Chris L. Gilbert and Glenn E. Janik v. Kate M. Moseley ( 2014 )

In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-13-00081-CV
CHRIS L. GILBERT AND GLENN E. JANIK, Appellants
V.
KATE M. MOSELEY, Appellee
On Appeal from the County Court at Law No. 4
Dallas County, Texas
Trial Court No. CC-13-02405-D
Before Morriss, C.J., Carter and Moseley, JJ.
Opinion by Justice Moseley
OPINION
At their inception, the dealings giving rise to the lawsuit appealed here involved a
controversy over improvements to real estate in Dallas County, Texas. 1 The owners of the real
estate, attorney Chris L. Gilbert and his wife, Dawn E. Gilbert, 2 contracted with Moseley Homes,
LLC, the owner of which (Steve Moseley) was married to another attorney, Kate M. Moseley. 3
Although Moseley Homes performed some remodeling to the structure on the real estate, Gilbert
was dissatisfied and refused to pay, prompting Moseley Homes to file a mechanic’s lien
affidavit. Eventually, a suit was filed by Moseley Homes in the County Court at Law No. 4 of
Dallas County to foreclose the mechanic’s lien; Gilbert responded by filing a counter-claim
against Moseley Homes and Steve Moseley as an individual.
Gilbert also filed a separate lawsuit in a Dallas County district court against Moseley
Homes, Steve and Kate (in their individual capacities), and “John Doe Nos. 1–5.” 4 This lawsuit
sought very strikingly similar relief to the relief requested in Gilbert’s counter-claim against
Steve and Moseley Homes. Gilbert’s lawsuit in district court attacked the money claim by
Moseley Homes and complained about the lien filed by Moseley Homes, LLC, against the
1
Originally appealed to the Fifth Court of Appeals, this case was transferred to this Court by the Texas Supreme
Court pursuant to its docket equalization efforts. See TEX. GOV’T CODE ANN. § 73.001 (West 2013). We are
unaware of any conflict between precedent of the Fifth Court of Appeals and that of this Court on any relevant issue.
See TEX. R. APP. P. 41.3.
2
Apparently, there was a divorce between Dawn and Chris Gilbert, and the realty was awarded to Chris (from
hereafter we will refer to Chris only as “Gilbert,” individually).
3
Kate, it appears, was once associated with Chris in the practice of law.
4
Gilbert named “John Doe Nos. 1–5” as other defendants, describing them as attorneys and/or law firms whose
rights may be affected or who may have a material interest in the property. They were, in fact, employers of Kate
Moseley.
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property, seeking to have the property declared not subject to the mechanic’s lien claim. This
litigation contains a large number of imaginative claims as well as implicit threats to involve the
employers of Kate as a John Doe in the action, despite the apparent lack of any indication that
any of the employers had any interest in the case or controversy or any legitimate reason for
being named as parties to the suit. Glenn E. Janik, Gilbert’s attorney, caused a subpoena to be
served on the law firm that employed Kate.
The district court case was eventually transferred to the county court at law where the
original lawsuit was filed. Kate sought sanctions against both Gilbert and Janik, claiming that
the district court case had been filed for the sole purpose of harassing Kate.
The county court at law sanctioned Gilbert and Janik, awarding Kate judgment jointly
and severally against them in the sum of $30,150.00, and ordered the dismissal of the lawsuit
against Kate. Janik and Gilbert filed a petition for writ of mandamus with the Dallas Court of
Appeals to set aside that order; this petition was heard and denied without the order of dismissal
containing any discussion of the case on its merits. 5 Upon a severance of the one-time district
court case from the case filed in the county court at law, the sanctions order and the order of
dismissal became a final judgment, and the matter was appealed.
Gilbert characterizes the dismissal of Kate and the sanction against him as death penalty
sanctions and argues they were improper because the trial court did not first attempt to utilize
lesser sanctions.
5
In re Gilbert and Janik, No. 05-13-00258-CV, 2013 WL 1397150 (Tex. App.—Dallas Apr. 5, 2013, orig.
proceeding) (mem. op.).
3
The order of which Gilbert complains does two things: (1) it dismisses Kate from the
lawsuit and (2) it sanctions Gilbert and Janik in the amount of $30,150.00. Although the
appellants’ brief mentions the dismissal of Kate, it provides no specific argument regarding the
reason they feel that improper, other than generic statements that the sanctions order is a death
penalty and ultimately asking that the sanctions order (which necessarily includes the dismissal)
be vacated. In other words, the brief aims its complaints almost solely toward the issue of the
order for Gilbert and Janik to pay the sanctions with much less emphasis on the order for
dismissal of the claim against Kate. Even so, we consider both the ordered sanction and the
order of dismissal.
Gilbert and Janik argue that because the trial court did not experiment with other, lesser,
sanctions before ordering their case dismissed, as a matter of law, neither the dismissal nor the
associated monetary sanctions can stand. We disagree.
An initial question is whether this qualifies as a death penalty sanctions case. Originally,
the term death penalty as applied to sanctions was strictly in the context of discovery abuse.
TransAmerican Nat’l Gas Corp. v. Powell, 811 S.W.2d 913, 918 (Tex. 1991) (orig. proceeding).
In that context, the concept encompasses the limitation on the power of courts to dismiss an
action without allowing a hearing on its merits. Id. Such a sanction cannot be applied just to
punish or deter bad behavior, “absent a party’s flagrant bad faith or counsel’s callous disregard
for the responsibilities of discovery under the rules.” Id.The complained-of order does indeed dispose of the entirety of the severed action by
dismissing all claims against Kate with prejudice to refiling them. However, the dismissal with
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prejudice was from the parallel suit which Gilbert had filed in another court and which had been
transferred to the county court at law. If Gilbert and his attorney chose to add Kate in the
controversy concerning the real estate and its improvements, they could have added Kate to the
lawsuit pending in the county court at law. It is plain that the filing of a separate lawsuit which
included her as a defendant (particularly with the implicit threat of involving Kate’s employers in
the controversy) in an entirely different court was done with the intent to manipulate the system
and to harass Kate. Arguably, in such a situation even a dismissal might not constitute a death
penalty.
However, a death penalty sanction is generically defined as a sanction that ends the
prosecution of a lawsuit. The complained-of dismissal itself (although not specifically described
by the trial court as a sanction) did operate to terminate this particular suit against this particular
person. In the absence of any suggestion of a proper alternative justification for the dismissal,
we will treat the dismissal in our analysis as a sanction. That conclusion does not, however,
automatically require the importation of every piece of analysis used for death penalty reviews in
the context of discovery abuses. We will apply those analyses as they appear to be appropriate in
to this situation.
The issue before this Court is whether the trial court abused its discretion, either by
dismissing the case or ordering the imposition of cash sanctions against counsel and party. See
Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). In applying that standard, we determine
whether the trial court acted without reference to guiding rules and principles and reverse only if
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the ruling was arbitrary or unreasonable. Id. at 838–39. The trial court, in its sanction/dismissal
order, made a number of findings which are reproduced below in their entirety:
Defendant Kate Moseley is DISMISSED WITH PREJUDICE from this lawsuit.
The Court finds the claims asserted against Defendant Kate M. Moseley were
brought in bad faith by Defendant/Counter-Plaintiff Chris Gilbert and his counsel
Glenn Janik. Specifically, the claims asserted by Chris Gilbert and his counsel
Glenn Janik were groundless and brought for purposes of harassment in violation
of TRCP 13 and CPRC 9 & 10. Chris Gilbert and Glenn Janik are
SANCTIONED, jointly and severally, in the amount of $30,150.00.
The Court finds the following after reviewing the evidence and taking judicial
notice of the contents of its file:
1. The underlying dispute concerns home remodeling services provided by
Steve Moseley and Moseley Homes, LLC to Chris and Dawn Gilbert. Because
Moseley Homes, LLC was allegedly not paid in full for its work, a lawsuit against
the Gilberts was filed and counterclaims were alleged against Moseley Homes,
LLC and Steve Moseley, individually (See Ex. 4–7).
2. A lien was placed by Moseley Homes, LLC on the Gilberts’ home at 4402
Taos Road. Chris Gilbert believes the lien is a fraudulent lien and has pleaded
those allegations (See Ex. 4–7, 15).
3. Chris Gilbert, through his counsel, demanded the lien be removed on the
property at 4402 Taos Road. If the lien was not removed, Gilbert threatened to
add more claims against Steve Moseley and Moseley Homes. Gilbert also
threatened to sue Kate Moseley, the wife of Steve Moseley and an attorney at
Alston & Bird. Gilbert also threatened to send counsel for Moseley Homes, LLC
“litigation hold letters” and to evaluate the ethics of Moseley Homes, LLC’s
counsel, possibly for reporting to the State Bar of Texas (See Ex. 3).
4. It is undisputed that Kate Moseley is not a member of Moseley Homes,
LLC. It is also undisputed that Kate Moseley did not perform remodeling
services at the 4402 Taos Road property. Finally, it is undisputed Kate Moseley
never put a lien on the property at 4402 Taos Road.
5. After this Court had heard a July 16, 2012 summary judgment motion
concerning Chris Gilbert’s counterclaim of fraudulent lien by Moseley Homes,
LLC, and before the Court ruled in writing, Gilbert went to state district court on
July 25, 2012 and filed nearly identical claims for relief (See Exhibit 21, Exhibit
6
5, and the First Amended Motion for Sanctions, containing Original Petition in
44th District Court). Ultimately, this Court denied Gilbert’s summary judgment
motion on August 7, 2012, and the 44th District Court transferred the DC-12-
08228-B case to this Court. DC-12-082228-B was converted into CC-12-06402-
D, which was then consolidated into this cause, CC-II-00621-D.
6. Gilbert and his counsel did argue, in a Motion to Transfer to district court,
that this Court did not have jurisdiction to hear suits to quiet title to land, which is
why they claimed they needed to file the state district court case. The Court
disagreed and denied the Motion. The Court does not base its sanctions against
Chris Gilbert and Glenn Janik due to their decision to sue Moseley Homes, LLC
and Steve Moseley in state district court. It is the claims against Kate Moseley
the Court finds objectionable and subject to sanction.
7. In the Original Petition in the 44th District Court, Gilbert and Janik
claimed Moseley Homes, LLC was not observing corporate formalities and
therefore Kate Moseley was a “necessary party” to the suit to quiet title (See 44th
district court Original Petition). Failure to observe corporate formalities would
not be a legal basis upon which liability would be created against Kate Moseley.
She is not a member of Moseley Homes, LLC. The fact that she may have
introduced Chris Gilbert to her husband, Steve Moseley, or that she may have
done legal work for Moseley Homes, LLC is irrelevant.
8. After Kate Moseley’s counsel, James Pennington, had a conversation on
August 23, 2012 with Glenn Janik regarding the claims made against
Ms. Moseley, Gilbert amended his petition in state district court (See Exhibit 21-
22). Gilbert and Janik, rather than dismissing Kate Moseley, doubled down on
their original claims and added a tortious interference of contract claim against
her (See Exhibit 21). Gilbert and Janik now claimed Kate Moseley had a
“material interest” in the property in dispute and her failure to remove the lien
was interfering with Gilbert’s ability to sell his home (Exhibit 21). Again, Kate
Moseley never filed a lien on the property at issue. She has no duty or individual
ability to remove a lien filed by another party. The fact that a spouse may
indirectly benefit from the operation of her husband’s construction company does
not mean she has a “material interest” in the property in dispute. With that logic,
why not sue the Moseley children, if any? Kate Moseley did no work on the
property at issue. She did not put a lien on the property. She is not a member of
the LLC that did put a lien on the property. The claims brought against Kate
Moseley have no basis in law or fact.
9. Gilbert and Janik served a subpoena and corporate representative
deposition notice to the law firm of Alston & Bird, LLP, Kate Moseley’s
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employer. This discovery was done for purposes of harassment. The deposition
topics are irrelevant to the underlying litigation between the only known
“materially interested” or “necessary” parties for the reasons articulated above
(see Exhibit 19).
Unlike the discovery cases, in this case it appears that the sanction order was issued based on an
application of Chapters 9 and 10 of the Texas Civil Practice and Remedies Code and Rule 13 of
the Texas Rules of Civil Procedure. Those authorities allow a court to issue sanctions for
specific conduct. The improper conduct specified by Section 10.001 of the Texas Civil Practice
and Remedies Code as a basis for sanctions includes the presentation of a pleading or motion for
“any improper purpose, including to harass or to cause unnecessary delay or needless increase in
the cost of litigation.” TEX. CIV. PRAC. & REM. CODE ANN. § 10.001(1) (West 2002).
By filing a pleading or motion, the signatory to that pleading also certifies, among other
things, that
(2) each claim, defense, or other legal contention . . . is warranted by
existing law or by a nonfrivolous argument for the extension, modification, or
reversal of existing law or the establishment of new law; [and]
(3) each allegation or other factual contention in the pleading or
motion has evidentiary support or, for a specifically identified allegation or
factual contention, is likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery . . . .
TEX. CIV. PRAC. & REM. CODE ANN. § 10.001(2), (3) (West 2002).
A court is permitted to “impose a sanction on the person [who signed the pleading], a
party represented by the person, or both.” TEX. CIV. PRAC. & REM. CODE ANN. § 10.004(a)
(West 2002). “The sanction must be limited to what is sufficient to deter repetition of the
8
conduct or comparable conduct by others similarly situated.” TEX. CIV. PRAC. & REM. CODE
ANN. § 10.004(b) (West 2002).
Similarly, a sanction for violating Rule 13 may be assessed against a signatory of a
“pleading, motion or other paper” that was “groundless and brought in bad faith or groundless
and brought for the purpose of harassment,” a party represented by the signatory, or against both.
TEX. R. CIV. P. 13.
Section 9 of the Civil Practice and Remedies Code (focused solely on tort cases)
authorizes a laundry list of sanctions, specifically including, among other sanctions, dismissal of
a cause of action, 6 and it “does not apply to any proceeding to which Section 10.004 or Rule 13
. . . applies.” TEX. CIV. PRAC. & REM. CODE ANN. § 9.012(h) (West 2002). Section 10 applies to
other actions, with a much shorter list of specified available sanctions, while Rule 13 refers to the
discovery sanction section in Rule 215.2(b) for its list of (nonexclusive) sanctions. TEX. R. CIV.
P. 215.2(b).
In Low v. Henry, 221 S.W.3d 609, 620 (Tex. 2007), the Texas Supreme Court addressed
sanctions entered under Chapter 10 and generally concluded that such sanctions should not be
excessive; the court further commented that in Cire, it had required a trial court to explain that it
considered lesser sanctions before imposing severe, death penalty, sanctions.
Following the lead of the Texas Supreme Court in Cire, the Dallas Court of Appeals has
determined that “the trial court need not test the effectiveness of each available lesser sanction by
actually imposing the lesser sanction on the party before issuing the death penalty.” Shops at
6
It appears that the section was created in 1987 as part of the swarm of legislation created in the opening salvos of
tort reform.
9
Legacy (Inland) Ltd. P’ship v. Fine Autographs & Memorabilia Retails Stores, Inc., 418 S.W.3d
229, 233 (Tex. App.—Dallas 2013, no pet.) (citing Cire, 134 S.W.3d at 840). However, the
cases go on to explain that the trial court “must analyze the available sanctions and offer a
reasoned explanation as to the appropriateness of the sanction imposed.” Id. (citing Cire, 134
S.W.3d at 840).
In the context of sanctions assessed for the filing of frivolous lawsuits, the El Paso Court
of Appeals has held that lesser sanctions must be considered in discovery sanctions proceedings,
but where attorney fees awarded as sanctions were involved, there were no lesser sanctions that
the court could have considered; therefore, a trial court did not abuse its discretion by awarding
monetary sanctions. Sellers v. Gomez, 281 S.W.3d 108, 115 (Tex. App.—El Paso 2008, pet.
denied).
In this case, although Gilbert had explicit opportunity to amend his claims against (or
dismiss his claims against) Kate, he declined to do so. In fact, as pointed out by the trial court in
its findings, rather than dismissing the claims against Kate, Gilbert instead “doubled down” on
his claims, adding a tortious interference with contract claim (a claim for which he has failed to
direct us to any legitimate support).
The trial court explained in its order that it was dismissing this case because the claims
against Kate were made in bad faith, were groundless, and were brought for purposes of
harassment in violation of Rule 13 of the Texas Rules of Civil Procedure as well as Chapters 9
and 10 of the Texas Civil Practice and Remedies Code. The court went on to lay out the
behavior of counsel and explained in detail why each of the claims against her were groundless
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and why those claims constituted harassment. The court further noted (although explicitly
without relying upon) the filing of the action in a separate court. The trial court also emphasized
that although Gilbert had opportunities to amend the pleadings to add a legitimate cause of action
or amend the claims so that they would raise a viable claim, he and his attorney had not corrected
the failure but, instead, compounded it by adding additional specious claims.
This is not a discovery scenario where many types of lesser sanctions might be utilized,
e.g., striking a particular pleading, disallowing certain discovery, or limiting types of discovery.
The sanctionable conduct here is the institution and pursuit of a groundless lawsuit that was
brought in bad faith for purposes of harassment.
“Meritless claims impose a terrible hardship on opponents, and it is unjust to
allow such claims to be presented.” Although we recognize that the supreme
court strongly prefers that trial courts consider the availability of lesser sanctions
before imposing death-penalty sanctions, they do not require it where, as here, the
offensive conduct is egregious and where it is apparent that no lesser sanctions
would promote compliance with the rules. See Cire, 134 S.W.3d at 840 (citing
GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 729–30 (Tex. 1993)).
JNS Enter., Inc. v. Dixie Demolition, LLC, 430 S.W.3d 444, 456 (Tex. App.—Austin 2013, no
pet.) (citation omitted).
Under these facts, there is no realistic lesser measure that could have been utilized by the
trial judge as a lesser sanction in addition to the opportunities already provided. See Almanza v.
Transcon. Ins. Co., No. 05-97-01612-CV, 1999 WL 1012959 (Tex. App.—Dallas Nov. 8, 1999,
pet. denied) (not designated for publication) (although trial court did not state it had considered
availability of lesser sanctions, appeals court found only appropriate sanctions were dismissal of
petition and assessment of attorney fees).
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We conclude that the trial court could properly utilize a death penalty sanction in this
case. A remaining question is whether the application of such a sanction is supported by the
record. In that vein, appellants raise a number of complaints about the sufficiency of evidence to
support the trial court’s findings. A critical additional consideration in this case is the fact that
the appellants requested (without reference to Rule 34.6 of the Texas Rules of Appellate
Procedure) that the court reporter not include the exhibits from the sanctions hearing in the
appellate record. We, therefore, apply the presumption that the omitted portions of the record are
relevant and support the judgment on appeal. See Bennett v. Cochran, 96 S.W.3d 227, 229 (Tex.
2002) (per curiam); Christiansen v. Prezelski, 782 S.W.2d 842 (Tex. 1990). Accordingly, we
presume that the omitted portions of the record are relevant to determining whether the evidence
provided was insufficient to support the trial court’s decision to dismiss the case against Kate or
to issue sanctions against Gilbert and Janik. See El Paso Accent Homes, L.L.C. v. Preferred Grp.
Props., Inc., 387 S.W.3d 810, 812 (Tex. App.—El Paso 2012, no pet.) (requesting record be
prepared without including exhibits).
In this case, there was evidence about attorney fees at a level which would readily
support the amount of the sanctions award. See Stromberger v. Turley Law Firm, 251 S.W.3d
225, 226 (Tex. App.—Dallas 2008, no pet.). Even if there was no such evidence, we would be
required to assume that the omitted portions of the record supported the award. 7
7
We also note authority indicating that proof of the necessity or reasonableness of attorney fees is not required in a
situation where the fees are assessed as sanctions. Gorman v. Gorman, 966 S.W.2d 858, 868–69 (Tex. App.—
Houston [1st Dist.] 1998, pet. denied). “Rather, the amount of attorney’s fees awarded as sanctions is within the
sound discretion of the trial court.” Sellers v. Gomez, 281 S.W.3d 108, 116 (Tex. App.—El Paso 2008, pet. denied).
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Under these facts and in this posture, we conclude that the absence of explicit language in
the order stating that the court had considered using lesser measures and found them wanting is
not controlling; therefore, the absence of this language does not render the dismissal improper.
We further conclude that the evidence is sufficient to support the monetary sanction. In the
absence of a complete record, we are unable to find that the trial court abused its discretion in its
ruling on either of these matters. On this record, we therefore conclude that Gilbert and Janik’s
conduct is one of the exceptional cases in which lesser sanctions either do not exist or are not
such as would promote the requisite compliance with the rules. See generally Citibank, N.A. v.
Estes, 385 S.W.3d 671, 677 (Tex. App.—Houston [14th Dist.] 2012, no pet.).
We affirm.
Bailey C. Moseley
Justice
Date Submitted: October 29, 2014
Date Decided: December 17, 2014
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