premature" because the "final sale [of the property] occurred" after the filing of the related lawsuit.
Citing to various statutory provisions and rules, Bosch further contends that Scott "did not have
standing to sue or capacity to sue Bosch at the time she did, therefore the absolute privilege was not
invoked."
To prevail on a summary judgment motion, a movant has the burden of proving that it is entitled to
judgment as a matter of law and that there is no genuine issue of material fact. Tex. R. Civ. P.
166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). When a defendant moves for summary
judgment, it must either (1) disprove at least one essential element of the plaintiff's cause of action or
(2) plead and conclusively establish each essential element of its affirmative defense, thereby
defeating the plaintiff's cause of action. Cathey, 900 S.W.2d at 341; Yazdchi v. Bank One, Tex., N.A.,
177 S.W.3d 399, 404 (Tex. App.--Houston [1st Dist.] 2005, pet. denied). When deciding whether
there is a disputed, material fact issue precluding summary judgment, evidence favorable to the
non-movant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985).
Every reasonable inference must be indulged in favor of the non-movant and any doubts must be
resolved in its favor. (2) Id. at 549.
In Texas, lawsuits against an opposing counsel are discouraged if "based on the fact that counsel
represented an opposing party in a judicial proceeding." Alpert v. Crain, Caton & James, P.C., 178
S.W.3d 398, 405 (Tex. App.--Houston [1st Dist.] 2005, pet. denied) (citing Bradt v. Sebek, 14 S.W.3d
756, 766 (Tex. App.--Houston [1st Dist.] 2001, pet. denied)). Of course, an attorney has a duty to
"zealously represent his clients within the bounds of the law." Id. (citing Bradt v. West, 892 S.W.2d 56,
71-72 (Tex. App.--Houston [1st Dist.] 1994, writ denied)). In fulfilling his duty, an attorney has "the
right to interpose defenses and pursue legal rights that he deems necessary and proper, without
being subject to liability or damages." Id. "If an attorney could be held liable to an opposing party for
statements made or actions taken in the course of representing his client, he would be forced
constantly to balance his own potential exposure against his client's best interest." Id. "Thus, to
promote zealous representation, courts have held that an attorney is 'qualifiedly immune' from civil
liability, with respect to non-clients, for actions taken in connection with representing a client in
litigation." (3) Id. "This qualified immunity generally applies even if conduct is wrongful in the context
of the underlying lawsuit." Id. (citing Renfroe v. Jones & Assocs., 947 S.W.2d 285, 288 (Tex.
App.--Fort Worth 1997, writ denied)). "Thus, an attorney's conduct, even if frivolous or without merit,
is not independently actionable if the conduct is part of the discharge of the lawyer's duties in
representing his or her client." Id. at 406. In determining whether an attorney is immune, the focus is
on "the type of conduct, not on whether the conduct was meritorious in the context of the underlying
lawsuit." (4) Id.
Here, it is undisputed that Bosch's claims in the instant lawsuit are based upon communications and
statements made by appellees in the course of representing Scott in her lawsuit. Appellees sent, on
behalf of Scott, a pre-suit demand letter, and then filed, on behalf of Scott, pleadings. Appellees are
entitled to the protection of a qualified immunity or privilege for the statements and assertions made
in these documents on behalf of Scott. See Alpert, 178 S.W.3d at 405; Watson v. Kaminski, 51
S.W.3d 825, 827 (Tex. App.--Houston [1st Dist.] 2001, no pet.). Appellees also sought, and obtained,
a temporary restraining order on behalf of Scott in the related lawsuit. (5) Any statements made in
this application were made in the course of judicial proceedings and, thus, these statements are
subject to the defense of immunity or privilege. See Alpert, 178 S.W.3d at 405. Accordingly, we hold
that the trial court did not err in granting summary judgment in appellees' favor on all of Bosch's
claims.
We overrule Bosch's second and eighth issues.
Sanctions
In his third, fourth, fifth, sixth, and seventh issues, Bosch contends that the trial court erred in finding
that he had "improperly attempted to gain advantage" by filing the instant lawsuit, sanctioning him
under rules 13 and 215.2(b), finding that he had filed a groundless and harassing pleading, and
finding that a reasonable attorney's fee or sanction was $5,000. Bosch asserts that the related
lawsuit "did not have any merits" and Scott had "no right or standing to sue" in the related lawsuit.
Bosch also asserts that the $5,000 sanction is based upon appellees' "limited papers" of a general
denial and a summary judgment motion. Bosch argues that he did not file the related lawsuit for
purposes of harassment because Scott's "alleged misrepresentations in her affidavit for the TRO [in
the related lawsuit] constitute a wrongful use of the court system and an abuse of process" and that
the evidence showed that appellees' "request for production from a third party" constituted a "clear
interference with the practice of buyers who would like to preserve secrecy in their dealings to gain
advantage in negotiations during sale." (6)
We review a trial court's rule 13 sanction order under an abuse of discretion standard, and we must
determine whether the trial court acted without reference to any guiding rules and principles. Bradt,
14 S.W.3d at 760-61. The trial court's discretion is limited only by the requirement that its order be
just and that the sanction imposed be directly related to the harm done by the sanctioned conduct. Id.
at 761.
The signatures of attorneys or parties "constitute a certificate by them" that they have read their
pleadings, motions, or other papers and, to the best of their knowledge, information, and belief
formed after reasonable inquiry, "the instrument is not groundless and brought in bad faith or
groundless and brought for the purpose of harassment." Tex. R. Civ. P. 13. If a trial court imposes
sanctions under rule 13, it is authorized to "impose an appropriate sanction" under rule 215, "upon
the person who signed [the pleading, motion, or other paper], a represented party, or both." Id. Rule
215 allows a trial court to charge a sanctioned party with court costs, litigation expenses, and
"reasonable expenses, including attorney fees." Tex. R. Civ. P. 215.2(b)(8). A pleading is
"groundless" when it has "no basis in law or fact and [is] not warranted by good faith argument for the
extension, modification, or reversal of existing law." Tex. R. Civ. P. 13. A trial court may only impose
sanctions under rule 13 for good cause, "the particulars of which must be stated in the sanction
order." Id.
Here, the trial court found that Bosch's pleadings in the instant lawsuit were groundless and brought
in bad faith and for the purpose of harassment. See Tex. R. Civ. P. 13. Bosch's claims in the instant
lawsuit clearly arose from statements made by appellees, in their capacity as the attorneys for Scott,
in her lawsuit, which even Bosch agrees was pending at the time that Bosch filed the instant lawsuit.
By filing the instant lawsuit, Bosch attempted to raise defensive issues that should have been
asserted in the related lawsuit. For example, Bosch asserted in the instant lawsuit that statutory
provisions deprived Scott from bringing the related lawsuit. (7) Bosch provided no explanation or
authority to the trial court or this Court for his raising of these issues in a separate lawsuit while the
related lawsuit was ongoing. Moreover, Bosch's claims of defamation and his related claims in the
instant lawsuit, as pleaded, are clearly based on statements made by appellees, on behalf of Scott,
that are subject to the defense of immunity or privilege because these statements were made by
appellees in discharging their duties in the course of judicial proceedings. We conclude that Bosch's
claims in the instant lawsuit were groundless. See Bradt, 14 S.W.3d at 766 (affirming trial court's
groundless finding and noting that "[a]ppellant had before him ample precedent to recognize that
Texas case law frowns on suing opposing counsel simply for representing a party in a judicial
proceeding").
The trial court, in its findings of fact, found that Bosch brought the instant lawsuit "to gain an
advantage" in the related lawsuit and that his claims were brought in bad faith and for purposes of
harassment. The trial court's findings are supported by the record before us. Bosch, in bringing the
instant lawsuit, sought to raise matters that should have been raised in the related lawsuit, not in an
entirely separate case. In filing the instant lawsuit, Bosch complained that Scott did not have standing
to pursue her claims. Based upon this assertion, Bosch attempted to sue Scott's attorneys, and their
law firm, without any legal or factual basis. Moreover, it is undisputed that the related lawsuit was
pending at the time Bosch filed the instant lawsuit. To the extent that Bosch sought damages for
injuries allegedly sustained as a result of the related lawsuit, all of the statements at issue were made
by appellees in the course of the related lawsuit. The trial court could have reasonably concluded
that the claims brought by Bosch in the instant lawsuit were frivolous and were brought for the
purpose of harassing appellees for representing Scott in her lawsuit. Bosch has provided this Court
with no valid argument or authority to show that the trial court abused its discretion in concluding that
Bosch's intent was to harass appellees with his frivolous claims, which certainly resulted in a waste of
judicial resources. See Bradt, 14 S.W.3d at 761.
In regard to the amount of the sanction, Bosch's only specific assertion is that appellees filed "limited
papers" in the instant lawsuit. Even assuming that Bosch has presented a complaint regarding the
amount of the sanction, Bosch has not provided us with the record from any sanctions hearing, and
he has not asserted that the trial court failed to conduct a hearing or provide him proper notice. (8) It
was Bosch's burden to provide this Court with a record supporting his argument. Appleton v.
Appleton, 76 S.W.3d 78, 87 (Tex. App.--Houston [14th Dist.] 2002, no pet.). In the absence of a
reporter's record, we cannot determine whether the trial court erred in the amount of sanctions
awarded or whether Bosch preserved any error relating to the amount. Id. In sum, we hold that the
trial court did not abuse its discretion in imposing sanctions under rule 13.
We overrule Bosch's third, fourth, fifth, sixth, and seventh issues.
Conclusion
We affirm the judgment of the trial court.
Terry Jennings
Justice
Panel consists of Justices Jennings, Alcala, and Higley.
1. We note that parties who represent themselves pro se must comply with all applicable laws and
rules of procedure and are held to the same standards as are licensed attorneys. See Mansfield
State Bank v. Cohn, 573 S.W.2d 181, 184 (Tex. 1978); Kanow v. Brownshadel, 691 S.W.2d 804, 806
(Tex. App.--Houston [1st Dist.] 1985, no writ).
2. We assume, without deciding, that Bosch has adequately briefed the issue of the trial court's
granting of summary judgment in favor of appellees on the affirmative defense of privilege or, as we
refer to it, qualified immunity. We initially note that, contrary to Bosch's contention on appeal,
appellees plainly sought summary judgment on all of Bosch's claims.
3. Although we use the term "qualified immunity" to describe the appellees' affirmative defense, we
note that our Court, and other courts, also refer to the defense as one of "privilege." See Watson v.
Kaminski, 51 S.W.3d 825, 827 (Tex. App.--Houston [1st Dist.] 2001, no pet.). For example, in Watson,
we explained that "[a]n attorney's statements made during litigation are not actionable as defamation,
regardless of negligence or malice," and we described this as an "absolute privilege," which "includes
communications made in contemplation of and preliminary to judicial proceedings." Id. We noted that
"[t]o be privileged, the communication must relate to pending or proposed litigation and must further
the attorney's representation," and we cautioned that " [a]n absolute privilege does not extend to an
attorney's communications outside of judicial proceedings." Id. Finally, we explained that "[w]hether a
statement relates to a proposed or existing judicial proceeding is a question of law" and that a trial
court "must consider the entire communication in its context and must extend the privilege to any
statement that bears some relation to an existing or proposed judicial proceeding." Id.
4. "For example, a third party has no independent right of recovery against an attorney for filing
motions in a lawsuit, even if frivolous or without merit, although such conduct is sanctionable or
contemptible as enforced by the statutory or inherent powers of the court." Alpert v. Crain, Caton &
James, P.C., 178 S.W.3d 398, 406 (Tex. App.--Houston [1st Dist.] 2005, pet. denied). This is
"because making motions is conduct an attorney engages in as part of the discharge of his duties in
representing a party in a lawsuit." Id.
5. We note that Bosch entered into multiple, subsequent agreements to extend this restraining order.
6. As we discuss below, Bosch has not provided this Court with the record from any hearing held on
the sanctions imposed by the trial court. We note that, although Bosch cites the rule requiring notice
and a hearing prior to imposing sanctions, Bosch does not raise an issue concerning any alleged
lack of notice or a hearing. To the extent he has attempted to raise such an issue, we hold that he
has inadequately briefed it. See Tex. R. App. P. 38.1(h).
7. In his reply brief, Bosch states that he brought the instant lawsuit to stop the "filing of an unlawful
lawsuit," but he offers no explanation as to whether he raised these issues in the related lawsuit and,
if not, why he did not raise these issues.
8. It appears from Bosch's briefing that there was a hearing conducted on the issue of sanctions. For
example, in his brief, Bosch refers to a $250 hourly rate for attorney's fees that may have been
considered by the trial court, and, in his reply brief, Bosch states that the trial court set the sanctions
hearing.