Opinion
03-22-00532-CV
06-19-2024
Phyllis McRae, Appellant v. WMCI Austin VIII LLC d/b/a Bexley Wolf Ranch, Appellee
FROM COUNTY COURT AT LAW NO. 4 OF WILLIAMSON COUNTY NO. 22-0501-CC4, THE HONORABLE JOHN MCMASTER, JUDGE PRESIDING
Before Justices Baker, Kelly, and Smith, J.
MEMORANDUM OPINION
Thomas J. Baker, Justice.
Phyllis McRae, appearing pro se, appeals from the trial court's take-nothing judgment in her suit against WMCI Austin VIII LLC d/b/a Bexley Wolf Ranch (Bexley) for negligence arising out of Bexley's handling of an application to lease a unit in an apartment complex Bexley owned and managed. She also challenges the trial court's award of attorneys' fees to Bexley as Rule 13 sanctions. See Tex. R. Civ. P. 13. In two issues, McRae asserts that the trial court violated her constitutional right to due process when it "quickly rendered its verdict, directly after defense introduced a criminal allegation in court" and that its sanctions award was error. We will affirm the trial court's take-nothing judgment on McRae's negligence claim, and we will reverse the trial court's award of Rule 13 sanctions.
BACKGROUND
McRae sued Bexley in justice court, asserting that Bexley was negligent in its handling of her application to lease an apartment. Specifically, McRae alleged that a Bexley property manager was "negligent and careless with [her] approved application by failure to inform" which "resulted in [her] sustaining thousands of dollars in damages." McRae also alleged that the property manager failed to timely provide her with a "required form," apparently a form that would entitle her to have a support animal in the residence without having to pay a pet deposit or monthly pet fee, causing "forfeiture of the apartment only one week before move in." Bexley filed a general denial and filed a counterclaim seeking attorneys' fees pursuant to Rule 13 of the Texas Rules of Civil Procedure. After a bench trial, the justice court rendered a take-nothing judgment against McRae and awarded Bexley $2,204.50 in attorneys' fees. McRae appealed the judgment to the Williamson County Court at Law. See Tex. R. Civ. P. 506 (providing right to appeal justice court judgment to county court for trial de novo).
Bexley asserted no other basis for its request for an award of attorneys' fees.
At the trial in county court, McRae asserted in her opening statement that the issue before the court was whether Bexley was negligent "under the statute of the Deceptive Trade Practices Act, specifically 16.46 to 50" by "neglectfully handling of her application to live" in a unit at the Bexley Wolf Ranch apartment complex. McRae stated that the Bexley property manager did not give her "a complete application up front" and then later gave her a document that "was not ADA compliant." McRae argued that by the time she received the document, she had already been approved for an apartment and had a move-in date. McRae stated that she had paid an application fee and a deposit, both of which were returned to her. McRae stated that she suffered monetary damages as a result of not receiving a complete rental application package "up front" and because "there was one document that came in very late in the game."
Bexley countered that it had no landlord-tenant duty to McRae because it was never McRae's landlord and that there was no other relationship between them that could give rise to any other duty with regard to her application to rent a unit in the apartment complex. Bexley also represented to the court that, based on the justice court proceedings, the dispute concerned a Disability Accommodation Verification Request form, which though not part of the application to lease a unit "is often requested and provided when the disability of a potential resident is not made apparent during the application process." Bexley requested that the Court rule that McRae take nothing and that it award it, as sanctions, the fees expended in defending the case in both justice and county courts.
In her case in chief, McRae testified that when she applied to lease the unit, she "did what was required of her for the screening process," submitted "all the right things," "passed the screening to get the apartment," and was given a move-in date. McRae testified that one issue was not "answered from the very start," which was "how they handle rent regarding [her] service dog." McRae stated that a pet deposit and monthly "pet rent" would have precluded her from being able to afford to rent the apartment. McRae testified that she was approved as a tenant on July 29th, 2021, but still had not heard how Bexley would handle the issue of a pet deposit and rent for her service dog. McRae testified that she went to the office and "encountered someone who identified themself as the manager." McRae described the interaction with this person as "a little too hostile for me and I'm a stranger, I don't know what happened there." McRae stated that the individual "started shaking their head and they typed in the computer" and directed McRae to "go home and check your email, there's something else that you have to fill out." McRae testified that her email contained a "DVR" form that "followed no known protocol for the ADA at all." McRae described the form as "wanting to dig deeper into [her] medical file" and as seeking "an exact description of [her] illness." McRae testified that she called the office and "encountered the same individual who sent [her] home" and informed that person that the form "appears to be illegal and you can't ask these questions of me." McRae asked the person "by what justification this form was invented and why wasn't it given to me sooner" and described the interaction as "a little tense on behalf of this person to the point where, I don't want to say I was frightened, but I was pretty surprised that someone could go be that angry when I didn't do anything wrong." McRae testified that "the basic gist of it was, It's our way or the highway." McRae stated that she did not sign a lease but, rather, "pulled out right then and there." McRae testified that once she decided to "pull out of the deal," she called the office to "make absolutely sure that they had on record that I pulled out of the application." McRae stated that "it was understood" and that Bexley returned her deposits.
McRae then testified that there were only 14 days left before the proposed move-in and that because of a "housing crunch" in Williamson County, there was not enough time to find another apartment. McRae stated that she was forced to be "homeless, living in the forests, sleeping on the ground, sleeping in [her] car" in her condition and with her disabilities. McRae stated that "this isn't a civil rights case" but "I just think I had a right according to business practices to all the documentation up front." McRae testified that had she received the DVR form earlier she still would have refused to fill it out but would have had 30, rather than 14, days to find alternative housing. McRae stated that the basis for her negligence claim against Bexley was that it did not give her "up front all of the documents that would be required in order to get inside the apartment with that rent concession that I needed for the service dog."
The court then heard testimony from Savannah Stiba, the property manager at the Bexley Wolf Ranch apartment complex. Stiba testified that the Disability Accommodation Verification Request form is not part of the application process but is provided to prospective tenants who have a service animal as one way to verify eligibility. Stiba testified that she provided a copy of the form to McRae when McRae mentioned that she had a service animal. Stiba stated that filling out the form is not a requirement but is one option for securing approval for a service animal. Stiba testified that a prospective tenant can either fill out the form or provide a letter from their physician verifying that the animal is a service animal. Stiba stated that she informed McRae that she could fill out as much or as little of the form as she wanted and return it to Stiba or, alternatively, provide a letter from her physician.
The court then heard testimony from Bexley's counsel, Allison Mattocks, regarding attorneys' fees. Mattocks testified that she was licensed to practice law in Florida and Texas and practiced primarily trial work with an emphasis on multi-family housing issues. Mattocks testified that she represented Bexley in both the justice and county court proceedings and charged an hourly rate of $325. Mattocks introduced an exhibit that detailed the time spent on the case, with billing in tenths of an hour describing tasks performed. The exhibit also included work performed by a paralegal at an hourly rate of $90. Mattocks testified that she was familiar with the usual and customary fees charged in and around Williamson County and that her fees were comparable to those of others of similar experience in similar types of cases. Mattocks testified that she was familiar with the State Bar of Texas guidelines regarding attorneys' fees and that she had adhered to those guidelines. Mattocks stated that a reasonable and necessary fee for the usual and customary services rendered in this case for Bexley was $4,402.00, which represented 19 hours of work by her and the paralegal.
At the close of the evidence, the court stated that it found that McRae's suit was "harassing" and that it would award Bexley attorneys' fees of $4,400 as sanctions. Thereafter, the court rendered a take-nothing judgment on McRae's claim of negligence and awarded Bexley $4,400 in attorneys' fees for preparation and trial, along with conditional attorneys' fees of $5,000 for an unsuccessful appeal to this Court, $3,000 in the event McRae filed a petition for review in the Texas Supreme Court and such petition was denied, and $5,000 in the event the petition for review was granted but McRae's appeal was unsuccessful. This appeal followed.
DISCUSSION
In her first issue, McRae asserts that the trial court "committed a prejudicial error of McRae's constitutional right to due process, under the Fifth, Sixth, and Fourteenth Amendments of [sic] the United States Constitution-when it quickly rendered its verdict, directly after defense introduced a criminal allegation to the court." In her summary of the argument contained in her brief, McRae states that "[suppressed evidence swayed the court for defense, in violation of McRae's right to due process." In her brief, McRae asserts that "without warning, the trial turned" from a civil proceeding regarding a negligence claim "to one with criminal overtones." McRae contends that opposing counsel:
without notice to McRae, pursuant to (Tex. Civ. P. R. 194.2) made the decision to announce a criminal allegation against McRae, to the court. Defense had not pled or disclosed the allegation, pursuant to (F.R.C.P.) (37). The allegation is as follows: "We were wondering if its personal." (Att. Allison Mattocks, Aug. 5th, Williamson County Tex. Court # 4). This new introductory allegation was not in compliance with the Tex. R. Ev. (403), (404(a), (404b-1), 405(1)). Defense did not provide proof of this allegation to the court. McRae used her Fifth Amendment right to remain silent.(Emphasis in original). McRae asserts that "in response to the allegation, the court [nearly instantly] awarded defendants' atty's fees." McRae's brief includes argument regarding the meaning of the statement "We were wondering if its personal" to support her assertion that the statement improperly "sway[ed] the court for the defense," causing a "distorted ruling in favour of defendants" thereby prejudicing McRae's constitutional rights. We need not address the merits of McRae's argument, however, because the record does not reflect that the statement "We were wondering if its personal" was ever made by Mattocks or by anyone else during trial. Moreover, McRae did not object to the alleged statement during trial. See Tex. R. App. P. 33.1 (requiring that complaint be made to trial court as prerequisite to presenting it for appellate review). We overrule McRae's first issue.
In her second issue, McRae asserts that the trial court did not have authority to award Bexley any attorneys' fees. McRae maintains that, in the absence of any contract between her and Bexley, there was no statutory basis for the award. See Tex. Civ. Prac. & Rem. Code § 38.001 (providing for award of attorneys' fee to prevailing party in breach of contract cause of action). In its pleadings, however, Bexley requested attorneys' fees as a sanction for McRae's filing a frivolous suit. See Tex. R. Civ. P. 13 (authorizing trial court to impose sanctions against party who files pleading that is groundless and brought in bad faith or groundless and brought for purpose of harassment); Emmons v. Purser, 973 S.W.2d 696, 700 (Tex. App-Austin 1998, no pet.).
A trial court's imposition of Rule 13 sanctions is within its discretion, and we set aside that decision only upon a showing of a clear abuse of discretion. Emmons, 973 S.W.2d at 699. In deciding whether the trial court abused its discretion, we determine whether the trial court's act was arbitrary, unreasonable, or without reference to guiding principles. Id. A trial court abuses its discretion in imposing sanctions only if it based its order on an erroneous view of the law or a clearly erroneous assessment of the evidence. Id.
The purpose of Rule 13 is to check abuses in the pleading process. Id. at 700. When determining whether Rule 13 sanctions are proper, the trial court must examine the circumstances existing when the litigant filed the pleading. Id. Rule 13 requires the court to base sanctions on the acts or omissions of the party and not on the legal merit of a pleading or motion. See Zarsky v. Zurich Mgmt., Inc., 829 S.W.2d 398, 400 (Tex. App.-Houston [14th Dist.] 1992, no writ). Filing a motion or pleading that the trial court denies does not entitle the opposing party to Rule 13 sanctions. See Schwager v. Texas Com. Bank, N.A., 813 S.W.2d 225, 226 (Tex. App.-Houston [1st Dist.] 1991, no writ). Courts should presume parties and their counsel file all papers in good faith, and the party seeking sanctions must overcome that presumption. See Tex. R. Civ. P. 13; GTE Commc'ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993). The party seeking sanctions has the burden of showing its right to relief. GTE Commc'ns, 856 S.W.2d at 731.
We will assume for the purpose of this discussion that the claims asserted by McRae were groundless. As previously noted, however, the inquiry does not end there. We must determine whether Bexley proved the additional element that the claim was brought either in bad faith or for the purpose of harassment. See id. (burden on moving party to overcome presumption that papers filed with court are brought in good faith); see also New York Underwriters Ins. Co. v. State Farm Mut. Auto. Ins., 856 S.W.2d 194, 205 (Tex. App.-Dallas 1993, no writ) (trial court must find that pleadings are in fact groundless and brought in bad faith or to harass).
Here, the trial court did not make findings of fact or conclusions of law nor did either party request them. After a bench trial, when neither party timely requests findings of fact or conclusions of law, and none are filed by the court, we must imply all necessary findings to support the trial court's judgment. Shields Ltd. P'ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017). When, as here, the record includes a reporter's record, implied findings may be challenged for legal and factual sufficiency in the same manner as a challenge to express findings of fact or jury findings. Id. In this case, at the conclusion of the trial, the court stated: "I do find that this is a harassing lawsuit." Thus, we imply a finding of fact that McRae brought her suit to harass Bexley. On appeal, McRae argues that there was never a hearing held to determine whether her suit was brought to harass Bexley. We understand McRae to challenge the legal sufficiency of the evidence supporting the trial court's finding that she brought suit for purposes of harassment.
When a party attacks the legal sufficiency of an adverse finding on which it did not have the burden of proof, the party must demonstrate that no evidence supports the adverse finding. Graham Cent. Station, Inc. v. Pena, 442 S.W.3d 261, 263 (Tex. 2014) (per curiam). In determining whether the evidence is legally sufficient to support the challenged finding, we review the evidence in the light most favorable to the finding. City of Keller v. Wilson, 168 S.W.3d 802, 807, 826 (Tex. 2005). We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. Id. Anything more than a scintilla of evidence is legally sufficient to support the challenged finding. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998).
Informed by this standard, we conclude that no evidence supports a finding that McRae filed suit against Bexley for harassment purposes or in bad faith. There was simply no direct testimony that McRae's intent in filing suit was to harass; in fact, as McRae points out, there was no hearing or other proceeding related to Bexley's request for sanctions. We will not infer bad faith or harassment solely from McRae's bringing a meritless suit, particularly in light of the fact that she was not represented by counsel. Having found no evidence in the record supporting a claim of harassment or of bad faith, we conclude that the trial court abused its discretion in ordering attorneys' fees as Rule 13 sanctions against McRae. We sustain McRae's second issue.
CONCLUSION
For the reasons stated in this opinion, we affirm the trial court's take-nothing judgment on McRae's claims against Bexley. We reverse the trial court's sanctions order and render judgment that Bexley take nothing on its request for an award of attorneys' fees as sanctions.
Affirmed in Part, Reversed and Rendered in Part.