In The
Court of Appeals
Ninth District of Texas at Beaumont
____________________
NO. 09-08-00041-CV
____________________
VICTORIA HALL, HOLLI ROFFEY, JOHN C. OSBORNE, AND
THE LAW OFFICES OF JOHN C. OSBORNE, P.L.L.C., Appellants
V.
ROXANE GUEST AND LESLIE WELDY, Appellees
Montgomery County, Texas
Trial Cause No. 07-01-00732 CV
This is an appeal from an order awarding monetary sanctions. We affirm.
I. Background
Victoria Hall and Holli Roffey filed this lawsuit after the North Country Women's Tennis League ("NCWTL" or "League") suspended them for their conduct during a doubles match. Hall and Roffey forfeited the match to the opposing team, Roxane Guest (1) and Leslie Weldy. After the match ended, Hall and Roffey "were upset and hit a couple of tennis balls into the fence around the court." Peggy Payne and Kay Rice, the supervisors of the Guest-Weldy team, filed charges with the NCWTL and accused Hall and Roffey of intentionally trying to hit Guest and Weldy with the tennis balls. After the League concluded its investigation, it suspended Hall and Roffey for eight months, and placed Guest on probation for her role in the events that occurred prior to Hall and Roffey's decision to forfeit the match.
Subsequently, Hall and Roffey sued Guest, Weldy, Payne, and Rice for defamation per se. Hall and Roffey asserted that the defendants had falsely accused them of "unsportsmanlike conduct," and lodged "disparaging and untrue accusations with the NCWTL." Approximately two and one-half months after they filed suit, Hall and Roffey dismissed their claims against Payne and Rice.
Guest counterclaimed, seeking to have Hall and Roffey sanctioned. Guest alleged that Hall's and Roffey's claims were "baseless, without merit, and brought likely for the purpose of harassing Guest." Several months later, Guest filed traditional and no-evidence motions for summary judgment. In her no-evidence motion for summary judgment, Guest asserted that the statements attributed to her could not constitute slander per se and that Hall and Roffey could not prove the elements of a claim of defamation per se. Hall and Roffey filed no response to Guest's motions for summary judgment, which were to be heard on November 8, 2007. On the day before the hearing, Hall and Roffey nonsuited their claims against Guest and Weldy.
On November 13, 2007, Guest notified Hall and Roffey's attorney that the trial court would hear her "Counterclaim/Motion for Sanction" on November 20. On November 15, Guest filed a brief in support of her request for sanctions, and, for the first time, included a specific request that the court include an award of sanctions against Hall and Roffey's attorney. Hall and Roffey filed a response opposing Guest's request for sanctions; they asserted that the counterclaim was not a motion, and objected that they received insufficient notice. Hall and Roffey's response also alleged that Guest had signed a release that waived her claims for sanctions, and that their voluntary nonsuit prevented the trial court from considering the sanctions request.
During the sanctions hearing, the trial court found that the counterclaim included a motion for sanctions and that Guest's request for sanctions had survived Hall and Roffey's nonsuit. The court ruled that the release did not prevent Guest from seeking sanctions. The trial court awarded monetary sanctions against Hall, Roffey, their attorney who filed the original petition, and the attorney's law firm with the purpose of reimbursing Guest for fees she incurred in defending the suit.
II. Appellate Issues
Hall, Roffey, their attorney, and his law office (collectively, the "sanctioned parties") raise five issues on appeal. Issue one contends that the trial court never acquired jurisdiction over Guest's sanctions claim against the lawyer and his law offices because the counterclaim did not seek such sanctions. Issue two asserts that the trial court never acquired jurisdiction over Guest's claim for sanctions against the attorney or his law office because there were no pending motions for sanctions naming them when Hall and Roffey dismissed their suit. Issue three argues that there was no evidence that the lawsuit was filed for "dishonest, discriminatory, or malicious purposes." Issue four argues that Guest did not present evidence to show that Hall's and Roffey's claims were "filed for purposes of harassment, delay, or to increase the costs of litigation." Issue five contends that Guest released or waived her sanctions claim.
III. Trial Court's Jurisdiction
In their first two issues, the sanctioned parties challenge the trial court's jurisdiction to adjudicate the sanctions issue. We find no error in the trial court's treatment of the counterclaim as a motion for sanctions and find no error in the trial court's exercise of jurisdiction over the attorney and his law offices.
When determining the nature of a document, courts look to the substance of the relief requested by the pleading and not merely the title given the document. Tex. R. Civ. P. 71 ("When a party has mistakenly designated any plea or pleading, the court, if justice so requires, shall treat the plea or pleading as if it had been properly designated."); see State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex. 1980) ("We look to the substance of a plea for relief to determine the nature of the pleading, not merely at the form of title given to it.").
In our opinion, Guest's counterclaim clearly sought to invoke the trial court's authority to enter sanctions. The counterclaim specifically requested an award of reasonable attorney's fees under Chapter 10 of the Texas Civil Practice and Remedies Code and under Rule 13 of the Texas Rules of Civil Procedure, and alleged that the lawsuit was frivolous, groundless, brought in bad faith, and brought for the purpose of harassment. Rule 13 and Chapter 10 both authorize a trial court to impose sanctions. We find no error in the trial court's treatment of Guest's counterclaim as a motion for sanctions.
The sanctioned parties also assert that the trial court did not have jurisdiction to impose sanctions on their attorney because Guest's counterclaim did not specifically ask for sanctions against the attorney or his law offices. The sanctioned parties argue that Guest's assertion of her sanctions request against Hall and Roffey's attorney in a brief supporting her sanctions motion was insufficient to vest the trial court with jurisdiction to adjudicate the issue against the attorney.
Both Rule 13 and Chapter 10, the bases for Guest's sanction request, allow the trial court to impose sanctions on the parties, or to impose them on the attorney who signed the offending pleading. See Tex. Civ. Prac. & Rem. Code Ann. § 10.004(a) (Vernon 2002) ("A court that determines that a person has signed a pleading or motion in violation of Section 10.001 may impose a sanction on the person, a party represented by the person, or both."); Tex. R. Civ. P. 13 ("If a pleading, motion or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, after notice and hearing, shall impose an appropriate sanctions available under Rule 215, upon the person who signed it, a represented party, or both.") (footnote omitted). We conclude that by the express terms of Rule 13 and Chapter 10, the trial court possessed jurisdiction over both the parties and their attorneys to decide the sanctions motion.
The sanctioned parties also contend that the trial court could not address motions for sanctions that were filed after their notice of nonsuit. However, Guest's request for sanctions against Hall and Roffey was filed prior to the nonsuit, and it gave the trial court jurisdiction to sanction the attorneys who signed the offending pleadings. See Tex. Civ. Prac. & Rem. Code Ann. §10.004(a); Tex. R. Civ. P. 13. With respect to the effect of a nonsuit, Rule 162 of the Texas Rules of Civil Procedure specifically provides that a dismissal by nonsuit "shall have no effect on any motion for sanctions, attorney's fees or other costs, pending at the time of dismissal, as determined by the court." Guest's request for sanctions was a pending claim when Hall and Roffey decided to nonsuit their claims; therefore, Rule 162 protected Guest's request for sanctions from their nonsuit.
Even had Rule 162 not insulated Guest's sanctions claim from the effect of the nonsuit, a trial court has the continuing authority to decide a motion for sanctions relating to pre-judgment conduct during the period it possesses plenary jurisdiction following a nonsuit. See Scott & White Mem'l Hosp. v. Schexnider, 940 S.W.2d 594, 596 (Tex. 1996) ("Thus, the time during which the trial court has authority to impose sanctions on such a motion is limited to when it retains plenary jurisdiction and is not limited by Rule 162."). Further, "the signing of an order dismissing a case, not the filing of a notice of nonsuit, is the starting point for determining when a trial court's plenary power expires." In re Bennett, 960 S.W.2d 35, 38 (Tex. 1997); see Davidoff v. GX Tech. Corp., 134 S.W.3d 514, 515 (Tex. App.-Waco 2004, pet. denied). In this case, the judge signed the order on Hall and Roffey's motion for nonsuit on November 16, 2007, and signed the sanctions order on December 4, 2007. Hall and Roffey filed a motion for new trial on December 14, 2007, and the trial court denied the motion on December 19, 2007. The trial court's plenary power, however, existed for thirty days after it denied the motion, a date well past the date the trial court signed the sanctions order on December 4, 2007. See Tex. R. Civ. P. 329b(d), (e). "A trial court's power to decide a motion for sanctions pertaining to matters occurring before judgment is no different than its power to decide any other motion during its plenary jurisdiction." Schexnider, 940 S.W.2d at 596.
We conclude that the trial court had jurisdiction to act on Guest's pending request for sanctions at the time it entered the order. We overrule issues one and two.
IV. Abuse of Discretion
An appellate court reviews the imposition of sanctions by the trial court for abuse of discretion. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007). We may reverse the trial court's ruling only if the court "acted without reference to any guiding rules and principles, such that its ruling was arbitrary or unreasonable." Id. Courts generally presume that the parties filed pleadings or other papers in good faith, and the party asking for sanctions has the burden to overcome the good-faith presumption. Id.
In issues three and four, the sanctioned parties argue there was no evidence to establish sanctions under Chapter 10 or Rule 13. Both allow the trial court to impose sanctions on an attorney or a party for filing pleadings or motions that have no reasonable basis in law or fact. See Tex. Civ. Prac. & Rem. Code Ann. § 10.001(1)-(4) (Vernon 2002) (2); Tex. R. Civ. P. 13; Low, 221 S.W.3d at 614. Under Section 10.001, "the signer of a pleading or motion certifies that each claim, each allegation, and each denial is based on the signatory's best knowledge, information, and belief, formed after reasonable inquiry." Low, 221 S.W.3d at 615 (emphasis in original). "The fact that an allegation or claim is alleged against several defendants-so-called 'group pleadings'-does not relieve the party from meeting the express requirements of Chapter 10. Each claim against each defendant must satisfy Chapter 10." Id. Under the Rules of Civil Procedure, Rule 13 provides that a signature on pleadings or other legal documents constitutes the signer's certification that to the best of his "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."
At the sanctions hearing, five witnesses testified, but Guest was the only one who testified about the circumstances leading to the charges of unsportsmanlike behavior against Hall and Roffey. Guest testified that she did not file the complaint against them and stated that she never made any statements to the League prior to the time that it sanctioned Hall and Roffey for their conduct. She also testified that she never made any false statements about Hall and Roffey to anyone. During the hearing, Hall and Roffey called no witnesses to dispute Guest's testimony.
Prior to the hearing, Hall and Roffey filed a response to the motion for sanctions that included their attorney's affidavit as an exhibit. According to the affidavit, Hall and Roffey told their attorney that Roffey "hit a couple of tennis balls into the fence surrounding the tennis court" after the match ended. Then, "Guest and Weldy took umbrage, and falsely accused [Hall and Roffey] of intentionally trying to hit them after the match." The attorney's affidavit further states that he did not file the lawsuit to harass Guest, in bad faith, or for any improper purpose. The balance of the attorney's affidavit explains why he did not consider the release signed by his clients Hall and Roffey as sufficiently broad to apply to off-court conduct or verbal exchanges that occurred after a match ended.
Reasonable Inquiry
In its sanctions order, the trial court concluded that the sanctioned parties did not make a reasonable inquiry. The court found that
Guest did not have any communication with the Board of the NCWTL prior to the time that disciplinary action was taken by the Board against Plaintiffs and Guest. Thus, Guest could not have made any false or defamatory statements to the Board. If Plaintiffs and Plaintiffs' Counsel had investigated their claims by simply responding to or communicating with [Guest's attorneys], they would have learned this information and this lawsuit could have been entirely avoided.
According to the trial court, Hall, Roffey, and their attorney each failed to make the required reasonable inquiry. The trial court's sanctions order states that Hall, Roffey, and their attorney "did not conduct any investigation into the facts alleged by them before asserting them in pleadings filed with the Court."
This case is similar to Low. See 221 S.W.3d at 617. The Low appellants, who were physicians, presented undisputed evidence to the trial court that they did not prescribe or administer medication as alleged in the plaintiff's petition and that a pre-suit review of the plaintiff's medical records would have confirmed that fact. Id. In concluding that the trial court did not abuse its discretion in imposing sanctions, the Low Court explained that the physicians were not required to specifically show that counsel had acted in bad faith or with malicious intent. Id. Instead, they had to show that the attorney certified that all the allegations in the petition had evidentiary support, or were likely to have such support, when, in fact, they did not. Id.
Guest's testimony at the sanctions hearing was evidence that she did not make any statements about Hall and Roffey to the NCWTL. No witnesses at the hearing made any contrary contentions. The only evidence concerning the sanctioned parties' inquiry consisted of their attorney's affidavit, which was attached to their supplemental response to the motion for sanctions. The affidavit does not contend that Guest made statements to the NCWTL. Rather, the affidavit states that Payne and Rice, who were nonsuited, filed the charges with the NCWTL. Although the attorney's affidavit reflects that he interviewed his clients and reviewed various e-mails sent to and from the NCWTL, there is nothing in the attorney's affidavit that proves he had evidence from any source that Guest published any statements about Hall and Roffey that were actionable under a theory of defamation per se. Further, there is no evidence of any investigation made by Hall or Roffey.
Both Chapter 10 and Rule 13 require that a reasonable inquiry be made. The evidence in the record supports the trial court's conclusion that the sanctioned parties failed to make reasonable inquiry.
Defamation Per Se
In its sanctions order, the trial court also found:
Plaintiffs sued Guest for Defamation Per Se, which could only be supported by evidence that Guest made false statements causing Plaintiffs injury to their business reputation, imputing to them a crime, disease or sexual misconduct. Plaintiffs failed to make any allegation of such injury much less provide evidentiary support of this claim.
According to the plaintiffs' pleadings, the alleged defamation per se occurred when, "[s]ubsequent to the match, the Defendants lodged false charges against the Plaintiffs, accusing them of trying to 'intentionally' hit them with tennis balls after the match was over." Statements constituting defamation per se are actionable without proof of injury. Tex. Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 580 (Tex. App.-Austin 2007, pet. denied); see Bentley v. Bunton, 94 S.W.3d 561, 605 (Tex. 2002). As the Austin Court of Appeals explained, "A false statement will typically be classified as defamatory per se if it injures a person in his office, profession, or occupation; charges a person with the commission of a crime; imputes sexual misconduct; or accuses one of having a loathsome disease." Tex. Disposal Sys. Landfill, 219 S.W.3d at 581 (citations omitted).
The alleged statement in this case asserted that Hall and Roffey intentionally tried to hit Guest and Weldy with tennis balls after the match ended. In the context that the statement is alleged to have occurred, the statement, at most, accused Hall and Roffey of unsportsmanlike conduct. Even presuming, for purposes of the appeal, that the alleged statement was published, it does not fit into the categories of statements identified as constituting defamation per se. See id. We agree with the trial court that "[p]laintiffs failed to make any allegation of such injury [i.e., injury to their business reputation, imputing to them a crime, disease or sexual misconduct] much less provide evidentiary support of this claim."
Harassment
The record also contains evidence that supports the trial court's conclusion that the suit was filed for malicious purposes and for purposes of harassment. During the sanctions hearing, Guest testified, without objection, that the suit was filed for purposes of harassment. Further, the trial court properly considered the entire history of the case before it, which included Hall's and Roffey's failures to answer interrogatories and their dismissal of their claims shortly before the date of the summary judgment hearing. See Falk & Mayfield L.L.P. v. Molzan, 974 S.W.2d 821, 825-26 (Tex. App.-Houston [14th Dist.] 1998, pet. denied) (stating that a trial court considering whether to sanction a party or attorney is entitled to consider the history of the case). Guest's testimony about the motivations that led to the suit, the absence of any facts that were brought out during the sanctions hearing justifying a claim of defamation per se, and the history of the case are sufficient to support the trial court's finding that the suit was filed for "an improper purpose including to harass, embarrass, and cause needless and unnecessary expense to Guest."
Therefore, based on the record before it, the trial court did not abuse its discretion in imposing sanctions against appellants. Issues three and four are overruled.
V. Release of Sanctions Claim
In issue five, appellants argue that Guest released her sanctions claims when she signed a liability release that allowed her to participate in the tennis league. The release (3) states:
I hereby request entry into North Country Women's Tennis League [hereinafter NCWTL] and request permission to participate in activities at the tennis courts of the Clubs participating in NCWTL. Acceptance of my entry in any activity of NCWTL is without assumption of responsibility of any kind by NCWTL, its members, officers, directors, or agents, or by clubs, or court owners which allow use of their courts for NCWTL activities, their members, officers, directors, or agents.
In consideration of the acceptance of my entry into NCWTL, I do hereby and on behalf of myself and my heirs and legal representatives release and forever discharge the NCWTL, its members, officers, directors, agents or participating clubs of and from any and all claims and demands of every kind, nature, and character which I may have or may hereafter acquire for any damages, losses or injuries which may be suffered or sustained by me.
I understand that I alone am responsible for determining the safety, condition, and playability of any tennis court upon which I will participate in a NCWTL activity before I use any such court. I understand that I have the right and responsibility to refuse to participate in any activity on such court if I am uncertain whether the court is safe for my use. Having personally determined a court is safe and satisfactory for my use, I alone am responsible for refusing to continue any activity on such court if I believe the condition of the court has changed during my use.
The issue before us is whether claims arising from the use of the Texas court system are within the subject matter of Guest's release. The plain language of Guest's release contemplates the release of claims arising from the use of tennis courts. The sanctions claims at issue here arose from litigation. "[C]laims not clearly within the subject matter of the release are not discharged." Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991). Considering the subject matter of the release as a whole, and in light of the release's contemplation of claims arising from activities on tennis courts rather than those arising from the use of the legal system, we conclude that Guest's claims for sanctions were not mentioned and are not clearly within the subject matter of Guest's release.
We hold that the release is not sufficiently broad to include Guest's claims for sanctions and overrule issue five. Having overruled all of the appellants' issues, we affirm the trial court's order.
AFFIRMED.
_____________________________
HOLLIS HORTON
Justice
Submitted on November 11, 2008
Opinion Delivered February 5, 2009
Before McKeithen, C.J., Gaultney and Horton, JJ.
1. In their pleadings, the plaintiffs' incorrectly spelled Guest's first name as "Roxanne."
We use the correct spelling, "Roxane." 2.
- is not being presented for any improper purpose, such as harassment, unnecessary delays, or needless increased litigation costs;
- contains only those claims, defenses, or legal contentions that are either warranted by existing law or by nonfrivolous arguments for extensions or changes to existing law;
- contains only those allegations or contentions that are warranted by the evidence or likely will be after a reasonable opportunity for further investigation or discovery; and
- contains only those denials that either are warranted by the evidence or based reasonably on a lack of information or belief.
Tex. Civ. Prac. & Rem. Code Ann. § 10.001(1)-(4) (Vernon 2002 ).
3.