Opinion ID: 894843
Heading Depth: 1
Heading Rank: 4

Heading: Amount of Sanction

Text: Henry claims that the $50,000 sanction, a $25,000 sanction for the petition filed against each doctor, is excessive. The amount of the sanction is limited by the trial court's duty to exercise sound discretion. Powell, 811 S.W.2d at 917. A trial court abuses its discretion when it acts without reference to any guiding rules or principles, not when it simply exercises that discretion in a different manner than reviewing appellate courts might. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). In Powell we held that a sanction under rule 215 of the Texas Rules of Civil Procedure, now rule 215.2, must relate directly to the abuse found and be no more severe than necessary to satisfy its legitimate purpose. Powell, 811 S.W.2d at 917. Texas Rule of Civil Procedure 215.2 allows a trial court to disallow any further discovery; charge certain expenses, costs, or attorney's fees of one party against the offending party; order certain facts to be established as true; limit a party's ability to defend against or bring certain claims; strike pleadings or parts of pleadings; or find a party in contempt of court. In contrast, Chapter 10 authorizes a sanction ordering the offending party to, among other things, pay a penalty into the court, as ordered in this case. TEX. CIV. PRAC. & REM.CODE § 10.004. The only restriction on the amount of the penalty in the language of the statute is that the sanction must be limited to what is sufficient to deter repetition of the conduct or comparable conduct by others similarly situated. Id. § 10.004(b); see, e.g., Skepnek v. Mynatt, 8 S.W.3d 377, 380 (Tex.App.-El Paso 1999, pet. denied) (upholding $25,000 sanction to be paid into registry of court under Chapter 10). The legislative history does not shed light on the question. Generally, a sanction cannot be excessive nor should it be assessed without appropriate guidelines. See Powell, 811 S.W.2d at 917. [4] Although this Court has not specifically identified factors for a trial court to consider when assessing penalties under Chapter 10, see Altus Commc'ns., Inc. v. Meltzer & Martin, Inc., 829 S.W.2d 878, 883 (Tex.App.-Dallas 1992, no writ), the absence of an explanation of how a trial court determined that amount of sanctions when those sanctions are especially severe is inadequate. For example, in Cire v. Cummings , we held the trial court was required to explain that it considered lesser sanctions before imposing severe, death penalty sanctions. 134 S.W.3d at 842. In Powell, we held that the dismissal of plaintiff's case with prejudice for failing to appear for a deposition was an excessive sanction under Texas Rule of Civil Procedure 215. 811 S.W.2d at 918-19. Because we held that the death penalty sanction at issue was manifestly unjust, we did not identify specific factors for determining appropriate sanctions. Id. at 917 n. 6, 919. In his concurrence, Justice Gonzalez recognized that the American Bar Association cumulated relevant factors useful to this type of analysis. Id. at 920-21 (Gonzalez, J., concurring). [5] Although we do not require a trial court to address all of the factors listed in the report to explain the basis of a monetary sanction under Chapter 10, it should consider relevant factors in assessing the amount of the sanction. In addition, the determination of the amount of a penalty to be assessed under Chapter 10, which is not limited to attorney's fees and costs, should nevertheless begin with an acknowledgment of the costs and fees incurred because of the sanctionable conduct. This provides a monetary guidepost of the impact of the conduct on the party seeking sanctions and the burdens on the court system. The trial court found that the claims brought against the doctors did not meet the evidentiary support requirement in Chapter 10. The trial court also concluded that the lawsuit was groundless, as defined in Texas Rule of Civil Procedure 13. The trial court's order stated that Henry has consistently engaged in a similar pattern of conduct. Dr. Low testified that he felt that Henry harassed him by filing the lawsuit. He testified that he lost a day and a half from the office because of the lawsuit but does not quantify this expense and identifies no other out-of-pocket expenses. Dr. Smith testified that he believed Henry felt bad will toward [him] personally because Henry filed a suit with no basis in fact against him. Two other physicians, Drs. Mastin and Canterbury, testified that Henry had named them in lawsuits in which they had never treated the plaintiff patients. Both testified about the impact of the lawsuits and intent to sue letters on their malpractice insurance rates: Dr. Mastin testified that his group's rates increased by 68% due in part to three groundless suits filed by Henry's clients; Dr. Canterbury also testified that her practice group faced increased insurance premiums due to groundless pleadings like Henry's. Although we conclude that the trial court was within its discretion to award sanctions under Chapter 10, we cannot determine the basis of the $50,000 penalty on this record. Given the severity of the sanction, therefore, we remand this case in the interest of justice to allow the parties to present evidence responsive to our guidelines, if necessary, and to allow the trial court to consider the amount of the penalty imposed in light of the guidelines in this opinion. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 314-15 (Tex.2006) (remanding because evidence of attorneys fees for entire case is some evidence of what amount of segregated fees would be).