Marc R. Wein // William Sherman v. William Sherman and Eduardo Alarcon // Cross-Appellee, Marc R. Wein

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-10-00499-CV

Appellant, Marc R. Wein // Cross-Appellant, William Sherman

v.

Appellees, William Sherman and Eduardo Alarcon // Cross-Appellee, Marc R. Wein

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT
NO. D-1-GN-06-001292, HONORABLE GISELA D. TRIANA, JUDGE PRESIDING

MEMORANDUM OPINION

This appeal arises from disputes among neighbors. Marc R. Wein appeals the district

court’s judgment incorporating its prior order awarding sanctions against him in favor of appellee

William Sherman and denying all other relief. Cross-Appellant Sherman appeals the district court’s

dismissal of his claims against Wein.1 For the reasons that follow, we affirm the trial court’s

final judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The parties to this suit are neighbors who have a history of disputes, including prior

litigation. In 2004, Sherman and the parties’ neighborhood association obtained a money judgment

1
Eduardo Alarcon was a defendant and, after realignment of the parties, a plaintiff below
and is named as an appellee here. However, none of the issues before us involves claims by or
against Alarcon, and he has filed no briefs with this Court.
and a permanent injunction against Wein relating to his disputed activities and accessory structure.

Wein’s failure to comply with the temporary and permanent injunctions issued in that suit resulted

in his being found in contempt of court three times, fined, and confined to county jail.2 Following

the entry of judgment, Sherman filed an abstract of judgment in the Travis County real property

records. Upon Wein’s filing a supersedeas bond and Sherman’s receipt of notice from Wein’s

attorney, Sherman provided a partial release of the abstract of judgment, excluding Wein’s

homestead. This Court subsequently upheld the 2004 judgment.3

Litigation Commenced

Sherman contends that following the 2004 judgment he began to observe vandalism

to his property and suspected Wein was responsible. As a result, Sherman installed video cameras

at various locations on his property. In December 2005, one of the video cameras captured Wein

trespassing at the edge of Sherman’s property and damaging a sprinkler head. Sherman filed charges

against Wein, who was arrested and charged with criminal mischief in April 2006. Eight days later

Wein filed this suit against Sherman and Alarcon alleging invasion of privacy, wiretapping,4 and

trespass. Specifically, Wein alleged that Sherman and Alarcon had installed infrared cameras

2
In an ancillary proceeding to Wein’s appeal of the 2004 judgment, this Court, after ordering
that a show cause hearing be held in the trial court, found Wein in contempt of court and fined him
$2,000. See Wein v. Jenkins, No. 03-04-00568-CV (Tex. App.—Austin Feb. 15, 2005, order)
available at http://www.3rdcoa.courts.state.tx.us/opinions/Opinion.asp?OpinionID=13506. The
other contempt findings were made by the district court.
3
See Wein v. Jenkins, No. 03-04-00568-CV, 2005 Tex. App. LEXIS 7477 (Tex.
App.—Austin Sept. 9, 2005, no pet.) (mem. op.).
4
See Tex. Civ. Prac. & Rem. Code §§ 123.002, .004.

2
directed at the interior of Wein’s home and that Sherman had installed a listening device that would

allow him to intercept Wein’s telephone conversations. Wein further alleged that Sherman and

Alarcon intentionally directed irrigation devices to spray water on Wein, his family, and his guests

and painted a red stripe on the pavement in front of his home, which he contends was intended to

mark his home as the residence of a person of the Jewish faith.

In May 2006, the district court held a hearing on Wein’s request for injunctive relief.

Sherman contends that at the hearing both Wein and his expert testified that they did not know “what

the cameras are looking at.”5 The expert further testified that he did not know the make, model, or

zoom capabilities of the cameras but they did not appear to have infrared illuminators or night vision.

The district court denied the injunction.

Wein subsequently filed an amended petition adding a claim for slander of title

against Sherman, alleging that because Sherman filed an abstract of the 2004 judgment, Wein had

been unable to obtain a home equity loan. During discovery, Wein explained that he had needed the

loan to replenish his retirement account, from which he had borrowed money to supercede the 2004

judgment, and had been forced to secure a loan at a less favorable rate. Wein further asserted that

he had obtained a loan from his fiancé’s mother, Mary Richards, and had paid her $25,000 in

interest. Wein produced a check payable to Richards for $25,000 dated November 22, 2004. The

reverse side of the check indicated that it had been presented for payment on May 2, 2007.

5
The record does not contain a transcript of the injunction hearing.

3
Disposition of Wein’s Claims

In September 2007, Sherman served Wein with a notice of intent to take the oral

deposition of Richards. Two days later Wein nonsuited his slander of title claim and concurrently

filed a motion to quash the deposition. The next day Wein’s attorney filed a motion to withdraw.

The record does not contain an order on Wein’s motion to quash Richards’ deposition, but on

September 21, 2007, Richards was deposed. Richards testified that she loaned Wein money, he paid

her back, and she did not charge or receive any interest from him. She further testified that she did

not receive a check from Wein for $25,000 and did not recall signing or endorsing such a check.

Richards also stated that the loan was arranged through her daughter, Melissa Steffen, and she never

spoke to Wein about it.6 On the same day Richards was deposed, Wein’s attorney filed an

amended motion to withdraw, to which Wein agreed and which the district court granted on

September 27, 2007,7 and Sherman and Alarcon filed no-evidence motions for partial summary

judgment on Wein’s claims for invasion of privacy and trespass, which the district court granted in

October 2007.8

6
In her deposition, taken around the same time, Steffen testified that Wein and Richards
came up with the terms of the loan and Steffen was not involved.
7
Wein’s withdrawing counsel was his third attorney and second attorney of record in this
lawsuit. Wein continued pro se for a brief period and was subsequently represented by three
other attorneys. Although the record is unclear, there is reference to Wein’s representation by a
seventh attorney.
8
In his first deposition in August 2007, Wein testified that his expert “couldn’t find any
wiretapping” when he checked the lines “probably” before Wein filed suit. Referring to his claim
for wiretapping, he further testified, “I can withdraw that allegation.” Although the record is unclear,
Wein’s claim for wiretapping was either withdrawn by Wein’s deposition testimony, dismissed as
a portion of the invasion of privacy claim, or subsequently abandoned by Wein through his attorney.

4
 After the dismissal of Wein’s claims, there remained pending counterclaims filed by

Sherman and Alarcon for attorney’s fees, trespass, nuisance, and violations of neighborhood

restrictions. Alleging that the $25,000 check Wein produced in discovery was fabricated and that

Wein, Richards, and Steffen conspired to defraud them, Sherman and Alarcon obtained leave to

redepose Wein, Richards, Steffen on the sole issue of fabrication of evidence.

Deposition Testimony on Fabrication of Evidence and Partial Settlement

In her second deposition in April 2008, Richards recanted her prior testimony, stating

that she did recall signing a $25,000 check from Wein and placing her thumbprint on it in 2007. She

testified that in February or March 2007, Wein asked her if she would sign a check for $25,000 to

help him and she agreed without further discussion. Richards also testified that on the day she

signed the check, she and Steffen were running errands in Richards’ car on the last day before

Richards moved out of state for the summer. She stated that they drove past Wein’s place of

business, he was standing outside, Steffen asked her to stop so she could talk to Wein, and when she

stopped, Wein got into the car. She added that when they got close to Chase Bank, Wein said he

needed to go to the bank and asked her to stop. Richards testified that when they arrived at the bank,

Steffen asked her to come inside to meet some people, and she agreed. She further testified that

when she got inside, Wein motioned for her to join him at a table, asked her to sign a check, and laid

the check face down on the table where she signed it. Richards further testified that Wein then

motioned for her to accompany him to the teller counter where she handed Wein the check and the

teller took her thumbprint. She stated that she did not recall whether she or Wein presented the

check to the teller and that she did not receive the $25,000.

5
 Wein testified that he wrote Richards a check instead of wiring the interest payment,

as he had the repayment of the principal amount of the loan, because he wanted to pay her in person

and thank her. Wein also answered questions about his bank records. He explained that the check

he wrote to Richards in 2004 did not appear until his April–May 2007 statement because he has

numerous checkbooks which he does not keep in order sequentially and that the transfer of $25,000

into his account on May 23, 2007, was probably transferred from another of his accounts.

Steffen testified that Wein and Richards arranged to cash the check and she was not

involved, but it was her understanding that they were going to cash the check that Wein had given

her earlier. She stated that she and Wein rode together and met Richards at the bank. Steffen further

testified that after they cashed the check, Richards handed Steffen the money and asked her to keep

it for her. She also testified that she placed the money in her personal safe at home, began using it

to pay bills, and ultimately spent it all.

Following these depositions, the parties agreed to an order realigning the parties.

Sherman and Alarcon, proceeding as plaintiffs, filed an original petition reasserting the claims

against Wein they had originally asserted as counterclaims and adding Richards and Steffen as

defendants. Alarcon asserted causes of action for fraud, fraud by nondisclosure, conspiracy,

intentional infliction of emotional distress, and negligence against Richards and Steffen. Sherman

asserted the same causes of action against all three defendants and later added a claim for malicious

prosecution against Wein. In March 2009, the parties attended mediation, which resulted in

Sherman’s settlement with Richards. Under the terms of the settlement agreement signed at the

conclusion of the mediation, Richards agreed to pay Sherman $90,000 in return for her dismissal

6
with prejudice from the lawsuit. Subsequently, Sherman and Richards signed a second settlement

agreement allocating $2,488.24 of the settlement proceeds to payment of attorney’s fees and the

remaining $87,5111.76 to the payment of punitive damages. On May 13, 2009, Sherman filed a

dismissal with prejudice as to Richards.

Motion for Sanctions

In May 2009, Sherman filed a motion for sanctions against Wein, which the district

court heard over two days in June 2009. At the hearing, Sherman offered numerous exhibits,

including court records from the parties’ prior litigation, pleadings and transcripts from hearings in

this lawsuit, deposition excerpts, Wein’s bank records, bank surveillance photographs from the day

Wein and Richards cashed the $25,000 check, and an affidavit from Sherman’s attorney on

attorney’s fees. The bank photos showed that during the transaction in which the $25,000 check was

cashed, at one point Wein and Richards stood at the teller counter together, while later in the

transaction, Wein stood at the teller counter alone. The affidavit of Sherman’s attorney indicated

that Sherman had incurred $113,562.60 in attorney’s fees and expenses, after a deduction of

$2,488.24 for the settlement amount paid by Richards. Sherman’s attorney supplemented his

affidavit with testimony that Sherman had incurred an additional $3,445 in attorney’s fees in

preparing for and attending the hearing on the motion for sanctions.

Wein’s documentary evidence included correspondence between the parties’ attorneys

regarding the partial release of the abstract of judgment and photographs of Sherman and Alarcon,

Sherman’s cameras, and the red stripe painted in front of Wein’s home. Wein also called seven

witnesses. Linette Harris, who assisted Wein’s first attorney in this lawsuit, testified generally that

7
she and her co-counsel, after doing some investigation and relying on Wein’s representations, had

told Wein that there was some basis for the factual allegations made in his original petition. The

bank teller who cashed the $25,000 check testified that she properly identified Richards, obtained

her thumbprint, and handed the cash to her. She also testified that Wein and Richards were at her

counter together during the entire transaction and was unable to explain the bank photo showing

Wein standing at the counter alone. When shown Wein’s bank statement, the teller identified a

$25,000 deposit into Wein’s account three weeks later as an online deposit from Wein’s money

market account.

Wein testified that in filing this lawsuit, he had relied on his attorney who told him

he had a causes of action for invasion of privacy and trespass. When asked about his claims that

Sherman’s cameras could peer into his home and that Sherman could observe his family’s private

actions, Wein stated that the only definitive evidence he had was “still photos taken from

Mr. Sherman’s residence which absolutely peer into my home, back deck, and into my bedroom.”

Wein also stated that his attorney had the photographs, but they had not been admitted into

evidence.9 Wein further testified that he recalled testifying at the temporary injunction hearing that

he did not know what the cameras could see and stated that the only photographs he had were of the

cameras “clearly in a viewpoint or stance where they would have the ability to look into [his] house.”

He testified that he based his factual allegations regarding the cameras on his opinion and that of his

expert, but said he could not clearly remember his expert’s testimony at the temporary injunction

hearing. Wein also acknowledged that he maintained his cause of action for invasion of privacy

9
A review of the record reveals that Wein subsequently admitted photographs into evidence
However, none of them displayed a view into Wein’s home or deck.

8
based on the cameras in his amended petition.10 He also acknowledged that when he filed his

petition, he had no evidence to support his allegation of wiretapping.

Concerning his trespass claim, Wein testified that the sprinkler trespass began in

2004 and he filed suit in 2006 because “there’s a culmination of events.” He also testified that

Sherman’s sprinkler had sprayed water onto his property and driveway “for approximately five years,

four or five times a day, for 15 to 20 minutes at a time.” Wein subsequently denied testifying that

Sherman’s sprinklers sprinkle four or five times a day. He then stated that they sprinkled “[a]t least

every other day for a period of 20 or 30 minutes in the morning” and “intermittently every other day

or so,” and that he and his family and guests could not avoid getting wet. Wein acknowledged that

in deposition in August 2007 he stated he was not seeking damages related to the sprinkler trespass.

Wein also testified that “a red stripe was painted 1/16th of an inch off [his] property in front of [his]

home,” and “part of it was on [his] property as well.” He stated that it was painted on the

neighborhood common property, but there was “more than a splatter on [his] property.”

Regarding his claim for slander of title, Wein testified that he relied on his attorney

in the prior litigation and his first and second attorneys in this lawsuit. He also testified that he had

incurred special damages because he had borrowed money from his retirement funds to pay the prior

judgment, tried to obtain a home equity loan to repay the funds, had been forced to borrow the

money from Richards, paid her back in full, and gave her a check for $25,000 in interest. Wein

stated that check number 1540, payable to Richards for $25,000 and dated November 11, 2004,

10
When pressed for additional evidence, Wein stated that he had also seen Sherman
physically peering into his windows. He acknowledged that he had not made that assertion
previously and did not intend to sue for it.

9
which he disclosed in discovery, was a replacement check for the original, which Richards lost.

Wein also stated that he gave Richards the replacement check approximately “a year or so” after the

original check, but he is not sure of the exact date. He testified that he dated the replacement check

November 22, 2004, “because that was the date of the first original check that she had misplaced and

it corresponded to the payment in full of the loan less the interest” and he had no duplicate check or

bank record of the original check. Wein acknowledged that in his deposition in April 2008, he

testified that he gave check number 1540 to Richards “on or about the 22nd of ‘04” but stated he had

made a mistake in his prior testimony.

Wein further testified that in 2007, Richards mentioned the check and asked him if

he thought she would have trouble cashing it, to which Wein replied that he would go to the bank

with her, and if there were a problem, he would write another check. Wein stated that Richards and

Steffen arranged to go to the bank to cash the check on the day Richards was moving out of state for

the summer, and he decided to go so that he could tell Richards goodbye and to be available to write

another check if necessary. Wein also stated that when they cashed the check, the teller handed

Richards the cash, and he never saw it again. He then stated that Richards handed the money to

Steffen and he had no idea what Steffen did with it after she put it in her purse.

Wein acknowledged that he had no proof of payment of the $25,000 to Richards at

the time he filed his amended petition containing the slander of title claim alleging special damages,

had not produced check number 1540 in discovery in 2004, and did not remember that it had not

been produced in discovery until 2007. He denied nonsuiting his slander of title action after it

became obvious that check number 1540 was being circulated under false pretenses and stated that

10
his attorney who withdrew about the same time as the nonsuit “never gave [him] a reason” for

withdrawing but it “had nothing to do with” check number 1540. With regard to the subsequent

$25,000 transfer into his checking account from his money market account, Wein testified that he

transferred the money to pay for a building he was constructing but could not trace the exact source

of those funds.

Following the hearing, the district court ordered Wein to pay Sherman $100,000 for

reasonable and necessary attorney’s fees and expenses “and as a sanction against Defendant Marc

Wein for abuse of the discovery process, for violation of Chapter 10 of the Texas Civil Practices and

Remedies Code, and for violation of Rule 13, TRCP.” The district court further ordered Wein to pay

Sherman $7,500 “for collection of the sanctions award if the award is not paid to William Sherman

by July 6, 2009.” Finally, the district court ordered Wein to pay Sherman $10,000 and $15,000,

respectively, in the event of appeal to the court of appeals and supreme court.

The order stated that the sanctions were “just and made for good cause” and contained

“findings to explain the reason for imposing sanctions.” At Wein’s request, the district court also

entered findings of fact and conclusions of law. The findings in both the order and the subsequent

findings of fact included that each of Wein’s causes of action was “groundless, brought in bad faith

and with the improper purpose of obtaining a judgment against Sherman and causing Sherman to

incur significant attorney’s fees and costs.” The district court further found that the “$25,000

transaction was a fraudulent transaction entered into by Wein to manufacture evidence in this case”

and constituted abuse of the discovery process.

11
Disposition of Remaining Issues

In September 2009, Wein filed a motion for summary judgment on all of Sherman’s

and Alarcon’s claims, contending that Sherman and Alarcon were not seeking, and there was no

evidence to support, any damages other than attorney’s fees, that the causes of action asserted do not

support an award of attorney’s fees, and that there can be no award of attorney’s fees without actual

damages.11 In January 2010, without specifying the grounds on which it relied, the district court

granted Wein’s motion for summary judgment.

Following the entry of summary judgment dismissing Sherman’s and Alarcon’s

claims, the only issue remaining to be determined was Wein’s pending motion for settlement credit,

an issue that was expressly reserved in both the sanctions order and summary judgment dismissing

Sherman’s and Alarcon’s claims. In the motion, Wein sought a credit against the sanctions award

for Richards’ settlement payment. In March 2010, the district court denied Wein’s motion for

settlement credit. At Wein’s request, the district court entered corresponding findings of fact and

conclusions of law. The district court’s findings included that the sanctions award was based on

Wein’s abuse of discovery and violation of various statutes and not on a determination of liability

sounding in tort. The district court concluded that the settlement payment did not represent payment

for common damages between Wein and Richards, that “[t]he purpose of sanctions is to secure a

party’s compliance with the rules, punish those who violate the rules, and to deter other litigants

11
Wein also argued that there was no evidence to support an award of damages for mental
anguish and that Sherman’s claims could not be construed as claims for malicious prosecution
because such claims arise only after the underlying case is concluded.

12
from violating the rules” and that “Wein’s sanctions were assessed against him individually . . . and

. . . are not damages for which joint and several liability could attach.”

In May 2010, the district court rendered final judgment incorporating the sanctions

award, conditioning the award of appellate attorneys fees on Wein’s unsuccessful appeal, and

denying all other relief. Wein filed a motion to modify judgment, alternative motion for remittitur,

and alternative motion for new trial, which was overruled by operation of law. This appeal followed.

DISCUSSION

Award of Sanctions

Standard of Review

In his first issue, Wein contends that the district court erred in its determination of

sanctions. We review a trial court’s imposition of sanctions for abuse of discretion. Unifund CCR

Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (per curiam). We will reverse the trial court’s

ruling only if it is arbitrary, unreasonable, or without reference to any guiding rules or principles.

American Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006) (per curiam). “The trial

court does not abuse its discretion if it bases its decision on conflicting evidence and some

evidence supports its decision.” Unifund, 299 S.W.3d at 97 (citing In re Barber, 982 S.W.2d 364,

366 (Tex. 1998)).

Under an abuse of discretion standard, legal and factual sufficiency challenges to the

evidence are not independent grounds of error but are relevant factors in assessing whether the trial

court abused its discretion. Zeifman v. Michels, 212 S.W.3d 582, 587 (Tex. App.—Austin 2006, pet.

denied). In reviewing the legal sufficiency of the evidence, we view the evidence in the light most

13
favorable to the judgment, crediting favorable evidence if a reasonable fact finder could, and

disregarding contrary evidence unless a reasonable fact finder could not. City of Keller v. Wilson,

168 S.W.3d 802, 807 (Tex. 2005). The test is “whether the evidence at trial would enable reasonable

and fair-minded people to reach the [judgment] under review.” Id. at 827. In reviewing factual

sufficiency of the evidence, we consider and weigh all of the evidence in the record, and we may

overturn a judgment only if it is so against the great weight and preponderance of the evidence as

to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

In determining whether the trial court abused its discretion in awarding sanctions, we

must ensure that the sanctions were appropriate or just. American Flood, 192 S.W.3d at 583 (citing

TransAmerica Natural Gas Corp. v. Powell, 811 S.W.2d 913, 916 (Tex. 1991)). The supreme court

has articulated a two-part inquiry: First, we must ensure that there is a direct relationship between

the improper conduct and the sanction imposed; because the sanction should be directed toward the

true offender, the trial court must attempt to determine whether sanctions should be imposed on the

party, its attorney, or both. American Flood, 192 S.W.3d at 583–84; TransAmerican, 811 S.W.2d

at 917. Second, the sanction must not be excessive. American Flood, 192 S.W.3d at 583–84;

TransAmerican, 811 S.W.2d at 917. The sanction “should be no more severe than necessary to

satisfy its legitimate purposes.” TransAmerican, 811 S.W.2d at 917. In determining whether a

sanction is just, we must review the entire record, American Flood, 192 S.W.3d at 583, and confine

our review of the sanctions order to the grounds specified by the trial court. Id. at 583–84; Unifund,

299 S.W.3d at 94 n.1; Pool v. Diana, No. 03-08-00363-CV, 2010 Tex. App. LEXIS 2208, at *24

(Tex App.—Austin Mar. 24, 1010, pet. denied).

14
 Sanctions Order

The district court imposed sanctions against Wein for violations of Chapter 10 of the

Texas Civil Practices and Remedies Code and Rule 13 of the Rules of Civil Procedure and for abuse

of discovery. See Tex. Civ. Prac. & Rem. Code §§ 10.001–.006; Tex. R. Civ. P. 13, 215.3 (Abuse

of Discovery Process in Seeking, Making, or Resisting Discovery). Chapter 10 allows sanctions for

filing a pleading or motion “for any improper purpose, including to harass or to cause unnecessary

delay or needless increase in the cost of litigation.” Tex. Civ. Prac. & Rem. Code §§ 10.001(1),

.004. Rule 13 provides that a court may impose sanctions upon a determination that a pleading or

motion is groundless and brought in bad faith or groundless and brought for the purpose of

harassment. Tex. R. Civ. P. 13. Rule 215.3 authorizes sanctions upon a finding that a party has

abused the discovery process. Tex. R. Civ. P. 215.3. Chapter 10 and Rules 13 and 215.3 all specify

attorney’s fees caused by the improper conduct as an appropriate sanction. See Tex. Civ. Prac. &

Rem. Code § 10.004(c)(3); Tex. R. Civ. P. 13 (incorporating sanction available under Rule

215.2(b)(8)), 215.3 (same).

The district court’s order states that “the sanctions awarded herein are just and made

for good cause,” and the corresponding findings of fact track the language of Chapter 10 and

Rules 13 and 215.3 in stating that Wein’s claims were groundless and brought in bad faith and with

an improper purpose. The findings also track the language of Rule 215.3 in stating that “the $25,000

transaction was a fraudulent transaction entered into by Wein to manufacture evidence in this case”

and “constitutes abuse of the discovery process.” Further, the district court’s conclusions of law

include that Wein violated Chapter 10 and Rule 13 and committed abuse of the discovery process.

15
If the district court’s imposition of sanctions is supported on one of these legal bases, we will uphold

the order. See Zeifman v. Nowlin, 322 S.W.3d 804, 809 (Tex. App.—Austin 2010, no pet.).

Appropriateness of Sanction

Reviewing the entire record, we conclude that there is ample evidence to support a

sanction against Wein under Rule 215.3 for abuse of discovery. See American Flood, 192 S.W.3d

at 583–84 (upholding monetary sanction award under Rule 215.3 for repeated refusal to appear for

deposition). The evidence showed that Wein’s testimony was inconsistent, both internally and with

that of other witnesses, as well as in conflict with documentary evidence. Wein admitted that he had

no evidence to prove his special damages of $25,000 in interest paid to Richards when he asserted

his claim for slander of title. As fact finder, the district court was entitled to evaluate the credibility

of the testimony and determine what weight to give it. Alpert v. Crain, Caton, & James, P.C.,

178 S.W.3d 398, 412 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). Considering all of the

conflicting evidence, as well as the evolving nature of Wein’s testimony and the timing of his

nonsuit of his slander of title claim, the district court could have reasonably determined that the

$25,000 transaction was a fraudulent attempt to manufacture evidence. See Daniel v. Kelley Oil

Corp., 981 S.W.2d 230, 234 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (affirming sanction

of striking pleadings where trial court, based on conflicting evidence that included expert testimony

to the contrary, concluded that party had fabricated evidence); Response Time v. Sterling Commerce,

95 S.W.3d 656, 662 (Tex. App.—Dallas 2002, no pet.) (upholding death penalty sanction where

evidence showed party testified falsely and produced false documents); see also Werley v. Cannon,

344 S.W.3d 527, 535 (Tex. App.—El Paso 2011, no pet.) (upholding sanction award of attorney’s

16
fees for abuse of discovery resulting from ex parte contacts with witnesses in violation of protective

order and attempts to subvert testimony).

In addition, the evidence supports an imposition of sanctions under Chapter 10 and

Rule 13. The act of fabricating evidence strongly suggests that Wein had no legitimate evidence of

damages to support his slander of title claim. See Kelley Oil Corp., 981 S.W.2d at 235; see also

TransAmerica, 911 S.W.3d at 918 (noting party’s hindrance of discovery process may justify

presumption that its claims lack merit). The record also shows that Wein had little to no evidence

to support his claims for invasion of privacy and trespass when he instituted this lawsuit and that he

maintained those claims despite failing to develop supporting evidence during discovery. Wein’s

testimony regarding these claims was inconsistent, and he admitted he suffered no damages from the

alleged sprinkler trespass, seeks only “future damages” for the “more than a spatter” on his property

from the painting of the red stripe, and failed to produce any evidence of damages from the alleged

invasion of privacy. Moreover, his testimony revealed extreme hostility toward Sherman. In light

of this evidence and the parties’ multi-year battle, the district court could have reasonably determined

that Wein’s claims were groundless, brought in bad faith, and filed for the improper purpose of

incurring a judgment against Sherman and causing him to incur needless and unreasonable attorney’s

fees and expenses. See Tex. Civ. Prac. & Rem. Code §§ 10.001, .004; Tex. R. Civ. P. 13; Low

v. Thomas, 221 S.W.3d 609, 621 (Tex. 2007) (upholding award of sanctions under Chapter 10 when

pleading lacked evidentiary support but remanding for reconsideration of amount in absence of stated

basis by trial court); Daniels v. Indemnity Ins. Co., 345 S.W.3d 736, 742 (Tex. App.—Dallas 2011,

no pet.) (affirming sanctions under Chapter 10 and Rule 13 where trial court determined lawsuit

17
brought to circumvent adverse ruling in related litigation and increase cost of litigation for opposing

party); Zeifman, 322 S.W.3d at 811 (affirming sanctions under Rule 13 where trial court found

pleading had no basis and lacked evidentiary support).

Having concluded that the evidence supports the imposition of a sanction, we turn

to a determination of whether the sanction awarded was appropriate or just. American Flood,

192 S.W.3d at 583; TransAmerica, 811 S.W.2d at 917. Applying the two-part test articulated by the

supreme court, we must first determine whether there is a direct relationship between the

sanctionable conduct and the sanction imposed. American Flood, 192 S.W.3d at 583;

TransAmerica, 811 S.W.2d at 917. The evidence shows that Wein, rather than any of his numerous

attorneys, was the offender in bringing and maintaining groundless claims and committing discovery

abuse. The sanction of attorney’s fees is directed against the commission of groundless, bad faith

filings and discovery abuse and is an appropriate sanction under Chapter 10 and Rules 13 and 215.3.

See Tex. Civ. Prac. & Rem. Code § 10.004; Tex. R. Civ. P. 13, 215.3; American Flood, 192 S.W.3d

at 584; Daniels, 345 S.W.3d at 742. Because the record supports a finding that Wein’s conduct, and

not that of his attorneys, was sanctionable, there is a direct relationship between the improper

conduct and the sanction.12 See American Flood, 192 S.W.3d at 584; Werley, 344 S.W.3d at 534.

12
Wein contends that the fees awarded do not have a direct nexus to the sanctionable
conduct because they were not properly segregated. In support of this argument, Wein cites Low
v. Thomas, 221 S.W.3d 609 (Tex. 2007) and Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299
(Tex. 2006). These cases, however, do not support Wein’s argument. In Low, the supreme court
remanded an award of $50,000 in sanctions under Chapter 10 solely because the trial court failed to
state the basis of the amount awarded and the supreme court could not determine the basis from the
record. See id. at 621–22. Holding that a trial court should consider relevant factors in assessing the
sanction and that a determination of the amount of a sanction under Chapter 10 should begin with
an acknowledgment of the fees and costs incurred, the supreme court then remanded the case for
reconsideration of the amount of the sanction in light of those guidelines. Id. at 622. In doing so,

18
 We next consider whether the sanction amount was excessive. Sherman’s attorney

presented itemized bills stating the work done and the time and amount billed for each entry. He

testified that Sherman had incurred $117,007.60 in reasonable and necessary attorney’s fees and

expenses. Considering the entire record, and in light of cases in which the courts have upheld the

death penalty sanction for fraudulent conduct, see, e.g., Kelley Oil Corp., 981 S.W.2d at 235–36;

Response Time, 95 S.W.3d at 661–62, we conclude that the district court’s award of $100,000 was

not excessive.13 See Werley, 344 S.W.3d at 534–35 (sanction of $12,660 not excessive

the supreme court cited Tony Gullo, 212 S.W.3d at 314–15. Id. However, the supreme court relied
on its prior holding in Tony Gullo for the proposition that remand was proper to allow the parties to
present evidence responsive to its guidelines and to allow the trial court to determine the appropriate
amount of the sanction, not for the proposition that attorney’s fees must be segregated for the
purpose of sanctions awards. Id. at 621–22.
Nor does Tony Gullo stand for the proposition that attorney’s fees must be segregated for
purposes of a sanction award. Rather, Tony Gullo states the general rule that a party seeking
attorney’s fees as part of its principal claims must segregate fees incurred in connection with a claim
that allows their recovery from fees incurred in connection with a claim for which no such
recovery is allowed. 212 S.W.3d at 313–14; see also Keys v. Litton Loan Servicing. L.P.,
No. 14-07-00809--CV, 2009 Tex. App. LEXIS 9017, at *22–23 (Tex. App.—Houston [14th Dist.]
Nov. 24, 2009, no pet.) (mem. op.). Thus, Wein cites no authority, and we have found none, to
support his contention that the concept of segregation of attorney’s fees applies to the award of
attorney’s fees as a sanction.
13
While Wein does not dispute that Sherman actually incurred more in fees than the amount
awarded, he argues that the sanction amount is nevertheless excessive because the majority of
Sherman’s fees were incurred in pursuit of his motion for sanctions after Wein’s claims were
dismissed. Wein contends that, in contrast with Rule 215.1(d), which authorizes attorney’s fees
incurred in bringing or opposing a motion to compel discovery, Chapter 10 and Rules 13 and 215.3
do not expressly provide for the recovery of attorney’s fees incurred in pursuing sanctions. We find
this argument unpersuasive. Chapter 10 allows as a sanction fees incurred “because of” the frivolous
filing. See Tex. Civ. Prac. & Rem. Code § 10.004(c)(3). Available sanctions under Rules 13 and
215.3, by reference to Rule 215.2, include expenses of discovery and attorney’s fees “caused by” the
“disobedient party.” See Tex. R. Civ. P. 215.2(b)(2), (8). Fees and expenses incurred “because of”
or “caused by” the “disobedient party” reasonably include those incurred in pursuing a motion for
sanctions.
Further, Wein does not cite any cases, and we have found none, in which the courts refused

19
where evidence showed party had incurred that amount in attorney’s fees); Sellers v. Gomez,

281 S.W.3d 108, 116 (Tex. App.—El Paso 2008, no pet.) (award of $80,000 sanction not excessive

where evidence showed attorney’s fees of $81,000–$82,000); Scott Bader, Inc. v. Sandstone Prods.,

248 S.W.3d 802, 817 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (upholding sanction of

$68,000 in attorney’s fees where evidence showed discovery abuse justified that amount even in

absence of competent proof of necessity and reasonableness); In re M.I.L., No. 02-08-00349-CV,

2009 Tex. App. LEXIS 4645, at *18 (Tex. App.—Fort Worth June 18, 2009) (mem.op.), overruled

in part on other grounds by Iliff v. Iliff, 339 S.W.3d 74 (Tex. 2011) (sanction of $38,000 not

excessive where evidence showed party had incurred $38,362 in attorney’s fee and $2,071.23

in expenses).

While we acknowledge that the amount of the award is substantial, we conclude that

it is not excessive in light of the entire record and considering that it was intended not only to

reimburse Sherman but also to punish Wein and deter similar conduct in the future. See American

Flood, 192 S.W.3d at 583; Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 849 (Tex. 1992)

(legitimate purposes of sanctions are to secure compliance with rules, deter similar misconduct, and

punish violators). On the record before us, we cannot say that the district court abused its discretion

to allow a sanction award to include fees and expenses incurred in obtaining the sanction. Rather,
the authority we have found supports the inclusion of the costs of pursing the motion for sanction.
See, e.g., Wythe II Corp. v. Stone, 342 S.W.3d 96, 109 (Tex. App.—Beaumont 2011, pet. denied)
(award of fees incurred in pursuing motion for sanctions under Chapter 10, Rule 13, and Rule 215
for submission of false testimony upheld but remanded for reconsideration of reasonableness of
amount); Werley v. Cannon, 344 S.W.3d 527, 534–35 (Tex. App.—El Paso 2011, no pet.)
(upholding sanction for attempt to subvert testimony which included amount for fees incurred on
sanctions matter).

20
in ordering Wein to pay Sherman $100,000 in attorney’s fees. See Unifund, 299 S.W.3d at 97;

American Flood, 192 S.W.3d at 583.14

Wein also challenges the district court’s award of $7,500 to Sherman “for collection

of the sanctions award, if the award is not paid to William Sherman by July 6, 2009.” Wein

contends that there is no legal basis for awarding this “collections” amount because it cannot

represent attorney’s fees incurred as a result of the sanctionable conduct and is simply a penalty,

which must be paid to the court, not to the litigants. However, the record shows that Sherman’s

attorney testified that reasonable and necessary attorney’s fees for collection of the sanctions, if

required, would be $7,500, and Wein did not challenge this testimony on cross-examination.

Further, the legitimate purposes of sanctions include the goals of securing compliance. See Chrysler

Corp., 841 S.W.2d at 849. The trial court could have reasonably determined that the “collections”

award would operate to ensure Wein’s compliance with the order and that, should collection efforts

become necessary, the fees and expenses incurred would be “caused by” the “disobedient party” and

“because of” Wein’s frivolous filing. See Tex. R. Civ. P. 13, 215.2(b)(2), (8); Tex. Civ. Prac.

& Rem. Code § 10.004(c)(3). Thus, there is some evidence that the award of $7,500 for collection

of the sanctions award was directly related to the sanctionable conduct and was not excessive, see

American Flood, 192 S.W.3d at 583; TransAmerica, 811 S.W.2d at 917, and we cannot say that the

trial court abused its discretion in awarding the “collections” sanction amount. See Unifund,

299 S.W.3d at 97.

14
Wein also requests this Court to enter a remittitur “to reduce the excessiveness of the
judgment.” We deny this request.

21
 In his last complaint regarding the sanctions order, Wein challenges the district

court’s award of attorney’s fees conditioned upon unsuccessful appeals to this Court and to the

supreme court, contending that this amount also constitutes a penalty. However, while a trial court

may not penalize party for taking a successful appeal, a trial court may grant appellate attorney’s fees

as part of a sanctions order under Rule 215 if the court conditions the award on the outcome of the

appeal. In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex. 1998, orig. proceeding); Hoefker

v. Elgohary, 248 S.W.3d 326, 332–33 (Tex. App.—Houston [1st Dist] 2007, no pet); Westech Eng'g,

Inc. v. Clearwater Constructors, Inc., 835 S.W.2d 190, 205 (Tex. App.—Austin 1992, no writ). A

conditional award of appellate fees is part of a sanctions award of trial court costs, designed to

compensate for the expense of defending the trial court award, see Loeffler v. Lytle I.S.D.,

211 S.W.3d 331, 351 (Tex. App.—San Antonio 2006, pet denied.), and the district court did not

abuse its discretion in awarding such appellate attorney’s fees. Therefore, we overrule Wein’s

first issue.

Settlement Credit

Standard of Review

In his second issue, Wein contends that the district court erred in failing to apply a

credit against the award of sanctions for Richards’ settlement payment. The parties disagree about

which standard of review we are to apply. Wein asserts that we should conduct a review for legal

and factual sufficiency of the evidence but cites no authority. Sherman contends that allocation of

settlement credits is reviewed for abuse of discretion, citing this Court’s decision in Utts v. Short,

No. 03-03-00512-CV, 2004 Tex. App. LEXIS 2874 (Tex. App.—Austin, Apr. 1, 2004, pet. denied)

22
(mem. op.) and Oyster Creek Fin. Corp. v. Richwood Invs. II, Inc., 176 S.W.3d 307 (Tex.

App.—Houston [1st Dist.] 2004, pet. denied.). In Utts, however, we noted that our analysis did not

include statutory construction, the defendant’s entitlement to a settlement credit was not in dispute,

and only the amount to be credited to each plaintiff was at issue. 2004 Tex. App. LEXIS 2874, at

*9–10. Similarly, in Oyster Creek, the court applied an abuse of discretion standard where there

were factual disputes concerning the character of the settlement and the allocation of the settlement

credit. 176 S.W.3d at 326. Here, our analysis turns on questions of statutory construction and

application of legal principles, and we do not reach the questions of disputed facts concerning the

settlement allocation.15 Therefore, we review the district court’s determination of the settlement

credit de novo. See Galle, Inc. v. Pool, 262 S.W.3d 564, 571 n.3 (Tex. App.—Austin 2008, pet.

denied); Sugar Land Props., Inc. v. Becnel, 26 S.W.3d 113, 119 (Tex. App.—Houston [1st Dist.]

2000, no pet.) (applying de novo standard where resolution of issue required interpretation of two

statutory provisions).

Wein also challenges the district court’s findings of fact and conclusions of law on

the issue of the settlement credit. A trial court’s findings of fact are subject to review for legal and

factual sufficiency of the evidence by the same standards applied to a jury verdict. Ortiz v. Jones,

917 S.W.2d 770, 772 (Tex. 1996). We review a trial court’s conclusions of law de novo and will

uphold the conclusions if the judgment can be sustained on any legal theory supported by the

evidence. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Although a

15
Wein raises factual issues concerning his allegations that the settlement agreement
between Sherman and Richards allocating amounts to actual and punitive damages was a sham and
that there were no actual damages to support an award of punitive damages. However, because of
our disposition of this issue, we do not reach these factual issues.

23
trial court’s conclusions of law may not be challenged for factual sufficiency, we may review the

legal conclusions drawn from the facts to determine whether the conclusions are correct. Id.

One-satisfaction Rule

Wein seeks a settlement credit under the one-satisfaction rule. The one-satisfaction

rule is the longstanding proposition that precludes a plaintiff from recovering twice for the same

injury. Utts v. Short, 81 S.W.3d 822, 831 (Tex. 2002) (citing Crown Life Ins. Co. v. Casteel,

22 S.W.3d 378, 390 (Tex. 2000)); Galle, 262 S.W.3d at 573. The rule applies when several

defendants commit the same act and when multiple defendants commit technically different acts that

result in a single injury. Crown Life, 22 S.W.3d at 390; Galle, 262 S.W.3d at 573. The

one-satisfaction rule guards against a plaintiff’s “receiving a windfall ‘by recovering an amount in

court that covers the plaintiff’s entire damages, but to which a settling defendant has already

contributed.’” Galle, 262 S.W.3d at 573 (quoting Osborne v. Jauregui, 252 S.W.3d 70, 75 (Tex.

App.—Austin 2008, pet. denied) (en banc)).

Wein contends that Sherman is attempting to collect from Wein damages for the same

injury for which he has already collected from Richards by way of settlement. However, although

Richards paid a sum in settlement of Sherman’s claims against her, Sherman received no damages

in court for his claimed injuries; the district court dismissed his claims on summary judgment. The

attorney’s fees the district court ordered Wein to pay were as a sanction for Wein’s “wrongful

conduct,” not as compensation for Sherman’s alleged injuries. Sanctions are not damages for harm

alleged in the underlying lawsuit but are used to punish parties who file groundless, bad faith, or

frivolous pleadings, see Tex. R. Civ. P. 13; Tex. Civ. & Prac. & Rem. Code §§ 10.001, .004, or

24
violate discovery rules, see Tex. R. Civ. P. 215.3; Cire, 134 S.W.3d at 843. Thus, the sanctions

award did not constitute compensation for the same harm for which Sherman recovered in settlement

with Richards. Cf. Teel v. American Title Co., No. 14-00-00375-CV, 2001 Tex. App. LEXIS 6422,

at *7–8 (Tex. App. —Houston [14th Dist.] Sept. 20, 2001, pet. denied) (not designated for

publication) (one-satisfaction rule did not apply because appellant sought recovery for injury for

which she had not been previously compensated; prior recovery was for different damages under

different cause of action). Wein has cited no cases, and we have found none, in which a court has

applied the one-satisfaction rule to reduce a sanctions award. We decline to do so here.

Chapter 33

Wein also contends that, to the extent Sherman asserts tort claims, Wein is entitled

to a settlement credit under Chapter 33 of the Texas Civil Practices and Remedies Code. Chapter

33 governs settlement credits with respect to “any cause of action based on tort in which a defendant

. . . is found responsible for a percentage of the harm for which relief is sought.” Tex. Civ. Prac.

& Rem. Code §33.002(a)(1). Section 33.012 requires that, if a claimant has settled with one or more

persons, the court must reduce the amount of damages to be recovered by the claimant by the amount

of all settlements. Id. § 33.012(b). Chapter 33 does not define “settled” or “settlement” but defines

“settling person” as “a person who has . . . paid or promised to pay money or anything of monetary

value to a claimant in consideration of potential liability with respect to . . . harm for which recovery

of damages is sought.” Id. § 33.011(5) (West 2008). Read together, these provisions contemplate

that Chapter 33 applies if Sherman was compensated in the settlement with Richards for the same

harm for which he was compensated by the sanctions award. See Galle, 262 S.W.3d at 571.

25
 Under this analysis, Wein’s argument under Chapter 33 fails for the same reasons that

his argument under the one-satisfaction rule fails. As we have already discussed, Richards paid a

sum to Sherman in an exchange for a release from all liability. In contrast, the district court ordered

Wein to pay attorney’s fees as a sanction for his improper conduct, not as a consequence of a

determination of his liability for damages to Sherman. The district court found that the sanctions

award was for abuse of discovery and statutory violations, not based on a determination of liability

sounding in tort. The district court concluded that Richards’ settlement payment did not represent

common damages between Richards and Wein, the sanction was assessed against Wein individually,

and the sanctions award was not damages for which joint and several liability could attach. There

is legally and factually sufficient evidence to support these findings, and the conclusions of law are

supported by Chapters 10 and 33 and Rules 13 and 215.3. See Tex. R. Civ. P. 13, 215.3; Tex. Civ.

Prac. & Rem. Code §§ 10.001(1), .004(b)(3); 33.002(a)(1), .011(5), .012(b). Thus, Sherman was not

compensated in the settlement with Richards for the same harm for which he was compensated by

the sanctions award, and Chapter 33 does not apply. We overrule Wein’s second issue.

Summary Judgment Dismissing Sherman’s Claims

Standard of Review

In his cross-appeal, Sherman challenges the district court’s summary judgment

dismissing his claims. We review the trial court’s decision to grant summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When reviewing a

summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor. Mack Trucks, Inc. v. Tamez,

26
206 S.W.3d 572, 582 (Tex. 2006); Dorsett, 164 S.W.3d at 661. A motion for summary judgment

is properly granted when the movant establishes that there are no genuine issues of material fact and

that it is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Provident Life

& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). When the trial court does not

specify the grounds for its summary judgment, the appellate court must affirm the summary

judgment if any of the theories presented to the trial court and preserved for appellate review are

meritorious. Knott, 128 S.W.3d at 216.

Evidence of Damages to Support Claims

One of the grounds Wein asserted in his motion for summary judgment was that the

evidence showed Sherman had incurred no damages other than attorney’s fees and there can be no

award of attorney’s fees without actual damages. Sherman does not dispute that his only damages

were attorney’s fees but contends that the attorney’s fees are his actual damages. The issue then is

whether the district court erred in granting summary judgment when Sherman’s only damages were

attorney’s fees incurred as a result of Wein’s instigating and maintaining this suit.

Texas has long followed the “American Rule,” which prohibits an award of attorney’s

fees unless specifically provided by contract or statute. MBM Fin. Corp. v. The Woodlands

Operating Co., 292 S.W.3d 660, 6693d (Tex. 2009). Here, there is no contract between the parties,

and Sherman does not seek attorney’s fees under any statutory provision. Rather, he contends that

because Wein filed a fraudulent lawsuit against him, causing him to expend money in attorney’s fees

and expenses, he is entitled to recover those fees and expenses as actual damages.

27
 Attorney’s fees, however, are ordinarily not recoverable as actual damages in and of

themselves. See Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 81–82, 83 (Tex. 2003) (attorney

plaintiffs who sought to recover damages based solely on value of time and costs incurred in

defending claims had not suffered actual damages and were not entitled to only damages

they claimed; plaintiffs should have pursued attorney’s fees as sanctions under Rule 13 or

Chapter 10); Worldwide Asset Purchasing, L.L.C. v. Rent-a-Center East, Inc., 290 S.W.3d 554, 570

(Tex. App.—Dallas 2009, no pet.) (attorney’s fees not recoverable as actual damages); Haden

v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.—Houston [1st. Dist.] 2007) (same), rev’d

on other grounds, 266 S.W.3d 447 (Tex. 2008); Quest Commc’ns Int’l, Inc. v. AT&T Corp.,

114 S.W.3d 15, 35–36 (Tex. App.—Austin 2003) (damages measured by plaintiff’s attorney’s fees

recoverable only under certain exceptions not implicated here), rev’d in part on other grounds,

167 S.W.324 (Tex. 2005) (per curiam). Because Sherman neither sought nor proved any damages

other than attorney’s fees, there is no evidence to support the actual damage element of any of his

asserted claims, and the district court did not err in granting summary judgment in Wein’s favor.

We overrule Sherman’s cross-issue.

CONCLUSION

Having overruled Wein’s issues, we affirm the trial court’s judgment.

28
 __________________________________________

Melissa Goodwin, Justice

Before Justices Puryear, Pemberton, and Goodwin

Affirmed

Filed: August 23, 2013

29