Tim Levasseur and Krissy Levasseur, Individually, and D/B/A Liberty Coin v. Steve Avezzano ( 2019 )

IN THE
TENTH COURT OF APPEALS
No. 10-17-00145-CV
TIM LEVASSEUR AND KRISSY LEVASSEUR,
INDIVIDUALLY, AND D/B/A LIBERTY COIN,
Appellants
v.
STEVE AVEZZANO,
Appellee
From the County Court at Law
Ellis County, Texas
Trial Court No. 15-C-3523
MEMORANDUM OPINION
Steve Avezzano filed suit against Tim and Krissy Levasseur, individually and
d/b/a Liberty Coin, alleging causes of action for theft, fraud, conversion, DTPA, breach of
contract, and quantum meruit. The trial court issued an order striking the Levasseurs’
only pleading1 as a discovery sanction. The trial court later entered judgment in favor of
Avezzano. We affirm.
BACKGROUND FACTS
Tim Levasseur, d/b/a Liberty Coin, purchased gold and coins from Avezzano.
Avezzano testified that in February 2015 and April 2015, he sent coins to Levasseur in
accordance with their agreement, but Levasseur did not send payment for the coins.
Avezzano requested Levasseur to pay for the coins or return them. After not receiving
payment or return of the coins, Avezzano filed suit on August 31, 2015 against the
Levasseurs seeking the price of the coins, $200,000, in damages. On September 30, 2015,
the Levasseurs filed special exceptions to the petition. The Levasseurs did not file any
other pleadings.
On December 21 2015, the parties entered into a settlement agreement where the
Levasseurs would pay Avezzano $200,000 in certain installments. The Levasseurs paid
the first installment of $25,000 to Avezzano as part of the agreement, but failed to make
the rest of the payments. Avezzano proceeded with the lawsuit and attempted discovery.
Beginning in August 2016, the Levasseurs failed to appear at noticed depositions.
On November 2, 2016, Avezzano filed a motion for sanctions against the Levasseurs for
failing to attend the numerous properly noticed depositions. On November 30, 2016, the
1Both of the Levasseurs filed Defendant’s Special Exceptions to Plaintiff’s Petition. Neither the Levasseurs
nor Liberty Coin filed a general denial or any other response to Plaintiff’s Petition. Neither of the
Levasseurs obtained a hearing on their special exceptions or obtained a ruling on same.
Levasseur v. Avezzano Page 2
trial court granted the motion for sanctions and ordered the Levasseurs to pay costs and
attorney’s fees. The trial court also warned the Levasseurs that any further failure to
comply could result in the striking of their pleadings. On December 1, 2016, Avezzano’s
attorney sent deposition notices to the Levasseurs for December 6, 2016. The Levasseurs
again failed to appear, and Avezzano filed a second motion for sanctions. The trial court
granted the motion for sanctions, ordered the Levasseurs to pay costs and attorney’s fees,
and struck their pleadings. The trial court further entered a default judgment against the
Levasseurs as to liability. The trial court ordered that the cause would remain on the trial
docket for January 31, 2017, where Avezzano could appear and offer proof of damages,
costs, and attorney’s fees. The Levasseurs were provided with notice of the January 31,
2017 trial setting.
On January 31, 2017, the Levasseurs failed to appear for trial, but their attorney
was present. The trial court awarded Avezzano $175,000 in damages and also awarded
attorney’s fees.
STRIKING THE PLEADINGS
In the first issue, the Levasseurs argue that the trial court erred in granting “death
penalty” sanctions. A trial court's ruling on a motion for sanctions is reviewed under an
abuse of discretion standard. Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004); Downer
v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985). The test for an abuse of
discretion is not whether, in the opinion of the reviewing court, the facts present an
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appropriate case for the trial court's action, but "whether the court acted without
reference to any guiding rules and principles." Downer v. Aquamarine Operators, Inc., 701
S.W.2d at 241. The trial court's ruling should be reversed only if it was arbitrary or
unreasonable. Cire v. Cummings, 134 S.W.3d at 839.
Rule 215.2 of the Texas Rules of Civil Procedure provides that if:
a party fails to comply with proper discovery requests or to obey an
order to provide or permit discovery, … the court in which the action is
pending may, after notice and hearing, make such orders in regard to the
failure as are just, and among others the following:
(1) an order disallowing any further discovery of any kind or of a
particular kind by the disobedient party;
(2) an order charging all or any portion of the expenses of discovery
or taxable court costs or both against the disobedient party or the attorney
advising him;
(3) an order that the matters regarding which the order was made or
any other designated facts shall be taken to be established for the purposes
of the action in accordance with the claim of the party obtaining the order;
(4) an order refusing to allow the disobedient party to support or
oppose designated claims or defenses, or prohibiting him from introducing
designated matters in evidence;
(5) an order striking out pleadings or parts thereof, or staying further
proceedings until the order is obeyed, or dismissing with or without
prejudice the action or proceedings or any part thereof, or rendering a
judgment by default against the disobedient party;
(6) in lieu of any of the foregoing orders or in addition thereto, an
order treating as a contempt of court the failure to obey any orders except
an order to submit to a physical or mental examination;
(7) when a party has failed to comply with an order under Rule 204
requiring him to appear or produce another for examination, such orders
as are listed in paragraphs (1), (2), (3), (4) or (5) of this subdivision, unless
the person failing to comply shows that he is unable to appear or to produce
such person for examination.
(8) In lieu of any of the foregoing orders or in addition thereto, the
court shall require the party failing to obey the order or the attorney
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advising him, or both, to pay, at such time as ordered by the court, the
reasonable expenses, including attorney fees, caused by the failure, unless
the court finds that the failure was substantially justified or that other
circumstances make an award of expenses unjust. Such an order shall be
subject to review on appeal from the final judgment.
TEX. R. CIV. P. 215.2 (b).
Discovery sanctions must be just. TransAmerican Natural Gas Corp. v. Powell, 811
S.W.2d 913, 917 (Tex. 1991). The Texas Supreme Court has set out a two-part standard to
determine if the imposition of sanctions is just.
First, a direct relationship must exist between the offensive conduct and the
sanction imposed. This means that a just sanction must be directed against
the abuse and toward remedying the prejudice caused the innocent party.
It also means that the sanction should be visited upon the offender. The
trial court must at least attempt to determine whether the offensive conduct
is attributable to counsel only, or to the party only, or to both. This we
recognize will not be an easy matter in many instances. On the one hand, a
lawyer cannot shield his client from sanctions; a party must bear some
responsibility for its counsel's discovery abuses when it is or should be
aware of counsel's conduct and the violation of discovery rules. On the
other hand, a party should not be punished for counsel's conduct in which
it is not implicated apart from having entrusted to counsel its legal
representation. The point is, the sanctions the trial court imposes must
relate directly to the abuse found.
Second, just sanctions must not be excessive. The punishment should fit
the crime. A sanction imposed for discovery abuse should be no more
severe than necessary to satisfy its legitimate purposes. It follows that
courts must consider the availability of less stringent sanctions and whether
such lesser sanctions would fully promote compliance.
TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d at 917.
In the first motion for sanctions, Avezzano detailed each of his numerous attempts
to take the depositions of the Levasseurs. At the hearing on the motion, the Levasseurs’
Levasseur v. Avezzano Page 5
attorney offered explanations for some of the missed depositions. Levasseurs’ counsel
also made clear that the Levasseurs were aware of some of the deposition dates and chose
not to appear. Further, counsel also did not dispute that the Levasseurs breached the
Rule 11 Agreement. The Levasseurs did not appear at the hearing on November 30, 2016.
After hearing from counsel, the trial court declined to sanction the Levasseurs’ counsel,
but imposed sanctions against the Levasseurs by ordering them to pay costs as provided
in Rule 215.2 (b). The trial court further warned that if the Levasseurs failed to appear at
another deposition “I will seriously consider striking their pleadings at that time.”
Shortly after the November 30, 2016 hearing, Avezzano’s counsel sent deposition
notices for December 6, 2016. Once again, the Levasseurs did not attend. Avezzano then
filed a second motion for sanctions. At the January 31, 2017 hearing, the Levasseurs’
counsel stated that the Levasseurs were given notice of the depositions, but did not
appear. Counsel did not offer any reason for the Levasseurs’ failure to appear, and they
were again not present at the hearing.
The trial court is not required to make a specific finding that the party (as opposed
to the attorney) abused the discovery process to impose sanctions. Van Es v. Frazier, 230
S.W.3d 770, 777 (Tex. App. —Waco, 2007, pet. den’d). Rather, the entire record must be
reviewed to determine whether sanctions were warranted. Id. The trial court had an
extensive list of failures to appear by the Levasseurs that explained in detail each missed
deposition. Counsel appeared and explained some of the failures to appear and his
Levasseur v. Avezzano Page 6
responsibility in them. The record shows that the Levasseurs were personally aware of
the discovery abuses. The record supports a finding that the sanction was directed at the
offensive conduct.
The record shows that the trial court assessed lesser sanctions at the hearing on
the first motion for sanctions by ordering the Levasseurs to pay the costs associated with
the missed depositions and attorney’s fees. The trial court warned that it would consider
striking their pleadings if the Levasseurs failed to appear again. A warning is a lesser
sanction. Lockhart v. McCurley, No. 10-11-00073-CV, 2013 Tex. App. LEXIS 4075, at * 17
(Tex. App. —Waco, March 28, 2013, no pet.) (mem. op); Van Es v. Frazier, 230 S.W.3d at
783. Neither of the sanctions imposed by the trial court at the either hearing were
excessive. We find that the trial court did not abuse its discretion in striking the
Levasseurs’ pleadings. We overrule the first issue.
PROOF OF CLAIMS
In the second issue, the Levasseurs argue that the trial court erred in granting
judgment for Avezzano as a matter of law at the hearing on Avezzano’s second motion
for sanctions. They contend that Avezzano sought damages for multiple causes of action,
including theft, fraud, conversion, DTPA, breach of contract, and quantum meruit, but
did not establish as a matter of law the necessary elements for any of them.
The Levasseurs argue that Avezzano must offer evidence to support its claims as
it would in a judgment resulting from trial citing Stoner v. Thompson, 578 S.W.2d 679 (Tex.
Levasseur v. Avezzano Page 7
1979) as authority. However, default judgments are not all alike and different rules apply
in different circumstances. Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177,
183 (Tex. 2012). A default judgment caused by a defendant's failure to answer after
service is treated differently from a default judgment caused by a defendant's failure to
appear for trial after answering a suit. Id. In the latter instance, a post-answer default
"constitutes neither an abandonment of the defendant's answer nor an implied confession
of any issues thus joined by the defendant's answer." Id. Because the merits of the
plaintiff's claim remain at issue, judgment cannot be rendered on the pleadings, and the
plaintiff must prove its claim. Id. By contrast, the non-answering party in a no-answer
default judgment is said to have admitted both the truth of facts set out in the petition
and the defendant's liability on any cause of action properly alleged by those facts. Id.
The defendant's default thus establishes liability, but a trial may still be necessary if the
plaintiff's damages are unliquidated. Id. And as a general rule, a defendant who has not
answered but nevertheless appears at the post-default hearing on damages is entitled to
participate. Id.
The order granting Avezzano’s Second Motion for Sanctions specifically granted
a default judgment against the Levasseurs as to liability only, as expressly authorized
under Rule 215.2 of the Texas Rules of Civil Procedure. In so doing, the trial court
adjudicated the merits of Avezzano’s claims. See Paradigm Oil, Inc. v. Retamco Operating,
Inc., 372 S.W.3d at 184. Further, the Levasseurs, by not filing an answer and by virtue of
Levasseur v. Avezzano Page 8
having their only pleadings stricken for discovery abuse, were non-answering
defendants. Because the Levesseurs were non-answering defendants, Avezzano was not
required to offer evidence in support of his liability claims. Paradigm Oil, Inc. v. Retamco
Operating, Inc., 372 S.W.3d at 183. As non-answering defendants, the Levasseurs
admitted the truth of the facts set out in the petition and the defendant's liability on any
cause of action properly alleged by those facts. Id.
The Levasseurs were entitled to appear at the post-default hearing on damages,
and their attorney appeared on their behalf. Avezzano proved his entitlement to the
unliquidated damages by testimony establishing the value of the coins at $200,000. The
Levasseurs were entitled to a $25,000 credit from the payment pursuant to the Rule 11
Settlement Agreement. Avezzano’s attorney testified as to the attorney’s fees and costs.
We overrule the second issue.
CONCLUSION
We affirm the trial court’s judgment.
JOHN E. NEILL
Justice
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Before Justice Davis,
Justice Neill, and
Judge Coley2
Affirmed
Opinion delivered and filed August 7, 2019
[CV06]
2 The Honorable Judge Gary Coley, Judge of the 74th District Court, sitting by assignment of the Chief
Justice of the Texas Supreme Court. See TEX. GOV’T CODE ANN. § 74.003(a) (West 2013).
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