Jimmy Miaoulis and Theresa Miaoulis v. Amegy Bank and Prosperity Bank ( 2012 )

Opinion issued June 14, 2012

In The

Court of Appeals

For The

First District of Texas

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NO. 01-11-00959-CV

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Jimmy Miaoulis and Theresa Miaoulis, Appellants

V.

AmegyBank and Prosperity Bank, Appellees

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Case No. 2011-06093

MEMORANDUM OPINION

Appellants, Jimmy Miaoulis and Theresa Miaoulis, appeal the trial court’s grant of the motion for summary judgment filed by appellees, AmegyBank and Prosperity Bank, denial of their motion for summary judgment against appellees, and grant of appellees’ motion for sanctions. In four issues, the Miaoulises argue the trial court (1) erred by granting AmegyBank and Prosperity Bank’s motion for summary judgment and denying their motion for summary judgment and (2) abused its discretion by awarding AmegyBank and Prosperity Bank sanctions.  In their brief, AmegyBank and Prosperity Bank ask this Court to award sanctions against the Miaoulises for bringing a frivolous appeal.

We deny the motion for sanctions on appeal and affirm the judgment of the trial court.

Background

The Miaoulises had money in two bank accounts.  One of the accounts was with AmegyBank, and the other was with Prosperity Bank.  On December 14, 2009, the Montgomery County District Attorney obtained warrants for the seizure of the two bank accounts.  Upon being served the warrants, AmegyBank and Prosperity Bank tendered cashier’s checks for the full amount held in each account.  Around the same time, the Miaoulises were charged with multiple crimes concerning operation of a gambling facility.

On January 13, 2011, the Miaoulises filed suit against AmegyBank and Prosperity Bank, asserting claims of breach of contract, breach of duties of good faith and fair dealing, and breach of fiduciary duties. For each of these claims, the Miaoulises claimed that AmegyBank and Prosperity Bank wrongfully tendered the money instead of segregating the money in separate accounts.  AmegyBank and Prosperity Bank filed a joint answer and a counterclaim for filing groundless claims under rule 13 of the Texas Rules of Civil Procedure.

All parties ultimately filed motions for summary judgment on the Miaoulises’ claims.  The Miaoulises argued that article 59.12 of the Texas Code of Criminal Procedure prohibited the banks from simply turning over the money. Instead, the banks were required to transfer the money to a segregated account until an action on the forfeiture of the money was complete.

The banks argued in their motion for summary judgment that the plain language of article 59.12 authorized them to turn over the money and that transferring the property to a segregated account was only elective.  They also argued that, even if the money should have been transferred to a segregated account, the Miaoulises could not establish any harm they have suffered as a result.  The trial court granted AmegyBank and Prosperity Bank’s motion for summary judgment and denied the Miaoulises’ motion.

Subsequently, AmegyBank and Prosperity Bank filed a motion for sanctions.  An evidentiary hearing was held.  The banks sought sanctions on the ground that (1) the plain language of article 59.12 showed they had not violated the statute, establishing that the Miaoulises’s claims were meritless; (2) the Miaoulises had made inconsistent factual assertions in other lawsuits; (3) the Miaoulises had admitted one ground in their lawsuit was baseless, yet subsequently continued to assert it; and (4) the Miaoulises had engaged in discovery abuse.  The trial court granted the motion for sanctions, supported by written findings of fact and conclusions of law.

Summary Judgment

In their first, third, and fourth issues, the Miaoulises argue the trial court erred by granting summary judgment in favor of AmegyBank and Prosperity Bank and against them because the trial court erred in its interpretation of article 59.12 of the Code of Criminal Procedure.

A. Standard of Review

The summary-judgment movant must conclusively establish its right to judgment as a matter of law.  See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986).  Because summary judgment is a question of law, we review a trial court’s summary judgment decision de novo.  Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).

To prevail on a “traditional” summary-judgment motion asserted under rule 166a(c), a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law.  See Tex. R. Civ. P. 166a(c); Little v. Tex. Dep’t of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004).  A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence.  See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

When a party moves for summary judgment on a claim for which it bears the burden of proof, it must show that it is entitled to prevail on each element of its cause of action.  See Parker v. Dodge, 98 S.W.3d 297, 299 (Tex. App.—Houston [1st Dist.] 2003, no pet.). The party meets this burden if it produces evidence that would be sufficient to support an instructed verdict at trial.  Id. 

A defendant moving for traditional summary judgment must either (1) conclusively negate at least one of the essential elements of each of the plaintiff’s causes of action or (2) conclusively establish each essential element of an affirmative defense. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995).  If the movant meets its burden, the burden then shifts to the nonmovant to raise a genuine issue of material fact precluding summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

To determine if there is a fact issue, we review the evidence in the light most favorable to the nonmovant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not.  See Fielding, 289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827). We indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.  Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002).

When, as here, the parties file cross-motions for summary judgment on overlapping issues, and the trial court grants one motion and denies the other, we review the summary judgment evidence supporting both motions and “render the judgment that the trial court should have rendered.”  FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).

B. Analysis

On appeal, the Miaoulises argue the trial court erred by granting summary judgment in favor of AmegyBank and Prosperity Bank and against them because the trial court erred in its interpretation of article 59.12 of the Code of Criminal Procedure.  This was not the only ground that the banks presented for summary judgment, however.

An appellant must attack all independent grounds that fully support an adverse ruling; if he fails to do so, we must affirm the trial court’s judgment.  Britton v. Tex. Dep’t of Criminal Justice, 95 S.W.3d 676, 681 (Tex. App.—Houston [1st Dist.] 2002, no pet.).  When the grant of summary judgment rests on several independent grounds, appellant must assign error to each independent ground on appeal or the summary judgment will stand on any omitted ground regardless of the merits of that ground.  Jack v. Holiday World of Houston, 262 S.W.3d 42, 49–50 (Tex. App.—Houston [1st Dist.] 2008, no pet.).   When the unchallenged independent ground fully supports the trial court’s judgment, any error in the grounds challenged on appeal is harmless.  Britton, 95 S.W.3d at 681.

In their petition, the Miaoulises argued that the warrants were not served on the right person and that article 59.12 required the banks to transfer the money to a segregated account.  For both claims of wrongdoing, AmegyBank and Prosperity Bank argued in their motion for summary judgment, “As a matter of law, based on Plaintiffs’ own admissions, whether or not the Banks’ actions were proper, nothing the Banks did or failed to do could have been the proximate cause of [the Miaoulises’] injuries.”  For the claim that the wrong person was served, the banks argued that “there is no causal relationship between where the Banks were served and any claimed damages to Plaintiffs in this case.  Regardless of where served, the action the Banks took would have been the same.  Without proof of causation, Plaintiffs cannot sustain their case.” 

For the claim that the banks were required to transfer the money to a segregated account, the banks argue that, even if this argument were correct,

the Banks’ failure to do so has not been the cause of any damages to Plaintiffs as a matter of law.  Had the Banks chosen to follow the procedure as set forth in [the subsection upon which the Miaoulises rely], for example, the assets would have remained in the Banks, but would still have remained frozen and unavailable to Plaintiffs until the forfeiture actions were concluded.  Because Plaintiffs pled guilty, and admitted that their currency at issue was contraband, the result here is the same. Their money was forfeited.

In short, the banks asserted that, even if the warrants had been served on different persons or the banks had placed the funds in segregated accounts, the result would have been the same.  The Miaoulises admitted in discovery that they had not been damaged by any alleged improper service on the warrants.  Even if the funds had been kept in the banks, the Miaoulises would not have had any access to the funds. The funds were ultimately forfeited. Where the funds were held prior to their forfeiture could not have harmed them.

The Banks’ arguments regarding causation and damages are independent grounds that would fully support the trial court’s grant of summary judgment on the Miaoulises’ claims.  See Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, no pet.) (identifying “damages sustained by the plaintiff as a result of the breach” as element of breach of contract); Finger v. Ray, 326 S.W.3d 285, 291 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (holding “[t]o prevail on a breach of fiduciary duty claim, the plaintiff must prove that the defendant's breach of their fiduciary duties proximately caused the plaintiff's damages”); Aranda v. Ins. Co. of N. Am., 748 S.W.2d 210, 215 (Tex. 1988) (identifying proof of suffering damages as a result of the breach as element in breach of duty of good faith and fair dealing).  The Miaoulises challenged neither of them on appeal.  Because these unchallenged grounds fully support the trial court’s judgment, we must affirm the trial court’s judgment and hold that any error in the ground challenged on appeal is harmless.  See Britton, 95 S.W.3d at 681.

We overrule the Miaoulises’s first, third, and fourth issues.

Trial Court’s Sanctions

In their second issue, the Miaoulises argue that the trial court abused its discretion by awarding AmegyBank and Prosperity Bank sanctions because interpretation of article 59.12 of the Code of Criminal Procedure was a case of first impression.

A. Standard of Review

We review a trial court’s imposition of sanctions for an abuse of discretion.  Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007).  A trial court abuses its discretion in imposing sanctions when it acts “without reference to any guiding rules and principles, such that its ruling was arbitrary or unreasonable.”  Id.  We presume that pleadings are filed in good faith, and the party seeking sanctions bears the burden of overcoming this presumption.  Id.  In reviewing the sanctions order, we review the entire record to determine whether the trial court abused its discretion.  Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006).  The trial court may consider everything that has occurred during the history of the litigation when determining how to sanction a party.  Berry–Parks Rental Equip. Co. v. Sinsheimer, 842 S.W.2d 754, 757 (Tex. App.—Houston [1st Dist.] 1992, no writ); see also Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985).

B. Analysis

AmegyBank and Prosperity Bank sought sanctions under rules 13 and 215.2 of the Texas Rules of Civil Procedure.  Tex. R. Civ. P. 13, 215.2(b).

Under rule 13, 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).  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.

Rule 215.2 of the Texas Rules of Civil Procedure allows a trial court to sanction a party for failure to comply with a discovery order or request. See Tex. R. Civ. P. 215.2; Cire v. Cummings, 134 S.W.3d 835, 839 (Tex. 2004).  The legitimate purposes of discovery sanctions are (1) to secure compliance with discovery rules; (2) to deter other litigants from similar misconduct; and (3) to punish violators.  Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 849 (Tex. 1992).

On appeal, the Miaoulises argue that the trial court abused its discretion by awarding AmegyBank and Prosperity Bank sanctions because interpretation of article 59.12 of the Code of Criminal Procedure was a case of first impression.  The Miaoulises fail to acknowledge, however, that interpretation of article 59.12 was only one of many grounds for which AmegyBank and Prosperity Bank sought sanctions.  It is also one of many grounds upon which the trial court based its award of sanctions.  In its findings of fact, the trial court also identified the following as grounds for sanctions: (1) representing in an earlier case with other parties that no other parties were responsible for the same damages sought in this case; (2) making claims in another lawsuit that directly contradict the Miaoulises’ position in this case; (3) admitting in requests for admissions in this case that the place or method of service upon the banks was not the proximate cause to any damage they suffered, while continuing to pursue this very claim before the court; and (4) engaging in multiple instances of discovery abuse.

“When findings of fact are filed and are unchallenged . . . . [t]hey are binding on an appellate court unless the contrary is established as a matter of law, or if there is no evidence to support the finding.” McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986). “[A]n appellate court will overrule a challenge to fact findings that underpin a legal conclusion or disposition when other fact findings that also support that legal conclusion or disposition go unchallenged.”  Britton, 95 S.W.3d at 682; accord Howeth Invs., Inc. v. City of Hedwig Village, 259 S.W.3d 877, 889 (Tex. App.—Houston [1st Dist.] 2008, pet. denied).

Because the Miaoulises have failed to challenge the other bases for sanctions, we must overrule the challenge they raised to one of the bases for the sanctions award.  See Britton, 95 S.W.3d at 682. We overrule the Miaoulises’ second issue.

Sanctions on Appeal

AmegyBank and Prosperity Bank urge this Court to impose sanctions on the Miaoulises pursuant to rule 45 of the Texas Rules of Appellate Procedure for filing a frivolous appeal.  See Tex. R. App. P. 45.  After considering the record, briefs, or other papers filed in this Court, we may award a prevailing party damages if we objectively determine that an appeal is frivolous.  Tex. R. App. P. 45; Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.—Houston [1st Dist.] 2001, pet. denied).  An appeal is frivolous when the record, viewed from the perspective of the advocate, does not provide reasonable grounds for the advocate to believe that the case could be reversed.  Smith, 51 S.W.3d at 381.  The decision to grant appellate sanctions is a matter of discretion that an appellate court exercises with prudence and caution and only after careful deliberation.  Id.  Although imposing sanctions is within our discretion, we will do so only in circumstances that are truly egregious.  See id.  After considering the record and briefs, we do not believe the circumstances in this case warrant sanctions.  Accordingly, we overrule AmegyBank and Prosperity Bank’s request for rule 45 sanctions.

Conclusion

We deny the motion for sanctions on appeal and affirm the judgment of the trial court.

                                                                      Laura Carter Higley

                                                                      Justice

Panel consists of Justices Higley, Sharp, and Huddle.