Kevin W. Liles, Bryan K. Harris, Stuart R. White, James L. Ray and Kyle D. Giacco (Cross-Appellees) v. Maria Isabel Serna Contreras as Next Friend and Guardian of Samara Isabella Morales Serna and Samantha Isabel Morales Serna, Minor Children (Cross-Appellant) , 547 S.W.3d 280 ( 2018 )

Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-16-00636-CV
Kevin W. LILES, Bryan K. Harris, Stuart R. White, James L. Ray, and Kyle D. Giacco,
Appellants/Cross-Appellees
v.
Maria Isabel Serna CONTRERAS, as Next Friend and Guardian of Samara Isabella Morales
Serna and Samantha Isabel Morales Serna, Minor Children,
Appellee/Cross-Appellants
From the 341st Judicial District Court, Webb County, Texas
Trial Court No. 2014CVT001295 D3
Honorable Rebecca Ramirez Palomo, Judge Presiding
Opinion by: Marialyn Barnard, Justice
Sitting: Marialyn Barnard, Justice
Rebeca C. Martinez, Justice
Irene Rios, Justice
Delivered and Filed: March 21, 2018
AFFIRMED
This is an appeal challenging a trial court’s order imposing sanctions on several attorneys
for actions and omissions relating to the execution of a settlement agreement, and a cross appeal
challenging the trial court’s refusal to permit review of documents submitted for in camera
examination. We affirm the trial court’s sanctions order, but reject as moot the complaint
regarding in camera inspection.
04-16-00636-CV
BACKGROUND
Samuel Morales Castillo was killed when an FE Express, LLC truck driven by Francisco
Javier Bernal struck a vehicle, which then struck Castillo as he stood next to his vehicle on the side
of the road. Castillo’s girlfriend, Maria Isabel Serna Contreras, as next friend and guardian of
Samara Isabella Morales Serna and Samantha Isabel Morales Serna, Minor Children (collectively
“Contreras”), filed a wrongful death action against FE Express and Bernal. Contreras was
represented by attorney Ronald Rodriguez of the Law Offices of Ronald Rodriguez, P.C., a Laredo
firm. This suit was assigned to the 341st District Court, Webb County, Texas. Castillo’s wife,
Paulina Navarro Hernandez, individually and on behalf of her two minor children (collectively
“Navarro”), also filed a wrongful death action against FE Express and Bernal. Navarro was
represented by the Corpus Christi firm of Liles Harris, PLLC — specifically attorneys Kevin W.
Liles, Brian K. Harris, and Stuart R. White (collectively “Liles”). The lawsuit filed by Liles on
behalf of Navarro was assigned to the 111th District Court, Webb County, Texas. Thereafter, FE
Express and Bernal, who were represented by James L. Ray and Kyle D. Giacco (collectively
“R&G”) of Daw & Ray, L.L.P., a Houston law firm, filed a motion to consolidate the two suits.
The trial court granted the order, ordering Navarro’s suit consolidated into Contreras’s suit in the
341st District Court. It is undisputed that attorneys for both Navarro and Contreras sent demands
to counsel for FE Express and Bernal, seeking the full limits of FE Express’s $1 million per
accident insurance policy. In January 2015, FE Express’s insurer, who was willing to settle for
policy limits, proposed mediation or arbitration to apportion the insurance proceeds between
Navarro and Contreras. It does not appear any formal mediation or arbitration proceedings
occurred.
On September 11, 2015, approximately nine months after the motion to consolidate was
granted and while the wrongful death suits were still pending in Webb County, Liles, on behalf of
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Navarro, filed a wrongful death suit in Nueces County asserting the identical factual and legal
allegations contained in the Webb County petition. 1 Liles served R&G with a copy of the petition,
but did not notify counsel for Contreras of the new suit. In the Nueces County petition, Liles
asserted venue was proper in Nueces County “under the general venue rule.” Three days later,
Liles, who represented that a settlement had been reached, asked the Nueces County trial court to
appoint a guardian ad litem to protect the interest of the Navarro minor children. The trial court
granted the motion and rendered an order appointing an ad litem. Thereafter, Liles served R&G
— but not Contreras’s attorney — with a notice stating that “a Friendly Suit Hearing” had been
set for October 1, 2015 in the Nueces County court, indicating a settlement had been reached
between Navarro and FE Express and Bernal. Two amended hearing notices were filed September
24, 2015 and September 30, 2015 — these too were served on R&G, but not on counsel for
Contreras. The final notice set the friendly suit hearing for on October 12, 2015.
On October 6, 2015, several events took place. First, R&G, as stated in their appellate
brief, “agreed to waive service” and filed an answer on behalf of their clients, FE Express and
Bernal, to Navarro’s Nueces County suit. The answer was a Rule 92 general denial; R&G did not
contest Liles’s venue allegation. See TEX. R. CIV. P. 92. Second, approximately two hours after
R&G filed the answer in the Nueces County suit, Liles filed a notice of nonsuit in Webb County,
dismissing Navarro’s claims against FE Express and Bernal without prejudice. There was no
mention of the settlement or the friendly suit setting in the notice of nonsuit. Finally, R&G served
Navarro and Contreras with FE Express and Bernal’s “First Amended Responses to All Plaintiffs’
Request for Disclosure.” In the amended response, FE Express and Bernal amended twelve
responses — (a) through (l) — to the requests for disclosure. Included in the amendment, was the
1
There was nothing in the Nueces County petition to indicate that the suit was merely a “friendly suit,” nor was there
any mention of the wrongful death action still pending in the 341st District Court in Webb County.
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response to request (h), which sought disclosure of “[a]ny settlement agreements described in Rule
192.3(g).” FE Express and Bernal amended their original responses to advise they had reached a
settlement agreement with Navarro in the amount of $700,000.00. The response noted the
settlement had not been finalized and the settlement documents were being prepared for court
approval. Accordingly, no actual settlement agreement was produced. The responses did not
include any information about the Nueces County suit or the hearing set for October 12, 2015. The
amended responses were served the day before the scheduled deposition of Paulina Navarro
Hernandez.
The next day, October 7, 2015, Contreras took Navarro’s deposition. There was no
mention during the deposition of the settlement or the hearing pending in Nueces County.
Contreras’s attorney stated at the sanctions hearing that he received the amended responses to the
request for disclosure regarding the settlement “late in the day” on October 6th as he was preparing
for the deposition. As to the settlement, he “figured we would come back to this Court later and
deal with that.” (emphasis added)
The hearing on the Nueces County friendly suit was held on October 12, 2015, as set out
in the final amended notice of hearing. At the hearing, there was no specific mention of the Webb
County suit — or the fact that there were additional minors involved. The only hint of additional
claimants arose when R&G asked Navarro if she understood there were “other claimants against
our clients that are also seeking part of the proceeds of the insurance policy.” Navarro replied that
she was aware there were other claimants, but did not mention the other minors. When questioned
by her own attorney, Navarro admitted a settlement agreement and release existed and she had met
with Liles the night before the friendly suit hearing “and discussed and read the entire agreement.”
Thus, the record establishes the written settlement agreement existed as of October 11, 2015.
However, no copy of the agreement was produced to Contreras until February 1, 2016, when her
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attorney specifically requested it. On the same date the hearing was held, the Nueces County trial
court approved the settlement and signed an “Agreed Final Judgment” between Navarro and
defendants FE Express and Bernal.
After Contreras received a copy of the actual settlement agreement, her attorney filed a
motion for sanctions on her behalf. In the motion, Contreras alleged the Webb County trial court
should impose sanctions: (1) under Chapter 10 of the Civil Practice and Remedies Code because
Liles filed the October 6, 2015 notice of nonsuit for an improper purpose; (2) under Rule 215.3
because Liles and R&G abused the discovery process by failing to timely produce a copy of the
actual settlement agreement; and (3) under its inherent power to impose sanctions because Liles
and R&G engaged in abusive conduct that affected the court’s core functions and attacked the
integrity of the judicial system. 2 As a consequence for this sanctionable conduct, Contreras
requested the trial court to order the following relief: (1) order the settling parties and their
attorneys deposit the $700,000.00 settlement funds into the court registry; (2) strike Navarro’s
pleadings and render judgment that she and her children take nothing; (3) order Navarro’s three
attorneys to each pay Contreras $250,000.00; (4) strike FE Express and Bernal’s answer and render
a default judgment in the amount of $10 million in favor of Contreras; and (5) order the attorneys
for FE Express and Bernal to each pay Contreras $250,000.00.
In response to the motion for sanctions filed on behalf of Contreras, Liles filed a motion
for sanctions on behalf of his client. In this counter motion for sanctions, Navarro alleged the
motion for sanctions filed by Contreras violated Rule 13 of the Texas Rules of Civil Procedure,
which precludes the filing of pleadings that are groundless and brought in bad faith or groundless
and brought to harass, and Chapter Ten of the Texas Civil Practice and Remedies Code, which
2
In the motion, Navarro sought sanctions against Contreras and FE Express and Bernal, as well as their attorneys.
However, the trial court imposed sanctions only upon the attorneys, Liles and R&G.
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precludes the filing of any pleading that is presented for an improper purpose. See TEX. CIV. PRAC.
& REM. CODE ANN. §§ 10.001(1), 10.004(a) (West 2017); TEX. R. CIV. P. 13.
The trial court held a hearing on the motions for sanctions. The hearing took place on
different days over the course of several months. Prior to making a determination, the trial court
ordered Liles and R&G to submit certain documents for in camera review. The trial court
reviewed the documents, but denied Contreras’s request for access to them. Ultimately, the trial
court granted Contreras’s motion for sanctions, finding that:
• Liles filed a notice of nonsuit for an improper purpose in violation of Chapter
10;
• R&G abused the discovery process by failing to respond fully to Contreras’s
request for disclosure by not producing the settlement agreement as required by
the discovery rules; and
• Liles and R&G conspired to intentionally and unethically avoid and interfere
with the court’s jurisdiction, sabotaged Contreras’s ability to object to the
settlement agreement, and undermined the trial court’s duty to protect the
Contreras minors’ best interests, resulting in a direct attack on the judiciary and
legal system.
However, the trial court did not adopt the relief requested by Contreras. Rather, the trial court
ordered Navarro’s attorneys to pay, jointly and severally:
• a monetary penalty of $50,000.00 into the court registry;
• all court costs incurred in representing the Navarro plaintiffs;
• one-half of all court costs related to the motion for sanctions;
• attorney’s fees and expenses to the Contreras’s attorney in the amount of
$37,744.00 with post-judgment interest; and
• $10,000.00 into the court registry if an appeal is filed to be held as attorneys’
fees and expenses in the event of an unsuccessful appeal.
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The trial court also ordered the Navarro attorneys to complete three hours of legal ethics education
within six months of the order. As for R&G, the trial court ordered them to pay, jointly and
severally:
• a monetary penalty of $25,000.00 into the court registry;
• one-half of all court costs related to the motion for sanctions;
• attorney’s fees and expenses to the Contreras’s attorney in the amount of
$12,180.00 with post-judgment interest; and
• $10,000.00 into the court registry if an appeal is filed to be held as attorneys’
fees and expenses in the event of an unsuccessful appeal.
The trial court also ordered R&G to complete three hours of ethics education within six months of
the order. The trial court denied Navarro’s counter motion for sanctions. After the trial court
signed an order of severance, all parties, including Contreras, filed notices of appeal.
ANALYSIS
On appeal, Liles and R&G challenge the imposition of sanctions. Contreras challenges the
trial court’s refusal to allow her to inspect the documents that were submitted to the trial court by
Liles and R&G for in camera inspection.
Sanctions
On appeal, Liles and R&G, who filed separate briefs, contend the trial court erred in
imposing sanctions against them. Liles also contends the trial court erred in denying Navarro’s
motion for sanctions against Contreras’s attorney.
Standard of Review
Appellate courts review a trial court’s imposition of sanctions under an abuse of discretion
standard. Nath v. Tex. Children’s Hosp., 446 S.W.3d 355, 361 (Tex. 2014) (sanctions under
Chapter 10 of the Civil Practice & Remedies Code); Low v. Henry, 221 S.W.3d 309, 614 (Tex.
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2007) (sanctions under Rule 13 of the Texas Rules of Civil Procedure); Cire v. Cummings, 134
S.W.3d 835, 838–39 (Tex. 2004) (sanctions under Rule 215 of the Texas Rules of Civil Procedure);
In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997) (sanctions under trial court’s inherent power). A
trial court abuses its discretion if it acts without reference to guiding rules and principles of law to
such an extent that its ruling is arbitrary or unreasonable. Nath, 446 S.W.3d at 361 (citing Cire,
134 S.W.3d at 838–39). A sanctions award is an abuse of discretion if it does not comply with
due process because a trial court has no discretion in determining what the law is or applying it to
the facts. Id. However, we cannot say a trial court abused its discretion simply because it decided
a matter differently than we might have in a similar circumstance. Samlowski v. Wooten, 332
S.W.3d 404, 410 (Tex. 2011). Moreover, if some evidence supports the trial court’s decision, we
will not hold it abused its discretion. Nath, 446 S.W.3d at 361.
In reviewing a sanctions order for an abuse of discretion, we are not bound by a trial court’s
findings of fact and conclusions of law, if any. Am. Flood Research, Inc. v. Jones, 192 S.W.3d
581, 583 (Tex. 2006) (per curiam). Any “findings of fact” made by a trial court in support of a
sanctions order are not treated on appeal as findings under Rule 296 of the Texas Rules of
Appellate Procedure. Clark v. Bres, 217 S.W.3d 501, 513 (Tex. App.—Houston [14th Dist.] 2006,
pet. denied); see IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 442 (Tex. 1997).
In other words, our review of a sanctions order is not limited to evaluating the sufficiency of the
evidence supporting a trial court’s findings. In re Estate of Perez-Muzza, 446 S.W.3d 415, 419
(Tex. App.—San Antonio 2014, pet. denied). Rather, we must conduct an independent review of
the entire record to determine whether there has been an abuse of discretion. Am. Flood Research,
192 S.W.3d at 583; Perez-Muzza, 446 S.W.3d at 419. The purpose of findings made following
the imposition of sanctions is to assist the appellate court in its analysis, assure judicial
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deliberation, and enhance the deterrent effect of the sanctions order itself. Clark, 217 S.W.3d at
513).
The imposition of sanctions must be in accordance with due process. Nath, 446 S.W.3d at
363. Accordingly, “a sanction must be neither unjust nor excessive.” Id. As the court recognized
in Nath, this standard was promulgated most clearly in TransAmerican Nat. Gas Corp. v. Powell,
811 S.W.2d 913 (Tex. 1991). Id. The first prong of the TransAmerican test — whether a sanction
is just — requires a direct relationship between the offensive conduct, the offender, and the
sanction imposed. Id. (citing TransAmerican, 811 S.W.2d at 917); Petroleum Solutions, Inc. v.
Head, 454 S.W.3d 482, 489 (Tex. 2014). In other words, a sanction is just if it is directed against
the abusive conduct “with an eye toward remedying the prejudice caused to the innocent party,”
and is “visited upon the true offender.” Nath, 446 S.W.3d at 363; see Head, 454 S.W.3d at 489.
Sanctions may also be imposed to secure compliance with relevant rules of civil procedure, punish
violators, and deter others from similar misconduct. Id. (citing Spohn Hosp. v. Mayer, 104 S.W.3d
878, 882 (Tex. 2003)); Bodnow Corp. v. City of Hondo, 721 S.W.2d 839, 840 (Tex. 1986) (per
curiam). The second prong of the test set out in TransAmerican considers the proportionality of
the sanction relative to the misconduct — the sanction must not be excessive. Nath, 446 S.W.3d
at 363; Head, 454 S.W.3d at 489. The punishment should fit the crime and be no more severe than
necessary to satisfy its legitimate purposes. Nath, 446 S.W.3d at 363.
Discovery Sanctions
The trial court found R&G committed a discovery violation by failing to respond fully to
Contreras’s requests for disclosure. 3 More specifically, the trial court found R&G failed to respond
3
In its brief, Liles recognizes that discovery sanctions were imposed only against R&G. Nevertheless, it challenged
and addressed the imposition of discovery sanctions “out of an abundance of caution.” We agree the only discovery
sanction imposed by the trial court was imposed against R&G for its failure to respond fully to Contreras’s requests
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fully, on behalf of its clients, to the request for disclosure seeking disclosure of “[a]ny settlement
agreements described in Rule 192.3(g)” of the Texas Rules of Civil Procedure. See TEX. R. CIV.
P. 192.3(g). On appeal, R&G contends the trial court abused its discretion in sanctioning it for an
abuse of the discovery process because the supplemental disclosure it filed on its clients’ behalf
complied with the pertinent discovery rules. We disagree.
The discovery of settlement agreements is addressed by the Texas Rules of Civil
Procedures. Rule 194 governs requests for disclosure. See id. R. 194. Rule 194.2 advises what
disclosures may be requested, and subsection (h) of that rule states a party may discover “any
settlement agreements described in rule 192.3(g).” Id. R. 194.2(h). Thus, to determine what in
particular a party may discover with regard to settlement agreements, we must look to Rule
192.3(g). That rule provides that a party may obtain discovery of the existence and contents of
any relevant portions of a settlement agreement. Id. R. 192.3(g). The rules further provide that if
a trial court determines a party is abusing the discovery process in “seeking, making or resisting
discovery,” the trial court may impose any appropriate sanction authorized in paragraphs (1)–(5)
and (8) of Rule 215.2. Id. R. 215.3; see id. R. 215.2(b)(1–5), (8).
As noted above, we review a trial court’s imposition of discovery sanctions for an abuse
of discretion. Cire, 134 S.W.3d at 838–39. Texas courts have long recognized — before and after
TransAmerican — that trial courts have broad discretion in matters of discovery and sanctions.
See, e.g., Bodnow Corp., 721 S.W.2d at 940; Johnson v. Davis, 178 S.W.3d 230, 242 (Tex. App.—
Houston [14th Dist.] 2005, no pet.); Sharpe v. Kilcoyne, 962 S.W.2d 697, 702 (Tex. App.—Fort
Worth 1998, no pet.); Gonzales v. Conoco, Inc., 722 S.W.2d 247, 249 (Tex. App.—San Antonio
1986, no writ); see also Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520 S.W.3d 848,
for disclosure as it related to disclosure of the settlement agreement. Thus, our analysis of the discovery sanction
applies only to R&G.
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884 (Tex. 2017) (holding that broad discretion granted to trial court to impose discovery sanctions
is not unlimited). The purpose of a discovery sanction is to: (1) secure compliance with the
discovery rules; (2) deter others from violating the discovery rules; and (3) punish those who
violate the discovery rules. Horizon Health Corp., 520 S.W.3d at 884 (quoting Bodnow Corp.,
721 S.W.2d at 840).
Here, Contreras, in her requests for disclosure — served with her August 2014 original
petition, asked FE Express and Bernal for “[a]ny settlement agreements described in Rule
192.3(g).” Thus, R&G, on behalf of its clients, was required to disclose the existence and contents
of any relevant portions of a settlement agreement. See TEX. R. CIV. P. 192.3(g).
It appears that when R&G first responded on behalf of its clients, there was no written
agreement to disclose. However, as discussed above, Navarro and R&G’s clients subsequently
reached a written settlement agreement. Some sort of settlement agreement, given the timeline,
was presumably reached before Liles filed the second wrongful death action on behalf of Navarro
in Nueces County on September 11, 2015 — there would have been no reason for Liles to file the
second wrongful death action in Nueces County in the absence of a settlement. But it was not until
October 6, 2015, that R&G served Navarro and Contreras with FE Express and Bernal’s “First
Amended Responses to All Plaintiffs’ Request for Disclosure.” In the amendment, R&G disclosed
FE Express and Bernal had reached a settlement agreement with Navarro in the amount of
$700,000.00. The response stated:
Defendants FE Express and Francisco Javier Bernal have reached a settlement with
Paulina Navarro Hernandez, Individually and as Next Friend of Minor Children
Ana Morales Navarro and Samuel Morales Navarro for Seven Hundred Thousand
Dollars and 0/100 ($700,000.00) The settlement has not been finalized. The
settlement documents are being prepared and subject to approval by a Court.
No actual settlement agreement was produced until February 1, 2016, after Contreras’s counsel
made a specific request.
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R&G argues its supplemental response was sufficient to comply with the request for
disclosure as it identified “the existence of a tentative settlement agreement” and “the contents of
the tentative settlement agreement—the parties to the settlement, the amount of the settlement, the
status of the pending-court approval of the settlement, and the fact that the settlement documents
are still being prepared.” It is undisputed that R&G did not produce the actual written settlement
agreement to Contreras until her attorney made an additional request for the document, even
though the written settlement agreement and release were completed and signed at least by October
12, 2015 — the date of the friendly suit hearing — because at the hearing Navarro testified that
the night before the hearing she had met with Liles “and discussed and read the entire agreement.”
She further stated she was asking the Nueces County trial court to “approve the entire settlement
and the structured annuities that are in place” for her children. Moreover, on the same date, but
after the hearing, the trial court rendered an agreed final judgment based on the settlement. The
judgment included specific terms relating to the amounts to be paid and when such payments
would be made.
Rule 192.3(g) requires a party responding to a request for disclosure to disclose not just the
existence of a settlement agreement, but the contents of it. Id. Under Rule 194.4, a responding
party “ordinarily must” serve documents with the response. Id. R. 194.4; see In re GreCon, Inc.,
No. 14-17-000639, 2018 WL 444316, at *3 (Tex. App.—Houston [14th Dist.] Jan. 12, 2018, orig.
proceeding) (determining whether settlement agreements were discoverable). Settlement
agreements are discoverable for many reasons, including demonstrating bias or prejudice of a party
or potential witness. Bristol-Myers Co. v. Gonzales, 561 S.W.2d 801, 805 (Tex. 1978); GreCon,
2018 WL 444316, at *8 (quoting In re Univar USA, Inc., 311 S.W.3d 175, 180 (Tex. App.—
Beaumont 2010, orig. proceeding)). Merely disclosing the names of the parties to the settlement,
the amount, and that court approval was pending did not disclose “the contents” of the settlement
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agreement so as to allow Contreras’s counsel, among other things, to determine whether there
might be bias or prejudice by the settling parties based on the agreement. Although Rule 408 of
the Texas Rules of Evidence generally precludes the admission of settlement agreements, such
agreements may be admissible to prove a party’s or witness’s bias or prejudice. TEX. R. EVID.
408. Admittedly, at the time R&G served Contreras with the supplemental responses, the
information therein was full and complete as required by Rule 192.3(g). However, once the
settlement agreement was complete — as it obviously was by October 12, 2015, Rule 192.3(g)
mandated a full and complete disclosure of the written settlement agreement. See TEX. R. CIV. P.
192.3(g). Pursuant to the discovery rules, R&G was required to provide Contreras with additional
supplementation — specifically the written settlement agreement — in a reasonably prompt time
period. See id. R. 193.5; id. R. 194.4; see also GreCon, 2018 WL 444316, at *3. Yet, R&G waited
almost four months to provide Contreras with the settlement agreement and only after Contreras
made an addition request, which she was not required to do. The trial court could have found the
almost four month delay in supplementation was not reasonably prompt. See TEX. R. CIV. P.
193.5(b).
Because there is evidence in the record to establish R&G did not fully comply with the
mandates of Rule 192.3(g) until months after the settlement agreement was reduced to writing,
and only after a second request from Contreras, we hold the trial court did not abuse its discretion
in finding R&G’s conduct sanctionable. The imposition was just, i.e., the sanction was directed
against the abusive conduct — the failure to respond fully and timely to a request for disclosure
— and was visited upon the offending party — the attorneys for FE Express and Bernal, who were
in control of supplementing discovery. See Nath, 446 S.W.3d at 363; Head, 454 S.W.3d at 489.
Moreover, the sanction served the purposes of deterring others from violating Rule 192.3(g) as
R&G did, and punishing R&G for the violation. See Horizon Health Corp., 520 S.W.3d at 884.
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“Inherent Authority” Sanctions
The trial court sanctioned both Liles and R&G under its inherent authority based on acts
or omissions relating to the filing of the Nueces County suit. Liles and R&G argue the imposition
of sanctions was erroneous because their actions comported with Texas law. As stated in Liles’s
brief, the attorneys “complied with well-settled Texas law and demonstrate[d] smart, effective
lawyering.”
Courts have inherent authority to impose sanctions, authority beyond that provided by rule
or statute. See, e.g., In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997) (holding courts possess inherent
power to discipline attorney’s behavior); Eichelberger v. Eichelberger, 582 S.W.2d 395, 398–99
(Tex. 1979) (recognizing that court has inherent power which it may call upon to aid exercise of
its jurisdiction, in administration of justice, and in preservation of its independence and integrity);
Roberts v. Rose, 37 S.W.3d 31, 33 (Tex. App.—San Antonio 2000, no pet.); see also Chambers v.
Nasco, Inc., 501 U.S. 32, 45–46, 50 (1991) (holding federal courts have inherent power to impose
sanctions on attorneys for bad-faith conduct). A trial court may exercise this inherent authority as
necessary to deter, alleviate, or counteract a bad faith abuse of the judicial process. Westview
Drive Invs., LLC v. Landmark Am. Ins. Co., 522 S.W.3d 583, 613 (Tex. App.—Houston [14th
Dist.] 2017, pet. denied). This includes sanctioning for interference with a court’s traditional core
functions, which include: hearing evidence, deciding issues of fact raised by the pleadings,
deciding questions of law, rendering final judgment, enforcing its judgment, managing its docket,
and the issuance and enforcement of its orders. Id.; In re K.A.R., 171 S.W.3d 705, 715 (Tex.
App.—Houston [14th Dist.] 2006, no pet.). However, the inherent power to sanction is not limited
to interference with a court’s core functions. Westview Drive Invs., 522 S.W.3d at 613. A court
may also use its inherent power to impose sanctions for conduct, that if tolerated, “breeds
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disrespect for and threatens the integrity of our judicial system.” Id. (quoting Bennett, 960 S.W.2d
at 40).
The attorneys’ actions and omissions in this case — considered individually or in
combination — initially would appear, when considered in a vacuum, to constitute legal actions
not necessarily subject to sanctions under a trial court’s inherent authority:
• filing a wrongful death action;
• waiving service by filing an answer, see TEX. R. CIV. P. 121 (stating that answer
constitutes appearance of defendant so as to dispense with necessity for
issuance or service of citation upon him); Kao Holdings, L.P. v. Young, 261
S.W.3d 60, 61 (Tex. 2008) (holding that judgment shall not be rendered against
one who was neither named nor served as defendant unless he waives service
by making general appearance before court);
• filing a friendly suit to secure approval of a settlement that requires judicial
approval, such as a suit involving a minor, see TEX. R. CIV. P. 44(2); see, e.g.,
J. Fuentes Colleyville, L.P. v. A.S., 501 S.W.3d 239, 241 (Tex. App.—Fort
Worth, 2016, no pet.); Maltsberger v. Maloney, No. 04-05-000579-CV, 2006
WL 3725545, at *1 (Tex. App.—San Antonio Dec. 20, 2006, pet. denied)
(mem. op.);
• filing suit in an impermissible venue, see In re Masonite Corp., 997 S.W.2d
194, 197 (Tex. 1999) (holding that plaintiff has first choice to fix venue by filing
suit in county of choice); Marantha Temple, Inc. v. Enter. Prods., Inc., 833
S.W.2d 736, 741 (Tex. App.—Houston [1st Dist.] 1992, writ denied) (holding
that plaintiff has right to file suit in any permissible county and plaintiff that
files suit in impermissible county waives option of where to file suit); see also
TEX. R. CIV. P. 87(3)(a) (stating that venue facts, when properly pled, shall be
taken as true unless specifically denied by adverse party).
• knowingly waiving a complaint about improper venue by failing to object, see
TEX. R. CIV. P. 86(1); Combined Specialty Ins. Co. v. Deese, 266 S.W.3d 653,
666 (Tex. App.—Dallas 2008, no pet.) (holding that even mandatory venue
provisions can be waived if there is no challenge in accordance with Rule 86);
• moving for the appointment of a guardian ad litem in a suit involving minors,
see TEX. R. CIV. P. 173.3(a); see Patterson v. McMickle, 191 S.W.3d 819, 822
(Tex. App.—Fort Worth 2006, no pet.) (attorney retained by mother of minor
child to pursue medical negligence claim on child’s behalf moved for
appointment of guardian ad litem).
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• providing notice of hearing, see TEX. R. CIV. P. 21(c) (parties are required to
serve other parties with notice not less than three days before time specified for
hearing); Prototype Mach. Co. v. Boulware, 292 S.W.3d 169, 172 (Tex. App.—
San Antonio 2009, no pet.) (reversing and remanding trial court’s order striking
intervention when movant failed to provide three days’ notice of hearing
pursuant to Rule 21); and
• setting and participating in a friendly suit hearing to secure judicial approval of
a settlement for a minor, see, e.g., J. Fuentes Colleyville, L.P., 501 S.W.3d at
242.
However, when the attorneys’ acts and omissions are considered in context, the trial court could
have determined, in its discretion, that the attorneys showed disrespect for, and exhibited a
collusive intent to undermine, the judicial system and the Webb County trial court’s administration
of justice, particularly given that this matter involved four minor children.
When Liles filed the petition in Nueces County, the same wrongful death action was still
pending in Webb County where it was first filed. Liles served R&G’s clients with a copy of the
petition, but neither served nor notified Contreras of the filing. Liles failed to advise the Webb
County trial court that it had filed a second suit in Nueces County, nor did it make the Nueces
County trial court aware of the action pending in Webb County. The petition, on its face, appeared
to be nothing more than a wrongful death action. Liles did not include any language in the petition
to suggest the suit was a friendly suit for purposes of settlement. Compare J. Fuentes Colleyville,
L.P., 501 S.W.3d at 241–42 (in friendly suit petition, plaintiff included not only the general
negligence allegations for personal injury action, but advised all claims had been settled, amount
of settlement, and noted purpose of suit was for trial court to approve settlement for minor). In
addition, with regard to venue, Liles alleged venue was proper “under the general venue rule.”
This was a misstatement of law because the accident did not occur in Nueces County, none of the
parties resided in Nueces County, and FE Express did not have its principal office in Nueces
County. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.002(a) (West 2017). The only connection
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to Nueces County was the fact that Navarro’s attorneys had their principal office in that county.
Soon after filing the suit in Nueces County, Liles sought appointment of a guardian ad litem for
the protection of Navarro minors. Again, without notice to Contreras’s counsel or the Webb
County court.
In response to the Nueces County petition, R&G agreed to waive service on behalf of its
clients. Moreover, R&G, despite knowing venue was not proper in Nueces County, declined to
challenge Liles’s misstatement regarding venue by not filing a motion to transfer venue and
allowing the case to continue in Nueces County. The trial court could have found this to be
evidence of collusive conduct by Liles and R&G to keep Contreras and the Webb County trial
court in the dark regarding the settlement.
Although R&G supplemented its responses to Contreras’s requests for disclosure six days
prior to the final hearing in Nueces County, advising Contreras’s counsel of a settlement, the
language in the response appears carefully contrived to avoid disclosure of the action pending in
Nueces County. In the response, R&G stated the settlement documents were being prepared “and
subject to approval by a Court” — not “a court in Nueces County” or the “Nueces County Court
at Law No. 1” — again, leaving Contreras in the dark and without information that might have
been used to advise the Webb County trial court about the happenings in Nueces County.
Liles and R&G continued the process, which culminated in an October 12, 2015 hearing
after which the Nueces County trial court approved the settlement and rendered an agreed
judgment. There is nothing in the record to indicate the Nueces County judge knew anything more
than there were “other claimants” to the insurance proceeds. Liles and R&G did not see fit to
advise the Nueces County judge that those “other claimants” included two other minor children in
a pending suit in Webb County. Notably, Liles waited until six days prior to the Nueces County
hearing to nonsuit Navarro’s Webb County suit. Liles had permitted the Webb County suit to
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remain pending until October 6, 2015, despite having filed the suit in Nueces County suit on
September 11, 2015. Thus, identical suits were pending on behalf of Navarro in two counties for
almost thirty days without notice to either court or Contreras. If Liles and R&G believed their
conduct in filing and participating in the Nueces County suit was completely above board and
nothing more than effective lawyering, why the secrecy? Why, as the Webb Count trial court
determined, procure the settlement in “darkness”?
At the sanctions hearing, Liles admitted the attorneys pursued the action in Nueces County
to avoid Rodriguez — counsel for Contreras — and any effort he might make to disrupt the
settlement. They point out Contreras had no authority or right to stop or interfere with the
settlement even if the settlement had exhausted the insurance proceeds. See Tex. Farms. Ins. Co.
v. Soriano, 881 S.W.2d 312, 315 (Tex. 1994) (holding that insurer faced with multiple claims and
inadequate proceeds may enter into reasonable settlement with one of claimants even if it exhausts
or diminishes proceeds available to satisfy other claims). We do not disagree with this general
proposition. But the attorneys’ avoidance of Contreras’s counsel suggests something more,
particularly given the involvement of competing minors, and supports the trial court’s decision to
impose sanctions under its inherent authority.
It is undisputed that two sets of minors were competing over limited insurance funds —
this was known by all parties. When minors bring suit, trial courts have the responsibility to protect
their best interests. Urbish v. The Honorable 127th Judicial Dist. Court, 708 S.W.2d 429, 432
(Tex. 1986). Here, when Navarro and Contreras filed suit, the Webb County trial court became
responsible for the best interests of all four minor children. The attorneys’ decision to file suit in
Nueces County to avoid Contreras’s counsel suggests a belief by the attorneys that not only would
her counsel lodge objections to any settlement that awarded the Navarro minors more than half of
the available settlement funds, but those objections might have found favor with the Webb County
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trial court given its duty to protect all of the minors under its jurisdiction, thereby impairing any
settlement between Liles’s clients and R&G’s clients. Thus, we hold the Webb County trial court
could have concluded, in its discretion, complicity by the attorneys to keep the court in the dark
regarding their settlement actions, thereby unilaterally divesting the trial court of its jurisdiction
over and ability to protect all the minors under its authority.
Moreover, as the trial court recognized, attorneys have a duty of candor toward the tribunal.
See TEX. RULES DISCIPLINARY P. R. 3.03(a)(1), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit.
G. app. A-1 (West 2013) (stating lawyer shall not knowingly make false statement of material fact
or law to tribunal). They also have a duty not to engage in deceptive conduct. Id. 8.04(a)(3)
(stating lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation). Additionally, although attorneys are expected to act as zealous advocates for
their clients, an attorney cannot allow his zealous representation “to supersede the attorney’s
obligation to maintain confidence in our judicial system.” Nath, 446 S.W.3d at 367 (citing TEX.
RULES DISCIPLINARY P. R., pmbl. ¶ 2).
The attorneys argue their actions neither violated the disciplinary rules nor warrant
sanctions because no misrepresentations were made to the trial court and all of the actions taken
were legal actions in their clients’ best interests. Given the evidence and the context in which the
attorneys’ conduct took place, we hold the trial court could have determined otherwise. Although
there may have been no affirmative misrepresentations to the Webb County trial court, silence may
constitute a misrepresentation when there is a duty to speak and a person remains silent. See
Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001). The attorneys had a duty of candor toward
the tribunal, and they admittedly took every action necessary to avoid the possibility that the Webb
County trial court might learn of their actions in Nueces County, including failing to advise the
Nueces County judge of the pending action in Webb County and the involvement of additional
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minors. Although, as R&G points out, the affirmative actions taken in Nueces County — to secure
the settlement so as to avoid discovery of the events by counsel for Contreras or the Webb County
trial court — were executed by Liles, R&G’s actions reflect complicity with Liles. Liles would
not have been able to succeed without R&G’s involvement and agreement.
The attorneys also argue the Webb County trial court was without authority to sanction
based on conduct that occurred in Nueces County. Under the facts of this case we disagree. The
cases relied upon by the attorneys for this position are distinguishable. In those cases, a trial court
in one jurisdiction attempted to sanction attorneys under Chapter 10 of the Texas Civil Practice
and Remedies Code or Rule 13 of the Rules of Civil Procedure based on documents filed in another
jurisdiction. See Alanis v. Valdespino, No. 04-11-00122-CV, 2012 WL 1865498, at *5 (Tex.
App.—San Antonio May 23, 2012, no pet.) (holding that claim asserting that pleading was
groundless had to be asserted in cause in which pleading was filed, not as separate cause of action
in different court); Greene v. Young, 174 S.W.3d 291, 301 (Tex. App.—Houston [1st Dist.] 2005,
pet. denied) (holding that trial court lacked jurisdiction to impose Rule 13 sanctions based on a
filing in bankruptcy court); Mantri v. Bergman, 153 S.W.3d 715, 718 (Tex. App.—Dallas 2005,
pet. denied) (holding that only court with jurisdiction where allegedly frivolous litigation was
pending had jurisdiction to impose sanctions under Chapter 10). Here, the Webb County trial court
did not sanction the attorneys under Chapter 10 for filing an improper document in Nueces County,
nor did it sanction them under Rule 13 for filing frivolous, groundless, or harassing documents in
Nueces County. Rather, they were sanctioned under the trial court’s inherent authority for
interfering with the Webb County court’s core functions, including its jurisdiction, and
disrespecting and threatening the integrity of the judicial system. See Bennett, 960 S.W.2d at 40;
Westview Drive Invs., 522 S.W.3d at 613.
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Contrary to the attorneys’ arguments, we further find the supreme court’s decision in
Bennett indistinguishable and persuasive. In Bennett, the plaintiffs’ attorneys filed sixteen
lawsuits, each of which was randomly assigned to a separate district court in Nueces County. See
Bennett, 940 S.W.2d at 36. The plaintiffs’ attorneys admitted that none of the sixteen suits was
assigned to the particular district court they desired. Id. Therefore, they filed a seventeenth suit,
which was assigned to their forum of choice. Id. After securing the court of choice, the attorneys
nonsuited the other sixteen lawsuits. Id. at 37. Ultimately the trial court that was assigned the
seventeenth suit sanctioned the attorneys pursuant to its inherent authority for abusing the judicial
process. Id. at 39. The supreme court upheld the sanctions, holding the attorneys’ actions were
sanctionable because they bred disrespect for and threatened the integrity of the judicial system.
Id. at 40. The conduct was sanctionable even thoug, as here, none of the actions taken by the
plaintiffs’ attorneys, when considered in a vacuum was sanctionable — filing suit, nonsuiting, etc.
See id. The same is true in this case. Although nothing the attorneys did in Nueces County would
generally constitute bad faith or show a disrespect for the judicial system, when considered in
context and in conjunction with the basis for the actions — avoidance of any potential disruption
of the settlement by the Webb County trial court — the trial court could have found the conduct
was sanctionable. See id. The attorneys overlook the significant harm to the judicial system
inherent in their lack of candor with regard to the settlement.
In sum, we hold the Webb County trial court could have, in its discretion, concluded the
attorneys’ actions and omissions in Nueces County are the type of conduct, that if tolerated, would
breed disrespect for and threaten the integrity of the judicial system as a whole. See Bennett, 960
S.W.2d at 40. Based on the evidence, the trial court could have determined the attorneys’ decisions
and actions interfered with the court’s ability to decide issues of fact, questions of law, and control
the management of its docket. See Westview Drive Invs., 522 S.W.3d at 613. And, it could have
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found the attorneys’ conduct in keeping the trial court in the dark regarding the settlement
interfered with its jurisdiction, administration of justice, as well as its independence and integrity.
See Eichelberger, 582 S.W.2d at 398–99; Rose, 37 S.W.3d at 33. Accordingly, our review of the
course of conduct undertaken by Liles and R&G, as well as the intent that can be inferred from
that conduct, leads us to conclude that the trial court did not abuse its discretion in sanctioning
Liles or R&G under its inherent authority.
Chapter Ten Sanctions
In addition to sanctioning Liles under its inherent authority, the trial court sanctioned Liles
pursuant to Chapter 10 of the Texas Civil Practice and Remedies Code for filing the nonsuit in
Webb County for an improper purpose. Liles argues it was entitled to file the nonsuit and its
conduct is not sanctionable.
Section 10.004(a) of Chapter 10 provides that if a court determines that a person has signed
a pleading or motion in violation of section 10.001, the court may impose a sanction on the party.
TEX. CIV. PRAC. & REM. CODE ANN. § 10.004(a). Section 10.001(1) provides that a sanctionable
pleading includes a pleading that is presented for “any improper purposes.” Id. § 10.001(1).
We recognize that pursuant to Rule 162 of the Texas Rules of Civil Procedure, a plaintiff
may take a nonsuit at any time before she has introduced all of her evidence other than rebuttal
evidence. TEX. R. CIV. P. 162. Courts, including this one, have described this right as unqualified
and absolute. E.g., Villafani v. Trejo, 251 S.W.3d 466, 469 (Tex. 2008); Vick v. Floresville Indep.
Sch. Dist., 505 S.W.3d 24, 31 (Tex. App.—San Antonio 2016, pet. denied); Genesis Producing
Co., L.P. v. Smith Big Oil Corp., 454 S.W.3d 655, 659 (Tex. App.—Houston [14th Dist.] 2014, no
pet.). This right is important and firmly rooted in Texas jurisprudence. Aetna Cas. & Sur. Co. v.
Specia, 849 S.W.2d 805, 806 (Tex. 1993).
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However, even the filing of a nonsuit is subject to sanctions. See Bennett, 960 S.W.3d at
40. Here, the filing of the nonsuit in Webb County — undertaken approximately twenty-five days
after suit was filed in Nueces County — was just the final act in the collusive scheme perpetrated
by Liles and R&G to avoid any objection to the settlement that might have found favor by the
Webb County trial court. As such, we hold the trial court was within its discretion in concluding
the nonsuit was filed for an improper purpose. We therefore hold the trial court did not abuse its
discretion in imposing sanctions upon Liles under Chapter 10 for filing the nonsuit for an improper
purpose.
Amount of Sanctions
As set out above, the trial court did not err in imposing sanctions. The only remaining
question is whether the amount of sanctions imposed was excessive. As set out above, a sanction
does not comport with due process if it is excessive. Nath, 446 S.W.3d at 363. Under the second
prong of the TransAmerican test, we consider the proportionality of the sanction relative to the
misconduct. Nath, 446 S.W.3d at 363; Head, 454 S.W.3d at 489. A sanction should be no more
severe than necessary to satisfy its legitimate purposes. Nath, 446 S.W.3d at 363.
Here, the trial court imposed numerous types of sanctions: court costs, attorneys’ fees,
monetary penalties, appellate fees in the event of an unsuccessful appeal, and legal ethics
education. However, we hold we need not address whether the sanctions imposed were excessive
because that issue either has not been presented, or has not been presented in such a way as to
require appellate review.
With regard to Liles, Liles has not challenged the amount of sanctions imposed. Rather,
Liles’s only appellate complaint concerns the actual imposition of sanctions. Liles makes no
argument in its brief that the amounts imposed are excessive, and therefore, violative of due
process.
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It is the appellant’s burden to raise and discuss assertion of error. Valadez v. Avitia, 238
S.W.3d 843, 845 (Tex. App.—El Paso, 2007, no pet.); see TEX. R. APP. P. 38.1(f), (i). We have
no duty — in fact, no right — to perform an independent review of the appellate record and the
applicable law to determine if the trial court committed error. Donohue v. Hernandez, No. 04-15-
00695-CV, 2016 WL 7119049, at *5 (Tex. App.—San Antonio Dec. 7, 2016, no pet.) (mem. op.);
Ihnfeldt v. Reagan, No 02-14-00220-CV, 2016 WL 7010922, at *9 (Tex. App.—Fort Worth Dec.
1, 2016, pet. denied) (mem. op.); Valadez, 238 S.W.3d at 845. In civil cases, we have no discretion
to consider an issue not raised in appellant’s brief, even if the court may perceive that the ends of
justice seem to require it. Curnutt v. Conocophillips Co., 508 S.W.3d 641, 644 (Tex. App.—El
Paso, 2016, no pet.); Krumb v. Porter, 152 S.W.2d 495, 496 (Tex. Civ. App.—San Antonio 1941,
writ ref’d). To do otherwise would require the appellate court to construct an argument for
appellant and engage in research to support the argument. This would run afoul of our position as
neutral and unbiased adjudicators of a dispute; we would become advocates for the party. Ihnfeldt,
2016 WL 7010922, at *9; Plummer v. Reeves, 93 S.W.3d 930, 931 (Tex. App.—Amarillo 2003,
pet. denied). After reviewing Liles’s appellate brief we hold Liles has presented nothing for our
review with regard to the second prong of the TransAmerican test, i.e., the amount of the sanctions.
Although R&G raises the issue of excessiveness, it does so in a very specific way. R&G’s
entire argument on excessiveness is based on the premise that it was sanctioned $37,180.00, plus
$10,000.00 in contingent appellate attorney’s fees, for the discovery violation. However, the
record does not support this premise. As discussed above, the trial court imposed sanctions on
R&G not only for a discovery violation pursuant to the Texas Rules of Civil Procedure, but under
its inherent authority for R&G’s collusive conduct with Liles. The trial court made this clear in
its order and on the record. In the order, as set out above, the trial court specifically notes the
Chapter 10 violation by Liles, the discovery violation by R&G, and the collusive conduct by both
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sets of attorneys with regard to procurement of the settlement agreement in Nueces County. At
the conclusion of the sanctions hearing, on the record, the trial court sets out the collusive conduct
and then specifically states that in order to deter such conduct it would impose a monetary sanction
of $25,000.00 against R&G — and $50,000.00 against Liles. This is exactly what the trial court
did in its sanctions order. Thus, R&G was not sanctioned $37,180.00 for a single discovery
violation. However, R&G fails to parse its excessiveness argument based on the sanctions actually
imposed for separate conduct. Rather, R&G simply lumps the monetary sanctions together,
arguing all of the amounts were imposed for a single discovery violation, which is inaccurate.
As this is R&G’s only argument regarding excessiveness, and it is based on an erroneous
premise, we conclude R&G has not presented an apposite argument for our review. As noted
above, it is not this court’s responsibility to construct an argument for an appellant and engage in
research to support the argument as it would render us advocates as opposed to unbiased
adjudicators. See Ihnfeldt, 2016 WL 7010922, at *9. We have no duty or right to independently
review the record and the law to determine if the trial court committed error. Donohue, 2016 WL
7119049, at *5.
Liles’s Counter Motion for Sanctions Pursuant to Rule 13 & Chapter 10
After Contreras’s attorney filed the motion for sanctions, Liles filed a counter motion for
sanctions, asking the trial court to sanction Rodriguez under Rule 13 of the Rules of Civil
Procedure and Chapter 10 of the Civil Practice and Remedies Code for filing the motion for
sanctions. The trial court denied the motion. Liles contends the trial court erred in denying its
motion for sanctions.
Rule 13 of the Texas Rules of Civil Procedure provides that pleadings that are groundless
and filed in bad faith, to harass, or false when made are subject to sanctions:
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The signatures of attorneys or parties constitute a certificate by them that they have
read the pleading, motion, or other paper; that 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. Attorneys or parties who … make statements in [a] pleading which
they know to be groundless and false, for the purpose of securing a delay of the trial
of the cause, shall be held guilty of a contempt … [and] the court, upon motion or
upon its own initiative, after notice and hearing, shall impose an appropriate
sanction … upon the person who signed it, a represented party, or both.
TEX. R. CIV. P. 13; see Nath, 446 S.W.3d at 362. It is not enough for the signed document to be
groundless, but it must have also been brought in bad faith, to harass, or have been false when
made. TEX. R. CIV. P. 13; see Nath, 446 S.W.3d at 362–63. As set out above, Chapter 10 provides
a court may sanction a party if it determines that a person has signed a pleading or motion that is
presented for “any improper purposes.” TEX. CIV. PRAC. & REM. CODE ANN. §§ 10.001(1),
10.004(a).
Liles argues the allegations in the sanctions motion filed by Rodriguez are sanctionable
because many lacked evidentiary support and even the ones with evidentiary support do not
support a credible argument for sanctions. Liles contends there was nothing in the motion “that
was even arguably meritorious,” but it was still required to respond to the motion. Thus, Liles
contends the trial court erred in denying its motion for sanctions against Rodriguez. Having
determined the trial court did not err in sanctioning Liles and R&G for the acts and omissions set
out in the Contreras sanctions motion, it would be counter intuitive to hold the trial court erred in
denying Liles’s counter motion for sanctions. Accordingly, we hold the trial court did not err in
denying Liles’s motion for sanctions.
Pending Motion & Temporary Order
At the time this appeal was submitted, there was a pending motion for access to the record.
In addition, this court had rendered an order granting a temporary stay. We will now deal with
these matters in light of our disposition.
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In February 2017, Contreras filed in this court a “Motion for Access to the Appellate
Record.” In the motion, Contreras advised that part of the appellate record consists of documents
submitted to the trial court in camera and then sealed. Contreras asserted she needs access to the
documents to properly prepare for appeal. This court ordered the motion carried with the appeal.
When Contreras filed her brief, she renewed her request for access to the in camera
documents, arguing a lack of access to the documents prevented her from briefing that evidence
in detail. However, we hold that access to the in camera documents was not necessary for full
briefing of this matter. As is clear from our holding, Contreras was able to rely on and point to
sufficient evidence in the unsealed portion of the appellate record to permit this court to render a
decision affirming the sanctions order. Accordingly, any complaint about access to the in camera
documents is now moot. See Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012)
(holding matter is moot when court’s action on merits cannot affect parties’ rights or interests).
We therefore deny as moot the motion for access to the portion of the appellate record filed in this
court under seal.
In addition to the foregoing motion filed by Contreras, Liles also filed a motion in this court
prior to full briefing, asking for a stay. Liles filed its notice of appeal in this court on October 3,
2016. Concomitant with that filing, Liles filed a “Conditional Emergency Motion to Stay
Enforcement.” Therein, Liles asked this court to stay the portions of the trial court’s order that
required Liles: (1) to deposit monetary sanctions and contingent appellate attorneys’ fees into the
registry of the court within ten days of the trial court’s September 23, 2016 sanctions order; and
(2) to pay the court-ordered costs and attorney’s fees within three days of the trial court’s sanction
order. On October 3, 2016, after reviewing the motion, we rendered an order granting Liles’s
motion. We ordered the portion of the trial court’s sanctions order that required Liles to deposit
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monies and pay fees stayed pending further order of this court. Having determined the trial court
did not abuse its discretion in imposing the sanctions, we now order our temporary stay lifted.
Contreras Cross Appeal
Contreras filed a notice of appeal to contest the trial court’s refusal to permit her to review
the documents Liles and R&G submitted for in camera inspection by the trial court. The trial court
wished to review the documents prior to rendering a decision on Contreras’s motion for sanctions.
After reviewing the documents, and as set out in detail above, the trial court granted Contreras’s
motion for sanctions.
On appeal, Contreras contends she has been “unfairly denied access to a portion of the
record supporting her argument to affirm [the] sanctions award.” She argues she is “entitled to
review and rely on the in camera documents in support of her [appellate] arguments” and that this
court “should reverse the trial court’s refusal to provide Contreras access to the documents.” The
argument presented in this cross appeal is essentially the same as that urged by Contreras in her
motion for access to the record — Contreras needs access to the in camera documents reviewed
by the trial court to properly present her appeal.
As set out in our discussion above, given our affirmance of the sanctions order, the unsealed
portion of the record was sufficient to permit Contreras to argue, and this court to hold, that the
trial court did not abuse its discretion by imposing sanctions on Liles and R&G. Thus, we hold
any complaint about access to the in camera documents is now moot. See Heckman, 369 S.W.3d
at 162. Granting Contreras access to the in camera documents cannot affect her rights given our
decision affirming the sanctions order. Alternatively, if the cross appeal is not moot, and the trial
court’s refusal to grant Contreras access to the in camera documents was error, we hold the error
was harmless. See TEX. R. APP. P. 44.1(a)(2). The portion of the record to which Contreras had
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access was sufficient for her to properly present her case to this court, and for this court to find in
her favor, precluding a finding of harm. See id.
CONCLUSION
Based on the foregoing analysis, we overrule the complaints presented by Liles and R&G
with regard to the trial court’s imposition of sanctions and hold that the trial court did not abuse
its discretion in imposing sanctions as set out in its September 23, 2016 order. We further hold
that Liles failed to raise an issue challenging the amount of fees imposed, and the issue raised by
R&G with regard to the amount of fees was based on a faulty premise, so neither issue is properly
presented for our review. As to the in camera documents, we deny as moot Contreras’s motion
for access to the sealed portion of the record. On the same basis, we hold the cross appeal is also
moot, or any error by the trial court is harmless. Finally, we order the temporary stay imposed on
October 3, 2016 lifted. Accordingly, we affirm the trial court’s order of sanctions.
Marialyn Barnard, Justice
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