Green Oaks, Ltd. v. Cannan

ESQUIVEL, Justice,

dissenting.

I disagree with the majority’s recognition of Green Oaks’ cause of action.

Appellants’ cause of action is not based on a wrongful foreclosure. Instead, Green Oaks contends that they possess a private remedy in the form of a cause of action against Cannan because Cannan, as the note holder, conducted a non-judicial foreclosure sale of the property in question in violation of a temporary restraining order. The central question presented is whether Cannan is liable to appellants in damages for conducting the prohibited sale, and if so, under what theory of recovery.

The majority states that a court may punish a contempt by fine or imprisonment in order to vindicate its authority, and a litigant injured by a contempt may file a civil suit for damages.

The majority concludes that Cannan’s violation of the temporary restraining order automatically gives Green Oaks a cause of action based solely on the fact that the order was violated, regardless of the underlying acts of Cannan which constitute the violation. The cases relied on by Green Oaks and the majority do not stand for the proposition that a violation of a court order, in and of itself, gives rise to a cause of action.

In Edrington v. Pridham, 65 Tex. 612 (1886), a court appointed a receiver for a corporation. The receiver showed the order to the corporation’s treasurer and demanded that the treasurer turn over the corporation’s funds to the receiver. The treasurer refused. At the conclusion of a contempt proceeding, the court awarded the receiver the money that the treasurer withheld.

*133On appeal, the Texas Supreme Court found no authority for awarding damages in a contempt proceeding. The Court indicated that damages could be recoverable in, what the Court termed, a regular or civil suit. Edrington v. Pridham, at 617-18. The Court did not state that the violation of the court order would constitute a cause of action. Rather, the Court noted that the receiver’s affidavit states facts sufficient to show the civil liability, and the answer confesses enough facts to warrant, in a regular suit, the judgment rendered. Edrington v. Pridham at 617.1 In other words, the receiver had a cause of action based on the treasurer’s underlying wrongful acts themselves.

Additionally, nothing in Beverly v. Roberts, 215 S.W. 975 (Tex.Civ.App. — Amarillo 1919, no writ), supports a conclusion that a cause of action may be grounded solely on the fact that a party violated a court order. Appellant has not presented any case, and I find no authority, which would support such a conclusion.

Edrington and Beverly only say that a person injured by a contempt may file a civil suit for damages separate from contempt proceedings. The cases do not indicate that a cause of action automatically arises from a violation of a court order.

The only breach of duty Green Oaks alleges Cannan committed was a violation of a court order. Disobeying a court order is indeed a breach of duty. Cannan’s duty, however, was owed to the court. Green Oaks has not alleged that Cannan breached some duty owed to Green Oaks. It is undisputed that “but for” the issuance of the restraining order, Cannan was entitled to conduct the foreclosure sale. I would hold that the underlying act itself, which constitutes a violation of a court order, must provide the grounds for a cause of action. Accordingly, Green Oaks failed to state a cause of action in their eighth amended petition.

As stated above, disobeying a court order is a breach of a duty owed to the court. A court order is enforceable by contempt proceedings. TEX.GOV’T CODE ANN. § 21.002 (Vernon 1987). The power to punish for contempt enables courts to persuade parties to obey a prior order of the court so that the prior order will not be rendered inefficient by recalcitrant litigants. Ex parte Gorena, 595 S.W.2d 841, 844 (Tex.1979). When an order is disobeyed, a court punishes the contemnor because the act affronts the dignity and authority of the court, and the purpose is to vindicate public authority. Ex parte Werblud, 536 S.W.2d 542, 545-46 (Tex.1976). As the Edrington Court noted, the judgment awarding damages does not vindicate the dignity of the court; it redresses private injury. Edrington v. Pridham, at 617.

In our case, the majority is circumventing the statute providing for punishment of a contempt. Here, Green Oaks alleges that Cannan violated the temporary restraining order, and as a result, Green Oaks was unable to consummate a sale of the property. The only wrongful act Green Oaks alleges that Cannan committed was the violation of the TRO. On that basis alone Green Oaks seeks damages. By recognizing Green Oaks’ cause of action, this court is requiring Cannan to face a possible punishment for contempt in the way of damages recoverable by Green Oaks.

The majority acknowledges that the effect of the recognition of Green Oaks’ cause of action will be to punish Cannan for contempt. This court states, “Though such private civil suits are rare, they are necessary to insure that restraining orders concerning valuable property are respected since the relatively minor penalties imposed by section 21.002 provide little incentive to follow court orders when their subject matter is worth millions of dollars.” The majority is in effect allowing what the Edr-ington court held was improper — punishment of a contempt through private damages.

For the foregoing reasons, I would hold that the trial court properly dismissed *134Green Oaks’ suit, since Green Oaks did not allege a recognizable cause of action in its eighth amended petition.

. The substance of the affidavit and answer is set out in the Statement of the Case. Edrington v. Pridham, at 615.