Opinion
No. 10-02-00239-CV
Opinion delivered and filed July 14, 2004.
Appeal from the 249th District Court Johnson County, Texas, Trial Court # C-2001-00153.
Order affirmed.
Grey Pierson, Pierson Behr, Arlington, TX and Donald Ray, Attorney at Law, Arlington, TX, for appellant/relator.
G. Kevin Buchanan, Buchanan Boulware, Dallas, TX, and Dan M. Boulware, Buchanan Boulware, Cleburne, TX, and Curtis Pritchard, Lummus, Hallman, Pritchard Baker, Cleburne, TX, for appellee/respondent.
MEMORANDUM OPINION
We determine that a trial judge did not abuse his discretion when he denied motions to impose sanctions against a litigant and his attorneys.
Troy Martinez filed a class action petition against Yamaha Motor Corporation USA and Yamaha Suzuki of Texas (YST) concerning allegedly defective personal watercraft (PWC) manufactured and sold by them. Martinez alleged that he owned a 1997 Yamaha personal watercraft which had the alleged defect. Martinez later added W.L.E. Enterprises, Inc. (WLE) and Yamaha Motor Manufacturing Corporation of America as defendants. He also added an allegation that he owned a 1996 Yamaha personal watercraft which had the same alleged defect. A year after the first petition was filed, Martinez non-suited defendants Yamaha Motor Corporation USA and Yamaha Motor Manufacturing Corporation of America. Two months later, Martinez non-suited YST and WLE. Prior to the two requests for non-suit, YST and WLE filed several motions for sanctions against Martinez and his attorneys. These motions requested sanctions under Rule 13 and Rule 215 of the Texas Rules of Civil Procedure and Chapters 9 and 10 of the Texas Civil Practice and Remedies Code. After an evidentiary hearing, the trial judge denied all motions for sanctions.
We agree with YST and WLE that the standard by which we review a sanctions order is for abuse of discretion. Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 852 (Tex. 1992). A trial court abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). When reviewing matters committed to the trial court's discretion, a court of appeals may not substitute its own judgment for the trial court's judgment. See Flores v. Fourth Court of Appeals, 777 S.W.2d 38, 41-42 (Tex. 1989).
YST and WLE point to Rules of Civil Procedure 13, 191.3, and 215 and to sections 9.011 through 9.014 and 10.001 through 10.006 of the Civil Practice and Remedies Code as the legal bases for sanctions. Tex. Civ. Prac. Rem. Code Ann. §§ 9.011-.014, 10.001-.006 (Vernon 2002); TEX. R. CIV. P. 13, 191.3, 215. They also point to seven factual bases, which they contend required the trial court to impose sanctions: (1) filing of the original class action petition, which contained material allegations that were untrue; (2) filing a false affidavit; (3) filing an amended class action petition, which added a groundless claim and a claim on which limitations had expired; (4) filing false assertions in response to a request for disclosure; (5) failing to produce documents at a deposition after the court directed him to do so; (6) discovery requests made to YST and WLE after Martinez and his attorneys knew their claims had no merit; and (7) false corrections to a deposition concerning ownership of the personal watercraft. Martinez points to: (1) publication of a "Safety Study" by the National Safety Transportation Board (NTSB) concerning the characteristics of personal watercraft based on their involvement in boating accidents; the study resulted in nine conclusions and recommended that PWC manufacturers evaluate the design of and make changes in personal watercraft; (2) title documents related to two Yamaha PWCs, a 1996 and a 1997, showing the details of transfers of title and registration of the two PWCs; (3) evidence that Martinez' attorneys had authority to investigate and did investigate the ownership of the personal watercraft registered to Martinez and his wife; (4) evidence that Martinez and his wife were married throughout the course of the legal proceedings, Martinez' wife did not own a personal watercraft as her separate property, and Martinez' wife transferred title to a personal watercraft to her father without Martinez' knowledge; (5) evidence that Martinez did not understand, know of, or appreciate the risks and dangers alleged to be inherent in the design and operation of personal watercraft; (6) evidence that Martinez believed that the information about ownership contained in an affidavit was true when he signed it; (7) evidence that Martinez' attorneys took reasonable steps to have Martinez produce the documents the court ordered; and (8) evidence showing that YST and WLE's attorneys knew before Martinez and his attorneys that the personal watercraft had been transferred by Martinez' wife to her father.
To apply an abuse-of-discretion standard, we defer to the trial court's factual determinations but review questions of law de novo. Castellano v. Garza, 110 S.W.3d 70, 73 (Tex. App.-San Antonio 2003, no pet.). Our review of the record convinces us that no abuse of discretion occurred in the denial of the motions for sanctions. Blackmon, 841 S.W.2d at 852; see also Elkins v. Stotts-Brown, 103 S.W.3d 664, 668-70 (Tex. App.-Dallas 2003, no pet.). To hold otherwise would be to substitute our view of disputed evidence for that of the trial judge. Flores, 777 S.W.2d at 41-42.
The order denying sanctions is affirmed.
The sole issue in this appeal is whether the trial court should have imposed sanctions on the plaintiff, Troy Martinez, and his attorneys. Because a majority of this Court fails to find that due to the egregious conduct of Martinez and his attorneys the trial court had no option under the applicable rules other than to render an order for some sanction, I respectfully dissent.
Martinez filed a class action petition in Johnson County against Yamaha Motor Corporation USA and Yamaha Suzuki of Texas (YST) concerning allegedly defective personal water crafts manufactured and sold by them. He alleged that he owned a 1997 Yamaha personal water craft which had the alleged defect. Martinez later added W.L.E. Enterprises, Inc. (WLE) and Yamaha Motor Manufacturing Corporation of America as defendants. He also added an allegation that he owned a 1996 Yamaha personal water craft which had the same alleged defect. A year after the first petition was filed, Martinez non-suited defendants Yamaha Motor Corporation USA and Yamaha Motor Manufacturing Corporation of America. Two months later, Martinez non-suited YST and WLE.
Prior to either of the two non-suits, YST and WLE filed several motions for sanctions against Martinez and his attorneys. These motions requested sanctions under Rules 13 and 215 of the Texas Rules of Civil Procedure and Chapters 9 and 10 of the Texas Civil Practice and Remedies Code. YST's and WLE's complaints included that Martinez and/or his attorneys knew: (1) Martinez did not live in Johnson County where the suit was filed; (2) his wife, not Martinez, owned the 1997 personal water craft alleged in the original petition; (3) Martinez's wife sold the 1997 personal water craft two months before the first amended petition was filed; (4) the statute of limitations had run before the claim regarding the 1996 personal water craft was added in the first amended petition; and (5) Martinez was ordered to bring certain documents to his deposition, which he did not do. After two hearings, the trial court denied all sanction requests.
Courts should presume parties and their counsel file all papers in good faith, and the party seeking sanctions must overcome that burden. GTE Communication Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993) (orig. proceeding). The imposition of sanctions under Rules 13 and 215 of the Rules of Civil Procedure is within the sound discretion of the trial court. TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991); Thomas v. Thomas, 917 S.W.2d 425, 432 (Tex. App.-Waco 1996, no pet.). The purpose of Rule 13 is not to punish an inadvertent oversight but to check abuses in the pleading process, i.e., to insure that at the time the challenged pleading was filed, the litigant's position was factually well grounded and legally tenable. See Monroe v. Grider, 884 S.W.2d 811, 818 (Tex. App.-Dallas 1994, writ denied). Further, a legitimate purpose of Rule 215 sanctions is to obtain compliance. Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003); TransAmerican, 811 S.W.2d at 917.
Here, sanctions were appropriate under both rules. See TEX. R. CIV. P. 13 215. And when appropriate, sanctions must be imposed. TEX. R. CIV. P. 13 ("the court . . . shall impose an appropriate sanctions. . . ."); Tex. R. Civ. P. 215.1(d) ("the court shall . . . require a party . . . to pay . . . the reasonable expenses incurred. . . ."). If not, the denial of a sanctions request encourages the very conduct the rules are designed to prevent. As a result of the majority's opinion, this Court encourages egregious conduct without fear of sanctions.
The problem in not upholding a sanction order has caused the same concern to others that I have in response to this Court's holding today. The concern is that it encourages trial courts to take the path of least resistance; deny all sanctions regardless of the nature of the conduct because the chance of being reversed only happens if sanctions are imposed. In the reverse of our situation, where a trial court had imposed sanctions and that order was being reversed, the dissent stated,
Today's decision has far-reaching effects. In the Texas judiciary, numerous practical considerations discourage imposition of harsh sanctions — it is always easier to say "go work it out," to dissuade counsel from bringing heated discovery battles that are difficult to sort out before the busy trial judge. In the unusual situation where the trial court takes an interest in such a struggle, follows TransAmerican, and finally says "Enough!," the majority has now imposed another disincentive. The trial judge who does nothing about discovery abuse or at most offers a slight slap on the wrist need never fear review here. Doing too little to ensure that the search for the truth is meaningful will not justify involvement by this majority. See Walker v. Packer, 827 S.W.2d 833 (Tex. 1992, orig. proceeding) (making it more difficult to obtain timely review of decisions denying discovery). But if the trial court orders a meaningful sanction, a full de novo trial in this court is guaranteed. In overturning sanctions in cases such as this one in which the trial court has found highly egregious conduct, the majority ensures that trial judges will be further discouraged from taking the time and trouble to punish bad faith behavior.
Remington Arms Co. v. Caldwell, 850 S.W.2d 167, 177 (Tex. 1993) (Doggett, J., dissenting) (emphasis added).
After reviewing the record, it is clear that because of the flagrant disregard of the pleading and discovery rules, some amount of sanctions against Martinez and his attorneys was warranted. There are many claims of conduct which would justify sanctions in this record. I could take the time to discuss and explain what the evidence as to each is and why there was no basis for the refusal to impose sanctions. I will, however, not lengthen this dissenting opinion with such details but will simply mention a couple in passing. At the very least, Martinez knew that neither he nor his wife owned the 1997 personal water craft after August 28, 2001, but he continued to affirm under oath after that date that he still owned it. Also, his attorneys knew certain documents were to be produced at Martinez's deposition and neither informed Martinez of this requirement nor produced the documents.
The contrition of counsel in his brief to this Court and at oral argument cannot excuse the conduct which was engaged in at the trial court. I would hold that the trial court abused its discretion in failing to impose some amount of sanctions. YST's and WLE's sole issue on appeal should be sustained, and the trial court's order denying sanctions should be reversed. Because it is not, I respectfully dissent.