Noe Garcia and Iris Garcia v. Gloria Garcia

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-14-00561-CV
Noe GARCIA, Iris Garcia, and Maxie L. Houser,
Appellants
v.
Gloria GARCIA,
Appellee
From the 229th Judicial District Court, Duval County, Texas
Trial Court No. DC-12-335
Honorable Ana Lisa Garza, Judge Presiding
Opinion by: Luz Elena D. Chapa, Justice
Sitting: Patricia O. Alvarez, Justice
Luz Elena D. Chapa, Justice
Jason Pulliam, Justice
Delivered and Filed: July 1, 2015
AFFIRMED IN PART, REVERSED AND RENDERED IN PART
Noe and Iris Garcia (“the Garcias”) and their attorney, Maxie L. Houser, appeal the trial
court’s judgment, which dismissed the Garcias’ claims pursuant to their notice of nonsuit and
awarded Gloria Garcia (no relation to Noe and Iris) her expenses and attorney’s fees as a sanction
against Houser under chapter 10 of the Texas Civil Practice & Remedies Code. We reverse the
trial court’s award of sanctions and render judgment that Gloria take nothing on her request for
sanctions, and we affirm the remainder of the judgment.
04-14-00561-CV
BACKGROUND
Houser agreed to represent the Garcias in a property dispute with Gloria. Houser filed an
original petition on behalf of the Garcias and, after Gloria filed special exceptions, Houser filed a
signed, amended pleading alleging a trespass to try title claim and alleging, “The [Garcias] own
this property in fee simple.”
Houser filed numerous motions for continuance and then, the night before trial, filed a
notice of nonsuit. Gloria then filed a motion for sanctions under Texas Rule of Civil Procedure 13
and Chapter 10 of the Civil Practice and Remedies Code. The motion alleged, “Plaintiff[s] filed
this suit without proof of a good chain of title and with knowledge that [Gloria] possessed the land
for an adequate period to establish good limitations title in her name.”
At the hearing on Gloria’s motion for sanctions, Gloria’s counsel clarified the grounds for
the motion as follows, “Your Honor, I am not contending here that anything was filed in bad faith.
. . . We are not contending anything was filed in bad faith. We are just contending that the records
clearly show there’s no chain of title.” According to the trial court’s order, it granted sanctions
because “reasonable inquiry by [the Garcias or Houser] would have disclosed that [they] could not
show a good chain of title.” The final judgment, which dismissed the Garcias’ claims without
prejudice, stated the sanctions were awarded pursuant to chapter 10 of the Civil Practice &
Remedies Code because plaintiffs failed to make reasonable inquiry before filing the trespass to
try title suit. The Garcias and Houser filed a notice of appeal. However, the only issue raised on
appeal is whether the trial court abused its discretion in awarding sanctions. No issue or point
challenging the dismissal is raised.
SANCTIONS
We review a trial court’s award of sanctions for an abuse of discretion. Herring v. Welborn,
27 S.W.3d 132, 143 (Tex. App.—San Antonio 2000, pet. denied). When reviewing a trial court’s
-2-
04-14-00561-CV
ruling for an abuse of discretion, we may not substitute our judgment for that of the trial court.
Schlager v. Clements, 939 S.W.2d 183, 191 (Tex. App.—Houston [14th Dist.] 1996, writ denied).
We are limited to determining whether the trial court abused its discretion by acting arbitrarily and
unreasonably, without reference to guiding rules or principles, or misapplying the law to the
established facts of the case. Id. In deciding whether sanctions constitute an abuse of discretion,
we examine the entire record. Herring, 27 S.W.3d at 143. We review the conflicting evidence in
the light most favorable to the trial court’s ruling and draw all reasonable inferences in favor of
the trial court’s judgment. Id.
Section 10.001(3) of the Civil Practice & Remedies Code provides the signing of a pleading
or a motion “constitutes a certificate by the signatory that to the signatory’s best knowledge,
information, and belief, formed after reasonable inquiry . . . each allegation . . . 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(3) (West 2002). When a pleading is filed
in violation of section 10.001, a trial court may order a party, its counsel, or both to pay all
reasonable expenses, including attorney’s fees, incurred by the movant because of the filing of the
pleading. TEX. CIV. PRAC. & REM. CODE ANN. § 10.004(c)(3).
Houser argues the evidence establishes that she made a reasonable inquiry into the Garcias’
ownership of the property before suit was filed. In support of the motion for sanctions, Gloria
called Houser to testify. Houser testified about her and her clients’ investigation into their title
prior to the lawsuit. Houser testified the Garcias had wanted to buy the property. They obtained an
ownership and encumbrance report from a title company that stated record title to the land was in
Salvador Yzaguirre by virtue of a 1940 recorded deed. Houser testified that Yzaguirre was
deceased and she and her clients investigated the heirs of Mr. Yzaguirre. Houser testified she was
-3-
04-14-00561-CV
asked to prepare an affidavit of heirship “so [she was] were very careful and diligent to accurately
represent the information that they provided, and . . . follow . . . the chain of title back for a number
of years through that family . . . to Salvador Izaguirre [sic] who obtained . . . the property by deed
in 1940, . . . .” They obtained a survey of the property and Houser prepared an affidavit of heirship
that was signed by Yzaguirre’s heirs and recorded in 2011. The heirs then conveyed the property
by warranty deed to the Garcias.
Houser acknowledged that the four volumes of an abstract of title she filed contained gaps
in tracing title prior to 1932, but she stated she believed the abstract did not need to go back further
because she understood that to be the date of the common source from which Garcia was claiming
title. Houser further testified, “[W]e are relying upon what the title company researched and . . .
they gave me a professional response to our question of who owns the tract . . . . The title company
said Salvador [Yzaguirre] did by virtue of these deeds that I provided . . . .” Houser stated, “[W]e
were told by Emilia Izaguirre [sic] and my clients were told by her that she was the heir to the
property” and “[t]he surveyor represented to us that he followed the documents of record in
locating [the property].”
Gloria presented evidence of her attorney’s fees and expenses. She testified that although
her family owned the property for years, she never lived on it. She explained her grandfather “went
into possession” of the property in the early 1950s and lived on the property, her uncle took over
the property after her grandfather died, and her mother deeded the property to Gloria. Gloria
testified she was not aware of a deed conveying a part of the property to Salvador Yzaguirre.
Iris Garcia testified she believed she owned the part of the tract that was sold to Salvador
Yzaguirre because she had the title researched, had the property surveyed, purchased the property
from Yzaguirre’s heirs for $5,000, recorded the deed, and was paying taxes on the property. Iris
testified she became aware Gloria was attempting to claim the land after the Garcias had purchased
-4-
04-14-00561-CV
it. She testified Gloria was very upset and Iris feared for her own safety. That is when she and her
husband decided to seek relief through the legal system.
The record contains no evidence that when Houser filed the signed amended pleading, it
was not to her best knowledge, information, and belief that the allegation of her clients’ having
title to the property would not have evidentiary support. It was undisputed that the Garcias
purchased part of the larger tract for $5,000, conducted a title search confirming the seller had a
good deed to the property, had a land survey of the property completed, used the property to access
their home, and paid taxes on the property, and that Houser filed the pleadings at the Garcias’
request. We hold this evidence establishes that Houser made a reasonable inquiry into the Garcia’s
ownership of the property.
Citing Kilpatrick v. McKenzie, 230 S.W.3d 207, 208 (Tex. App.—Houston [14th Dist.]
2006, no pet.), Gloria argues Houser’s conduct is sanctionable because she was unable to produce
legally sufficient evidence to prove her clients’ claim to title. Kilpatrick was decided on legal
sufficiency grounds and not the propriety of sanctions under chapter 10. It therefore does not stand
for the proposition that a party may be sanctioned under chapter 10 for failing to present legally
sufficient evidence of a claim. Id. Many parties in trespass to try title claims are unable to present
legally sufficient evidence to support their claims, as was the case in Kilpatrick. The inability to
present legally sufficient evidence alone does not demonstrate that a signatory has failed to make
a reasonable inquiry before filing. Gomer v. Davis, 419 S.W.3d 470, 481 (Tex. App.—Houston
[1st Dist.] 2013, no pet.).
Gloria also argues this case is similar to Low v. Henry, 221 S.W.3d 609 (Tex. 2007). In
Low, the trial court’s sanctions award was supported by evidence that when the attorney signed
and filed the petition alleging medical malpractice, he had in his possession medical records that
clearly disproved the defendants’ involvement in the alleged malpractice. Id. at 616. In this case,
-5-
04-14-00561-CV
there is no evidence that when the case was filed, Houser had knowledge of or possession of any
evidence that clearly disproved the Garcias’ claim of title. Any gaps in the chain of title reflected
in the abstract of title do not support the sanctions found in this case because the Garcias did not
have the abstract of title when suit was filed and they were not required to produce one until and
unless the defendant demanded one. See Riner v. Neumann, 353 S.W.3d 312, 315 (Tex. App.—
Dallas 2011, no pet.) (citing TEX. R. CIV. P. 791-794).
CONCLUSION
Because the record establishes Houser made a reasonable inquiry into the Garcias’
ownership of the property, the trial court abused its discretion by awarding Gloria sanctions. See
Schlager, 939 S.W.2d at 191. Therefore, we reverse the trial court’s award of sanctions and render
judgment that Gloria take nothing on her claim for sanctions. We affirm the remainder of the trial
court’s judgment dismissing the Garcias’ claims without prejudice.
Luz Elena D. Chapa, Justice
-6-