devastating three million dollar judgment in a legal malpractise lawsuit that was in federal court on diversity or on or first complaint is the decision by the district court to impose a death penalty sanction striking the pleadings of mr munoz which resulted in the entry of a default judgment which then led to after an evidentiary hearing the entry of the three million dollar judgment and as i understand if there was there was a motion to strike the pleadings but mr menus did not opposed or in her any opposition to your honor you are correct that no response was filed to the motion for sanctions the motion for sanctions that was filed by the defendants or other the plaintiff rather in october  and sixteen and there were other matters going on but a response to that motion was not filed the plaintiff has asserted that because of that we have waived that complaint and our complaint your honor is that the court utilized the incorrect legal standard in deciding to impose a death penalty sanction the this court decisions clearly state that in imposing a death penalty sanction such as entry of a default judgment or striking pleadings that the court must find that the penalized parties discovery violation was willful and second in addition to willfulness there must be a finding that the drastic measure to be employed is only to be used where a lesser sanction would not substantially achieve the desired result in the district court order on sanctions your honor the court specifically stated that it was not required to find willfulness the co the court cited factors for general rule thirty seven b sanctions without citing the conner factors that are well cited in the decisions of this court your  honor including willfulness and that a lesser sanction would not achieve the justified result and that's the problem we have your honor and i understand the court's question did the court did the defendant file a response to this motion the answer is no what does that way of your honor we would assert that it does not waive a failure by the trial court to correctly apply the law in this case the trial court mis applied the law in deciding that a death penalty sanction striking pleadings should be utilized without actually going through and reviewing the factors that the court should review before imposing such a sanction and for that reason your honor we believe there is air and it is not wa specific standard of review that we've applied that the court applies for others abuse of discretion and as the court knows a district court abuses its discretion when its ruling is based on view of the law and in this case your honor it's our point that in failing to utilize the specific legal standard for the imposition of the death penalty sanction the honorable district court misapplied the law and imposed a sanction without reference to the correct legal standard and because obviously a de sanction is so serious taking away a party's defense it should be done very carefully so our complaint is that the district court misapplied the law and we believe that that is not something you waive even by filing  failing to file a response to a motion allow me to give an example your honor in a default judgment context a party fails to answer and does not have an excuse for their failure to answer the district court must still go through the record and make sure that the plaintiff's complaint properly sets forth a basis for a d entry of a judgment before the court could enter judgment and a a losing party in such a case would have a right to appeal if the court misapplied the law and improperly opposed to default judgment another thing that's important in this case your honor that the court point that the district court pointed out was that it was not required to utilize the death penalty sanction standard because it was only striking pleadings and after striking the pleadings the court would have to take additional steps to enter a default judgment finding that that was appropriate and therefore the district court took the position that it was not a death penalty sanction we have cited in our brief a number of cases from this cork finding that an order striking pleadings does constitute a death penalty sanction so it's our contention your honor is that the issue was not waived and specifically the issue of the court's application of the law that was not waived and when the cork entered an order imposing a death penalty sanction without utilizing in applying this court standards under the connor factors for the imposition of death penalty sanction that the court did commit an error of law by misapplying them long and the effect of that was obviously a devastating order striking a party's pleadings which caused harm to the defendant and we are requesti proceedings in addition to the issue of the sanctions order your honor the the other area of complaint that we've made in this case is as to the damages findings and our concern again is primarily a failure to correctly apply the law as the court knows this is a diversity case run texas state law the legal malpractise and in this case in texas legal malpractise the measure of damages is the amount of damages recoverable and collectible if the suit had been properly prosecuted so that's what a plaintiff can get in a honor because what the court did instead of making that finding instead of the court asking the question what was the amount of damages recovering recoverable and collectables of the court instead awarded all the reasonable and necessary attorney's fees incurred by point if to collect what was owed which was some one point seven million dollars and the evidence at the hearing on damages your honour's included testimony of attorney's fees incurred throughout years of litigation in this matter before mr monroe she even showed up on the scene now that is not something that is recoverable under texas law the plaintiff in the court below may argue that well this is an unusual circumstance because the malpractise we complained of resulted in in the tryout for work in the underlying lawsuit a disqualification of the judge which voided his prior rocks well that still doesn't justify a warning them all the attorney fees they had incurred in order to get to the point where they believe they could recover damages in this case in addition to that one point seven million dollars in attorney's fees that they had incurred the court of what are your damages what did you think you could have recovered in the underlying lawsuit and that was the number of one point two million dollars the third factor was twenty one thousand dollars in fees actually paid to mr mann yes so a fee forfeiture to mr munoz of about twenty one thousand dollars which included fees that were incurred in unrelated federal court litigation unrelated to the lawsuit that gave rise to the malpractise  now here's what that's error for many reasons one it doesn't follow the elizondo v chris standard what was recoverable and collectible if the lawyer had done his job correctly that's the standard and that wasn't followed by the court second you end up with double counting if i'm the plaintiff and i say i have to spend one point seven million dollars to recover one point two million dollars while i don't get my one point seven million plus my one point two million if i have to spend one point seven million to recover one point two million dollars that one point seven million is on me so the one point seven million is is what got n to the point where they could recover where they argued that they could recover the one point two million we have issues with the sufficiency evidence of that as well but let's just stick with this point if if it cost them one point seven million dollars to get in position to recover one point two million and then the malpractise of a lawyer prevents him from getting the one point two million dollars what are they out there out one point two million dollars that's what they've lost they haven't lost one point seven million dollars that they would have spent anyway it's not a proper measure of recoverable damages in a texas malpractise attorney malpractise lawsuit and the court should not have awarded now in the trial court's judgment on damages the final judgment it's a very short two paragraph order stating that the court awards the plaintiff two point nine eight a million dollars the almost three million dollars it doesn't include rule fifty two findings where did the two million nine hundred eighty thousand dollars come from so we  lack of findings in the judgment now and i think that's important because we are making very specific complaints about the court's damage award and asking the court to grant us relief in this appeal based on the court damage award and so you might ask well how can we decide that if we don't have the rule fifty two findings and that maybe the court needs to vacate the judgment and send it back out however under this court's decisions cited in our brief if it's evident to the court what the damage award was what the basis the judgment was the court can go forward without findings and i believe in this case  with the three numbers the reason all necessary attorneys fees of one point seven million the one point two million dollars in amounts they claim they could have recovered and the twenty one thousand it clearly adds up to the two point nine eight million dollars total so we believe the court can go forward and assess our complaints about the judgment amount and we will also point out one of the complaints we made within the damages issue was it was error to award attorneys fees at all because you can't recover attorney's fees in taxes in a lawsuit unless there's a statute that says you can get them or a contract now the plaintiff in the court below comes back and says well that was part of our lawsuits there's a there's a can gun case out of texas supreme court that says if it's part of our losses we can recover it i agree and we understand and that's the sort of another point that we cited in our brief the idea being if if i am a malpractise plaintiff and the lawyer made a mistake and that caused me to go spend another thousand dollars in legal fees well that could be part of my damages but all my legal fees that i ever spent in this case before i ever met that lawyer is not a proper measure of the damages so in other words if if a lawyer should have gotten a summary judgment and any competent lawyer could have gotten that summary judgment but because of some mistake they were failed to do it and you had to pay another twenty five thousand dollars to go through a trial but that could be damages because you would have incurred that but for the lawyers negligence but here we don't have that we have the plaintiff in the court below saying we spent almost two million dollars in legal fees and so we should get that from him as well and so your honor with that i will reserve the balance of many millions of dollars it was not one point two million dollars it was not one point seven million dollars for the attorneys fees that they had to spend but it was many millions of dollars that they were entitled to based on the agreements that they had and how the money was to be collected the appellant here has created a false image of what happened in the case below that's been done with selective representations omissions of the critical parts of the record which have to be considered in the whole with what happened during this case that's why we have an adversarial system so it and job to fill in the gap and your honor we have eight issues that are raised by by and each one of those your honor form some amalgamation of selective omission and misrepresentation of what happened below your honor i want to start with the issue of waiver because that's just one of the issues that we have here the appellant below violated at minimum three court orders from two different district court judges judge crane and judge alvarez he failed to appear twice once even after being ordered to show cause why he failed to appear he was sanctioned with monetary damages twice for failure to appear and failure to respond he failed to produce documents subject to a request for production of documents he failed to answer requests for admissions and the court again sanctioned him first failure to answer requests for admissions a motion for sanction was filed which the appellant didn't even bother to respond to and then a motion for a default judgment separate and distinct from the motion for sanctions was filed again  even bother to respond to those motions your honor what the factual record shows is an attorney that's what the defendant is he's an attorney license a practice in the state of texas who knew exactly what was going to happen when his day in court occurred and rather than respond to discovery rather than do the things that he was required to do he engaged in gamesmanship on the hopes that his feet would not be held to the fire and boy were t so to create this fiction about what judge alvarez did below related to the steps needed to be taken that brought you from monetary sanctions to forcing admissions or granting a request for admissions is the fact that the appellant is attempting to circumvent the fact that he never raised any substantive issues with the court's entry of the motion for sanctions which ultimately struck never raise any substantive legal issue with the entry of the default judgment and then after a bench trial was held then brought a new counsel who attempted to backdoor in these exact arguments t y one of the issues that counsel raised was the an incorrect standard that was applied by judge alvarez if you read the motion for sanctions and the order that flowed from it the cases the judge cited to were not related to the entry of default judgment they were related soley to whether or not to sanction so the determination of the type of st sion is a separate decision that has to be made the citation to cases like garza and vic air that the court cited to was actually in relation to whether or not i i the judge should sanction under these circumstances once the court made that determination in its order which is attached to our record to our record on appeal the court then laid out all of the factual predicates necessary to a ward of the sa that she ultimately entered into her honor ultimately entered into which was the striking of the answer in the rule sixty b motion again after the trial appellant again challenge that determination and hey you raise the wrong law you enter default judgment against me as a sanction here's a whole boatload of cases where it says you have to engage in this type of analysis and enter into these types of factors when you're entering default judgment judge alvarez clearly explains he didn't enter default judgment against you as a sanction and it's true there's a motion for sanctions where the judge struck his answer to tell him to answer then a separate motion enter default judgment is filed by the plaintiffs in that case which again the appellant never even responded to where the court then entered default judgment the court in that sixty the motion went on to explain even if even if the same shape could be construed as a motion as a striking of the answer and default judgment then the most appropriate case on point is a case called the source which the court cited in its papers and said under the the requirements of the plastic source all of the requirements are met based on the factual record that's included in the motion for sanctions and so the court set out and explain that all of the necessary elements that need to be met notwithstanding that explanation the appellant standing again in front of you making the exact same arguments and citing to the exact same cases but which is the same she was a striking of the pleadings and nothing further a separate motion was filed for default judgment which again was not opposed but now it's damning all that judge alvarez explained even if that is the appropriate standard read my motion for sanctions i laid out all the factual predicates three orders that were ignored two hearings not appeared for monetary sanctions and missions answered into no responses to requests for production of documents no responses to requests for admissions appellant also argues that there's a potential violation of the federal civil procedure fifty it was unclear as i stood here today it appears that they may be withdrawing that argument i don't know but just for the purposes of lamed out all of the factual predicates all of the legal b c s that it arrived at why the plaintiff was entitle to the release that they were seeking including a discussion of duty including a discussion of breach including a discussion of causation including a discussion that the plaintiff was actually damaged by the by the appellant actions the court then went through each one of the facts and applied it to the law in showing why the plaintiff was intitled to the release that was being sought so for were the appellant to stand before your honor's and to say the court didn't provide a factual basis or a legal basis for the conclusions that it that the court reached related to the judgment is disingenuous at best i've rarely seen a judgment that was six pages or incorporated a document that so clearly explain how the court arrived at all of its conclusions after and so your auditors i will also say that in the appellants papers they clearly indicate even though the judge doesn't specifically state in the judgment how the two point nine eight million dollar figure is arri at the hearing the expert was specifically asked what are the damages in this case and he said one two and three and judge alvarez in her order related to the sixty the motion explains exactly where those numbers arrived at it but no one hundred and one and then the in the record your honor your honors it's page twenty three so to stand before your honor's and say the judge didn't fulfill her obligations her honors obligations under rule fifty two is again disingenuous with regard to the issue of damages the the briefing from appellant was inscrutable to certain degrees because the issues were kind of dissected in a certain way to create a false light as to what the actual damages issues were and how the court result it isn't the case that some of those fees are a good portion of those fees would have been incurred anyway of practice no your honour's because here is here's what actually happened there was a receivership that was created of which mr  nino's was not an attorney for he represented one party and i was the last under there was a receivership that was created by by judge contrary with the sole purpose of going out and collecting monies that were owed by multiple law firms and to have those monies deposited into the texas court registry for which anybody who had a legitimate claim against those monies can assert those claims what happened was when mr meehan yo joined the lawsuit and it was discovered that he had the secret partnership or maybe it was out in the open but nobody knew about it when mr meehan you know is joining in the lawsuit somebody had discovered his partnership with judge contrarious had judge controllers disqualified and had reversed years of litigation up until that point in time as a result of that as a result of that action all of the attorneys fees that were spent up until that point were wasted in the litigation and the one party that could fund the entire lawsuit law funder was devastated by that determination and is now your honour's in liquidation they are not doing business anywhere they are collecting out monies trying to pay investors and they ar liquidation as a result of that so mr nino's is almost are his argument is well that's not my fault i didn't cause that to happen but they can go on the case that we rely on and actually quite default judgment motion judge alvarez explains exactly how are the actions of mr munoz in the misconduct mr lane yost caused the specific damages that last under complains about and i can i can undergrad is in the record it's pages four ninety one and four ninety two and specifically the court says plaintiff sufficiently plead proximate cause ation the depends were aware that this relationship would created how point of interest and dependence were further where this relationship could lead to disqualification of judge contrary indeed any reasonable person independent position would know that failing to disclose or withdraw from the conflict in question could lead to  examination on how much harm was actually caused by any negligence on the part of mr munoz and your honor i i will say that judge alvarez did not do that what judge alvarez actually did was limit cross examination on the question of causation which is already established the judge never said that mr minos cannot question the witnesses about the actual amount of the damages that were being caused the default judgment had been entered causation had been found by admission but if you read the entire transcript there's no specific citation to anything in the appellant records related to that but if you read how the limitations actually occurred you'll see that the court only limited the question of what were they the cause and specifically in our agree your honor i think we cited to the specific page numbers but certainly we have reference in here from the statements of mr baos his attorney where he specifically says when the judge asked him what's the basis of the questioning he says oh he didn't cause those damages but in the default judgment and the determination of the court based on the facts at issue the court had already the term that he had caused those damages that mr munoz's involvement led to the disqualification of judge contrary us which caused a complete reversal and a waste of all the monies that were expended by the law funder in addition to that your honor is there some discussion or at least some frame that's being created that law funder spent one point seven million dollars to recover one point two million dollars and that's not true what funder had peed in principle one point two million dollars to attorneys to purchase their right to continue a contingent interest in litigations when those monies were supposed to come through it went into the texas courts registry and law funder would have been that entitle to not only the one point two million papers he indicates that he successfully recovered over four hundred thousand dollars the truth of it was the receivers were successful in recovering those monies misdemeanor as was just law funders attorney at the time but money was already coming through directly to walk under as a result of all the money that were being spent so it wasn't one point seven million dollars of attorney's fees to collect one point two million dollars it was one point seven million dollars to bring themselves in where they can begin to recover all of the money that they were entitled to under their belts the problem was when the when the disqualification occurred they were still in the process of collecting out these monies and so what what ultimately the only damage award non secula damage figure law funder can actually explain was they were out one point two million dollars in principle the ultimate recoveries and what would have happened in every one of these litigations lawford couldn't establish but what they could establish the testimony at the  that many attorneys had already deposited their money and monies into the texas court registry law funder had already covered in excess of four hundred thousand dollars in this money and another attorney the one who actually filed the motion to disqualify this you know those was fighting vigorously because he was a motion to disqualify judge contrary he got judge contrary disqualified and all of the work that was leading up to our ability meaning law funders to collect that these monies was nullified and so it wasn't one point seven million to acquire one point two million with regard thank you your own a lot of that was argument and really isn't borne out by the record because it wasn't fleshed out because there was the striking of pleadings etc the fact is that when the trial judge  entered her order post judgment on the rule sixty in rule fifty nine motions she again said i don't have to consider these connor factors because i didn't do a death penalty sanction all i did was strike your pleadings and the simple fact is that's not an appropriate distinction for the court to make because this court's decisions make it clear that if you strike a party's pleadings that brings up let's judge him on the appropriate factors let's apply the law to him let's not just act without appropriate guidelines when was the first time you mentioned if at all the conner factors that was the post judgment your honor so in post judgment pleadings the we raised an issue that the court should have applied to connor factors so they were not raise before your own with respect to the damages again there was a failure to follow the elizondo v chris standard what would the plaintiff have recovered had but for the lawyers allege negligence that's the standard instead we've got this recovery of this one point seven million i still don't understand the plaintiff's claim would like to try the whole case because i'd like to look at the whole legalities of non lawyers investing in plaintiff's personal injury proceeds and lawyers fees but that's an issue for another day maybe the fact is that the court did not look at those proper standards and for example did not give credit to mr munoz for the four hundred eighteen thousand dollars that was recovered in an order on his watch that was already found it was damaged now the question is what are the damages and so i'm not going to let you challenge a specific part of the damages it's all coming in so what the trial counsel was trying to do was cross examine the witnesses as to when fees had been incurred with respect to the appearance of mr munoz in the case and events taking place in the case and the court said no i'm not going to allow that but i've already decided that they were damaged the question now is what's the amount and so we assert that that was an improper limitation on cross examination and it really just fits in with the court's error in failing to apply the elizondo of the chris standard and so we  think the court for the time for its time and our complaint is the failure of the district court to follow the proper legal standards in this case all right thank you mr carroll cases under submission