In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-15-00058-CV
SUE KILLGORE MOBLEY, Appellant
V.
JAMES A. MOBLEY, Appellee
On Appeal from the 124th District Court
Gregg County, Texas
Trial Court No. 2011-1426-B
Before Morriss, C.J., Moseley and Burgess, JJ.
Opinion by Justice Burgess
OPINION
This appeal involves two inextricably related lawsuits, the origins of which began in April
2009 when James A. Mobley filed for divorce from Sue Killgore Mobley. Within a year of James
having filed for divorce, the parties negotiated and entered into a mediated settlement agreement
dated June 7, 2010. Five days later, the trial court entered a final decree of divorce that
incorporated the settlement agreement. Pursuant to the settlement agreement, the parties arranged
to divide their personal property, multiple residences, and several vehicles, all of which were
considered community property. The decree of divorce also fully described the separate property
of both James and Sue.
About two years after the divorce proceedings concluded, Sue filed a lawsuit (the Reed
Suit) against Perry D. Reed and Perry D. Reed & Co. (the Reed Defendants)1 alleging that they
breached their fiduciary duty to her by betraying “the special relationship that existed between the
parties.” Specifically, Sue claimed, among other things, that the Reed Defendants obtained her
wage and income information from the Internal Revenue Service (IRS) without her consent. Not
long afterward, Sue filed her first amended petition, adding James as a defendant and claiming that
she believed him to have been a principal actor in obtaining her confidential wage and income
information. She also maintained that his participation might be necessary to aid with the waiver
of any accountant-client privilege in the suit.2
1
The Reed Defendants had been the couple’s accountants prior to their divorce proceedings and continued to serve as
James’ accountants during and after the proceedings.
2
Sue claimed to have learned through discovery in the Reed Suit that James had fraudulently concealed material
information during their earlier divorce proceedings. As a result, she filed a bill of review in the 307th Judicial District
Court of Gregg County (the Bill of Review Suit) asking that court to set aside its final decree of divorce and re-divide
2
In response to Sue’s first amended petition, James filed a motion for partial summary
judgment and also requested an award of attorney fees as sanctions. The trial court granted James’
motion and awarded attorney fees in his favor. Sue timely filed this appeal. For the reasons below,
we reverse the trial court’s award of attorney fees as sanctions and affirm the trial court’s partial
summary judgment in favor of James.3
I. Sue’s Voluntary Nonsuit Entered After the Trial Court Granted James’ Partial
Summary Judgment Mooted Any Appeal of the Merits of that Judgment
Sue voluntarily nonsuited all of her claims against James after the trial court granted the
partial summary judgment. When she did, she rendered any appeal of the partial summary
judgment moot.
The trial court entered its Order Granting Partial Summary Judgment to James on Sue’s
claims on March 7, 2012. Two days later, on March 9, 2012, Sue filed a notice of nonsuit of her
claims against James, asserting, “Plaintiff no longer desires to prosecute her claims asserted in this
lawsuit.” The trial court entered its Order Granting Nonsuit Against Defendant James A. Mobley
on March 9, 2012, ordering that “the portion of the case involving Defendant, James A. Mobley
[be] dismissed without prejudice to SUE KILLGORE MOBLEY’S right to refile it.” The trial
the parties’ community property after considering the information allegedly concealed by James during the original
divorce proceeding. The 307th District Court granted summary judgment in James’ favor in the Bill of Review Suit
and also awarded James his attorney fees. Sue has appealed from that summary judgment under our cause number
06-15-00058-CV. We include in this opinion facts that are applicable to both this appeal and the Bill of Review Suit
appeal; however, the substance of this opinion is limited to the issues raised by Sue in the Reed Suit. By opinion of
even date herewith, we address the issues raised by Sue in the Bill of Review Suit under cause number 06-15-00058-
CV.
3
On November 25, 2013, the trial court consolidated the Reed Suit and the Bill of Review Suit for purposes of the
hearing on the attorney fees issue. The trial court took the matter under advisement and, on June 3, 2015, it issued a
letter ruling granting James’ requests for attorney fees in both cases.
3
court entered a subsequent Amended Order Granting Nonsuit Against Defendant, James A.
Mobley, on March 14, 2012, clarifying that the dismissal was “subject to JAMES A. MOBLEY’S
right to pursue his claim as set out in his Original Answer on file herein.”4
Accordingly, we are presented with the unique question of whether a plaintiff, who
voluntarily nonsuited all of her claims against the defendant after the trial court granted the
defendant’s summary judgment, may seek appellate review of the merits of the trial court’s
summary judgment. Not surprisingly, there is very little caselaw addressing this question. Yet,
the cases which do address appeals after voluntary nonsuits in other contexts persuade us that, by
voluntarily nonsuiting her case against James after the trial court granted James’ motion for partial
summary judgment, Sue has rendered moot her appeal of the merits of that summary judgment.
To begin with, the Supreme Court has held that, even though a plaintiff’s voluntary nonsuit
cannot negate a defendant’s counter-claim for “costs, attorney’s fees and sanctions . . . , it does not
forestall the nonsuit’s effect of rendering the merits of the case moot.” Univ. of Tex. Med. Branch
at Galveston v. Estate of Blackmon, 195 S.W.3d 98, 101 (Tex. 2006) (per curiam). In Blackmon,
Shultz sued UTMB for wrongful death and survival under the Texas Tort Claims Act. Id. at 99.
“UTMB filed a plea to the jurisdiction, which the trial court denied, and then brought an
interlocutory appeal.” Id. The court of appeals reversed the trial court’s order and rendered
4
Although the dismissal orders and partial summary judgment did not affect Sue’s claims against the Reed Defendants,
Sue subsequently nonsuited her claims against the Reed Defendants on October 17, 2012. Therefore, when the trial
court made its ruling on James’ pending claim for attorney’s fees, no unresolved claims remained between the parties.
Accordingly, even though the dismissal orders and partial summary judgment were not final at the time they were
entered because other claims were pending against other parties, those other claims were eventually resolved. To
simplify matters, we will discuss the dismissal orders and partial summary judgment as if James and Sue were the
only parties before the trial court at the time they were entered.
4
judgment for UTMB. Id. The court of appeals then granted Schultz’s motion for rehearing and
withdrew its original opinion. Id. After the original opinion was withdrawn, but before rehearing,
Schultz voluntarily nonsuited her case in the trial court and moved to dismiss the appeal. Id. The
court of appeals denied the motion to dismiss and rendered an opinion on rehearing affirming the
trial court’s original order denying UTMB’s plea to the jurisdiction. Id. The Supreme Court held
that the court of appeals lacked jurisdiction to rule on the motion for rehearing due to Schultz’s
voluntary nonsuit. Id.
Additionally, the Supreme Court has held that, if a plaintiff nonsuits his claims after the
trial court enters a summary judgment that is unfavorable to the plaintiff, the nonsuit “results in a
dismissal with prejudice as to the issues pronounced in favor of the defendant.” Hyundai Motor
Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (per curiam). In Hyundai, the Alvarados sued
Hyundai and others for personal injuries. Id. at 854. Hyundai moved for partial summary
judgment, which the trial court granted. Id. The Alvarados then nonsuited their claims against
Hyundai without prejudice and refiled the same claims in a different county. Id. The second trial
court granted Hyundai’s motion for summary judgment, holding that the dismissal of the original
lawsuit should have been with prejudice. Id. The court of appeals reversed and held that a plaintiff
had an absolute right to nonsuit his claim before the submission of evidence was completed and
that summary judgment could not prevail over that right. Id. The Supreme Court reversed the
court of appeals and held that the nonsuit should have been dismissed with prejudice. Id.
Although neither Blackmon nor Hyundai involved an attempt to appeal the merits of an
adverse summary judgment after a voluntary nonsuit, those cases support a finding that Sue’s
5
nonsuit in this case rendered any question regarding the merits of the underlying summary
judgment moot. Because a nonsuit effectively moots the merits of the underlying case, nothing
remained to be resolved on appeal, and because the nonsuit occurred after the partial summary
judgment was entered, the dismissal foreclosed any right Sue may have had to refile those claims
at a later date. Therefore, while Sue’s nonsuit did not dispose of James’ claims for costs and
sanctions, it mooted any possible error by the trial court in rendering the partial summary judgment
in favor of James and left Sue nothing to appeal on that point.
II. The Trial Court’s Award of Attorney Fees as Sanctions
On June 3, 2015, the trial court issued a letter ruling finding that Sue’s lawsuit against
James for breach of fiduciary duty was frivolous and awarded James $10,000.00 in attorney fees
as a sanction.5 On appeal, Sue contends that the trial court erred in ordering a sanction in James’
favor because: (1) James did not argue during the hearing on attorney fees that she pursued her
claim against James as harassment or in bad faith;6 (2) even if he had, there was a proper reason
to add James to the Reed Suit;7 (3) James did not prove the objective or subjective elements to
warrant the imposition of a sanction; (4) the fact that the Reed Defendants eventually entered into
5
The trial court’s judgment stated, “The Court finds that as to [James], the suit is frivolous and without justification.
The Court finds that attorney fees be imposed as an appropriate sanction against [Sue].” The trial court did not enter
findings of fact and conclusions of law.
6
During the hearing, James’ trial counsel testified that it was James’ “position that that particular lawsuit was a
frivolous suit and that [James] should be able to collect his attorney’s fees.”
7
Sue maintained that adding James as a party was necessary in order to adequately prosecute her claim against the
Reed Defendants because the Reed Defendants were acting as agents for James when they obtained her wage and
income information.
6
a settlement agreement with her established that her claims were not frivolous; and (5) James failed
to state the proper statutory authority he relied upon in pursuit of attorney fees.8
A. Standard of Review
Sanctions should not be used as “a weapon . . . to punish those with whose intellect or
philosophic viewpoint the trial court finds fault.” Tarrant Cty. v. Chancey, 942 S.W.2d 151, 155
(Tex. App.—Fort Worth 1997, no writ) (quoting Dyson Descendant Corp. v. Sonat Expl. Co., 861
S.W.2d 942, 951 (Tex. App.—Houston [1st Dist.] 1993, no writ)). But an appellate court will not
hold that a trial court abused its discretion in levying sanctions if some evidence supports its
decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (per curiam). An
assessment of sanctions will be reversed “only if the trial court acted without reference to any
8
Sue provided a bench brief to the trial court in opposition to James’ attorney fees award. As an initial matter, we note
that Sue’s bench brief was filed in the Bill of Review Suit, and not the Reed Suit, yet, the trial court granted attorney
fees as sanctions in the Reed Suit, and not the Bill of Review Suit. However, James filed a consolidated reply to Sue’s
bench brief in both the Bill of Review Suit and the Reed Suit, and the trial court consolidated the attorney fees hearings.
Accordingly, we will address them as a consolidated matter and review the records accordingly.
Sue’s bench brief stated, in part,
The Defendant is not entitled to recover any of his attorney’s fees as a sanction. The fact he won
the suit does nothing to show it was groundless, especially given this determination is made at the
time the suit is filed. Nor has the Defendant offered any competent evidence that would allow the
Court to make a determination that the Plaintiff pursued this matter in bad faith for some improper
purpose, such as harassment. In the absence of such evidence the Defendant has failed to carry the
burden of proof he must bear, and therefore has failed to prove himself entitled to a fee award as a
sanction.
A motion for sanctions must identify the specific statute or rule the offending party allegedly violated. See
Ball v. Rao, 48 S.W.3d 332, 338 (Tex. App.—Fort Worth 2001, pet. denied). James failed to comply with this
requirement; however, Sue did not object to the trial court’s award of attorney fees as sanctions based on James’
failure to identify the specific statute Sue allegedly violated. To the extent Sue did not present her argument that
James failed to provide the trial court with statutory authority, her claim was not preserved for our review. See TEX.
R. APP. P. 33.1. Her remaining claims at trial and on appeal appear to be based on James’ failure to prove the necessary
elements to enable the trial court to award attorney fees as sanctions. We will therefore address only those claims.
7
guiding rules or principles, such that its ruling was arbitrary or unreasonable.” Low v. Henry, 221
S.W.3d 609, 614 (Tex. 2007).
B. Analysis
1. Sanctions Pursuant to Rule 13
Sanctions may only be imposed for good cause under Rule 13, the particulars of which
must be stated in the order. TEX. R. CIV. P. 13; Rudisell v. Paquette, 89 S.W.3d 233, 237 (Tex.
App.—Corpus Christi 2002, no pet.). The trial court’s Rule 13 sanctions order must identify the
specific acts or omissions on which the court based the sanctions. Jimenez v. Transwestern Prop.
Co., 999 S.W.2d 125, 130 (Tex. App.—Houston [14th Dist.] 1999, no pet.); Chancey, 942 S.W.2d
at 155 (trial court’s statement that pleading was filed to harass and cause unnecessary delays was
too general). Likewise, a trial court may impose sanctions only for good cause. TEX. R. CIV. P.
13. Therefore, a court must include a statement of good cause in the order to support its imposition
of sanctions. Tarrant Restoration v. TX Arlington Oaks Apts., Ltd., 225 S.W.3d 721, 733 (Tex.
App.—Dallas 2007, pet. dism’d w.o.j.).
In this case, the trial court did not detail the specifics justifying its imposition of sanctions.
Yet, a trial court’s failure to do so constitutes an abuse of discretion only if the sanctioned party
brought the omission to the attention of the trial court. Olibas v. Gomez, 242 S.W.3d 527, 532
(Tex. App.—El Paso 2007, pet. denied). Sue did not object to the trial court’s failure to explain
its ruling in either its letter ruling or its final judgment. An appellant waives her right to complain
of a trial court’s failure to specify the grounds for its sanctions order if the appellant did not first
bring the omission to the trial court’s attention. TEX. R. APP. P. 33.1; Birnbaum v. Law Offices of
8
G. David Westfall, P.C., 120 S.W.3d 470, 475–76 (Tex. App.—Dallas 2003, pet. denied) (trial
court erroneously omitted detailed explanation of bases for Rule 13 sanctions, but appellant waived
error by not calling it to trial court’s attention). Because Sue failed to bring the omission to the
trial court’s attention, she has waived any complaint on that basis.
However, Sue did not waive her argument that James did not sufficiently prove his
entitlement to an award of attorney fees as sanctions. See TEX. R. APP. P. 33.1(d); McCain v. NME
Hosps., Inc., 856 S.W.2d 751, 756 (Tex. App.—Dallas 1993, no writ) (appellant may raise a no-
evidence point for the first time on appeal in non-jury case involving sanctions); Van Es v. Frazier,
230 S.W.3d 770, 784 (Tex. App.—Waco 2007, pet. denied) (no-evidence complaint may be made
for first time on appeal where pleadings struck as sanction). Accordingly, we must examine
whether the evidence is legally sufficient to support the trial court’s imposition of sanctions.
To impose sanctions under Rule 13 of the Texas Rules of Civil Procedure, the movant must
establish that the suit was (1) groundless and brought in bad faith or (2) groundless and brought
for purposes of harassment. TEX. R. CIV. P. 13. “Groundlessness turns on the legal merits of a
claim.” River Oaks Place Council of Co-Owners v. Daly, 172 S.W.3d 314, 322 (Tex. App.—
Corpus Christi 2005, no pet.); GTE Commc’ns Sys. Corp. v Tanner, 856 S.W.2d 725 (Tex. 1993)
(orig. proceeding). “A party seeking sanctions has the burden of establishing his right to relief.”
Tanner, 856 S.W.2d at 729. Even assuming that Sue’s claim against James was groundless,9 in
9
The Rule defines “groundless” as having “no basis in law or fact and not warranted by good faith argument for the
extension, modification, or reversal of existing law.” TEX. R. CIV. P. 13. A court should presume parties and their
counsel filed all papers in good faith, and the party seeking sanctions must overcome that presumption. TEX. R. CIV.
P. 13; Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Dist. ex rel. Bd. of Directors, 198 S.W.3d 300, 321–22 (Tex.
App.—Texarkana 2006, pet. denied). Because we find that James failed to prove that Sue’s claim was brought for the
purpose of harassment, we decline to examine whether Sue’s claim against James was groundless.
9
order to recover attorney fees as sanctions, James must also show that Sue brought her claim in
bad faith or for the purpose of harassment. Bad faith does not exist when a party exercises bad
judgment or negligence. Rather, bad faith means “the conscious doing of a wrong for dishonest,
discriminatory, or malicious purposes.” Campos v. Ysleta Gen. Hosp., Inc., 879 S.W.2d 67, 71
(Tex. App.—El Paso 1994, writ denied); see Mattly v. Spiegel, Inc., 19 S.W.3d 890, 896 (Tex.
App.—Houston [14th Dist.] 2000, no pet.).
“In deciding whether a pleading was filed in bad faith or for the purpose of harassment, the
trial court must measure a litigant’s conduct at the time the relevant pleading was signed.” Texas-
Ohio Gas, Inc. v. Mecom, 28 S.W.3d 129, 139 (Tex. App.—Texarkana 2000, no pet.). Rule 13
generally requires that the trial court hold an evidentiary hearing to make a determination about
the motives and credibility of the person signing the petition. R.M. Dudley Const. Co. v. Dawson,
258 S.W.3d 694 (Tex. App.—Waco 2008, pet. denied); Low, 221 S.W.3d at 613, 617 (referring to
trial court’s evidentiary hearing on motion for Chapter 10 sanctions); Alejandro v. Robstown Indep.
Sch. Dist., 131 S.W.3d 663, 669–70 (Tex. App.—Corpus Christi 2004, no pet.) (“Rule 13 requires
that the trial court provide notice and hold an evidentiary hearing to make the necessary factual
determinations about the motives and credibility of the person filing the groundless pleading.
Without such a hearing, the trial court has no evidence before it to determine that a pleading was
filed in bad faith or to harass.” (citations omitted)).
Here, the trial court held a hearing on attorney fees, which we presume included the issue
of the award of sanctions. During the hearing, the trial court admitted (1) Shannon Happney’s
10
curriculum vitae,10 (2) the parties’ final decree of divorce, and (3) a summary of the attorney fees
incurred by James during the litigation. In addition, James’ counsel testified,
The first case that was filed was a case that involved Perry Reed, [James’]
CPA, and the CPA for both he and Sue Mobley. And Perry Reed apparently got
some information from some governmental agency. Jimmy had nothing to do with
it. Never had anything to do with it.
We filed a motion for summary judgment when he was sued saying that in
effect that we didn’t have anything to do with it, and there was no controverting
affidavit filed to that. So it’s our position that that particular lawsuit was a frivolous
suit and that he should be able to collect his attorney’s fees.
We didn’t request any other sanctions, but we did request that he be awarded
attorney’s fees for defending that case.[11]
While the trial court found, as a matter of law, that Sue’s claim against James was meritless, its
order awarding attorney fees as sanctions is completely void of the basis upon which the award
was made. Likewise, there exists no evidence in the record showing that Sue filed her claim in
bad faith or for the purpose of harassment. If, in fact, the trial court awarded sanctions pursuant
to Rule 13 of the Texas Rules of Civil Procedure, we find its award of sanctions to be erroneous.
2. Sanctions Under Chapter 10
A party may also seek sanctions pursuant to Chapter 10 of the Texas Civil Practice and
Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 10.001 (West 2002). Chapter 10
10
Happney is the paralegal who assisted James’ counsel during the Mobley divorce proceedings and the subsequent
litigation. Happney testified as to the attorney fees that were incurred during the litigation between the parties.
11
During his closing argument, James’ counsel argued,
The first case, the Reed case, obviously it is a [frivolous] lawsuit as it relates to my client, because
there’s not one single fact issue against him, and there should have been reasonable inquiry before
that suit was filed as to what his role, if any -- anything that Mr. Reed may have done that was
untoward occurred.
And so for that reason, we believe that that lawsuit he should recover his attorney’s fees in
that lawsuit.
11
provides for an award of sanctions when a party shows (1) that the pleading or motion was brought
for an improper purpose, (2) that there were no grounds for the legal arguments advanced, or
(3) that the factual allegations or denials lacked evidentiary support. TEX. CIV. PRAC. & REM.
CODE ANN. § 10.001 (West 2002); Low, 221 S.W.3d at 614–15. Chapter 10 specifies that one of
the aims for imposition of sanctions for the filing of frivolous or groundless pleadings is to “deter
repetition of the conduct or comparable conduct by others similarly situated.” TEX. CIV. PRAC. &
REM. CODE ANN. § 10.004(b) (West 2002). “We construe the phrase ‘improper purpose’ as the
equivalent of ‘bad faith’ under Rule 13.” Dike v. Peltier Chevrolet, Inc., 343 S.W.3d 179, 183–84
(Tex. App.—Texarkana 2011, no pet.).
A trial court may award the prevailing party attorney fees and costs for inconvenience,
harassment, and out-of-pocket expenses incurred by the party or caused by the litigation. TEX.
CIV. PRAC. & REM. CODE ANN. § 10.002(c) (West 2002). When a trial court determines whether
sanctions are appropriate, it must examine the facts available to the litigant and the circumstances
existing when the litigant filed the pleading. Robson v. Gilbreath, 267 S.W.3d 401, 405 (Tex.
App.—Austin 2008, pet. denied). In the event a trial court finds that sanctions are appropriate
under Chapter 10, it must include in its order a description of the conduct violated and an
explanation of the basis for imposition of the sanctions. TEX. CIV. PRAC. & REM. CODE ANN.
§ 10.005 (West 2002); Univ. of Tex. at Arlington v. Bishop, 997 S.W.2d 350, 355 (Tex. App.—
Fort Worth 1999, pet. denied). The trial court should explain how it determined the amount of
sanctions, especially when the sanction is severe. Low, 221 S.W.3d at 620–21.
12
If the trial court entered the award of attorney fees as sanctions pursuant to Chapter 10, it
did not include that finding in its order awarding sanctions. That said, the limited evidence
presented during the hearing, standing alone, failed to demonstrate that Sue’s claim against James
was brought for an improper purpose, that there were no grounds for the legal arguments advanced,
or that the factual allegations lacked evidentiary support. Likewise, there was no evidence that
Sue did not make a reasonable inquiry prior to filing her claim against James. That is not to say
that such evidence did not exist—but it was not presented to the trial court.
In the event the trial court granted sanctions pursuant to Chapter 10 of the Texas Civil
Practice and Remedies Code, we conclude that it erred.
III. Conclusion
The trial court’s award of attorney fees as sanctions was erroneous; therefore, we reverse
the portion of the trial court’s judgment awarding attorney fees as sanctions and render judgment
that James take nothing on his claim for attorney fees. We affirm the trial court’s partial summary
judgment that Sue take nothing on her claims against James.
Ralph K. Burgess
Justice
Date Submitted: April 29, 2016
Date Decided: October 26, 2016
13