Patrick Hlavaty & Jeff Strnadel v. Commercial State Bank of El Campo, Texas, Inc. ( 2015 )

ACCEPTED
13-14-00516-CV
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
4/30/2015 6:38:30 PM
DORIAN RAMIREZ
CLERK
NO. 13-14-00516-CV
FILED IN
IN THE COURT OF APPEALS FOR THEOF APPEALS
13th COURT
CORPUS CHRISTI/EDINBURG, TEXAS
THIRTEENTH DISTRICT OF TEXAS 4/30/2015 6:38:30 PM
__________________________________________________________________
DORIAN E. RAMIREZ
Clerk
PATRICK HLAVATY AND JEFF STRNADEL,
Appellants and Cross-Appellees,
v.
COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.,
Appellee and Cross-Appellant.
__________________________________________________________________
COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.’S
APPELLEE’S BRIEF
__________________________________________________________________
From the District Court of Wharton County, Texas,
329th Judicial District; Trial Court Case No. 44081
__________________________________________________________________
DAWN S. HOLIDAY
TBA No. 24046090
MIA B. LORICK
TBA No. 24091415
Roberts Markel Weinberg Butler Hailey PC
2800 Post Oak Blvd., 57th Floor
Houston, TX 77056
Tel: (713) 840-1666
Fax: (713) 840-9404
dholiday@rmwbhlaw.com
mlorick@rmwbhlaw.com
ATTORNEYS FOR APPELLEE / CROSS-APPELLANT,
COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellants Trial Court Counsel Appellate Counsel
/ Cross-
Appellees
Patrick Howard H. Singleton Walter James Kronzer, III
Hlavaty Singleton Law Firm Walter James Kronzer, III,
and 109 East Milam Street P.C.
Jeff Strnadel Wharton, TX 77488 3000 Weslayan, Suite 247
Tel: (979) 532-9800 Houston, TX 77027
Fax: (979) 532-9805 Tel: (713) 622-5756
singletonlaw@sbcglobal.net Fax: (713) 622-5445
wkronzer@kronzer.com
Howard H. Singleton
Singleton Law Firm
109 East Milam Street
Wharton, TX 77488
Tel: (979) 532-9800
Fax: (979) 532-9805
singletonlaw@sbcglobal.net
Appellee / Trial Court Counsel Appellate Counsel
Cross-
Appellant
Commercial Gregg S. Weinberg Dawn S. Holiday
State Bank Dawn S. Holiday Mia B. Lorick
of El Campo, Chase A. Evans Roberts Markel Weinberg
Texas, Inc. Roberts Markel Weinberg Butler Hailey PC
Butler Hailey PC 2800 Post Oak Blvd., 57th Fl
2800 Post Oak Blvd., 57th Fl. Houston, TX 77056
Houston, TX 77056 Tel: (713) 840-1666
Tel: (713) 840-1666 Fax: (713) 840-9404
Fax: (713) 840-9404 dholiday@rmwbhlaw.com
gweingerg@rmwbhlaw.com mlorick@rmwbhlaw.com
dholiday@rmwbhlaw.com
cevans@rmwbhlaw.com
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL .................................................... ii
TABLE OF CONTENTS ...........................................................................iii
TABLE OF AUTHORITIES ....................................................................... v
RECORD REFERENCES ....................................................................... viii
STATEMENT OF THE CASE .................................................................. ix
ISSUES PRESENTED ............................................................................... x
STATEMENT REGARDING ORAL ARGUMENT .................................. xi
STATEMENT OF FACTS .......................................................................... 1
PROCEDURAL HISTORY ......................................................................... 3
SUMMARY OF THE ARGUMENT ........................................................... 5
ARGUMENTS AND AUTHORITIES ........................................................ 8
I. Standard of Review ........................................................................ 8
II. Appellants’ argument that CSB’s nonsuit as to all defendants
was interlocutory is misplaced and incorrect. ........................... 9
A. Appellants rely on Crites v. Collins and Unifund CCR
Partners v. Villa, which are not applicable to the issues
presented here. .................................................................. 10
B. The only matter pending at the time of CSB’s final
nonsuit of remaining defendants was Appellants’ Rule 13
motion for sanctions. ......................................................... 14
iii
III. Appellants did not have any pending counterclaims at the
time of the final nonsuit on September 1, 2010. ...................... 18
A. Appellants’ request for attorney’s fees is not an
independent cause of action. ............................................. 18
B. Appellants’ amended counterclaims filed after CSB’s
September 1, 2010 nonsuit of all parties are void as a
matter of law. ..................................................................... 20
IV. The trial court retained limited jurisdiction over Appellants’
Rule 13 motion for sanctions for only a reasonable amount of
time after CSB’s non-suit—not three and a half years............ 21
A. Three and a half years is not a reasonable amount of time.
............................................................................................ 22
B. The trial court lost plenary power on December 15, 2013,
and therefore, was without jurisdiction to enter an order
of sanctions on June 11, 2014. .......................................... 25
CONCLUSION ......................................................................................... 26
PRAYER .................................................................................................... 27
CERTIFICATE OF COMPLIANCE ........................................................ 28
CERTIFICATE OF SERVICE.................................................................. 28
iv
TABLE OF AUTHORITIES
Case Law
Binford v. Snyder,
189 S.W.2d 471 (Tex. 1945) ............................................................... 19
CTL/Thompson Tex., L.L.C. v. Starwood Homeowner's Ass’n,
390 S.W.3d 299 (Tex. 2013) ............................................................... 13
Crites v. Collins,
284 S.W.3d 839 (Tex. 2009) ................................................... 10, 11, 16
Digital Imaging Assocs. v. State,
176 S.W.3d 851 (Tex. App.—Houston [1st Dist.] 2005) ................... 20
Downer v. Aquamarine Operators Inc.,
701 S.W.2d 238 (Tex. 1985) ................................................................. 8
Eichelberger v. Eichelberger,
582 S.W.2d 395 (Tex. 1979) ................................................................. 8
Gen. Land Office v. Oxy U.S.A., Inc.,
789 S.W.2d 569 (Tex. 1990) ................................................... 20, 23, 24
Greenberg v. Brookshire,
640 S.W.2d 870 (Tex. 1982) ................................................... 20, 23, 24
Guidry v. Envtl. Procedures, Inc.,
388 S.W.3d 845 (Tex. App.—Houston [14th Dist.] 2012) ................ 15
Hansson v. Time Warner Entm’t Advance,
No. 03-01-00578-CV, 2002 LEXIS 2058 (Tex. App.—Austin Mar. 21,
2002) .................................................................................................... 20
In re Bennett,
960 S.W.2d 35 (Tex. 1997) ............................................... 21, 22, 23, 24
In re Fuentes,
960 S.W.2d 261 (Tex. App.—Corpus Christi 1997) .......................... 25
v
In re Metro. Lloyds Ins. Co. of Tex.,
No. 05-08-01712-CV, 2009 LEXIS 1764 (Tex. App.—Dallas Mar. 13,
2009) .................................................................................................... 23
In re Reynolds,
No. 14-14-00329-CV, 2014 Tex. App. LEXIS 7105 (Tex. App.—
Houston [14th Dist.] July 1, 2014) (mem.) ........................................ 17
In re Riggs,
315 S.W.3d 613 (Tex. App.—Fort Worth 2010) ................................ 20
In the Interest of T.G.,
68 S.W.3d 171 (Tex. App.—Houston [1st Dist.] 2002) ..................... 14
Kutch v. Del Mar College,
831 S.W.2d 506 (Tex. App.—Corpus Christi 1992) ............................ 8
Lane Bank Equip. Co. v. Smith S. Equip., Inc.,
10 S.W.3d 308 (Tex. 2000) ..................................................... 15, 17, 18
Mantri v. Bergman,
153 S.W.3d 715 (Tex. App.—Dallas 2005) ........................................ 15
Mart. v. Tex. Dep’t of Family & Protective Servs.,
176 S.W.3d 390 (Tex. App.—Houston [1st Dist.] 2004) ....... 15, 16, 17
Metzger v. Sebek,
892 S.W.2d 20 (Tex. App.—Houston [1st Dist.] 1994) ....................... 8
Newman Oil Co. v. Alkek,
614 S.W.2d 653 (Tex. App.—Corpus Christi 1981) .................... 20, 23
Scott & White Mem’l Hosp. v. Schexnider,
940 S.W.2d 594 (Tex. 1996) ............................................................... 25
Strawder v. Thomas,
846 S.W.2d 51 (Tex. App.—Corpus Christi 1992) ................ 20, 23, 24
Unifund CCR Partners v. Villa,
299 S.W.3d 92 (Tex. 2009) ........................................................... 11, 12
United Oil & Minerals v. Costilla Energy,
1 S.W.3d 840 (Tex. App.—Corpus Christi 1999) .............................. 20
vi
Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon,
195 S.W.3d 98 (Tex. 2006) ..................................................... 21, 23, 24
Villafani v. Trejo,
251 S.W.3d 466 (Tex. 2008) ............................................................... 16
Statutes
Tex. Civ. Prac. & Rem. Code Ann. § 150.002 (West) ............................ 13
Rules
Tex. R. Civ. P. 162 .................................................................... 5, 6, 10, 21
Tex. R. Civ. P. 13 .................................................................................... 15
vii
RECORD REFERENCES
Citations in this Appellee’s Brief to the Parties are as follows:
Appellee Commercial State Bank of El Campo, Texas, Inc. will be
referred to as “CSB” or “Appellee.”
Appellant Patrick Hlavaty will be referred to as “Hlavaty.”
Appellant Jeff Strnadel will be referred to as “Strnadel.”
Appellants Patrick Hlavaty and Jeff Strnadel will be collectively
referred to as “Appellants.”
Citations in this Appellee’s Brief to the record are as follows:
CR – Clerk’s Record designated by Commercial State Bank of El
Campo, Texas, Inc. and filed in this Court on 10/27/2014 (i.e. CR [page];
e.g. CR 1)
Appellants’ Brief – Patrick Hlavaty and Jeff Strnadel Appellants’ Brief
(i.e., Appellants’ Brief [page]; e.g. Appellants’ Brief 1)
viii
STATEMENT OF THE CASE
Nature of the case: This appeal arises from an order granting
CSB’s Motion to Dismiss for lack of subject
matter jurisdiction and the trial court
entering an order of sanctions against CSB
after the trial court determined it lost
jurisdiction as to all parties in this case.
Trial Court Disposition: Hlavaty and Strnadel filed a Motion for
Rule 13 sanctions against CSB on May 17,
2010. (CR 56–59). On June 23, 2010, CSB
filed a notice of nonsuit as to Hlavaty and
Strnadel. (CR 100). On September 1, 2010,
CSB filed a notice of nonsuit as to the
remaining defendants. (CR 126). The trial
court signed an order of dismissal on
November 15, 2013. (CR 559). But on June
11, 2014, the trial court granted Hlavaty
and Strnadel’s motion for Rule 13 sanctions.
(CR 788). CSB subsequently filed a Motion
to Vacate the Order for Sanctions for lack of
jurisdiction. (CR 791). On August 29, 2014,
the trial court denied CSB’s Motion to
Vacate the Order for Sanctions. (CR 853).
Trial Court: 329th Judicial District of Wharton County,
Texas.
ix
RESPONSE TO APPELLANTS’ ISSUES PRESENTED
1. The trial court did not abuse its discretion when it granted CSB’s
motion to dismiss and found that it lost jurisdiction over this
matter on December 15, 2013.
2. The trial court did not abuse its discretion in finding that at the
time of the final nonsuit, Appellants did not have any pending
counterclaims.
3. The trial court did not abuse its discretion in holding that it only
had a reasonable amount of time to resolve collateral matters such
as Appellants’ Rule 13 motion for sanctions.
x
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Appellate Procedure Rule 52.8(b)(4), Appellee
respectfully requests oral argument on belief it will materially aid the
Court in determination of the legal and procedural issues presented for
review.
xi
STATEMENT OF FACTS
CSB brought suit for damages arising from fraud and dishonesty
committed by former bank employees.1 The suit was brought against
nine defendants following internal investigations, as well as an ongoing
investigation by the Secret Service, which revealed fraudulent conduct
on behalf of the defendants.2 CSB subsequently nonsuited its claims
against all defendants and the trial court entered an order of final
nonsuit on November 15, 2013.3
However, on June 14, 2014 – six months after the trial court
determined that it lost plenary jurisdiction over this case, the trial court
entered an order of sanctions against CSB.4 The granting of CSB’s
motion to dismiss and the entry of the order of sanctions post-expiration
of the trial court’s jurisdiction are the subject of this appeal.
By way of background, on or about February 17, 1987, Patrick
Hlavaty (“Hlavaty”) began employment with CSB as vice president in
the mortgage lending department.5 He was responsible for marketing
the bank’s services as well as evaluating and recommending mortgage
1 CR 23–43.
2 CR 23; CR 777–78.
3
CR 784.
4 CR 559; CR 788.
5 CR 27.
1
lending and real estate loans to the loan committee.6 On October 31,
2007, Hlavaty was asked to resign from his position because internal
investigations revealed dishonesty, fraud, self-dealing, and numerous
breaches of fiduciary duties owed to CSB.7 The acts that led to Hlavaty’s
requested resignation were falsifying information, failing to disclose his
interest in certain corporations, and accepting kickbacks on loans made
to various customers.8 Hlavaty’s bad acts gave rise to this lawsuit.9
Jeff Strnadel (“Strnadel”) was also an employee of CSB.10 Part of
Strnadel’s duties and responsibilities were to make physical site
inspections of construction sites to determine whether improvements
had been made, whether construction had been made in a good and
workmanlike manner, and whether payment on requested draws should
be authorized.11 Strnadel failed to inspect job sites and accurately
report his findings to his superiors.12 As early as 2007, Strnadel’s bad
6 Id.
7 Id.
8 CR 32–37.
9 CR 354.
10 CR 39.
11 CR 39.
12 Id.
2
acts were being investigated by the Secret Service.13 And, CSB incurred
damages because of Strnadel’s actions.14
CSB brought suit in 2009 against Hlavaty, Strnadel, and seven
other defendants alleging fraud, fraud by nondisclosure, negligent
failure to disclose, breach of fiduciary duty, breach of the duty of loyalty,
unjust enrichment, and negligence.15
PROCEDURAL HISTORY
On October 23, 2009, CSB filed its Original Petition against nine
defendants, including Patrick Hlavaty and Jeff Strnadel.16 The
defendants filed an Original Answer on November 20, 2009, and
subsequently filed an Amended Answer on December 2, 2009.17
Defendants Hlavaty and Strnadel filed a Motion for Rule 13 Sanctions
on March 17, 2010.18 On June 23, 2010, CSB filed a notice of nonsuit as
to defendants Hlavaty and Strnadel.19 The trial court signed the
dismissal order as to Hlavaty and Strnadel on June 24, 2010.20
13 CR 777–78.
14 Id.
15 CR 23–43.
16 CR 23.
17 CR 47–49.
18 CR 56–59.
19 CR 100.
20 CR 100.
3
On September 1, 2010, CSB nonsuited the remainder of the
defendants in the lawsuit.21 However, because an objection was made by
Hlavaty and Strnadel as to the form of the dismissal order relating to
the dismissal of the other defendants, the proposed order of nonsuit was
not signed at that time. In March 2011, Appellants filed a “First
Amended Counterclaim” against CSB.22 Appellants’ “amended
counterclaim” asserted, for the first time, new claims against CSB.23
The last order granting the nonsuit was finally signed by the trial court
on November 15, 2013.24
On April 8, 2014, CSB filed its Motion to Dismiss and Vacate
Orders.25 The trial court granted CSB’s motion dismissing the case,
specifically stating that the trial court’s “plenary jurisdiction as to all
parties in this case ended on December 15, 2013.”26 Six months after the
trial court lost plenary jurisdiction, on June 11, 2014, the trial court
issued an order of sanctions against CSB.27 CSB filed a Motion to
21 CR 126.
22 CR 249 – 60.
23 Id.
24 CR 559.
25 CR 561.
26 CR 785–86.
27 CR 788.
4
Vacate the Order of Sanctions, which the trial court denied.28 This
appeal followed.
SUMMARY OF THE ARGUMENT
Appellants’ assertion that CSB’s nonsuit as to all defendants was
an interlocutory order is incorrect because the authorities Appellants
rely upon are not applicable here. Specifically, Appellants rely on case
law where statutory sanctions are at issue—not Rule 13 sanctions.
Because some statutory motions for sanctions are treated as affirmative
independent causes of action, Appellants’ arguments are without merit,
as Rule 13 sanctions—the sanctions at issue here—are not affirmative
causes of action, but rather are merely affirmative claims that are not
considered independent causes of action that extend a court’s
jurisdiction.
The only pending matter at the time of CSB’s September 1, 2010
final nonsuit was a Rule 13 motion for sanctions—implicating Tex. R.
Civ. P. 162. There were no counterclaims or other causes of action
before the trial court at the time of nonsuit. Appellants’ request for
attorney’s fees under Section 37.009 of the Texas Civil Practice and
28 CR 791–94.
5
Remedies Code—because Appellants’ incorrectly contend that CSB, in
seeking a constructive trust as a form of relief in its petition, was
somehow seeking declaratory relief—is not considered an affirmative
claim under Texas law. In addition, there were no counterclaims before
the trial court at the time of the final nonsuit because the filing of
counterclaims by Appellants—after the order of nonsuit—are void as a
matter of law. Therefore, as stated above, the only pending matter
before the court was a Rule 13 motion for sanctions.
Texas Rule of Civil Procedure 162 governs Rule 13 motions for
sanctions filed prior to an order of nonsuit. Pursuant to Rule 162, after
the notice of nonsuit is filed, a trial court has a reasonable amount of
time to resolve collateral matters. As such, the trial court should have
ruled on Hlavaty and Strnadel’s pending Rule 13 motion for sanctions
within a reasonable amount of time after CSB’s final nonsuit on
September 1, 2010.
Appellants’ however, never pursued the Rule 13 motion for
sanctions – even up to the time the trial court determined that it lost
jurisdiction. CSB asserted this argument in its Motion to Dismiss and
Vacate Orders, which the trial court granted. Although the trial court
6
ruled that “as of September 1, 2010 the [it] had a ministerial duty to
timely sign orders of non-suit,” and that it had “no reason to delay
signing orders of non-suit,” and that it “lost plenary jurisdiction on
December 15, 2013,” it still ruled on the motion for sanctions over three
years from the final nonsuit and over six months after its plenary
jurisdiction expired. Specifically, the trial court signed a final order of
nonsuit in November of 2013; therefore, the trial court lost its plenary
power 30 days later in December of 2013. In June of 2014, however, the
trial court signed the order of sanctions.
The trial court properly granted CSB’s motion to dismiss because
the trial court lost jurisdiction under Rule 162 within a reasonable time
after September 1, 2010, and at the latest on December 15, 2013.
Moreover, the trial court vacated its prior orders issued after September
1, 2010 as a nullity because the trial court determined that as of
September 1, 2010 there were no pending independent causes of action
asserted by any party in the suit. This Court should affirm the trial
court’s dismissal of the suit.
7
ARGUMENTS & AUTHORITIES
I. Standard of Review
Every trial court has the inherent power to control the disposition
of the cases on its docket with economy of time and effort for itself, for
counsel, and for litigants.29 Such inherent powers are those that a court
may call upon to aid it in the exercise of jurisdiction and administration
of justice.30
Appellate courts apply an abuse of discretion standard to a review
of a trial court’s actions pursuant to its inherent power.31 The appellate
court reviews the entire record and evidence in the light most favorable
to the trial court’s ruling.32 A trial court abuses its discretion if it acts in
an arbitrary or unreasonable manner, or without reference to guiding
rules and principles.33
29 Metzger v. Sebek, 892 S.W.2d 20, 38 (Tex. App.—Houston [1st Dist.] 1994, writ
denied); Eichelberger v. Eichelberger, 582 S.W.2d 395, 398 (Tex. 1979).
30 Eichelberger, 582 S.W.2d at 398.
31 See Kutch v. Del Mar Coll., 831 S.W.2d 506, 512 (Tex. App.—Corpus Christi 1992,
no writ).
32 See Kutch, 831 S.W.2d at 512.
33 See Downer v. Aquamarine Operators Inc., 701 S.W.2d 238, 241–42 (Tex. 1985).
8
II. Appellants’ argument that CSB’s nonsuit as to all
defendants was interlocutory is misplaced and incorrect.
Hlavaty and Strnadel improperly argue that CSB’s nonsuit on
September 1, 2010 as to all defendants was interlocutory because they
had a pending motion for sanctions.34 To support this assertion, Hlavaty
and Strnadel rely on cases in which statutory sanctions—not Rule13
sanctions—were at issue. Such cases are inapplicable here. Not only
were there no statutory sanctions filed in the trial court, but the cases
cited by Hlavaty and Strnadel do not address the effect of a nonsuit on
TRCP 13 (“Rule 13”) motions for sanctions—the sanctions at issue in
this case.
This issue can be confusing, as courts have generally referred to
motions for sanctions as affirmative claims. However, the distinction
that Appellants’ fail to recognize is the difference between a motion for
sanctions under a statutory provision, which creates an independent
cause of action that must be disposed of in a final order; and a Rule 13
motion for sanctions, which is an affirmative claim but is not an
independent cause of action and therefore, disposition by final order is
34 Appellants’ Brief 10.
9
not required as the motion is considered a collateral matter governed by
TRCP 162 (“Rule 162”).
A. Appellants rely on Crites v. Collins and Unifund CCR
Partners v. Villa, which are not applicable to the
issues presented here.
Hlavaty and Strnadel accuse CSB of ignoring two Texas Supreme
Court cases – Crites v. Collins and Unifund v. Villa – when it asserts
that a trial court has only a reasonable amount of time to rule on
collateral matters following a nonsuit under Rule 162. But CSB did not
ignore the cases referenced by Appellants. To the contrary, CSB found
the cases to be inapplicable, as the cases do not involve Rule 13 motions
for sanctions but rather, independent affirmative causes of action
created by statute.
Specifically, in Crites v. Collins, the court considered whether a
statutory motion for sanctions filed after an order of dismissal, but
before entry of a final order is a valid claim.35 The Crites court looked to
the nature of the motion for sanctions and determined that because the
sanctions were statutory—under Chapter 74 of the Tex. Civ. Prac. &
Rem. Code—the motion is an affirmative claim that is treated as an
35 Crites v. Collins, 284 S.W.3d 839 (Tex. 2009) (emphasis added).
10
independent cause of action.36 The Crites court reasoned that the order
of dismissal following the nonsuit was interlocutory because it did not
dispose of all claims and parties, as the subsequently filed motion for
sanctions was an independent cause of action. Because of the pending
cause of action, the Crites court held that so long as the trial court had
plenary jurisdiction at the time the motion was filed, the motion for
sanctions was not void and the trial court had jurisdiction to enter an
order.37
Five months later, in Unifund v. Villa, the same court was
presented with another dispute involving statutory sanctions.38 The
issue before the Unifund court was whether a motion for sanctions filed
under Tex. Civ. Prac. & Rem. Code Chapter 10 survived a voluntary
nonsuit if the court still had jurisdiction and set the hearing for the
motion prior to entering an order of dismissal.39 Relying on Crites, the
Unifund court stated that because the order of dismissal following the
nonsuit did not specifically reference the claim for statutory sanctions,
the motion for sanctions was still pending as an independent cause of
36 Id. at 842.
37 Id. at 842–43.
38 Unifund CCR Partners v. Villa, 299 S.W.3d 92 (Tex. 2009).
39 Id.
11
action—making the order of dismissal interlocutory.40 Therefore, when
the trial court entered an order for sanctions, the Unifund court held
that the trial court did not err on that basis.41
In Crites, the motion for sanctions was filed after the notice of
nonsuit, making Crites distinguishable on the facts because the motion
for sanctions in this case was filed before the notice of nonsuit—
implicating Rule 162. Similarly, Unifund does not apply because in
Unifund, the court set a hearing on the motion for sanctions prior to
entering an order of dismissal. The court relied on the setting of the
hearing as evidence that the trial court intended to preserve the cause
of action. The trial court in this case did no such thing; therefore,
Unifund, like Crites, is distinguishable.
However, the most important distinction between Crites, Unifund,
and this case is that in Crites and Unifund, the sanctions were
statutory independent causes of action, rather than a claim that does
not extend a trial court’s jurisdiction. Even in the trial court, Hlavaty
and Strnadel failed to make the distinction as they again incorrectly
relied on a 2013 Texas Supreme Court case involving the issue of
40 Id.
41 Id.
12
whether statutory sanctions under Tex. Civ. Prac. & Rem. Code §
150.002 allowing a dismissal with prejudice survived a nonsuit – a
voluntary dismissal without prejudice.42 Just as in Crites and Unifund,
in CTL/Thompson Texas, LLC, the Texas Supreme Court determined
that sanctions mandated by statute whose purpose is to deter claimants
from filing meritless suits survive a nonsuit.43 Here, there are no
statutory sanctions at issue, only Rule 13 sanctions. This is a
distinction with a difference.
Had Hlavaty and Strnadel actually considered the differences in
the two types of sanctions, then they would have been aware that, in
the cases they cite, the motions for statutory sanctions were considered
independent causes of action—making an order of dismissal that does
not specifically reference those causes of action interlocutory. However,
here, Hlavaty and Strnadel filed a motion for Rule 13 sanctions—an
affirmative claim, but not an independent cause of action or
counterclaim. And, pursuant to Texas law, an order of nonsuit is not an
42 CTL/Thompson Texas, LLC v. Starwood Homeowner’s Ass’n, Inc., 390 S.W.3d
299, 300 (Tex. 2013).
43 Id. at 300 – 01 (emphasis added).
13
interlocutory order when a party has filed a pre–nonsuit claim for
sanctions under Rule 13.44
As a result, Hlavaty and Strnadel’s reliance on Crites and
Unifund here and CTL/Thompson Texas, LLC at the trial court level is
unfounded and misplaced, as the cases are inapplicable to the issues
presented here for the reasons expressed above.
B. The only matter pending at the time of CSB’s final
nonsuit of remaining defendants was Appellants’ Rule
13 motion for sanctions.
Hlavaty and Strnadel filed their Motion for Rule 13 Sanctions on
March 17, 2010.45 CSB filed a nonsuit dismissing Hlavaty and Strnadel
from the underlying matter on June 23, 2010. The trial court signed an
order of nonsuit as to Hlavaty and Strnadel on June 28, 2010.46 On
September 1, 2010, CSB filed its notice of nonsuit as to all remaining
defendants.47 At the time of the final nonsuit on September 1, 2010,
Hlavaty and Strnadel did not have any pending counterclaims. The only
pending matter was their motion for sanctions under Rule 13.
44InRe T.G., 68 S.W.3d 171 (Tex. App.—Houston [1st Dist.] 2002, pet denied).
45 CR 56–59.
46 CR 96–101.
47 CR 126–29.
14
Texas law mandates that a motion for Rule 13 sanctions is not an
affirmative claim for relief that extends a trial court’s jurisdiction under
Rule 162.48 This is because “Texas Rule of Civil Procedure 13 does not
establish an independent cause of action for damages, but instead
provides a basis for a trial court to impose sanctions upon motion or
upon its own initiative.”49
The cases at which Rule 13 motions for sanctions are at issue use
the term “affirmative claim” when discussing that Rule 13 motions do
not effect a trial court’s jurisdiction, but that is different and distinct
from the court considering it as an independent cause of action or
counterclaim—like in the above referenced cases Crites and Unifund. In
those cases, as well as others that involve statutory sanctions, the
statutory sanctions are considered independent causes of action that
48 See, e.g., Martin v. Texas Dept. of Family & Protective Services, 176 S.W.3d 390,
393 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that defendant’s Rule 13
motion was not an affirmative claim for relief); Lane Bank Equip. Co. v. Smith S.
Equip., Inc., 10 S.W.3d 308, 312 (Tex. 2000).
49 Mart. v. Texas Dept. of Family & Protective Services, 176 S.W.3d 390 (Tex.
App.—Houston [1st Dist.] 2004, no pet.); Mantri v. Bergman, 153 S.W.3d 715 (Tex.
App.—Dallas 2005, pet. denied); Guidry v. Envtl. Procedures, Inc., 388 S.W.3d 845,
860 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (“Texas Rule of Civil Procedure
13 does not establish an independent cause of action for damages, but instead
provides a basis for a trial court to impose sanctions ‘upon motion or upon its own
initiative.’ We therefore construe this portion of the Brokers' pleading not as a
counterclaim for damages but as a motion for sanctions.”).
15
extend the trial court’s jurisdiction.50 But because Rule 13 does not
establish an independent cause of action, it follows that a Rule 13
motion for sanctions will never extend a trial court’s jurisdiction or be
considered as a counterclaim.
Because there were no statutory sanctions that were considered
independent causes of action at the time of the final nonsuit on
September 1, 2010, and the final nonsuit disposed of all parties,
pursuant to Rule 162, the court only had a reasonable amount of time to
rule on the Rule 13 motion for sanctions. Moreover, as of November 15,
2013—when the trial court signed the final order of nonsuit as to the
remaining defendants—the case was over because the court’s
ministerial act of signing a final nonsuit is considered a final
judgment.51
Hlavaty and Strnadel are mistaken when they assert that their
motion for sanctions must be specifically referenced in the order to be
disposed of.52 In fact, a direct quote from Appellants’ brief is illustrative
of why they are wrong. Specifically, Hlavaty and Strnadel state, “if a
50 Villafani v. Trejo, 251 S.W.3d 466, 470 (Tex. 2008); Crites v. Collins, 284 S.W.3d
839, 842 (Tex. 2009).
51 Martin, 176 S.W.3d 390
52 Appellants’ Brief 13.
16
sanctions request is a claim that survives a nonsuit, a judgment is
not final and appealable until the sanctions request is specifically
disposed of by the trial court.”53 CSB agrees with Hlavaty and
Strnadel’s above assertion. Hlavaty and Strnadel would be correct if
this case involved a statutory motion for sanctions that is considered an
independent cause of action. But it does not. Therefore, Hlavaty and
Strnadel are wrong. A judgment need not resolve a pending Rule 13
sanctions motion to be final.54 And, when the trial court signs the order
of nonsuit disposing of all parties, the nonsuit is a final judgment,
thereby starting the clock on the court’s plenary jurisdiction.
Accordingly, all parties and claims were effectively nonsuited as of
September 1, 2010, a final judgment was signed on November 15, 2013,
and the court lost plenary jurisdiction on December 15, 2013—30 days
later.
53 Appellants’ Brief 13 (emphasis added) (citing In re Reynolds, No. 14-14-00329-CV,
2014 Tex. App. LEXIS 7105 *13 (Tex. App.—Houston [14th Dist.] July 1, 2014, orig.
proceeding) (memorandum op.)).
54 Martin, 176 S.W.3d 390; Lane, 10 S.W.3d 308.
17
III. Appellants did not have any pending counterclaims at the
time of the final nonsuit on September 1, 2010.
A. Appellants’ request for attorney’s fees is not an
independent cause of action.
According to Appellants’ own assertions, Hlavaty and Strnadel’s
request for attorney’s fees under the Declaratory Judgment Act was
dependent on their mistaken belief that CSB had filed a claim for
declaratory relief. But CSB was not seeking declaratory relief in this
case; it was seeking a constructive trust because of Hlavaty’s ill gotten
gains.55 CSB never brought an action under the Declaratory Judgment
Act and never even sought a constructive trust against Strnadel.56
Hlavaty and Strnadel’s request for attorney’s fees is not an
affirmative claim for relief because CSB never asserted a claim under
the Declaratory Judgment Act.57 In its Original Petition, CSB claimed,
among other things, that Hlavaty and Strnadel had committed fraud
and breached fiduciary duties.58 In addition to damages, CSB requested
that the court impose a constructive trust over the assets that Hlavaty
improperly obtained. Based on this request for relief alone, Hlavaty and
55
CR 133; CR 172; CR 270.
56 Id.
57 CR 23.
58 CR 23.
18
Strnadel began calling CSB’s request for a constructive trust against
Hlavaty a “declaratory action,” despite CSB having never asserted a
claim for a declaratory judgment, nor requesting a declaration as to the
rights of the parties.59 And, CSB certainly never sought a constructive
trust against Strnadel. Counsel for Appellants knows that no
declaratory judgment claim exists in this case, yet Hlavaty and
Strnadel still attempt to assert that an independent cause of action
existed. But no such counterclaim existed.
In Texas, a “constructive trust” is an equitable remedy granted
after there is a breach of fiduciary duty, it is not a claim related to the
Declaratory Judgment Act.60 Therefore, Hlavaty and Strnadel had no
legal basis to claim they were entitled to attorney’s fees under the Act.
Furthermore, CSB never requested a “constructive trust” against
Strnadel,61 making Strnadel’s request for attorney’s fees entirely
baseless and improper.
Even if Hlavaty and Strnadel had intended to assert their own
cause of action for declaratory judgment—which they did not—a claim
under the Declaratory Judgment Act, solely for attorney’s fees, is not an
59 CR 61, 96.
60 CR 28; See Binford v. Snyder, 189 S.W.2d 471, 472 (Tex. 1945).
61 CR 28.
19
affirmative cause of action that survives a plaintiff’s nonsuit under Rule
162.62 Accordingly, Hlavaty and Strnadel’s request for attorney’s fees
was not an affirmative claim, and therefore, did not extend the trial
court’s jurisdiction following the final nonsuit.63
B. Appellants’ amended counterclaims filed after CSB’s
September 1, 2010 nonsuit of all parties are void as a
matter of law.
On March of 2011—seven months after CSB filed its September 1,
2010 notice of nonsuit as to the remaining defendants—Hlavaty and
Strnadel filed ten new counterclaims.64 But when a final nonsuit is
filed, the rights of the parties become fixed.65 Hlavaty and Strnadel had
62 See Gen. Land Office of State of Tex. v. Oxy, U.S.A., Inc., 789 S.W.2d 569, 570
(Tex.1990); In re Riggs, 315 S.W.3d 613, 615 (Tex. App.—Fort Worth 2010, no pet.);
see also Hansson v. Time Warner Entm't Advance, 03-01-00578-CV, 2002 WL
437297 (Tex. App.—Austin Mar. 21, 2002, pet. denied) (“[A] defendant may not seek
a declaratory judgment simply to recover attorney’s fees.”); Digital Imaging
Associates, Inc. v. State, 176 S.W.3d 851, 855 (Tex. App.—Houston [1st Dist.] 2005,
no pet.) (holding that the trial court did not error in advising parties it no longer
had jurisdiction because the plaintiff had filed a nonsuit and the intervenor's only
claim was for a defensive declaratory judgment that mirrored the plaintiff's claim.);
Newman Oil v. Alkek, 614 S.W.2d 653, 655 (Tex. App.—Corpus Christi 1981, writ
ref'd n.r.e)); United Oil & Minerals, Inc. v. Costilla Energy, Inc., 1 S.W.3d 840, 846
(Tex. App.—Corpus Christi 1999, pet. dism'd).
63 See, e.g., Digital Imaging, 176 S.W.3d at 855; see also Newman Oil, 614 S.W.2d at
655 (holding that the defendant’s alleged counterclaim under the Declaratory
Judgment Act is not a claim for affirmative relief under Rule 162, but “merely
denials of plaintiffs' cause of action).
64 CR 559.
65 Greenberg v. Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder v. Thomas,
846 S.W.2d 51, 59 (Tex.App.—Corpus Christi 1992, no writ); General Land Office v.
Oxy, U.S.A., Inc., 789 S.W.2d 569, 570 (Tex.1990).
20
no pending affirmative claims as of September 1, 2010; therefore, the
later filed counterclaims are void. The Rule 13 motion for sanctions was
the only matter pending at the time of CSB’s final nonsuit. To hold
otherwise would allow parties to file counterclaims well after a case is
nonsuited or dismissed. In the interest of judicial economy, a party
should not be permitted to file counterclaims months after a case is
over.
As such, the trial court, pursuant to Rule 162, only had a
reasonable amount of time to resolve the pending Rule 13 motion and
did not abuse its discretion in ignoring the void counterclaims.66
IV. The trial court retained limited jurisdiction over
Appellants’ Rule 13 motion for sanctions for only a
reasonable amount of time after CSB’s non-suit—not three
and a half years.
Pursuant to Texas Rule of Civil Procedure 162, a plaintiff’s
nonsuit does not prejudice the right of an adverse party to be heard on a
pending claim for affirmative relief.67 However, if there are no pending
affirmative claims, the court then has “a reasonable amount of time”
66 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 100–01; In re Bennett,
960 S.W.2d 35, 38 (Tex. 1997).
67 Tex. R. Civ. P. 162.
21
to hold hearings on those matters that are “collateral to the merits of
the underlying case.”68
As explained supra, under Rule 162, Texas courts consider
“affirmative claims for relief” to be independent causes of action.
However, Rule 13 motions for sanctions are not independent causes of
action. The plain language of Rule 162 makes a distinction between a
“pending claim for affirmative relief” and “a motion for sanctions.”
While some courts use the phrase “affirmative claim” interchangeably,
Texas law is well settled that a Rule 13 motion for sanctions is not an
independent cause of action that will extend a trial court’s jurisdiction
under Rule 162. Therefore, pursuant to Rule 162, the trial court here
only had a reasonable amount of time to rule on the Rule 13 motion for
sanctions once the final September 1, 2010 notice of nonsuit was filed as
to the remaining defendants.
A. Three and a half years is not a reasonable amount of
time.
The trial court entered an order on Hlavaty and Strnadel’s
pending motions for sanctions over three years after the final notice of
68 In re Bennett, 960 S.W.2d at 38-39 (emphasis added).
22
nonsuit was filed by CSB.69 But the trial court’s limited jurisdiction
under Rule 162 to resolve Hlavaty and Strnadel’s motion for sanctions
had lapsed.
Rule 162 permits the trial court to hold hearings and enter orders
affecting costs, attorney’s fees, and sanctions, even after notice of
nonsuit is filed, while the court retains plenary power.”70 If the court
fails to sign the order of nonsuit—as it did in this case—the trial court’s
jurisdiction is still limited under Rule 162. This limited jurisdiction to
hear collateral matters does not continue into perpetuity as Hlavaty
and Strnadel suggest.71 The fact that the trial court does not enter an
order of dismissal following the plaintiff’s timely notice of nonsuit does
not authorize the continuation of the proceeding.72 The collateral
matters must still be resolved within a reasonable amount of time.
69 CR 788.
70 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 101; In re Bennett, 960
S.W.2d at 38.
71 Id.; see also In re Bennett, 960 S.W.2d at 38; In re Metro. Lloyds Ins. Co. of Texas,
05-08-01712-CV, 2009 WL 638253 (Tex. App.—Dallas Mar. 13, 2009, no pet.)
(granting plaintiff’s petition for writ of mandamus holding that “the trial judge
abused his discretion by continuing to exercise jurisdiction over this case because”
plaintiff’s “non-suit of its claims disposed of all parties and claims then pending
before the trial court”).
72 Newman Oil Co. v. Alkek, 614 S.W.2d 653, 655 (Tex. Civ. App.—Corpus Christi
1981) (holding that defendant’s alleged counterclaim under the Declaratory
Judgment Act is not a claim for affirmative relief under Rule 162); Greenberg v.
Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder v. Thomas, 846 S.W.2d 51,
23
In this case, the trial court without a doubt exceeded its limited
jurisdiction under Rule 162 to resolve Hlavaty and Strnadel’s Rule 13
sanctions motion. After CSB’s last nonsuit on September 1, 2010, the
motion for Rule 13 sanctions was the only matter left pending under the
limited jurisdiction provided by Rule 162.73 The trial court had a
reasonable amount of time to hold hearings on these matters.74
However, the trial court did nothing. Indeed, the trial court expressly
held that “it had no reason to delay signing the orders of non-suit” and
that “[t]his court is aware of no reason which would justify the three
year delay.”75 More than three years passed between CSB’s final notice
of nonsuit and the trial court’s order of sanctions.76 Under any
interpretation of a “reasonable amount of time,” three years exceeds it.
59 (Tex. App.—Corpus Christi 1992, no writ); General Land Office v. Oxy, U.S.A.,
Inc., 789 S.W.2d 569, 570 (Tex.1990).
73 See Greenberg v. Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder, 846
S.W.2d at 59; General Land Office v. Oxy, U.S.A., Inc., 789 S.W.2d 569, 570
(Tex.1990).
74 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 100–01; In re Bennett,
960 S.W.2d at 38.
75 CR 784.
76 CR 788.
24
B. The trial court lost plenary power on December 15,
2013, and therefore, was without jurisdiction to enter
an order of sanctions on June 11, 2014.
Although a ministerial act, the trial court signed an order
granting CSB’s notice of nonsuit on November 15, 2013, and the trial
court correctly determined that it lost plenary jurisdiction 30 days
thereafter. The trial court’s plenary jurisdiction expired on December
15, 2013, and thus, the trial court lost its ability to sanction CSB after
this date.
Orders issued after a trial court’s jurisdiction expires are void.77 A
void order is null within itself and its nullity cannot be waived.78
Therefore, once jurisdiction has expired, a trial court may not sanction
counsel for pre-judgment conduct.79
In this case, the trial court signed a final order of nonsuit on
November 15, 2013. The entering of the final order triggered the
expiration of the trial court’s plenary jurisdiction. Because the final
order of nonsuit was entered on November 15, 2013, the trial court’s
plenary power expired 30 days later, on December 15, 2013. The trial
77 In re Fuentes, 960 S.W.2d 261, 262 (Tex. App.—Corpus Christi 1997, no writ).
78 Id.
79 Scott & White Mem’l Hosp. v. Schexnider, 940 S.W.2d 594, 596 (Tex. 1996).
25
court entered a final order on June 3, 2014, and in the order, the trial
court stated:
This event finally triggered the expiration of this
court’s plenary jurisdiction in this case on December
15, 2013. . . . No pleading has been filed which would
operate to extend this court’s plenary jurisdiction.80
However, on June 11, 2014, the same trial court that admitted to
losing its jurisdiction in December of 2013, entered an order of
sanctions for conduct that allegedly occurred pre-judgment.81 The trial
court lacked jurisdiction to enter such order. Because the trial court was
without jurisdiction to enter an order of sanctions, this Court should set
aside the trial court’s order as null and void as a matter of law.
CONCLUSION
The trial court properly granted CSB’s motion to dismiss because
the trial court lost plenary jurisdiction on December 15, 2013. Because
the trial court subsequently entered an order of sanctions on June 11,
2014, the trial court was without jurisdiction at the time it entered the
order. Therefore, the order of sanctions should be set aside because it is
void. The order granting CSB’s Motion to Dismiss should be affirmed.
80 CR 784-86 (emphasis added).
81 CR 788–90.
26
PRAYER
For these reasons, Appellee Commercial State Bank of El Campo,
Texas, Inc. respectfully requests this Court to affirm the trial court’s
granting of its Motion to Dismiss, to reverse the trial court’s Order
Denying Commercial State Bank’s Motion to Vacate Order of Sanctions,
set aside Hlavaty and Strnadel’s June 11, 2014 Order for Sanctions
against Appellee Commercial State Bank of El Campo, Texas, Inc., and
grant Appellee Commercial State Bank of El Campo, Texas, Inc. any
such other and further relief to which it is entitled.
Respectfully submitted,
ROBERTS MARKEL WEINBERG BUTLER HAILEY PC
/s/ Dawn S. Holiday
____________________________________
DAWN S. HOLIDAY
TBA No. 24046090
MIA B. LORICK
TBA No. 24091415
2800 Post Oak Blvd., 57th Floor
Houston, TX 77056
Tel: (713) 840-1666;
Fax: (713) 840-9404
dholiday@rmwbhlaw.com
mlorick@rmwbhlaw.com
ATTORNEYS FOR APPELLEE / CROSS-
APPELLANT, COMMERCIAL STATE BANK
OF EL CAMPO, TEXAS, INC.
27
CERTIFICATE OF COMPLIANCE
Pursuant to Rule 9.4 i(3) of the Texas Rules of Appellate
Procedure, I certify that the word count in this Appellee’s Brief is 4,732
words.
/s/ Dawn S. Holiday
_________________________________
DAWN S. HOLIDAY
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
instrument was served upon the parties listed below by facsimile,
messenger, regular U.S. Mail, certified mail, return receipt requested
and/or electronic service in accordance with the Texas Rules of
Appellate Procedure on this the 30th day of April, 2015.
Via Email: Via Email:
wkronzer@kronzer.com singletonlaw@sbcglobal.net
Walter James Kronzer, III Howard H. Singleton
Walter James Kronzer, III, P.C. Singleton Law Firm
3000 Weslayan, Suite 247 109 East Milam Street
Houston, TX 77027 Wharton, TX 77488
/s/ Dawn S. Holiday
_____________________________________
DAWN S. HOLIDAY
28