Affirmed and Majority and Concurring and Dissenting Opinions filed August 30, 2007.
In The
Fourteenth Court of Appeals
____________
NO. 14-06-00294-CV
____________
CHRIS MALLIOS, Appellant
V.
STANDARD INSURANCE COMPANY, FIRST FINANCIAL BENEFITS, INC.,
NULL LAIRSON, P.C., JIM YARBROUGH, EDDIE BARR, EDDIE JANEK, STEPHEN HOLMES, KEN CLARK, AND PHILLIP LOHEC, Appellees
On Appeal from the 122nd District Court
Galveston County, Texas
Trial Court Cause No. 04CV1063
C O N C U R R I N G A N D D I S S E N T I N G O P I N I O N
I join the court=s analysis and disposition of the issues appellant Chris Mallios presents for review, but respectfully dissent as to the court=s determination that appellate sanctions are not warranted.
Texas Rule of Appellate Procedure 45, entitled ADamages for Frivolous Appeals in Civil Cases,@ provides:
If the court of appeals determines that an appeal is frivolous, it mayCon motion of any party or on its own initiative, after notice and a reasonable opportunity for responseCaward each prevailing party just damages. In determining whether to award damages, the court must not consider any matter that does not appear in the record, briefs, or other papers filed in the court of appeals.
Tex. R. App. P. 45. Appellees Standard Insurance Company, First Financial Benefits, Inc., Null Lairson, P.C., Jim Yarbrough, Eddie Barr, Eddie Janek, Stephen Holmes, and Ken Clark each have invoked Rule 45, seeking Ajust damages@ against Mallios for filing a frivolous appeal.
The Supreme Court of Texas has not yet addressed the appropriate legal standard appellate courts should use to determine whether to assess appellate sanctions. Under Rule 45, the appellate court first must determine that an appeal is Afrivolous@ before it can consider awarding Ajust damages@ to any prevailing party. Most courts of appeals agree that, after the court determines that this prerequisite is satisfied, whether the court should award Ajust damages@ is a matter of discretion that courts exercise with prudence and caution, after careful deliberation and only under truly egregious circumstances.[1] However, there is a conflict among the courts of appeals as to how courts should make the preliminary determination whether an appeal is frivolous. The rule contains no definition of Afrivolous,@ and courts of appeals have asserted at least three different legal standards[2] for determining whether this prerequisite has been satisfied:
(1) Some courts consider the only prerequisite to be that there are no reasonable grounds to believe that an appellate court would reverse the trial court=s judgment, objectively considering the record from the viewpoint of an attorney representing the appellant. These courts do not require any determination that the appellant has acted in bad faith.[3]
(2) Some courts require that the appeal be both objectively frivolous and subjectively brought in bad faith or for purposes of delay.[4]
(3) Some courts state that appellate sanctions may be imposed if the appeal is either objectively frivolous or brought in bad faith.[5]
Absent (a) an intervening decision from the Supreme Court of Texas or this court sitting en banc that is on point and contrary to the prior panel decisions or (b) an intervening and material change in the statutory law, this court is bound by the decisions of prior panels of this court that have adopted the second rule above.[6] Since the Azubuike decision, decided shortly after the 1997 amendments to the Texas Rules of Appellate Procedure, Rule 45 has not been changed, and there have been no decisions by the Supreme Court of Texas or this court sitting en banc addressing this issue. See Azubuike v. Fiesta Mart, Inc., 970 S.W.2d 60, 66 (Tex. App.CHouston [14th Dist.] 1998, no pet.) (denying request for Rule 45 sanctions because record did not show that appeal was frivolous and brought for the purpose of delay). Therefore, this court must follow Azubuike and subsequent cases from this court that require the appeal to be both objectively frivolous and subjectively brought in bad faith or for purposes of delay before sanctions may be imposed under Rule 45.[7]
Are there reasonable grounds to believe that this court would reverse the trial court=s judgment, objectively considering the record from the viewpoint of an attorney representing the appellant?
The appellees moving for sanctions allege the appeal is frivolous because Mallios did not arrange for the filing of a sufficient appellate record. Under Texas Rule of Appellate Procedure 34.5, the trial court clerk is not required to include in the clerk=s record copies of any motion for summary judgment, summary-judgment response, or summary-judgment evidence, unless a party specifically requests in writing that a copy of any such item be included in the clerk=s record. See Tex. R. App. P. 34.5. No party, including Mallios, has ever requested that the district court clerk include in the clerk=s record copies of any motion for summary judgment, summary-judgment response, or summary-judgment evidence. None of those items have been included in our appellate record. In his thirteen-page opening brief, Mallios asserts the following:
! Mallios requests the court to find that the trial court erred in granting appellees= motions for summary judgment and in denying Mallios=s motion for summary judgment.
! In reviewing a trial court=s summary judgment, this court must determine whether the summary-judgment proof establishes as a matter of law that appellees are entitled to judgment in their favor.
! Standard=s summary-judgment evidence did not establish as a matter of law its statute-of-limitations defense.
! Standard=s summary-judgment evidence did not establish res judicata or collateral estoppel as a matter of law.
! The summary-judgment affidavit filed by appellee Null Lairson, P.C. was insufficient as a matter of law, and the trial court erred in granting summary judgment based on it.
! The summary-judgment affidavit filed by First Financial was insufficient as a matter of law.
! Appellee Phillip Lohec did not produce any summary-judgment evidence proving his defense of official immunity, and the trial court erred in granting summary judgment in his favor.
! In his motion for summary judgment, Mallios asked the trial court to declare as a matter of law that Athe Alternate Plan, Group Policy 602107, Insurance Code and the Demutualization Plan made certain representations to [Mallios].@ These documents were before the trial court without objection.
None of the items emphasized in boldface type above are contained in our record. In response to Mallios=s opening brief, appellees Standard, First Financial, Null Lairson, P.C., Yarbrough, Barr, Janek, Holmes, and Clark all asserted that this court should order Mallios to pay their appellate attorney=s fees as Ajust damages@ under Rule 45 because, among other things, Mallios did not arrange for the filing of a sufficient appellate record. Without requesting that the district clerk supplement the clerk=s record, the appellees attached copies of their motions for summary judgment to their appellate briefs.
In his reply brief, Mallios did not address the Rule 45 sanctions issue, and he did not ask this court to deny the requests for sanctions. Instead, Mallios stated that, although he has the burden to present a complete record on appeal, a Acomplete record@ is only the pertinent summary-judgment evidence considered by the trial court. Mallios asserted that, under Enterprise Leasing Co. v. Barrios, a Acomplete record@ does not include the actual motions for summary judgment and their attached evidence. See 156 S.W.3d 547, 549B50 (Tex. 2004) (per curiam). In Barrios, the Supreme Court of Texas stated that, Aalthough [the appellee/movant] bears the burden to prove its summary judgment as a matter of law, on appeal [the appellant/non-movant] bears the burden to bring forward the record of the summary judgment evidence to provide appellate courts with a basis to review his claim of harmful error. . . If the pertinent summary judgment evidence considered by the trial court is not included in the appellate record, an appellate court must presume that the omitted evidence supports the trial court=s judgment.@ Barrios, 156 S.W.3d at 550. Mallios has not brought forward an appellate record containing the summary-judgment motions or the summary judgment evidence considered by the trial court. Mallios=s argument that he has discharged his burden under Barrios is objectively frivolous.
There are no reasonable grounds to believe that an appellate court would reverse the trial court=s judgment in the absence of a complete record, objectively considering the record from the viewpoint of an attorney representing Mallios. The arguments made in Mallios=s opening brief are therefore objectively frivolous.[8]
Did the appellant bring this appeal in bad faith?
When confronted in the appellees= briefs with his failure to request an appellate record sufficient for this court to review the trial court=s summary-judgment rulings, Mallios did not concede any shortcomings; rather, in his reply brief, he asserted another objectively frivolous argument, taking the untenable position that these documents were unnecessary to the resolution of his appeal. In addition, in his reply brief, Mallios objected to the appellees= attachment of copies of their motions for summary judgment to their appellate briefs because these documents are not contained in the appellate record. Though Mallios is correct that this court cannot consider these documents because they are not contained in the appellate record,[9] his objection on this ground is outrageous because (1) it was his burden to put those documents properly before the court and (2) he failed to do so. Rather than requesting that these omitted, and apparently voluminous, items be added to the record in the correct form, Mallios objected to the presence of some of these documents in this court in an improper form. These actions, under these circumstances, bespeak improper motivation and purpose.
If Mallios had requested the district clerk to file a supplemental clerk=s record containing the apparently voluminous summary-judgment motions, evidence, and responses and if Mallios were to lose this appeal, then Mallios would bear the expense of the preparation of this record. See Tex. R. App. P. 43.4. Mallios not only importuned this court to reverse the trial court=s judgment without reviewing the summary-judgment record but to do so in manner that would allow him to avoid the full amount of appellate costs that he would be required to pay if he had requested that all necessary documents be included in the clerk=s record. Mallios=s refusal to acknowledge that the summary-judgment motions, responses, and evidence are necessary to adjudicate this appeal, and his objection to this court=s consideration of the appellees= summary-judgment motions because they are not in the appellate record show that Mallios is acting in bad faith and seeking to harass appellees through this appeal. See Tate, 954 S.W.2d at 875.
Should this court exercise its discretion to sanction the appellant?
Once a determination is made that the prerequisites to Rule 45 sanctions have been satisfied, the focus of the inquiry turns to whether it is appropriate under the facts of this case for the court to exercise its discretion to award just damages to the prevailing parties. In making this determination, this court considers the circumstances revealed by the record, briefs, and other papers filed in this court, and weighs factors that include the following:
! the failure to present a complete record,
! the raising of issues for the first time on appeal, even though preservation of error was required in the trial court,
! the failure to file a response to a request for appellate sanctions, and
! the filing of an inadequate appellate brief.
See id. Mallios has not presented a complete record. He appeals the granting of five different motions for summary judgment and the denial of his motion for summary judgment, yet Mallios has not requested the district clerk to include any of these motions, their attached evidence, or any summary-judgment responses in the clerk=s record. Although Mallios did request a copy of his motion to reconsider, this motion asserts that the trial court should not have granted the five motions for summary judgment, upon reconsideration should deny them, and should grant Mallios=s motion for summary judgment. Obviously, to evaluate the merits of the motion to reconsider, this court would need to review the five motions for summary judgment the trial court granted, Mallios=s motion for summary judgment, and any responses to these motions. Again, Mallios has not requested that any of these items be made a part of the appellate record. Moreover, Mallios=s failure to do so is not an oversight or an innocent matter that escaped his notice but a substantial defect that was brought to his attention in many ways and by many sources.
In three appellees= brief and in one motion for sanctions, various appellees requested Rule 45 sanctions against Mallios. Mallios has not filed any response to this motion or to any of these requests for sanctions. Mallios did file a reply brief; however, in that brief, Mallios did not present any argument as to whether Rule 45 sanctions should be assessed and he did not ask this court to deny the requests for sanctions. Although, as noted by the majority, Mallios did file a thirteen-page appellant=s brief with citations to the record and to legal authorities, for the reasons noted, this brief presents objectively frivolous arguments. Mallios also filed a reply brief, in which he added an additional frivolous argument that he satisfied his burden of requesting that the clerk include in the record all pertinent summary-judgment evidence considered by the trial court, even though he requested no summary-judgment evidence.
In declining to impose Rule 45 sanctions, the majority relies on Sam Houston Hotel, L.P. v. Mockingbird Restaurant, Inc., 191 S.W.3d 720, 721 (Tex. App.CHouston [14th Dist.] 2006, no pet.). In Sam Houston Hotel, this court stated that:
! The appellee contended the appellant should be sanctioned for failing to arrange for the filing of a reporter=s record and for mischaracterizing the evidence presented at trial.
! Appellant=s failure to arrange for a sufficient record does not necessarily make its appeal frivolous.
! In the absence of a reporter=s record, this court could not determine whether appellant had mischaracterized the evidence at trial.
! This court declined to impose sanctions under Rule 45.
Sam Houston Hotel, L.P., 191 S.W.3d at 721. If the Sam Houston Hotel court concluded that the appeal was not frivolous, then it would have had no discretion as to whether to assess Rule 45 sanctions, and it would not have been in a position to Adecline to impose sanctions.@ See id. The Sam Houston Hotel court appears to have focused on the appellee=s failure to assert that the appeal was frivolous, noting that an assertion that the record is inadequate to address the issues is not the same as an assertion that the appeal is frivolous. See id. The court then stated that it exercised its discretion not to award sanctions and did not discuss the facts and circumstances in the record upon which that decision was based. See id. The Sam Houston Hotel court did not say that an appellant=s failure to request an appellate record sufficient to review the appellate issues can never make an appeal frivolous. See id. Indeed, such a holding would be contrary to this court=s precedent. See Ward v. Lubojasky, 777 S.W.2d 156, 157 (Tex. App.CHouston [14th Dist.] 1989, no writ) (stating, in assessing appellate sanctions, that A[s]ufficient cause is obviously lacking, for we can hardly review evidence without a record@). The Sam Houston Hotel case is distinguishable.
For the reasons stated above, considering the record, briefs, and other papers filed in this court, Mallios=s appeal is objectively frivolous and subjectively brought in bad faith or for purposes of delay. Furthermore, after careful deliberation and exercising discretion under Rule 45 with prudence and caution, this court should conclude based on the above facts that this case presents egregious circumstances warranting imposition of Rule 45 sanctions. The court should order Mallios to pay the reasonable and necessary appellate attorney=s fees of Standard, First Financial, Null Lairson, P.C., Yarbrough, Barr, Janek, Holmes, and Clark. See Tate, 954 S.W.2d at 875. Because the court does not do so, I respectfully dissent.
/s/ Kem Thompson Frost
Justice
Judgment rendered and Majority and Concurring and Dissenting Opinions filed August 30, 2007.
Panel consists of Justice Anderson, Justice Frost, and Senior Justice Mirabal.[10] (Mirabal, J., Majority; Frost, J. Concurring and Dissenting).
[1] See Conseco Fin. Servicing v. Klein Indep. Sch. Dist., 78 S.W.3d 666, 676 (Tex. App.CHouston [14th Dist.] 2002, no pet.); Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.CHouston [1st Dist.] 2001, pet. denied) (en banc).
[2] Part of the confusion appears to stem from a failure to focus on the differences between the language in former Rule of Appellate Procedure 84 and current Rule 45. See Smith, 51 S.W.3d at 380B81.
[3] See Elwell v. Mayfield, No. 10-04-00322-CV, 2005 WL 1907126, at *7 (Tex. App.CWaco Aug. 10, 2005, pet. denied) (mem. op.); Smith, 51 S.W.3d at 380B82; Lloyd v. Whitmire, No. 09-02-0148-CV, 2003 WL 1738784, at *1 (Tex. App.CBeaumont Apr. 3, 2003, no pet.) (mem. op.); Mid-Continent Cas. Co. v. Safe Tire Disposal Corp., 2 S.W.3d 393, 396B97 (Tex. App.CSan Antonio 1999, no pet.).
[4] See Azubuike v. Fiesta Mart, Inc., 970 S.W.2d 60, 66 (Tex. App.CHouston [14th Dist.] 1998, no pet.); Faddoul, Glasheen & Valles, P.C. v. Oaxaca, 52 S.W.3d 209, 213 (Tex. App.CEl Paso 2001, no pet.); Keever v. Finlan, 988 S.W.2d 300, 315 (Tex. App.CDallas 1999, pet. dism=d); Duran v. Resdoor Co., 977 S.W.2d 690, 693 (Tex. App.CFort Worth 1998, pet. denied).
[5] See In re Estate of Davis, 216 S.W.3d 537, 548 (Tex. App.CTexarkana 2007, pet. denied); Njuku v. Middleton, 20 S.W.3d 176, 178 (Tex. App.CDallas 2000, pet. denied); Diana Rivera & Assocs., P.C. v. Calvillo, 986 S.W.2d 795, 799 (Tex. App.CCorpus Christi 1999, pet. denied).
[6] See D=Arcy v. Mead, No. 14-04-01220-CV, 2006 2165733, at *3 (Tex. App.CHouston [14th Dist.] Aug. 1, 2006, pet. denied) (mem. op.); City of Webster v. City of Houston, No. 14-04-00353-CV, 2005 913813, at *1 (Tex. App.CHouston [14th Dist.] Apr. 19, 2005, no pet.) (mem. op.); Barker CATV Const., Inc. v. Ampro, Inc., 989 S.W.2d 789, 793 n.2 (Tex. App.CHouston [1st Dist.] 1999, no pet.); United States v. Treft, 447 F.3d 421, 425 (5th Cir. 2006).
[7] See Yazdchi v. Chesney, No. 14-05-00817-CV, 2007 237697, at *2 & n.6 (Tex. App.CHouston [14th Dist.] Jan. 30, 2007, no pet.) (mem. op.) (noting the first rule above but holding that this court requires the appeal to be both objectively frivolous and subjectively brought in bad faith or for purposes of delay before Rule 45 sanctions may be assessed).
[8] See Tate v. E.I. Du Pont de Nemours & Co.., 954 S.W.2d 872, 875 (Tex. App.CHouston [14th Dist.] 1997, no writ) (assessing appellate sanctions against a party appealing a summary judgment based on her failure to request the inclusion in the record of one of the summary-judgment motions granted by the trial court, along with the motion=s accompanying evidence).
[9] See Bencon Mgmt. & Gen. Contracting, Inc. v. Boyer, Inc., 178 S.W.3d 198, 210 (Tex. App.CHouston [14 Dist.] 2005, no pet.).
[10] Senior Justice Margaret G. Mirabel sitting by assignment.