VACATE and AFFIRM and Opinion Filed May 25, 2022 

S 

In The 

Court of Appeals 

Fifth District of Texas at Dallas 

No. 05-20-00936-CV 

DIANA CONVENIENCE, LLC, HQ FOOD, INC., HAJAR CONVENIENCE, 

LLC, SHARK PHONES, LLC, AND AMK CONVENIENCE, LLC, 

Appellants 

V. 

DOLLAR ATM, LLC, Appellee 

On Appeal from the County Court at Law No. 4 

Collin County, Texas 

Trial Court Cause No. 004-02331-2019 

MEMORANDUM OPINION 

Before Justices Carlyle, Smith, and Garcia 

Opinion by Justice Smith 

 Appellants Diana Convenience, LLC, HQ Food, Inc., Hajar Convenience, 

LLC, Shark Phones, LLC, and AMK Convenience, LLC appeal from a final 

judgment awarding appellee Dollar ATM, LLC damages for breach of contract. In 

two issues, appellants challenge the trial court’s January 28, 2020 and July 23, 2020 

pre-trial orders imposing discovery sanctions against them. We vacate the portion 

of the January 28, 2020 motion to compel order awarding $1,050 in attorney’s fees 

and expenses and render appellee take nothing as to the interim award of fees. We 
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affirm the trial court’s July 23, 2020 order imposing death penalty sanctions and 

otherwise affirm the trial court’s judgment. 

Factual and Procedural Background 

 Appellee brought suit against appellants in July 2019 alleging that appellants 

breached “Placement Agreements” that appellee and each appellant entered into 

between 2014 and 2016. The agreements concerned automated teller machine 

(ATM) placement, installation, maintenance, and cash replenishment services at 

each of the convenience stores for a term of eighty-four months. The parties were 

to share the surcharge revenue generated by each ATM. Appellee alleged that 

appellants breached their agreements by seeking removal of the ATMs, interrupting 

or unplugging the power supply, covering the slot reader, or installing and using 

another ATM in their stores prior to the expiration of the agreements’ terms. 

Appellee sent multiple pre-trial letters urging appellants to respond to 

discovery requests. Appellee notified appellants that, if they did not respond, 

appellee would file a motion to compel and seek attorney’s fees. Appellants did not 

respond. On December 30, 2019, appellee filed a motion to compel appellants’ 

discovery responses complaining that appellants had failed to fully respond to 

interrogatories and requests for disclosure served on November 1, 2019. The 

interrogatories focused on whether appellants were contending that the 

representative who signed each Placement Agreement lacked the authority to do so, 

who such representatives were, and what authority the representatives had within 
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each store. One interrogatory also asked each appellant how much money it 

collected each year from the ATM surcharges since the Placement Agreement began. 

 On January 23, 2020, appellants filed supplemental responses denying that 

they or any authorized representative signed the Placement Agreements and 

asserting they had no knowledge of such agreements until appellee filed suit. 

Appellants answered that the representatives who signed the Placement Agreements 

had no authority to employ, direct, or discharge appellants’ employees and provided 

the name of the person who they claimed did have authority. Appellants otherwise 

objected to appellee’s interrogatories and its requests for production seeking all 

documents signed, since 2014, by the representatives who signed the Placement 

Agreements. Appellants did not provide a list of persons with knowledge of relevant 

facts and, instead, responded, “Defendant will supplement.” 

 The trial court held a hearing the same day appellants filed their supplemental 

responses. The trial court granted appellee’s motion to compel, including its request 

to recover its attorney’s fees and expenses incurred in preparing and presenting the 

motion. Appellants were ordered to fully respond to the interrogatories by January 

30 and to pay $1,050 in attorney’s fees and expenses by February 6, 2020. Trial was 

set for February 20, 2020. 

 Appellee again warned appellants that if they continued not to respond, 

appellee would file a motion for sanctions specifically asking the trial court to find 

that the agreements were signed by someone with authority to bind each appellant. 
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Although appellants served second supplemental responses on appellee on February 

10, they still failed to fully answer the interrogatories as previously ordered by the 

court. Appellee moved for sanctions against all defendants seeking an order finding 

that each of the employees who signed the Placement Agreements had authority to 

enter the agreement on behalf of their respective employer and prohibiting appellants 

from opposing appellee’s evidence regarding the amount of ATM revenue appellants 

received during the terms of the agreements. On February 20, 2020, after the parties 

discussed the discovery issues in chambers, the trial court granted appellants a trial 

continuance so that they could comply with the outstanding discovery requests. The 

trial court withheld its ruling on the motion for sanctions. 

 After another trial setting was continued due to the “Covid lockdown,” 

appellants’ counsel filed a motion to withdraw to which appellee objected. 

Appellants’ lead counsel had left the firm representing appellants since the time the 

trial court had granted appellants’ continuance. The trial court denied the firm’s 

motion to withdraw. 

 A bench trial was ultimately held remotely via Zoom on July 23, 2020. Prior 

to the parties presenting their cases, the trial court heard and granted appellee’s 

motion for sanctions and ordered the following fact established in the case: “Each 

agent, employee, owner, or officer of [appellants], who signed the five Placement 

Agreements had authority to enter into the Placement Agreements on behalf of each 

[appellant].” The trial court also prohibited appellants from opposing the amount of 
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ATM revenue they received under the Placement Agreements. The trial court found 

that appellants had failed to answer appellee’s discovery requests regarding whether 

appellants’ employees had authority to enter into the Placement Agreements and 

failed to produce copies of any checks or other documents signed by the individuals 

who signed the Placement Agreements. The trial court further found that appellants 

had “abused the discovery process by resisting discovery.” 

 After appellee presented evidence on its breach of contract claims and 

appellants rested without presenting evidence, the trial court found in favor of 

appellee and rendered judgment against appellants. Appellants filed a motion for 

new trial, which the trial court denied, and this appeal ensued. 

Death Penalty Sanctions 

In their first issue, appellants argue that the trial court erred by granting death 

penalty sanctions against them, which resulted in a declaratory judgment and 

uncontested damages in violation of appellants’ right to due process. Specifically, 

appellants contend the sanctions precluded them from contesting whether the 

signatories to the agreements represented appellants and had the authority to bind 

them. Appellants argue that the failure to respond to the discovery requests was not 

their fault because their previous trial counsel abandoned them, and they were left 

without knowledge of conversations held and agreements made between previous 

counsel and the court. Appellants also urge that we should view the sanctions in 
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light of the Covid pandemic and the Texas Supreme Court’s orders to show leniency 

during such unprecedented times. 

Appellee first responds that appellants waived their challenge to the trial 

court’s order imposing death penalty sanctions because they failed to object to the 

trial court’s exclusion of their evidence and further failed to raise the complaint in a 

motion for new trial. Appellee next responds that appellants’ conduct of repeated 

discovery abuse justified the death penalty sanctions. 

We disagree with appellee that appellants waived their challenge to the death 

penalty sanctions. Appellants opposed the motion for sanctions both in writing and 

at the hearing on the motion thereby by sufficiently presenting to the trial court their 

objection to death penalty sanctions being ordered against them. See TEX. R. APP.

P. 33.1(a); Wright v. State Farm Lloyds, No. 03-20-00384-CV, 2022 WL 567860, at 

*2 (Tex. App.—Austin Feb. 25, 2022, no pet.) (mem. op.). In the case appellee cited 

for support, the parties did not contest the sua sponte sanctions imposed by the trial 

court under Rule 13 or ask the trial court to reconsider its action. See Howell v. Tex. 

Workers’ Comp. Comm’n, 143 S.W.3d 416, 450 (Tex. App.—Austin 2004, pet. 

denied). Here, however, the sanctions were not sua sponte imposed, and they were 

based on discovery issues litigated by the parties for months. Furthermore, a 

complaint regarding sanctions is not one of the complaints required to be specifically 

raised in a motion for new trial in order to preserve error. See TEX. R. CIV. P. 324. 

Therefore, we reject appellee’s invitation to waive appellants’ complaint. 
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We review the imposition of discovery sanctions for an abuse of discretion. 

TransAm. Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991) (orig. 

proceeding). A trial court abuses its discretion when it acts arbitrarily or without 

regard to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 

701 S.W.2d 238, 241–42 (Tex. 1985). After notice and a hearing, a trial court may 

issue sanctions in response to a party’s failure to comply with discovery, such as 

ordering “that the matters regarding which the order was made or any other 

designated facts shall be taken to be established,” “refusing to allow the disobedient 

party to support or oppose designated claims or defenses, or prohibiting him from 

introducing designated matters in evidence.” TEX. RS. CIV. P. 215.2(b)(3), (4); 

215.3. However, the trial court’s order must be just. TEX. R. CIV. P. 215.2(b). 

A sanction is just if (1) there is a direct relationship between the offensive 

conduct and the sanction imposed and (2) it is not excessive. TransAm., 811 S.W.2d 

at 917. The sanction must be assessed against the true offender. Id. Therefore, the 

trial court should attempt to determine whether the offensive conduct is attributable 

to counsel only, the client, or to both, so that a client is not unduly punished by its 

counsel’s conduct. Id. Additionally, a sanction should be no more severe than 

necessary to satisfy its legitimate purpose. Id. When an offending party essentially 

loses the case because of the sanction, it is a death penalty sanction. Altesse 

Healthcare Sols., Inc. v. Wilson, 540 S.W.3d 570, 572 (Tex. 2018) (per curiam). 

Death penalty sanctions “cannot be used to adjudicate the merits of a party’s claims 
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or defenses unless a party’s hindrance of the discovery process justifies a 

presumption that its claims or defenses lack merit.” TransAm., 811 S.W.2d at 918; 

see also Altesse, 540 S.W.3d at 572. A trial court may presume that a claim or 

defense lacks merit when a party refuses to produce material evidence, despite the 

previous imposition of lesser sanctions. TransAm., 811 S.W.2d at 918. 

Here, after numerous opportunities to respond to discovery including a 

continuance granted in lieu of imposing sanctions in February 2020, appellants still 

failed to fully respond to appellee’s discovery requests before trial. While counsel 

provided many excuses as to why appellants had been unable to respond, such as the 

change in counsel, the unprecedented challenges of Covid, and not being able to 

contact his clients for an extended period of time because they were “not from 

America,” appellants’ failure to fully answer discovery began many months before 

a new attorney took over and the Covid pandemic began. 

Despite appellants’ resistance in answering discovery, appellee was able to 

take the deposition, by written questions, of the signatory to the Diana Convenience 

agreement. The signatory testified that he was authorized to sign the agreement on 

behalf of Diana Convenience and that he signed all the documents and checks for 

the company. This information, coupled with appellants’ refusal to provide 

discovery that would give appellee an opportunity to depose additional signatories, 

supports a presumption that appellants’ defense lacks merit. Furthermore, the 

decision by appellants Shark Phones and AMK Convenience to file a no-evidence 
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motion for summary judgment based on the very evidence that appellee was 

seeking—who signed the agreement and were they authorized to do so—supports 

the trial court’s finding that appellants had a callous disregard for the rules of 

discovery. See TransAm., 811 S.W.2d at 918 (sanctions that preclude presentation 

of the merits should be reserved for those cases in which there is evidence of “a 

party’s flagrant bad faith or counsel’s callous disregard for the responsibilities of 

discovery under the rules”). 

The sanction directly related to the abusive conduct in that it prohibited 

appellants from contesting the very information that they refused to provide—

whether the signatories had the authority to bind them and how much they received 

from the agreements. Thus, the sanction was just because it was “directed against 

the abusive conduct with an eye toward remedying the prejudice caused to the 

innocent party.” Nath v. Tex. Children’s Hosp., 446 S.W.3d 355, 363 (Tex. 2014) 

(Nath 1). 

The sanction was also assessed against the proper offender. Appellants’ 

behavior in not communicating with counsel in the months leading up to trial 

contributed to counsel’s inability to gather the appropriate discovery responses and 

documents and, thus, the clients played an active role in the offensive conduct. 

This is not a case in which the trial court did not consider and analyze the 

availability of less stringent sanctions and whether such lesser sanctions would 

promote compliance. See, e.g., Shops at Legacy (Inland), Ltd. P’ship v. Fine 
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Autographs & Memorabilia Retail Stores Inc., 418 S.W.3d 229, 234–35 (Tex. 

App.—Dallas 2013, no pet.). The trial court imposed lesser sanctions in the form of 

ordering appellants to pay appellee’s expenses and attorney’s fees when appellants 

first failed to timely comply with discovery. Then, the trial court withheld its ruling 

on appellee’s motion for death penalty sanctions and granted appellants a 

continuance on the day of trial because they still had not fully responded to 

discovery. Five months later, and after appellants failed to fully provide the 

discovery as ordered, the trial court granted appellee’s motion for death penalty 

sanctions. We cannot say that the trial court abused its discretion in doing so under 

the facts of this case. No further monetary sanctions or further extensions of time 

would have promoted compliance with the discovery rules. See Cire v. Cummings, 

134 S.W.3d 835, 841–42 (Tex. 2004). We overrule appellants’ first issue. 

Interim Award of Attorney’s Fees 

In their second issue, appellants argue that the trial court reversibly erred when 

it awarded attorney’s fees after granting appellee’s motion to compel because the 

award was not supported by legally sufficient evidence. Appellee responds that 

appellants lack standing to complain about the attorney’s fee sanction from the 

January 2020 order because they have not shown that they paid the sanction or are 

expected to pay it. Appellee contends that the fees were paid by a personal check 

from appellants’ prior counsel but concedes that the record does not reflect this 

information. 
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 We have found no evidence in the record that shows the interim attorney’s 

fee award was paid or by whom it was paid. But the trial court ordered appellants

to “[p]ay [appellee’s] attorney’s fees and expenses incurred in the amount of $1,050 

from drafting, filing, setting, and appearing for the hearing on Plaintiff’s Motion to 

Compel by February 6, 2020.” Therefore, appellants may challenge the order 

entered against them. 

“Before a court may exercise its discretion to shift attorney’s fees as a 

sanction, there must be some evidence of reasonableness because without such proof 

a trial court cannot determine that the sanction is ‘no more severe than necessary’ to 

fairly compensate the prevailing party.” Nath v. Tex. Children’s Hosp., 576 S.W.3d 

707, 709 (Tex. 2019) (per curiam) (Nath II). Rule 215 specifically incorporates a 

reasonableness determination in awarding attorney’s fees in connection with a 

motion to compel. If a party’s motion to compel is granted, the trial court shall 

award the moving party the reasonable expenses, including attorney’s fees, incurred 

in obtaining the order. TEX. R. CIV. P. 215.1(d). “In determining the amount of 

reasonable expenses, including attorney fees, to be awarded in connection with a 

motion, the trial court shall award expenses which are reasonable in relation to the 

amount of work reasonably expended in obtaining an order compelling compliance.” 

Id. Therefore, when a party seeks attorney’s fees as sanctions, the party must put 

forth evidence of the fees it incurred. Nath II, 576 S.W.3d at 709. Such evidence 
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must meet the legal and evidentiary requirements established in Rohrmoos Venture 

v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). Id. 

The motion to compel alleges that appellee “has incurred expenses in 

preparing and filing this motion” and that appellee “is entitled to reasonable 

expenses incurred in obtaining the order, including attorney’s fees.” However, 

appellee offered no evidence, either attached to its motion or at the hearing, 

regarding the reasonable amount of attorney’s fees incurred. As a result, the 

evidence is legally insufficient to support the $1,050 award of attorney’s fees. See 

Rohrmoos, 578 S.W.3d at 497, 501–02. Because appellee failed to present any 

evidence of reasonable expenses or attorney’s fees incurred, a remand for a 

redetermination of reasonable expenses and fees would be inappropriate. See Skeels 

v. Suder, No. 02-18-00112-CV, 2021 WL 4785782, at *13–14 (Tex. App.—Fort 

Worth Oct. 14, 2021, pet. filed) (mem. op. upon further reh’g). We sustain 

appellants’ second issue. 

 
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Conclusion 

 Having sustained appellants’ second issue, we vacate the portion of the 

January 28, 2020 motion to compel order awarding $1,050 in attorney’s fees and 

expenses and render appellee take nothing as to the interim award of fees. We affirm 

the trial court’s July 23, 2020 order imposing death penalty sanctions and otherwise 

affirm the trial court’s judgment. 

200936F.P05 

 

/Craig Smith/

CRAIG SMITH 

JUSTICE 
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S 

Court of Appeals 

Fifth District of Texas at Dallas 

JUDGMENT 

DIANA CONVENIENCE, LLC, HQ 

FOOD, INC., HAJAR 

CONVENIENCE, LLC, SHARK 

PHONES, LLC, AND AMK 

CONVENIENCE, LLC, Appellants 

No. 05-20-00936-CV V. 

DOLLAR ATM, LLC, Appellee 

 On Appeal from the County Court at 

Law No. 4, Collin County, Texas 

Trial Court Cause No. 004-02331-

2019. 

Opinion delivered by Justice Smith. 

Justices Carlyle and Garcia 

participating. 

 In accordance with this Court’s opinion of this date, we VACATE the portion 

of the trial court’s January 28, 2020 motion to compel order awarding $1,050 in 

attorney’s fees and expenses and RENDER appellee DOLLAR ATM, LLC take 

nothing as to the interim award of fees. We AFFIRM the trial court’s July 23, 2020 

order imposing death penalty sanctions and otherwise AFFIRM the trial court’s 

judgment. 

 It is ORDERED that each party bear its own costs of this appeal. 

Judgment entered this 25th day of May 2022.