Michael C. McDougal v. Delbert and Carolyn McDougal and D. Marc McDougal and the McDougal Trust

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-16-00422-CV
MICHAEL C. MCDOUGAL, APPELLANT
V.
DELBERT AND CAROLYN MCDOUGAL AND D. MARC MCDOUGAL AND THE
MCDOUGAL TRUST, APPELLEES
On Appeal from the 99th District Court
Lubbock County, Texas
Trial Court No. 2015-514,759; Honorable William C. Sowder, Presiding
October 10, 2018
DISSENTING OPINION
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
Appellant, Michael C. McDougal, contends a sanctions order issued against him
in favor of Appellees, Delbert McDougal, Carolyn McDougal, D. Marc McDougal, and the
McDougal Trust is void because the trial court lacked plenary power to enter the order.
The majority disagrees and affirms the issuance of the sanctions order. Because I believe
the trial court’s plenary power had lapsed and, therefore, the jurisdiction of the trial court
had expired, I respectfully dissent.
As more fully discussed in the majority opinion, an inter-family dispute between
Appellant and Appellees led to the filing of this lawsuit in February 2015. After the
completion of some discovery, the parties reached a mutually acceptable settlement of
that dispute in April 2016. That settlement resulted in the entry of an agreed Order on
Petition for Modification of the McDougal Trust, dated April 29, 2016, and signed by the
Honorable David Gleason. The order was also signed by the parties individually and by
their respective attorneys. The agreed order was filed with the district clerk on May 2,
2016. Because the order of April 29 resolved all then-existing claims between all parties,
on May 4, 2016, the parties filed an Agreed Nonsuit with Prejudice, signed by the attorney
of record for each respective party, bearing a certificate of service dated April 27, 2016,
thereby effectively terminating this litigation for all purposes.
However, on May 16, 2016, the attorneys for Delbert McDougal and Carolyn
McDougal moved to withdraw and the attorneys for D. Marc McDougal were substituted
in as their attorneys of record. On June 3, 2016, Appellees filed their Motion to Show
Cause, seeking discovery sanctions, which ultimately culminated in the entry of the order
the subject of this appeal. Following the filing of that motion, a hearing was held on
September 12, 2016. At that hearing, the trial court entered a formal Order of Dismissal
with Prejudice, stating that the order “disposes of all claims and all parties, other than
claims that survive a final judgment as a matter of law, and this Order is appealable.”
(Emphasis added).
The order the subject of this appeal, entitled Order on Motion for Sanctions, was
not, however, signed until October 17, 2016, thirty-five days after the entry of the court’s
Order of Dismissal with Prejudice, one hundred seventy-one days after entry of the Order
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on Petition for Modification of the McDougal Trust (arguably a “final” order), and one
hundred and sixty-six days after the filing of an undisputed joint agreed nonsuit of all
proceedings. The question to be resolved in this appeal then is whether the trial court
retained jurisdiction on October 17, 2016, to enter the sanctions order in question.
Because I believe it did not, I dissent.
ANALYSIS
As stated by the majority, a trial court cannot order the imposition of sanctions after
its plenary power has expired; Scott & White Mem’l Hosp. v. Schexnider, 940 S.W.2d
594, 596 & n.2 (Tex. 1996) (per curiam) (op. on reh’g), and whether a court retains plenary
power is a question of law we address de novo. Tex. Dep’t of Parks & Wildlife v. Miranda,
133 S.W.3d 217, 226 (Tex. 2004). The majority then relies upon precedent stating that it
is the signing of an order dismissing a case, not the filing of the nonsuit, that determines
when the clock starts to run on the trial court’s thirty-day plenary power. In re Bennett,
960 S.W.2d 35, 38 (Tex. 1997) (orig. proceeding) (per curiam). The facts leading up to
the order of sanctions in Bennett are, however, clearly distinguishable from the facts of
this case.
In Bennett, counsel filed seventeen related lawsuits in a deliberate attempt to
circumvent the court-ordered random assignment of cases in a county with eight district
courts. When the seventeenth case was filed in the desired court, counsel ceased filing
cases and five days later filed sixteen notices of nonsuit in the cases that were filed in
other courts. Judge Bennett, judge of one of the courts where cases were nonsuited,
issued a sua sponte order directing counsel to appear and show cause why they should
not be held in contempt for intentionally violating local rules pertaining to the random
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assignment of cases. Counsel sought and obtained a writ of mandamus directing Judge
Bennett to vacate that order. On Judge Bennett’s application to the Texas Supreme
Court, the court held that appellate timetables do not run from the date a nonsuit is filed,
but rather from the date the trial court signs an order of dismissal. The court effectively
held that the filing of a notice of nonsuit does not deprive the trial court of jurisdiction to
sanction pre-nonsuit conduct. That holding is entirely consistent with the generally
recognized principle that a notice of nonsuit does not cut off an existing claim. See TEX.
R. CIV. P. 162 (stating that a dismissal or nonsuit “shall not prejudice the right of an
adverse party to be heard on a pending claim for affirmative relief or excuse the payment
of all costs taxed by the clerk”) (emphasis added). However, the logic in Bennett and
similar cases has no application in a situation, such as here, where both parties file a
nonsuit after settling all claims.
At the moment the joint motion for nonsuit was filed in this case, all claims and
causes of action were resolved. No other relief was being sought and the trial court was
not exercising any inherent authority to sanction pre-nonsuit conduct. Accordingly, I
would find that the trial court’s plenary power expired on June 3, 2016, thirty days after
the filing of the joint notice of nonsuit. While counsel might argue that the filing of the
Motion to Show Cause on June 3, 2016, extended the trial court’s plenary power, I would
point out that at no time did counsel file a motion for new trial or a motion to reinstate.
Furthermore, the trial court did sign an order of dismissal on September 12, 2016,
and the order of sanctions was not entered within thirty days thereof. As such, even if the
filing of the motion for sanctions could have preserved the trial court’s jurisdiction until the
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court’s order of nonsuit, counsel failed to obtain an order within thirty days. As such, the
court’s plenary power would also have expired under this interpretation.
Counsel’s motion for sanctions is nothing more than a post-settlement, post-final
order attempt to enforce the trial court’s original disposing order—the Order on Petition
for Modification of the McDougal Trust. Such a motion is more appropriately the subject
of a new suit to enforce the settlement, not a motion for discovery sanctions.
CONCLUSION
For these reasons, I would find that the trial court lacked subject matter jurisdiction
to enter the order of sanctions and I would reverse and render judgment dismissing
Appellees’ claims for want of jurisdiction.
Patrick A. Pirtle
Justice
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