Court Opinion

ID: 4070431
Source: CourtListenerOpinion
Date Created: 2016-09-30 01:15:50.426949+00
Date Added: 2024-06-11T14:33:05.232630
License: Public Domain

ACCEPTED
                                                                                        01-15-00117-CV
                                                                             FIRST COURT OF APPEALS
                                                                                     HOUSTON, TEXAS
                                                                                   10/8/2015 2:03:06 PM
                                                                                  CHRISTOPHER PRINE
                                                                                                 CLERK

                         No. 01-15-00117-CV
                                                                     FILED IN
                                                              1st COURT OF APPEALS
                       In the Court of Appeals                    HOUSTON, TEXAS
                                                              10/8/2015 2:03:06 PM
                   for the First District of Texas            CHRISTOPHER A. PRINE
                                                                      Clerk

                              LEAGUE CITY,
                                                Appellant/Cross-Appellee,
                                      v.

           TEXAS WINDSTORM INSURANCE ASSOCIATION,
                                   Appellee/Cross-Appellant.

              BRIEF OF CROSS-APPELLEE LEAGUE CITY

Gregory F. Cox                               Jennifer Bruch Hogan
THE MOSTYN LAW FIRM                          Richard P. Hogan, Jr.
6280 Delaware Street                         James C. Marrow
Beaumont, Texas 77706                        HOGAN & HOGAN
409.832.2777–telephone                       Pennzoil Place
409.832.2703–facsimile                       711 Louisiana, Suite 500
                                             Houston, Texas 77002-2721
Rene M. Sigman                               713.222.8800–telephone
THE MOSTYN LAW FIRM                          713.222.8810–facsimile
3810 W. Alabama
Houston, Texas 77027                         Randal Cashiola
713.861.6616–telephone                       CASHIOLA & BEAN
713.861.8084–facsimile                       2090 Broadway Street, Suite A
                                             Beaumont, Texas 77701
                                             409.813.1443–telephone
                                             409.813.1467–facsimile

                   Attorneys for Cross-Appellee League City

  Oral Argument Requested                                      October 8, 2015

48146_1
                                           TABLE OF CONTENTS

                                                                                                    Page
INDEX OF AUTHORITIES.................................................................................... iv

STATEMENT OF THE CASE ............................................................................... vii

ISSUES PRESENTED........................................................................................... viii

STATEMENT OF FACTS ........................................................................................1

SUMMARY OF ARGUMENT .................................................................................2

ARGUMENT .............................................................................................................3

I.        Notice Is Not at Issue Here. .............................................................................3

          A.       TWIA has not briefed any notice complaint. ........................................4

          B.       TWIA did not preserve any notice complaint below. ...........................4

II.       The November 7, 2013 Monetary-Sanctions Order Is Not Before the
          Court. ...............................................................................................................5

          A.       The November 7 order was superseded by the judgment. ....................5

          B.       TWIA does not challenge the court’s ruling offsetting its cost
                   recovery by the amount of monetary sanctions.....................................7

III.      Alternatively, the Trial Court Properly Assessed Monetary Sanctions
          against TWIA...................................................................................................8

          A.       Reviewing courts must defer to trial courts’ considerable
                   discretion in imposing sanctions. ..........................................................8

          B.       The record shows a nexus between TWIA’s discovery abuse
                   and the sanctions imposed. ..................................................................10

                   1.        TWIA engaged in persistent discovery abuse and
                             disobeyed several court orders. .................................................10

48146_1                                                    i
                   2.       A finding of “intentional disrespect” is not necessary to
                            impose sanctions, and even if it were, the record supports
                            such a finding. ...........................................................................17

                   3.       The record supports the court’s finding that TWIA’s
                            discovery abuse prejudiced League City. .................................18

                   4.       The sanctions directly relate to TWIA’s discovery abuse. .......22

          C.       Monetary sanctions were not excessive but instead
                   compensated League City for the prejudice it suffered. .....................22

                   1.       The record supports the amount of monetary sanctions
                            found by the court. ....................................................................22

                   2.       The court considered the availability of lesser sanctions. ........24

IV.       The Court Properly Struck TWIA’s Affirmative Defenses for
          Continued Discovery Abuse Justifying the Presumption Its Defenses
          Lacked Merit. .................................................................................................25

          A.       The entire course of proceedings justified the conclusion that
                   TWIA’s affirmative defenses lacked merit. ........................................26

                   1.       The court’s unchallenged findings of fact are binding on
                            this Court. ..................................................................................27

                   2.       TWIA continued to disregard the court’s orders after the
                            imposition of monetary sanctions. ............................................27

          B.       There is a direct nexus between TWIA’s refusal to cooperate
                   with discovery into its affirmative defenses and the striking of
                   those affirmative defenses. ..................................................................34

          C.       The trial court properly considered lesser sanctions. ..........................35

PRAYER ..................................................................................................................36

CERTIFICATE OF COMPLIANCE .......................................................................38

CERTIFICATE OF SERVICE ................................................................................39

48146_1                                                 ii
APPENDIX

          November 7, 2013 order on Plaintiff’s Motion to Enforce
          Court’s order and Motion for Sanctions (CR160) ...................................Tab A

          April 17, 2014 order striking Defendant’s affirmative defenses
          (CR187-95) .............................................................................................. Tab B

48146_1                                               iii
                                   INDEX OF AUTHORITIES
                                                                                                      Page(s)
Cases
Am. Flood Research, Inc. v. Jones,
  192 S.W.3d 581 (Tex. 2006) ..................................................................... 9, 22, 26
Andras v. Mem’l Hosp. Sys.,
  888 S.W.2d 567 (Tex. App.—Houston [1st Dist.] 1994, writ denied) ................24
Banda v. Garcia,
  955 S.W.2d 270 (Tex. 1997) ......................................................................... 21, 23

Barnett v. Home of Tex. & Warranty Underwriters Ins. Co.,
  No. 14-09-01005-CV, 2011 WL 665309 (Tex. App.—Houston [14th Dist.]
  Feb. 24, 2011, no pet.) (mem. op.) .........................................................................6

Bd. of Adjustment, City of Corpus Christi v. McBride,
  676 S.W.2d 705 (Tex. App.—Corpus Christi 1984, no writ) ................................6
Britton v. Tex. Dep’t of Criminal Justice,
  95 S.W.3d 676 (Tex. App.—Houston [1st Dist.] 2002, no pet.) ...........................7

Chasewood Oaks Condo. Homeowners Ass’n v. Amatek Holdings, Inc.,
  977 S.W.2d 840 (Tex. App.—Fort Worth 1998, pet. denied) .............................26
Chrysler Corp. v. Blackmon,
  841 S.W.2d 844 (Tex. 1992) (orig. proceeding) ..................................................18
Cire v. Cummings,
  134 S.W.3d 835 (Tex. 2004) ............................................................................9, 24
Dao v. Md. Cas. Co.,
  No. 09-13-00353-CV, 2015 WL 2255263 (Tex. App.—Beaumont
  May 14, 2015, no pet.) (mem. op.) ......................................................................17

Downer v. Aquamarine Operators, Inc.,
  701 S.W.2d 238 (Tex. 1985) ..................................................................................9

Finlay v. Olive,
  77 S.W.3d 520 (Tex. App.—Houston [1st Dist.] 2002, no pet.) .........................23

48146_1                                           iv
Franz v. Katy Indep. Sch. Dist.,
  35 S.W.3d 749 (Tex. App.—Houston [1st Dist.] 2000, no pet.) ...........................4

Green v. Allied Interests, Inc.,
  No. 03-97-00510-CV, 1998 WL 105154 (Tex. App.—Austin
  Mar. 12, 1998, pet. denied) (not designated for publication) ............................6, 7
Headington Oil Co. v. White,
  287 S.W.3d 204 (Tex. App.—Houston [14th Dist.] 2009, no pet.) .......................7
In re Harvest Communities of Houston, Inc.,
   88 S.W.3d 343 (Tex. App.—San Antonio 2002, orig. proceeding) ............. 10, 27

Int’l Paper Co. v. Harris County,
   445 S.W.3d 379 (Tex. App.—Houston [1st Dist.] 2013, no pet.) .........................6
Keith v. Keith,
  221 S.W.3d 156 (Tex. App.—Houston [1st Dist.] 2006, no pet.) .......................21
Kroger Co. v. Am. Alternative Ins. Corp.,
  ___ S.W.3d ___, No. 14-13-01135-CV, 2015 WL 3878097
  (Tex. App.—Houston [14th Dist.] June 23, 2015, no pet.) ...................................7
Low v. Henry,
  221 S.W.3d 609 (Tex. 2007) ..................................................................................4
McMillin v. State Farm Lloyds,
 180 S.W.3d 183 (Tex. App.—Austin 2005, pet. denied) ........................... 8, 9, 17
Prize Energy Res., L.P. v. Cliff Hoskins, Inc.,
  345 S.W.3d 537 (Tex. App.—San Antonio 2011, no pet.)................. 9, 18, 21, 26

San Antonio Hous. Auth. v. Underwood,
  782 S.W.2d 25 (Tex. App.—San Antonio 1989, no writ) .....................................7

Scott Bader, Inc. v. Sandstone Prods., Inc.,
  248 S.W.3d 802 (Tex. App.—Houston [1st Dist.] 2008, no pet.) ............... passim

State Farm Mut. Auto. Ins. Co. v. Engelke,
  824 S.W.2d 747 (Tex. App.—Houston [1st Dist.] 1992,
  orig. proceeding) ..................................................................................................11

48146_1                                               v
State v. Castle Hills Forest, Inc.,
  842 S.W.2d 370 (Tex. App.—San Antonio 1992, writ denied) ............................7

Teate v. CBL/Parkdale Mall, L.P.,
  262 S.W.3d 486 (Tex. App.—Beaumont 2008, no pet.) .....................................27

TransAmerican Natural Gas Corp. v. Powell,
  811 S.W.2d 913 (Tex. 1991) (orig. proceeding) .......................................... passim

Van Es v. Frazier,
  230 S.W.3d 770 (Tex. App.—Waco 2007, pet. denied) ................... 19, 25, 34, 36

Vulcan Materials Co. v. Bowers,
  No. 04-04-00062-CV, 2004 WL 2997852 (Tex. App.—San Antonio
  Dec. 29, 2004, pet. denied) (mem. op.)................................................................17
Warwick Oil & Gas, Inc. v. FBS Props., Inc.,
 No. 01-14-00290-CV, 2015 WL 3637988 (Tex. App.—Houston [1st Dist.]
 June 11, 2015, no pet.) (mem. op.) ............................................................... 35, 36
Weinberger v. Longer,
 222 S.W.3d 557 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) ....... 35, 36
Wright v. Wentzel,
 749 S.W.2d 228 (Tex. App.—Houston [1st Dist.] 1988, no writ).........................6

Rules
TEX. R. APP. P. 38.1(i) ................................................................................................4
TEX. R. CIV. P. 11 .....................................................................................................31

TEX. R. CIV. P. 141 .....................................................................................................7
TEX. R. CIV. P. 191.2 ..................................................................................................7

TEX. R. CIV. P. 215.2(b) ...........................................................................................17

TEX. R. CIV. P. 215.2(b)(8) ........................................................................................8

48146_1                                               vi
                         STATEMENT OF THE CASE
Nature of the case:                         League City sued TWIA for breach of
                                            contract, violations of the Insurance Code,
                                            breach of the duty of good faith and fair
                                            dealing, and fraud. CR7. TWIA answered
                                            the lawsuit and later demanded an
                                            appraisal.     CR31, 43.      Following an
                                            appraisal, TWIA refused to pay the award,
                                            and a jury trial followed.

Trial Court:                                Hon. Kerry L. Neves
                                            10th Judicial District Court
                                            Galveston County, Texas

Plaintiff/Appellant/Cross-Appellee:         League City

Defendant/Appellee/Cross-Appellant:         TWIA

Trial Court’s Action:                       The jury found that TWIA failed to
                                            comply with the insurance policy, failed to
                                            comply with the Insurance Code, and
                                            failed to comply with its duty of good faith
                                            and fair dealing, and the jury awarded
                                            League City damages and attorney’s fees.
                                            The trial court disregarded all of these
                                            findings and rendered judgment that
                                            League City take nothing on its claims
                                            against TWIA. League City appealed the
                                            take-nothing judgment.

                                            TWIA then filed this cross-appeal,
                                            complaining of two pretrial rulings. First,
                                            on November 7, 2013, the pretrial court
                                            imposed $15,000 in monetary sanctions on
                                            TWIA for discovery abuse.          CR160.
                                            Second, on April 17, 2014, the court struck
                                            some of TWIA’s affirmative defenses for
                                            continued discovery abuse. CR187-95.
                                            TWIA appeals from both orders.

48146_1                               vii
                                ISSUES PRESENTED
1.        Whether the November 7, 2013 monetary sanctions order is properly before

the Court after the order was superseded by the trial court’s final judgment and

apportionment of costs, which TWIA does not challenge or brief.

2.        Whether the trial court abused its discretion by imposing monetary sanctions

after finding a nexus between TWIA’s discovery abuse and the sanctions imposed,

and whether such sanctions were excessive in compensating League City for the

prejudice it suffered from TWIA’s actions.

3.        Whether the trial court abused its discretion by striking TWIA’s affirmative

defenses, after finding that TWIA’s continuing abuse of the discovery process

justified the presumption that its defenses lacked merit.

48146_1                                 viii
                               STATEMENT OF FACTS
          The underlying lawsuit arose from TWIA’s failure to properly adjust League

City’s claims for property damage caused by Hurricane Ike. CR271-85, 286-325.

TWIA’s adjuster, Paul Gauthier, should have inspected the damaged properties,

determined what was and was not damaged, written estimates, applied appropriate

depreciation, and made recommendations. RR16:68-69. Instead, Gauthier made

League City complete repairs and submit receipts, after which Gauthier purported

to determine whether the repair was covered under the policy. RR11:69-71, 93;

13:88, 91-92, 140-42; 16:176. Because of TWIA’s failure to properly adjust the

claim, League City did not receive any payment on its claim for nine months,

RR16:129-30; 29:472, 509-10, and did not receive proper compensation for its

windstorm losses. RR16:71, 73; 12:136-37; 13:13-15, 135-38, 140-44.

          The jury found that TWIA failed to comply with the insurance policy,

violated the Insurance Code, and breached its duty of good faith and fair dealing,

and awarded damages. CR286-325. Nevertheless, the trial court disregarded the

jury’s findings in favor of League City and rendered judgment that League City

take nothing.      CR678-79.    League City has appealed from that take-nothing

judgment.

48146_1                                 1
          TWIA filed a cross-appeal and now complains of two interlocutory orders:

a November 7, 2013 order imposing monetary sanctions for discovery abuse,

CR160, and an April 17, 2014 order striking some of TWIA’s affirmative defenses

after Judge Lonnie Cox found that TWIA had continued to engage in discovery

abuse, that its conduct justified the presumption that its affirmative defenses lacked

merit, and that lesser sanctions would not suffice. CR187-95.

          The facts regarding these orders are laid out in significantly more detail

below.

                            SUMMARY OF ARGUMENT
          TWIA challenges an interlocutory monetary-sanctions order that was

incorporated into, and superseded, by the trial court’s final judgment apportioning

costs between the parties. However, TWIA does not complain about the judgment

or cost apportionment. Thus, any reversal of the superseded November 7, 2013

order would have no effect on the final judgment and the trial court’s order

offsetting TWIA’s cost recovery by the amount of the earlier sanctions.

          Alternatively, the trial court properly exercised its discretion by imposing

$15,000 in monetary sanctions.         The record supports its finding that TWIA

engaged in a pattern of discovery abuse, by refusing to answer proper discovery,

failing to produce relevant documents, and disobeying court orders. TWIA’s abuse

prejudiced League City by necessitating a second deposition of TWIA’s adjuster

48146_1                                  2
and forcing League City to prepare several motions to compel and attend multiple

hearings in efforts to secure TWIA’s compliance. Finally, the record demonstrates

that the court tested several lesser sanctions that did not work, that monetary

sanctions were appropriate, and that the amount of sanctions was not excessive.

          Despite the imposition of monetary sanctions, TWIA continued to abuse the

discovery process by obstructing legitimate discovery requests, and TWIA violated

several more court orders. Therefore, the court properly concluded that TWIA’s

discovery abuse warranted the presumption that its affirmative defenses lacked

merit. Accordingly, this Court should affirm the dismissal of TWIA’s affirmative

defenses.

                                    ARGUMENT
I.        Notice Is Not at Issue Here.
          TWIA’s brief assails only two orders: the November 7, 2013 monetary-

sanctions order and the April 17, 2014 order striking affirmative defenses. ANT

Br. at x, xi, 18-25, 25-40. TWIA does not ask this Court to review any of the

orders striking its objections or compelling TWIA to produce documents, respond

to discovery requests, or comply with the court’s orders. See CR52-53, 165, 875-

76, 879, 881-82, 887, 890, 895-96, 906; SuppCR376-77, 379, 395, 501, 1036,

1105, 1566; SuppCR2:4. Thus, notice is not relevant as to any hearings other than

those of November 7 and April 10 (which led to the April 17 order). Regarding

those two hearings, TWIA has not preserved any notice complaint.

48146_1                                  3
          A.    TWIA has not briefed any notice complaint.
          TWIA’s argument contains no discussion of the notice issue or legal

authority. Therefore, it has not adequately raised any complaint about notice.

TEX. R. APP. P. 38.1(i); Franz v. Katy Indep. Sch. Dist., 35 S.W.3d 749, 755 (Tex.

App.—Houston [1st Dist.] 2000, no pet.).

          B.    TWIA did not preserve any notice complaint below.
          To preserve a notice complaint, a party must alert the court to the lack of

notice, object to the hearing or request a continuance, and obtain a ruling. See Low

v. Henry, 221 S.W.3d 609, 618 (Tex. 2007). TWIA did not comply with these

preservation requirements for the hearings of November 7 and April 10.

          TWIA did not complain about notice of the November 7 hearing, either in its

written response1 or during the hearing,2 and it did not follow the preservation

steps discussed above. CR105-09; RR2:1-59. A month after monetary sanctions

were imposed, TWIA moved for reconsideration. SuppCR508-13. That motion

did not raise any complaint about notice, and any such objection would be

untimely. See Low, 221 S.W.3d at 618-19. TWIA did not preserve any complaint

about notice of the monetary-sanctions hearing.

1
  TWIA’s response complains about the sufficiency of the sanctions motion, but its sole
mentions about notice consist of retroactive, untimely complaints about earlier hearings, not the
November 7 hearing. CR107-08.
2
  TWIA raised notice after sanctions were awarded, but its complaint related to a different
hearing. RR2:54.

48146_1                                     4
          TWIA did not object to notice of the April 10 hearing, either.3 TWIA also

did not request a continuance or obtain a ruling from the court. SuppRR(4-10-

14):1-16. TWIA did not preserve any complaint about notice of the April 10

hearing. Id.

II.       The November 7, 2013 Monetary-Sanctions Order Is Not Before
          the Court.
          TWIA’s second issue attacks the November 7, 2013 monetary-sanctions

order. CR160. ANT Br. at x, 7, 15, 18-25, 40. That order was superseded by, and

incorporated into, the apportionment of costs in the final judgment. TWIA does

not challenge the judgment or the court’s cost apportionment; to the contrary,

TWIA urges the Court to affirm the judgment. ANT Br. at x. Instead, TWIA’s

argument is expressly confined to the November 7 sanctions order: “This cross-

appeal addresses a monetary sanction discovery order erroneously ordered by the

first pre-trial court, (CR.160) ...” Id.

          A.    The November 7 order was superseded by the judgment.
          TWIA disobeyed two orders to pay the monetary sanctions, SuppCR505,

600; SuppCR3:4, 8-9, and those sanctions remained unpaid when the court was

asked to apportion costs. SuppCR3:9. Rather than further sanctioning TWIA for

disobeying court orders, the court instead incorporated the monetary-sanctions

3
  TWIA initially complained about “insufficient time” to respond to League City’s motion before
the then-scheduled hearing on March 20. But the hearing was reset to April 10, and TWIA never
objected to notice of that hearing.

48146_1                                    5
order into its cost apportionment in the final judgment.4                     CR663, 678-69;

SuppCR2968-70; SuppCR3:8-19, 15.                 Thus, the pretrial sanctions order was

superseded by the amended final judgment, reflecting the court’s finding of good

cause to apply the unpaid sanctions against TWIA’s cost recovery. CR678-79.

          A complaint about a temporary order becomes moot after a final order is

entered if reversal of the temporary order would have no effect on the final order

that superseded it. Wright v. Wentzel, 749 S.W.2d 228, 234 (Tex. App.—Houston

[1st Dist.] 1988, no writ); Bd. of Adjustment, City of Corpus Christi v. McBride,

676 S.W.2d 705, 709 (Tex. App.—Corpus Christi 1984, no writ). Here, TWIA

does not challenge the final judgment that superseded and mooted the pretrial

sanctions order. Therefore, the mooted November 7 order is not before the Court.

See Int’l Paper Co. v. Harris County, 445 S.W.3d 379, 385-86 (Tex. App.—

Houston [1st Dist.] 2013, no pet.); Barnett v. Home of Tex. & Warranty

Underwriters Ins. Co., No. 14-09-01005-CV, 2011 WL 665309, at *6 (Tex.

App.—Houston [14th Dist.] Feb. 24, 2011, no pet.) (mem. op.) (“Because

appellees’ challenge to question 9 would have no impact on the court’s final

judgment, such challenge is moot.”); see also Green v. Allied Interests, Inc., No.

03-97-00510-CV, 1998 WL 105154, at *2 (Tex. App.—Austin Mar. 12, 1998, pet.

4
  TWIA requested $39,901.95 in costs. SuppCR2968-70. At League City’s urging, however,
Judge Neves offset that requested amount by the $15,000 in unpaid sanctions and further
excluded $1,714.63 that did not qualify as taxable costs, resulting in a final award of $23,187.32.
Compare SuppCR2968-70 with SuppCR3:8-15 and CR663, 679.

48146_1                                     6
denied) (not designated for publication) (holding appellant’s complaint was moot

where sanctions order was incorporated into and superseded by final judgment).

          B.   TWIA does not challenge the court’s ruling offsetting its
               cost recovery by the amount of monetary sanctions.
          The apportionment of costs is committed to the trial court’s sound

discretion. San Antonio Hous. Auth. v. Underwood, 782 S.W.2d 25, 27 (Tex.

App.—San Antonio 1989, no writ).           The trial court may set the amount of

recoverable costs and, as here, offset a party’s cost recovery for earlier discovery

abuse. TEX. R. CIV. P. 141; see State v. Castle Hills Forest, Inc., 842 S.W.2d 370,

373 (Tex. App.—San Antonio 1992, writ denied); cf. Headington Oil Co. v. White,

287 S.W.3d 204, 213 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (noting that

party’s failure to cooperate in discovery, or abuse of discovery process, constitutes

“good cause” under Rule 141) (citing TEX. R. CIV. P. 191.2).

          TWIA does not challenge the judgment or the court’s cost apportionment,

decision to incorporate monetary sanctions into such apportionment, or Rule 141

determination that TWIA’s discovery abuse justified such an offset. Thus, even if

TWIA could revive the mooted sanctions order, it still could not prevail for failure

to attack the court’s cost apportionment. Kroger Co. v. Am. Alternative Ins. Corp.,

___ S.W.3d ___, No. 14-13-01135-CV, 2015 WL 3878097, at *3, *5 (Tex. App.—

Houston [14th Dist.] June 23, 2015, no pet.); see Britton v. Tex. Dep’t of Criminal

Justice, 95 S.W.3d 676, 681 (Tex. App.—Houston [1st Dist.] 2002, no pet.).

48146_1                                7
III.      Alternatively, the Trial Court Properly Assessed Monetary
          Sanctions against TWIA.
          Even if the November 7 order were properly before the Court, the trial court

acted within its discretion by sanctioning TWIA.

          A.    Reviewing courts must defer to trial courts’ considerable
                discretion in imposing sanctions.
          Abuse of the discovery process through unwarranted delays and

unresponsiveness subverts justice, and such conduct is (and should be) condemned.

McMillin v. State Farm Lloyds, 180 S.W.3d 183, 199 (Tex. App.—Austin 2005,

pet. denied). Trial courts are therefore empowered to sanction parties for abusing

the discovery process; if a party fails to comply with proper discovery requests, the

court may enter orders “as are just,” including monetary sanctions awarding

attorney’s fees. TEX. R. CIV. P. 215.2(b)(8).

          Trial courts are better equipped than appellate courts to “evaluate the often

complex facts and equities of discovery disputes” and determine whether a party

has abused the discovery process, the relative culpability and harm of such

conduct, and the credibility of a party’s attempts to explain delays and

unresponsiveness.       McMillin, 180 S.W.3d at 199.        The trial court has more

complete access to relevant information than does a reviewing court, including the

entire history of litigation—which may not be fully captured in the record the

48146_1                                  8
appellant chooses to bring forward—plus the progression of events and firsthand

experience with the parties’ explanations and complaints. See id. at 200.

          Therefore, the decision to impose discovery sanctions is reviewed for an

abuse of discretion. Id. at 199. In exercising its discretion, the trial court may

consider not only the specific violation for which sanctions are finally imposed, but

also everything that has occurred during the history of the litigation. See Downer

v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985).

          An appellate court cannot substitute its judgment or simply decide whether

“the facts present an appropriate case for the trial court’s action” but instead must

determine whether the trial court acted arbitrarily or unreasonably, that is, without

reference to guiding rules and principles. See id. at 241-42; Cire v. Cummings, 134
S.W.3d 835, 838-39 (Tex. 2004).

          The appellate court is not limited to reviewing the “sufficiency of the

evidence” supporting the trial court’s finding but instead must independently

review the entire record, including any evidence, the arguments of counsel, written

discovery on file, and circumstances surrounding the discovery abuse. See Am.

Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006); Scott Bader, Inc.

v. Sandstone Prods., Inc., 248 S.W.3d 802, 812 (Tex. App.—Houston [1st Dist.]

2008, no pet.); Prize Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537, 575

(Tex. App.—San Antonio 2011, no pet.).

48146_1                                 9
          B.   The record shows a nexus between TWIA’s discovery abuse
               and the sanctions imposed.
          TWIA’s argument centers on the transcript from the sanctions hearing.

ANT Br. at 18-25. But the trial court was not limited to “what [TWIA] wish[es] to

present in isolation for inspection,” and neither is this Court. See In re Harvest

Communities of Houston, Inc., 88 S.W.3d 343, 347 (Tex. App.—San Antonio

2002, orig. proceeding). Here, the entire course of discovery shows a pattern of

discovery abuse justifying sanctions.

               1.    TWIA engaged in persistent discovery abuse and
                     disobeyed several court orders.
          League City served discovery requests on TWIA on March 4, 2013. CR94;

SuppCR109, 399. The requests sought, among other things, information about

TWIA’s contentions and production of files from the TWIA agent(s) or

representative(s) who adjusted League City’s claim. Id.

          TWIA did not serve its responses until September 3, 2013. SuppCR123.

Despite having six months to respond, TWIA provided few substantive answers.

SuppCR109-201.        Its responses were preceded by four pages of “general

objections” to the interrogatories and requests for production, SuppCR127-28, 166-

67, and raised countless stock objections to individual questions. SuppCR129-201.

48146_1                                 10
          Specifically, TWIA objected and did not provide substantive answers to

proper contention interrogatories, instead referring League City to an 869-page

claims file. SuppCR137-42. TWIA would not provide basic information about

individuals involved in handling the claim, and it refused to provide training

materials, SuppCR113-15, that have long been held discoverable. See State Farm

Mut. Auto. Ins. Co. v. Engelke, 824 S.W.2d 747, 753 (Tex. App.—Houston [1st

Dist.] 1992, orig. proceeding). TWIA also refused to produce other categories of

discoverable documents, such as photographs and other documents used to

estimate League City’s claim. SuppCR115-20.

          On October 1, the court ordered TWIA to “narrow down what your real

objections [are] versus what you just [have] written down.”         SuppRR(10-02-

13):14. But TWIA admittedly did not comply with the court’s order: “[T]he direct

answer is, no, we didn’t deal with my discovery objections[.]” Id. The court

reminded TWIA, “I told you ‘don’t come here without having had it done,’”

SuppRR(10-02-13):17, and ordered TWIA to produce responsive documents

before October 11, 2013. SuppCR379. TWIA did not comply with that order,

either.

          On October 14, the court heard League City’s motion to compel responses to

its discovery requests. CR94; SuppRR(10-14-13). TWIA first told the court that it

already had produced all non-privileged documents, SuppRR(10-14-13):6, a

48146_1                                11
representation that TWIA repeats in its brief to this Court. ANT Br. at 19 n.4. But

TWIA did not tell the trial court—and does not tell this Court, either—that it had

not produced “a large amount of documentation,” that is, “a very large file,” from

the claim adjuster.      SuppRR(10-14-13):6-7.     TWIA also did not produce all

relevant emails. SuppRR(10-22-13):17.

          Moreover, TWIA could not and would not assure the court that it had, in

fact, produced all responsive, non-privileged materials. SuppRR(10-14-13):11-12.

The trial court recessed the hearing and instructed TWIA “to come back at 3:00 …

[and] be clear on the record what you have and haven’t given and what you have

withheld and why.”        SuppRR(10-14-13):38.     Even after the recess, however,

TWIA could not answer the court’s question: “If the court wants a definitive

statement that we have produced every responsive document, we can’t make that.

We will never be [] able to make that definitive statement. It won’t happen.”

SuppRR(10-14-13):44; see SuppRR(10-14-13):38-41, 42.

          The trial court warned TWIA about “try[ing] to … run the clock” by failing

to cooperate with discovery. SuppRR(10-14-13):44. Then, the court proceeded to

specifically rule on each objection relevant to League City’s motion to compel, a

process that took more than 90 minutes. SuppRR(10-14-13):50-146.

48146_1                                12
          TWIA asked the court to order the deposition of League City’s corporate

representative, but League City objected to having to produce its witness without

the benefit of TWIA’s documents “to prep my people with.                I need their

documents[.]” SuppRR(10-14-13):147-48. Accordingly, the court ordered League

City to produce its corporate representative for deposition by Wednesday, October

23, but also ordered TWIA to supplement its discovery responses, per that day’s

rulings on the objections, before that deposition. SuppRR(10-14-13):148, 151.

          TWIA did not supplement its responses as ordered. SuppRR(10-22-13):29.

Its disobedience was the subject of yet another hearing, on October 22. The topic

came up during a discussion about TWIA’s desire to depose its own adjuster, Paul

Gauthier. League City wanted that deposition, too, but it could not take the

deposition without TWIA’s still-overdue discovery responses. SuppRR(10-22-

13):5-7, 10-11, 14, 29. The court asked TWIA to explain its non-compliance with

the October 14 order. SuppRR(10-22-13):32. TWIA claimed misunderstanding

about the court’s rulings on its objections, but the court did not accept that excuse.

SuppRR(10-22-13):33, 37. When pressed for details, TWIA could not identify any

particular ruling that it questioned. SuppRR(10-22-13):34, 36.

          The court ordered the parties to depose Gauthier on Monday, October 28,

but specifically ordered TWIA to supplement its responses by October 25, in

advance of the deposition. CR94, 99; SuppCR396; SuppRR(10-22-13):37-38.

48146_1                               13
          Once again, TWIA disobeyed the trial court by failing to supplement

discovery responses by October 25. CR94-95. League City was forced to take

Gauthier’s court-ordered deposition on October 28 without discovery that it had

repeatedly requested to prepare for the deposition, and which the court had ordered

twice.        SuppCR396.   To make matters worse, it was discovered during the

deposition that TWIA had not produced Gauthier’s physical file from his

adjustment of the claim, which contained relevant emails and photographs not

previously produced.          SuppCR399-400; see also CR93; SuppRR(11-07-

13)(volume 2).

          On October 29, League City reminded TWIA of the court’s October 25

deadline and again requested supplementation, but TWIA still did not comply.

CR103. Instead, TWIA purported to grant itself an extension from the court’s

order to November 1st or 4th. CR103. League City reiterated its request on

October 31, and also requested production of Gauthier’s physical file, CR 100, but

TWIA did not respond.

          TWIA did not produce the court-ordered discovery, or Gauthier’s file, by its

own self-extended November 4 “deadline.” CR94, 103. Finally, at the end of the

day, League City again had to seek the court’s assistance. The court was asked to:

                compel the production of Gauthier’s file, SuppCR399-400;

                strike TWIA’s objections and compel answers to yet another set of
                 outstanding discovery, CR62-93; and

48146_1                                 14
               enforce its previous orders, and impose sanctions, as compensation
                for its attorney’s fees and costs incurred from TWIA’s discovery
                abuse. CR94-104.

          TWIA waited until November 6—twelve days after the court-ordered

deadline—to finally respond to the discovery requests. CR105-09. Its response

offered no explanation for disobeying the court’s orders. CR121-33.

          The court heard League City’s motion for sanctions on November 7, 2013.

RR2:1-59.       League City expressed frustration with TWIA’s persistent non-

compliance, RR2:6, reiterated that it needed TWIA’s discovery responses prior to

Gauthier’s deposition, RR2:18-19, and complained that TWIA’s failure to produce

Gauthier’s file precluded a proper cross-examination of the witness and

necessitated another deposition, with incumbent costs that “[League City]

shouldn’t have to bear the expenses of.” RR2:19-21.

          The court asked TWIA to explain its non-compliance with the court’s

orders, but TWIA’s counsel replied, “I can’t give you a full reason because I don’t

know all of the reasons why.” RR2:8. TWIA could only explain its failure to

respond by its self-granted November 1st extension, but not for its non-compliance

with the court’s October 25 deadline. RR2:8-10. And its attorney’s sole excuse

for not complying by November 1—a week late—was that he did not have “final

approval” from TWIA, but he could not identify whose approval was needed or

“why [those people] were not available.” RR2:8-11. The court recessed the

48146_1                               15
hearing to give TWIA additional time to justify its disobedience, RR2:15-16, but,

even after the break, TWIA still had no explanation. RR2:16-17.

          Nevertheless, TWIA’s attorney tried to “assure” the court that his client did

not intend to disrespect the court’s rulings. Id. The court did not believe that

claim, however, and explained why:

          What did you think was going to happen when you spent the past
          month openly defying my orders…? You have done, nothing,
          nothing, nothing to comply with my orders. You have done
          everything you can to show me you don’t have to comply with my
          orders.

RR2:17-18.

          Accordingly, the court granted League City’s motion to enforce and for

sanctions and, after hearing further argument, ordered TWIA to pay $15,000 “as a

sanction for violations of the Court’s order, which includes the amount of

attorney’s fees and expenses Plaintiff incurred in preparing Plaintiff’s Motions, and

attending the hearing on the Motions.”          CR160; RR2:31-32.      The court also

ordered TWIA to re-produce Gauthier for another six-hour deposition “since

[League City] didn’t have the information before that [it] needed.” RR2:32.

48146_1                                 16
                2.    A finding of “intentional disrespect” is not necessary
                      to impose sanctions, and even if it were, the record
                      supports such a finding.
          The sole basis for TWIA’s claim that its conduct was not sanctionable is its

attorney’s bare assertion that TWIA’s non-compliance “wasn’t intentional and it

wasn’t out of disrespect.” ANT Br. at 25 (quoting RR2:27). TWIA cites no

authority for the proposition that “intentional … disrespect” is a prerequisite to the

imposition of monetary sanctions. There is none.

          Rule 215 authorizes “just” orders, including sanctions, for the “fail[ure] to

comply with proper discovery requests or to obey an order to provide or permit

discovery,” irrespective of intent. See TEX. R. CIV. P. 215.2(b). “While lack of

intentional disrespect may be considered, it is a matter for the trial court’s

determination.” Vulcan Materials Co. v. Bowers, No. 04-04-00062-CV, 2004 WL
2997852, at *3 (Tex. App.—San Antonio Dec. 29, 2004, pet. denied) (mem. op.).

          The court did not accept counsel’s claim, RR2:17-18, as was its prerogative.

Id.; see Scott Bader, 248 S.W.3d at 813 (affirming trial court’s ability to judge

credibility of witnesses and to reject non-credible explanations). The abuse-of-

discretion standard recognizes that the trial court is in the best position to judge the

credibility of a party’s explanations for its conduct. See McMillin, 180 S.W.3d at

199; Dao v. Md. Cas. Co., No. 09-13-00353-CV, 2015 WL 2255263, at *7 (Tex.

App.—Beaumont May 14, 2015, no pet.) (mem. op.).

48146_1                                 17
                3.      The record supports the court’s finding that TWIA’s
                        discovery abuse prejudiced League City.
          TWIA asserts there is an absence of “evidence” of prejudice from its

discovery abuse. TWIA’s argument misreads TransAmerican Natural Gas Corp.

v. Powell5 and also Chrysler Corp., in which the supreme court recognized that

prejudice can be presumed from the record: “It seems obvious that the Garcias

would be prejudiced by the expenditure of attorneys’ fees and expenses in pursuing

motions to compel discovery and sanctions.” Chrysler Corp. v. Blackmon, 841
S.W.2d 844, 850 (Tex. 1992) (orig. proceeding); see Scott Bader, 248 S.W.3d at

817 (upholding award of attorney’s fees based on work performed, and

“surmis[ing]” that counsel spent additional time on filings not even contained in

record).

          TWIA’s contention also ignores the weight of case law, including

controlling authority from this Court, holding that courts are not limited to

“evidence” introduced at the sanctions hearing in imposing—or upholding—

sanctions. See Scott Bader, 248 S.W.3d at 812; Prize Energy, 345 S.W.3d at 575.

As the Waco court has explained:

          [A] trial court may consider factors other than “evidence” in
          determining whether to impose a discovery sanction. Thus, the court
          did not abuse its discretion by imposing sanctions even though the
          Fraziers did not formally present “evidence” in the sanctions hearings.

5
    811 S.W.2d 913 (Tex. 1991) (orig. proceeding).

48146_1                                     18
                                          *****

          [O]ur review extends to the entire record and is not limited to
          “evidence” offered at a hearing. ... Thus, no abuse of discretion is
          shown by any failure of the Fraziers to proffer “evidence” of the
          manner in which they were prejudiced by Van Es’s failure to comply
          with their discovery requests.
Van Es v. Frazier, 230 S.W.3d 770, 778, 783 (Tex. App.—Waco 2007, pet.

denied) (citations omitted).

          The record affirmatively shows that TWIA’s non-compliance with court

orders, and its failure to produce Gauthier’s physical file, prejudiced League City

and caused it to incur additional attorney’s fees and expenses.           Even before

Gauthier’s deposition, League City demonstrated that it needed TWIA’s discovery

responses, including basic information about TWIA’s contentions, to properly

depose Gauthier. The trial court heard all of the following:

               “[League City] shouldn’t have to be forced to go take [Gauthier’s]
                deposition which is the key witness without the information that we
                are—this court has ruled now twice that we are entitled to.”
                SuppRR(10-22-13):6.

               “[W]e can move the discovery period back to take [Gauthier’s
                deposition] next week, but I’ve got to have that information provided
                to me ...” Id.

               “These are basic questions I need answered so I can ask the insurance
                adjuster.” SuppRR(10-22-13):7.

               “I don’t want to go down and take this adjuster’s depo without basic
                information to question him on. ... I need some time to get ready for it
                and I need to get prepared.” SuppRR(10-22-13):11.

48146_1                                 19
              “[T]hey have not given me any of the discovery you ordered them to
               give me. I don’t have any of the information I need to depose this
               adjuster.” SuppRR(10-22-13):29.

Based on these statements, the court specifically ordered TWIA to supplement its

discovery responses by October 25, before Gauthier’s deposition.           CR94, 99;

SuppCR396; SuppRR(10-22-13):37-38. The record thus shows that League City

would be prejudiced by TWIA’s failure to supplement discovery responses.

          Then, after the deposition, League City showed that it was prejudiced by

TWIA’s disobedience of the court’s order and failure to produce Gauthier’s file:

              “[I]t would have been really helpful to have the information on the
               Friday before the Monday and Tuesday deposition [of Gauthier].”
               RR2:19.

               “I had no access to those materials, no way to know whether he was
               telling the truth to cross-examine him or present him with that
               evidence. So I basically wasted a lot of my time there on Monday and
               Tuesday[.]” RR2:20.

               “[Gauthier] has a complete additional set of [unproduced] physical
               files, so that means we are going to have to start over.” RR2:23.

              “There is going to be time. There is going to be the time of re-
               deposing [Gauthier] and re-preparing for that deposition. I think those
               are direct costs that are directly related to them disregarding your
               order.” RR2:21.

              The requested re-deposition of Gauthier is “going to be quite an
               undertaking and probably an expensive undertaking that [League
               City] shouldn’t have to bear the expenses of.” RR2:19-20.

48146_1                                20
               “I’m going to have to probably spend another weekend getting ready
                [for Gauthier’s second deposition] like I spent the whole weekend
                before his deposition getting ready. I’m probably going to have to do
                this again at least for some amount of time . ...” RR2:20.

The court expressly found that League City was prejudiced, and was entitled to a

second deposition of Gauthier, “since you didn’t have the information before that

you needed.” RR2:32.

          Prejudice can be shown through a variety of ways, including, among other

things, the arguments of counsel6 and written materials on file with the court. See

Scott Bader, 248 S.W.3d at 812, 817; Prize Energy, 345 S.W.3d at 574. Here, the

record shows, and the trial court knew, that League City had filed several motions,

written TWIA numerous times, and attended multiple hearings trying to secure

TWIA’s participation in discovery and compliance with the court’s orders. The

record thus supports the court’s finding that League City was prejudiced by

TWIA’s discovery abuse.

6
  Moreover, unsworn statements by attorneys of record in open court can constitute evidence.
See Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997). TWIA did not object to counsel’s
statements as unsworn or non-evidentiary and therefore waived any complaint that League City’s
attorneys were not under oath while clearly attempting to show prejudice. See id.; Keith v. Keith,
221 S.W.3d 156, 170 (Tex. App.—Houston [1st Dist.] 2006, no pet.).

48146_1                                    21
                4.    The sanctions directly relate to TWIA’s discovery
                      abuse.
          The record supports a direct relationship between TWIA’s discovery abuse

and the sanctions imposed.        See Am. Flood Research, 192 S.W.3d at 583;

TransAmerican, 811 S.W.2d at 917. The trial court properly considered the entire

course of litigation. See Scott Bader, 248 S.W.3d at 814. TWIA’s pattern of

discovery abuse directly caused League City to incur attorney’s fees in preparing

several motions to compel, attending several hearings, preparing an entire weekend

and attending a two-day deposition of Gauthier that “wast[ed]” counsel’s time, and

having to prepare for a second deposition of Gauthier. The sanctions imposed by

the trial court directly compensate League City for these expenses. CR 160;

RR2:31-32. Thus, the record shows the requisite direct nexus. See Am. Flood

Research, 192 S.W.3d at 583; TransAmerican, 811 S.W.2d at 917.

          C.    Monetary sanctions were not excessive but instead
                compensated League City for the prejudice it suffered.
                1.    The record supports the amount of monetary
                      sanctions found by the court.
          League City suggested monetary sanctions of $5,000 for each day of

TWIA’s non-compliance. CR97. In the hearing, its attorney opined that such a per

diem amount would “capture all of the other things that might flow from the

delays.” RR2:24. Counsel opined that a total sanction of $30,000 “would be an

appropriate amount … [and] would encompass probably the cost of having to go

48146_1                               22
and re-depose [Gauthier].” RR2:24. That amount of requested sanctions was

further justified because:

               “I’m going to have to probably spend another weekend getting ready
                [for the second deposition] like I spent the whole weekend before his
                deposition getting ready. I’m probably going to have to do this again
                at least for some amount of time … when we do get [Gauthier’s
                physical file],” RR2:20; and

               “[Gauthier] has a complete additional set of [unproduced] physical
                files, so that means we are going to have to start over.” RR2:23.

The trial court also heard—from TWIA, no less—that the hourly rate for League

City’s attorney was $600. RR2:30. Not only did TWIA not quibble with that rate,

it encouraged the court to use that rate in setting the amount of sanctions. RR2:30.

          TWIA mentions a lack of affidavits, ANT Br. at 20, but affidavits were not

required here because attorney’s fees were imposed as sanctions, not as a

recoverable element of damages. See Scott Bader, 248 S.W.3d at 816-17. Further,

the statements of counsel in open court were sufficient to prove that $30,000

“would be an appropriate amount” to reimburse League City for “the cost of

having to … re-depose” Gauthier. RR2:24. See Banda, 955 S.W.2d at 272.

          In reviewing the amount of sanctions, this Court has focused on the work

that was performed. See Scott Bader, 248 S.W.3d at 817 (describing work required

because of opponent’s sanctionable conduct); see Finlay v. Olive, 77 S.W.3d 520,

527 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (affirming sanctions order,

48146_1                                23
despite absence of testimony about number of hours incurred by counsel, because

trial court was aware of counsel’s hourly rate and could see counsel’s work

product).

          Here, the record supports the trial court’s conclusion that $15,000—that is,

25 hours of work at $600 per hour—would adequately compensate League City for

having to (1) prepare two motions to compel, (2) attend three hearings (including

an all-day hearing) in connection with the motions to compel and for sanctions, (3)

spend an entire weekend preparing for a second deposition, and (4) take Gauthier’s

deposition a second time, as a result of TWIA’s discovery abuse. That finding is

not excessive, particularly where the record supported an award of twice that

amount. See Scott Bader, 248 S.W.3d at 817. Accordingly, TWIA has not shown

that the trial court abused its discretion by awarding $15,000 in attorney’s fees and

expenses. CR160.

                2.    The court considered the availability of lesser
                      sanctions.
          Case law holds that requiring the offending party to pay its opponent’s

attorney’s fees is itself a “lesser” sanction. See TransAmerican, 811 S.W.2d at

918; see also Cire, 134 S.W.3d at 840 (describing as “lesser sanctions” an award of

attorney’s fees); Andras v. Mem’l Hosp. Sys., 888 S.W.2d 567, 572 (Tex. App.—

Houston [1st Dist.] 1994, writ denied) (categorizing monetary penalties and

attorney’s fees as “lesser” sanctions).

48146_1                                   24
          The record also shows that the court did not begin with monetary sanctions

but instead tested several other alternatives, including two orders to compel

production, and several warnings that TWIA was not following the Rules and that

it was abusing the process. CR94, 99; SuppCR379; SuppRR(10-14-13):26-27,

148, 151; SuppRR(10-22-13):19-20.           See Van Es, 230 S.W.3d at 783 (“[A]

warning is, in itself, a lesser sanction[.]”). These lesser sanctions did not promote

TWIA’s compliance with the Rules and the court’s explicit orders, and further

“lesser sanctions” would not have cured the prejudice League City suffered, so the

trial court was justified in imposing monetary sanctions against TWIA.

IV.       The Court Properly Struck TWIA’s Affirmative Defenses for
          Continued Discovery Abuse Justifying the Presumption Its
          Defenses Lacked Merit.
          TWIA’s third issue complains about a second order, in which a different

judge struck some of its affirmative defenses for continued discovery abuse.

TWIA tries to cabin this Court’s review of that order solely to statements made

during the April 10 hearing. See ANT Br. at 28 (“The pre-trial court stated the

reason for its order at the third and final hearing on this matter[.]”). But Judge Cox

thoroughly explained his reasoning in a nine-page order, CR187-95, and that order

shows the court properly struck TWIA’s affirmative defenses for continued

discovery abuse.

48146_1                                25
          A.    The entire course of proceedings justified the conclusion
                that TWIA’s affirmative defenses lacked merit.
          When monetary sanctions fail to effectuate compliance, a party’s continued

failure or refusal to cooperate in discovery justifies the trial court in assuming that

the party’s claims lack merit. See TransAmerican, 811 S.W.2d at 918 (“[I]f a party

refuses to produce material evidence, despite the imposition of lesser sanctions, the

court may presume that an asserted … defense lacks merit and dispose of it.”).

          Thus, when a party makes a claim—as TWIA did here, with its affirmative

defenses—and then frustrates legitimate attempts to define the scope of that claim

and investigate possible responses, there is a direct relationship between the

conduct and dismissal of the claim. See Chasewood Oaks Condo. Homeowners

Ass’n v. Amatek Holdings, Inc., 977 S.W.2d 840, 845 (Tex. App.—Fort Worth

1998, pet. denied). “A party who will not ‘play by the rules’ even after repeated

orders to do so should not be allowed to play at all.” Id. Repeated non-compliance

thus justifies the trial court in assuming that the party either has no claim or is

“dragging its feet in mustering evidence of one.” Id.

          TWIA continues to make “trees” arguments, but this remains a “forest”

issue:     the Court must independently review the entire record, including the

evidence, arguments of counsel, written discovery on file, and circumstances

surrounding TWIA’s discovery abuse. See Am. Flood Research, 192 S.W.3d at

583; Prize Energy, 345 S.W.3d at 574. Notably, although TWIA makes much of

48146_1                                26
discovery that may have taken place after the court’s order, and the evidence at

trial, this Court may consider only “the record that was before the trial court” at the

time of its ruling, and not subsequent events. See Harvest, 88 S.W.3d at 348-49.

                1.     The court’s unchallenged findings of fact are binding
                       on this Court.
          To the extent that TWIA does not challenge the trial court’s findings of fact,

CR187-95, those findings are binding on this Court unless the record establishes

the contrary proposition as a “matter of law” or there is “no evidence” to support

the finding. See Teate v. CBL/Parkdale Mall, L.P., 262 S.W.3d 486, 490 (Tex.

App.—Beaumont 2008, no pet.).

                2.     TWIA continued to disregard the court’s orders after
                       the imposition of monetary sanctions.
          This case does not present “[a] supposed failure to comply with a single

court order,” ANT Br. at 34. The record, and the court’s detailed April 17 order,

shows a pattern of discovery abuse that continued well after the imposition of

monetary sanctions, including non-compliance with at least seven court orders.

CR188-95.

          TWIA’s violation of the first three court orders (October 1, October 14, and

October 22) are detailed above. Further, TWIA did not comply with the court’s

November 7th order to provide information about its ability to pay the sanctions,

RR2:44-45; SuppCR505, and also ignored the court’s December 2nd order to pay

48146_1                                  27
sanctions by December 9, 2013. CR165, 188. TWIA never complied with either

of those orders—the fourth and fifth court orders that TWIA ignored—and Judge

Cox found that TWIA’s disobedience of those orders “demonstrate its contempt for

judicial process and the inability of lesser sanctions to deter Defendant’s discovery

abuse.” CR188. TWIA does not challenge this finding on appeal.

          In addition, TWIA refused to cooperate with discovery into its affirmative

defenses challenging the appraisal award. CR182, 188-89. TWIA pleaded several

defenses to the appraisal award but provided no factual basis for these allegations,

id., so League City sent discovery requests inquiring about TWIA’s challenges to

the appraisal process. CR188.

          As before, TWIA responded with “numerous objections and few answers.”

CR189; SuppCR866-79. Specifically, TWIA refused to identify individuals with

knowledge about its contentions regarding the appraisal award or answer

interrogatories seeking information about those contentions.        SuppCR868-72.

TWIA claimed it did not have to answer these interrogatories because “Plaintiff

has already used all of its interrogatories,” SuppCR952 (capitalization normalized),

yet TWIA still refused to respond to requests for production—which have no such

limitation—seeking similar information. SuppCR873-79.

48146_1                                28
          On February 17, 2014, Judge Cox held a hearing to resolve several

discovery issues, including TWIA’s failure to provide answers to written

interrogatories concerning the appraisal process. CR189; SuppRR(2-17-14):32-50.

TWIA wanted to depose the appraisal umpire, Judge Burgess. SuppRR(2-17-

14):31.       League City agreed to take that deposition but first asked for more

information about TWIA’s contentions “because I don’t even know what to

question these people about if I don’t know what [TWIA’s] allegations are [and]

what would be the legal theories for setting aside” the appraisal award. SuppRR(2-

17-14):33-34, 39.

          Judge Cox reviewed TWIA’s discovery responses and found that they

“consisted mainly of objections, with few substantive answers.” SuppRR(2-17-

14):34; CR189. In exchange for an order for Burgess’s deposition, Judge Cox

required that TWIA answer League City’s interrogatories prior to the deposition.

CR189. TWIA agreed to answer the interrogatories within 10 days:

          THE COURT:          What concession are y’all willing to make now
          about Judge Burgess in getting the interrogatories prior to the
          depositions of Judge Burgess? … And that interrogatory needs to go
          before the deposition. When can you do it?

          [TWIA]:     Ten days.
          …

          THE COURT:        Then we will do that.
SuppRR(2-17-14):40 (emphasis added).

48146_1                                29
          TWIA later claimed it made no such agreement, and it now cherry-picks the

record in representing to this Court that it agreed only to try to “work out”

disagreements with League City. ANT Br. at 29; see, e.g., SuppCR880. But the

record reveals no ambiguity about TWIA’s agreement to answer the

interrogatories:

          TWIA:           And if we get those interrogatories answered soon, we
          will do it. . . . I am not exactly sure what his complaint is about them,
          but we can work with them to try to work that out.
          THE COURT:         What is the deal?
          LEAGUE CITY: Well, I think there are very few actual answers in
          those interrogatory responses.
          THE COURT:        Are there a whole lot of objections to answers?
          That’s a problem.

          TWIA:        Your Honor, I understand that. And we will do what we
          can.
SuppRR(2-17-14):41 (emphases added).

          The record shows that Judge Cox expected TWIA to answer the

interrogatories within ten days, SuppRR(2-17-14):40-41, and that TWIA

understood its court-ordered obligation was to “get those interrogatories

answered.” Id. Thus, the court found that “Defendant affirmatively represented on

the record that Defendant would answer the interrogatories regarding appraisal

within ten days,” and the court “accepted Defendant’s stipulation that it would

48146_1                                  30
provide supplemental answers within ten days and ordered the parties to proceed in

that fashion.” CR189. The record supports that finding.

          On February 26, League City asked TWIA about its interrogatory answers;

TWIA responded, “We have no more information to offer.” SuppCR880. In a

further display of gamesmanship, TWIA claimed it did not have to answer

discovery without a written court order, notwithstanding the court’s order and the

parties’ agreement in open court. SuppCR945. See TEX. R. CIV. P. 11. TWIA did

not answer League City’s appraisal interrogatories, within ten days or at all.

CR190. This, then, was the sixth court order that TWIA ignored.

          In a follow-up hearing on March 12, TWIA denied any agreement and

claimed it was under no order to answer interrogatories.7 CR190; SuppRR(3-12-

14):5.      The court reviewed the transcript and found otherwise.                  CR190.

Accordingly, Judge Cox enforced the parties’ open-court agreement, overruled

TWIA’s discovery objections, and ordered TWIA to “fully answer[]” the

interrogatories by the following day.               SuppRR(3-12-14):5, 12; CR191;

SuppCR1036.

7
  TWIA instead characterized its promise as one simply to “visit” with League City’s attorney
but later acknowledged it didn’t do that, either. SuppRR(3-20-14):15-16. Thus, whatever its
agreement, TWIA did not comply.

48146_1                                  31
          TWIA insinuates that the trial court imposed sanctions based solely on a

supposed “miscommunication[] or misunderstanding[].” ANT Br. at 30. But the

record shows TWIA persisted in discovery abuse even after these hearings.

          On March 13, TWIA served amended objections and answers to League

City’s appraisal interrogatories. CR191; SuppCR1176-83. Once again, TWIA

disobeyed the court’s order—now for the seventh time—as, instead of actually

answering the interrogatories, TWIA instead asserted new objections “but few

substantive answers.” CR191; SuppCR1178-83. TWIA still refused to identify

witnesses with knowledge of its contentions regarding the appraisal process,

SuppCR1178-79, and did not answer interrogatories about those contentions.

CR191; SuppCR1181-82.          League City was once again forced to move for

sanctions. SuppCR1085-1218.

          In response, TWIA exhorted the court to postpone its ruling because its

corporate representative, Paul Strickland, was due to be deposed and would explain

“the appraisal itself and his work in sorting through the appraisal in determining

what the merits of the appraisal are.” CR191; SuppRR(3-20-14):40. TWIA also

told the court that League City would “know more” about its contentions after the

deposition.     SuppRR(3-20-14):40.     Based on those representations, the court

agreed to take League City’s request for sanctions under advisement. CR192;

SuppRR(3-20-14):41.

48146_1                               32
          Then, TWIA repeatedly instructed Strickland not to answer questions about

the appraisal process, the identity of witnesses involved, and TWIA’s contentions

underlying its affirmative defenses, including questions asking simply whether

TWIA contended that the appraisal award was the result of an accident. 8 CR192-

93; SuppCR1340, 1342, 1345-74.

          On March 28, TWIA filed supplemental answers to League City’s appraisal

discovery. CR193; SuppCR1378-94. TWIA still raised numerous objections and

refused to provide any factual answers about its legal contentions regarding its

affirmative defenses or witnesses with knowledge of such contentions.

SuppCR1381.

          On April 10, the court held another hearing on TWIA’s non-compliance

with discovery requests and League City’s motion for sanctions. SuppRR(4-10-

14):8-16. The court was notified of TWIA’s interference and refusal to allow

Strickland to testify about its affirmative defenses. SuppRR(4-10-14):8-12. TWIA

argued, “We have more than adequately given the Plaintiffs a flavor or an

understanding of … what TWIA’s position is on appraisal.” Id. at 16. The trial

court responded, “I think more than a flavor is required. I just don’t think that

8
  Even if TWIA were “substantially justified” in refusing to answer contention interrogatories
premised on its claim that Judge Cox did not expressly expand the maximum number of
interrogatories allowed to League City, see ANT Br. at 30-31; but see CR191 (overruling
TWIA’s objections), there is no “substantial justification” for refusing to answer proper
contention questions during deposition.

48146_1                                  33
TWIA has participated appropriately in this discovery, so I am striking the three

affirmative defenses.” Id. The court’s subsequent order clearly articulated its

reasoning. CR193-94.

          The record demonstrates a persistent pattern of discovery abuse over a long

period of time.      Numerous efforts were made to obtain TWIA’s compliance.

However, TWIA persisted in its discovery abuse and in disobeying numerous court

orders. Therefore, and for the reasons provided below, the trial court properly

struck TWIA’s affirmative defenses because it was justified in assuming that those

defenses lacked merit. See Van Es, 230 S.W.3d at 783-84.

          B.    There is a direct nexus between TWIA’s refusal to
                cooperate with discovery into its affirmative defenses and
                the striking of those affirmative defenses.
          The record shows a direct relationship between TWIA’s refusal to allow

discovery into the factual bases for its affirmative-defense contentions, and the

striking of those defenses. See TransAmerican, 811 S.W.2d at 917. Despite

several orders to compel, warnings, and hours of court hearings at which the court

repeatedly emphasized the importance of TWIA’s participation in the discovery

process, TWIA still failed to disclose the factual bases for its affirmative defenses.

Further, TWIA was ordered to pay monetary sanctions for discovery abuse,

disobeyed that order, was again ordered to pay monetary sanctions, and disobeyed

that order, too. These are appropriate grounds for the striking of its affirmative

48146_1                                 34
defenses. See Warwick Oil & Gas, Inc. v. FBS Props., Inc., No. 01-14-00290-CV,

2015 WL 3637988, at *5-6 (Tex. App.—Houston [1st Dist.] June 11, 2015, no

pet.) (mem. op.); Weinberger v. Longer, 222 S.W.3d 557, 571 (Tex. App.—

Houston [14th Dist.] 2007, pet. denied).

          C.    The trial court properly considered lesser sanctions.
          The record affirmatively demonstrates the court’s consideration of lesser

sanctions and its finding, with reasons, why such sanctions would not deter

TWIA’s discovery abuse. CR187-95. Specifically, the trial court held countless

hearings in which it warned TWIA to cooperate in discovery, gave TWIA more

time to respond, granted numerous motions to compel, struck objections, awarded

attorney’s fees to League City, and twice ordered TWIA to pay those monetary

sanctions. TWIA disregarded no fewer than seven court orders.

          Thus, the trial court was well justified in concluding that lesser sanctions

would not deter abuse because the court had already tried such efforts and they

had failed. CR188, 193-94. Similar to Van Es,

          [TWIA] made only modest efforts to comply and frequently engaged
          in dilatory tactics in an apparent effort to avoid complying. [TWIA]
          fully aired [its] objections ... on several occasions, and the trial court
          rejected them. If the trial court’s rulings were erroneous, they were
          subject to review in this Court. Nevertheless, after repeatedly
          receiving adverse rulings on these discovery issues, [TWIA] still
          failed to comply. Therefore ... the trial court would not have abused
          its discretion to conclude that [TWIA] never intended to comply with
          those orders.

48146_1                                   35
Van Es, 230 S.W.3d at 780; see Warwick Oil, 2015 WL 3637988, at *5-6;

Weinberger, 222 S.W.3d at 571.

                                        PRAYER
          League City, as Appellant, respectfully prays that the trial court’s judgment

should be reversed and a new trial granted on all of League City’s issues, or

alternatively, that judgment should be rendered in favor of League City. If League

City’s appellate attorney’s fees are not established as a matter of law, a new trial

should be granted on that issue.

          League City, as Cross-Appellee, also respectfully prays that this Court

affirm the trial court’s imposition of monetary sanctions against TWIA and striking

of TWIA’s affirmative defenses.

          Finally, League City also respectfully prays for all relief to which it is

entitled.

48146_1                                 36
                          Respectfully Submitted,

THE MOSTYN LAW FIRM                   HOGAN & HOGAN

Gregory F. Cox                        By:   /s/ Jennifer Bruch Hogan
State Bar No. 00793561                      Jennifer Bruch Hogan
gfcox@mostynlaw.com                         State Bar No. 03239100
6280 Delaware Street                        jhogan@hoganfirm.com
Beaumont, Texas 77706                       Richard P. Hogan, Jr.
409.832.2777–telephone                      State Bar No. 09802010
409.832.2703–facsimile                      rhogan@hoganfirm.com
                                            James C. Marrow
Rene M. Sigman                              State Bar No. 24013103
State Bar No. 24037492                      jmarrow@hoganfirm.com
rmsigman@mostynlaw.com                711 Louisiana, Suite 500
3810 W. Alabama                       Houston, Texas 77002-2721
Houston, Texas 77027                  713.222.8800–telephone
713.861.6616–telephone                713.222.8810–facsimile
713.861.8084–facsimile
                                      CASHIOLA & BEAN

                                      Randal Cashiola
                                      State Bar No. 03966802
                                      rcashiola@cashiolabeanlaw.com
                                      2090 Broadway Street, Suite A
                                      Beaumont, Texas 77701-1944
                                      409.813.1443–telephone
                                      409.813.1467–facsimile

                  Attorneys for Cross-Appellee League City

48146_1                          37
                     CERTIFICATE OF COMPLIANCE
1.     This brief complies with the type-volume limitation of TEX. R. APP.
9.4(i)(2)(B) because this brief contains 7,895 words, excluding the parts of the
brief exempted by TEX. R. APP. 9.4(i)(1).

2.    This brief complies with the typeface requirements of TEX. R. APP. 9.4(e)
because this brief has been prepared in a proportionally spaced typeface using
Microsoft Word 2010 software in Times New Roman 14 point font in text and
Times New Roman 12 point font in footnotes.

                                    /s/ James C. Marrow
                                    James C. Marrow
                                    Dated: October 8, 2015

48146_1                            38
                           CERTIFICATE OF SERVICE
       I certify that a true and correct copy of the above and foregoing was
forwarded to all counsel of record by the Electronic Filing Service Provider, if
registered; a true and correct copy of this document was forwarded to all counsel
of record not registered with an Electronic Filing Service Provider and to all other
parties as follows:
Counsel for Cross-Appellant:

          Dale Wainwright
          BRACEWELL & GIULIANI LLP
          111 Congress Avenue Suite 2300
          Austin, Texas 78701-4061
          Via TexFile

          Andrew T. McKinney IV
          LITCHFIELD CAVO LLP
          One Riverway, Suite 1000
          Houston, Texas 77056
          Via TexFile

          James R. Old, Jr.
          JAY OLD & ASSOCIATES, PLLC
          3560 Delaware, Suite 308
          Beaumont, Texas 77706
          Via TexFile

                                       /s/ James C. Marrow
                                       James C. Marrow
                                       Dated: October 8, 2015

48146_1                              39
                      Tab A
          November 7, 2013 order on Plaintiff’s
          Motion to Enforce Court’s order and
             Motion for Sanctions (CR160)

45141_1
160
                        Tab B
                 April 17, 2014 order striking
          Defendant’s affirmative defenses (CR187-95)

45141_1
187
188
189
190
191
192
193
194
195