Court Opinion

ID: 4504155
Source: CourtListenerOpinion
Date Created: 2020-02-04 11:11:59.149678+00
Date Added: 2024-06-11T14:54:21.162816
License: Public Domain

Conditionally Granted in Part, Denied in Part, and Opinion Filed February 3, 2020

                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                       No. 05-19-01159-CV

  IN RE EMEKA ALUDOGBU AND RESTORATIVE HEALTHCARE, LLC, Relators

                  Original Proceeding from the 101st Judicial District Court
                                    Dallas County, Texas
                             Trial Court Cause No. DC-19-00112

                             MEMORANDUM OPINION
                  Before Justices Whitehill, Partida-Kipness, and Pedersen, III
                               Opinion by Justice Partida-Kipness
       In this original proceeding, relators Emeka Aludogbu and Restorative Healthcare, LLC

seek a writ of mandamus directing the trial court to vacate its June 21, 2019 sanctions order. In

that order, the trial court struck relators’ pleadings and awarded real party in interest Renew

Hydration, LLC (Renew) $9,073.12 in attorney’s fees. After reviewing the petition, Renew’s

response, and the mandamus record, we conditionally grant the petition as to the order striking

relators’ pleadings and deny the petition as to the attorney’s fees award.

                                        BACKGROUND

       In the fall of 2017, Aludogbu and Renew began a business relationship based on an oral

agreement. But they each have different views of the terms of that agreement. Renew maintains

that the parties agreed that Aludogbu, a chiropractor, would offer chiropractic and other services

under the Renew brand at Renew’s premises for a flat payment of $2,000 per month. Renew

contends it agreed to assume responsibility for and to finish out the premises to accommodate
Aludogbu’s chiropractic treatments, and it purchased equipment necessary for Aludogbu’s

chiropractic services. So, Renew was surprised when it discovered that Aludogbu had established

his own business, Restorative Healthcare, LLC, in June 2018 and, without Renew’s approval, had

begun operating Restorative from Renew’s premises rent-free. When Renew’s attempts to

negotiate a paid, lease agreement with relators for their use of the premises failed, Renew locked

Aludogbu out of the premises.

       Aludogbu, in contrast, contends that Renew hired him to establish the proper procedures

for Renew’s new IV therapy business and to hire and train all new Renew employees. In exchange,

Aludogbu maintains Renew agreed to pay him $2,000 per month, agreed to make him a partner in

the business if the business was successful, and allowed him to use several offices in the building

for his own practice. Aludogbu asserted below that he spent considerable funds remodeling the

space to fit the needs of his practice without complaint from Renew. According to Aludogbu, when

it became apparent that Renew did not intend to make him a partner, the parties entered into a lease

agreement under which Aludogbu would pay $2,500 per month for the space he was using in the

building. Aludogbu alleges that Renew unilaterally increased the monthly rent to $6,000 after his

first payment and then illegally locked him out of his offices in December 2018.

       After the lock-out, Aludogbu obtained a writ of re-entry to the premises from the justice

court and went to the premises with a moving truck to remove items. Concerned that Aludogbu

would remove Renew’s personal property if he regained access, Renew denied Aludogbu access.

Then, on January 4, 2019, Renew filed the underlying lawsuit in which it sought to enjoin

Aludogbu from taking property from its premises “until the parties have had an opportunity to

determine what belongs to whom” and asserted causes of action for breach of contract, fraud,

money had and received, and civil theft to recover damages caused by Aludogbu’s breach of the

agreement. Aludogbu and Restorative Healthcare later filed counterclaims for breach of contract,

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quantum meruit, and promissory estoppel, seeking damages related to Renew’s alleged breach of

the purported lease agreement and alleged promise to make Aludogbu a business partner.

         The trial court issued a temporary restraining order on January 4, 2019 restraining and

enjoining Aludogbu and Restorative Healthcare from taking the following actions:

         1.      Moving, removing, disassembling, utilizing, transferring, selling, altering,
                 tampering with or in any way profiting from the use of the property not
                 listed in Exhibits A or B of the property maintained at [the premises];

         2.      Interfering with, disrupting, or attempting to disrupt” Renew’s ongoing
                 business;

         3.      Destroying, removing, concealing, encumbering, transferring, or otherwise
                 harming or reducing the value of the property not listed in Exhibits A or B
                 maintained at [the premises].

The court set the temporary injunction hearing for January 18, 2019.

         The sanctions order at issue in this original proceeding relates to false accusations made by

Aludogbu against Renew in motions filed after the trial court issued the temporary restraining

order.

         A.      Aludogbu’s motions accusing Renew of stealing the Ondamed
                 machine

         On January 7, 2019, Aludogbu filed an “Application and Affidavit for Writ of

Sequestration” and a “Motion to Issue a Writ of Arrest” in which he accused Renew of refusing to

surrender possession of certain property listed in Exhibits A and B to the temporary restraining

order. Specifically, Aludogbu alleged that Renew would not allow relators to remove a blue

chiropractic table listed in Exhibit A and “have stolen the Ondamed Complete Solution machine

listed in Exhibit B of the order along with other miscellaneous items.” Aludogbu signed the

affidavit in support of the motion to issue a writ of arrest and his attorney, Alex L. Davis, III,

signed the affidavit in support of the application for writ of sequestration. Davis signed his affidavit

on information and belief based on evidence and statements provided to him by “the Defendants

in this case.”
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       Then, on January 9, 2019, Aludogbu and Restorative Health filed a motion to show cause

in which they accused Renew of failing to comply with the January 4, 2019 temporary restraining

order by failing to allow Aludogbu to remove the blue chiropractic table and the Ondamed

machine. They asked the court to hold a show cause hearing, to find Renew in contempt, and to

place Francis Miro, one of Renew’s members, in custody until he complied with the temporary

restraining order. On January 10, 2019, the trial court issued an order scheduling the show cause

hearing for January 28, 2019.

       B.      Aludogbu’s deposition

       On January 10, 2019, Renew filed an emergency motion for expedited discovery and

extension of the temporary restraining order seeking Aludogbu’s deposition before the injunction

hearing and a new date for that hearing. The court granted the motion for expedited discovery,

extended the temporary restraining order to February 1, 2019, and re-set the injunction hearing for

February 1, 2019.

       In his deposition, Aludogbu testified that he did not then have physical possession of,

access to, or control of the Ondamed machine, had not seen the Ondamed machine since the day

he was locked out of Renew, and did not know where the Ondamed machine was located.

Aludogbu also denied that the Ondamed machine was located at AXE Health, a facility where

Aludogbu was offering chiropractic services, and denied any knowledge of the last time he was

physically at the AXE Health facility. When Aludogbu was shown photos and video footage

showing the Ondamed machine at AXE Health, he testified that he borrowed the machine shown

in the video and photos from Dr. Pamela Smith, that machine is owned by Dr. Smith, and he does

not own the machine shown in the video and photos.

       The Ondamed machine owned by Aludogbu and located at Renew before the lock out had

Serial No. M18017. A photo of the Ondamed machine located at AXE Health, which Aludogbu

                                               –4–
said was owned by Dr. Smith, showed that the machine located at AXE Health bore the same serial

number as the machine owned by Aludogbu that he claimed Renew had stolen. When shown that

photo and asked how a machine he borrowed from Dr. Smith could have the same serial number

as his machine, Aludogbu said that he did not know and he would be surprised if that machine was

actually his machine.

       Aludogbu eventually admitted, however, that he placed his Ondamed machine at AXE

Health, but he did not know how long the machine had been at AXE Health. Aludogbu also

maintained that his prior testimony and affidavit statements were truthful because the machine was

not at Renew when he returned there to collect his things. On cross-examination, he testified that

sometime “after January 5th” the machine was given to him “by somebody with the Plaintiffs” and

that he did not have it in his possession when he told his lawyer it was missing. On further

examination by Renew’s counsel, however, Aludogbu conceded that he did not know when he

took possession of the machine, where he took possession of the machine, or who returned the

machine to him.

       Following the deposition, the parties entered an agreed temporary injunction that enjoined

Aludogbu and Restorative Health from the same conduct set out in the temporary restraining order

and set the underlying case for trial on June 11, 2019. The show cause hearing on relators’ motions

and the temporary injunction hearing were also cancelled.

       C.      Renew’s motion for sanctions

       On March 7, 2019, Renew filed a motion for sanctions against Aludogbu and Restorative

Health. In the motion, Renew argued that relators’ application for writ of sequestration, motion for

writ of arrest, and motion to show cause were based on false allegations that Renew stole the

Ondamed machine. Renew maintained that, by filing those motions, relators and their counsel

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signed, filed, and prosecuted false and groundless claims against Renew in violation of Rule 13 of

the rules of civil procedure and section 10.001 of the civil practice and remedies code.

       Renew supported its sanctions motion in part with exhibits confirming the serial number

of the Ondamed machine owned by Aludogbu, excerpts from Aludogbu’s deposition, the photos

and video footage showing the Ondamed machine found at AXE Health bore the same serial

number as Aludogbu’s machine, and video footage purportedly showing Aludogbu rolling the

Ondamed machine out of Renew’s office on December 28, 2018. Renew argued those exhibits and

other evidence proved Aludogbu lied about his possession of the machine and knew he was falsely

accusing Renew of theft when he signed his affidavit in support of the motion for writ of arrest on

January 7, 2019 and filed the motions.

       Renew requested attorney’s fees of $9,073.12 for legal work performed to discover that

Aludogbu had possessed the machine since December 28, 2018, was lying about the location of

the machine, and was falsely accusing Renew of theft. Renew also asked the trial court to strike

Aludogbu’s pleadings and to render a default judgment against him. The trial court held a hearing

on the sanctions motion on April 15, 2019 and took the matter under advisement. On June 21,

2019, the trial court signed an order awarding sanctions against Aludogbu pursuant to civil

procedure Rule 215.2(b)(8) and Rule 13, ordering relators to pay Renew attorney’s fees of

$9,073.12, and striking relators’ pleadings.

       Relators present two issues in their petition. First, they complain the trial court abused its

discretion by striking their pleadings. Second, they complain the trial court abused its discretion

by granting attorney’s fees in the amount granted and without adequate proof of fees.

                                   STANDARD OF REVIEW

       To obtain mandamus relief, a relator must show both that the trial court has clearly abused

its discretion and that relator has no adequate remedy by appeal. In re Prudential Ins. Co., 148

                                                –6–
S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). An abuse of discretion occurs when a trial

court’s ruling is arbitrary and unreasonable, made without regard for guiding legal principles or

supporting evidence. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016); Walker

v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding) (a clear abuse of discretion occurs

when a trial court “reaches a decision so arbitrary and unreasonable as to amount to a clear and

prejudicial error of law”). Similarly, a trial court abuses its discretion when it fails to analyze or

apply the law correctly. In re Nationwide Ins., 494 S.W.3d at 712.

       “The second requirement—appeal is an inadequate remedy—is fulfilled where a party’s

ability to present a viable claim or defense at trial is either completely vitiated or severely

compromised.” In re Garza, 544 S.W.3d 836, 840 (Tex. 2018). When a court imposes death

penalty sanctions that have the effect of adjudicating the dispute by striking pleadings, dismissing

an action, or rendering a default judgment, but which do not result in the rendition of an appealable

judgment, there is generally no adequate remedy by appeal. TransAmerican Nat. Gas Corp. v.

Powell, 811 S.W.2d 913, 919 (Tex. 1991) (orig. proceeding).

       Here, relators lack an adequate remedy by appeal as to the order striking their pleadings

because that order vitiates their affirmative defense of consent to Renew’s claims and prevents

relators from presenting evidence on their counterclaims relating to the alleged oral lease

agreement. The only question before this Court regarding the death penalty sanctions, therefore, is

whether the trial court clearly abused its discretion by ordering those sanctions.

       The same is not true for the trial court’s award of attorney’s fees to Renew. “Generally,

orders awarding attorney’s fees, even those imposed as sanctions, are reviewable on appeal and

mandamus will not issue.” Baluch v. O’Donnell, 763 S.W.2d 8, 11 (Tex. App.—Dallas 1988, no

writ) (citing Street v. Second Court of Appeals, 715 S.W.2d 638, 639 (Tex. 1986) (orig.

proceeding)). “Mandamus lies to correct the award of interim fees only in extreme cases in which

                                                 –7–
a ‘party’s ability to prosecute the case further is jeopardized’ by the party’s payment of, or inability

to pay, the fees.” In re Chu, 134 S.W.3d 459, 468 (Tex. App.—Waco 2004, orig. proceeding)

(quoting In re Ford Motor Co., 988 S.W.2d 714, 722 (Tex. 1988)); In re Bissell, 109 S.W.3d 87,

89 (Tex. App.—El Paso 2003, orig. proceeding).

       Here, the trial court ordered relators to pay Renew $9,073.12 in attorney’s fees. Relators

have not asserted that the payment of this amount would jeopardize their ability to continue the

litigation. In fact, relators make no arguments that they lack an adequate remedy by appeal

regarding the fees award. Accordingly, we deny relators’ petition for writ of mandamus as to the

award of attorney’s fees. See, e.g. In re RH White Oak, LLC, 442 S.W.3d 492, 503 (Tex. App.—

Houston [14th Dist.] 2014, orig. proceeding) (denying mandamus relief because relators have not

explained why the sanctions are so severe as to threaten their ability to continue litigation).

                                           DISCUSSION

       Having decided relators’ second issue against them, we turn to the only remaining issue

before us: whether the trial court abused its discretion by striking relators’ pleadings.

       A.      Applicable Law

       Sanctions for abuse of the discovery process are authorized by Rule 215.2. TEX. R. CIV. P.

215.2; Shops at Legacy (Inland) Ltd. P’ship v. Fine Autographs & Memorabilia Retail Stores Inc.,

418 S.W.3d 229, 232 (Tex. App.—Dallas 2013, pet. denied). If a trial court finds a party is abusing

the discovery process in seeking, making, or resisting discovery, then the trial court may, after

notice and hearing, impose any appropriate sanction authorized by rule 215.2(b)(1)-(5) and (8).

TEX. R. CIV. P. 215.3; Shops at Legacy, 418 S.W.3d at 232. Discovery sanctions serve three

purposes: (1) to secure the parties’ compliance with the discovery rules; (2) to deter other litigants

from violating the discovery rules; and (3) to punish parties who violate the discovery rules. Shops

at Legacy, 418 S.W.3d at 232.

                                                 –8–
        If a party signs a pleading, motion or other paper in violation of Rule 13, the court, after

notice and hearing, “shall impose an appropriate sanction under Rule 215, upon the person who

signed it, a represented party, or both.” TEX. R. CIV. P. 13. Among the sanctions available under

rule 215.2 are orders “striking out pleadings or parts thereof,” “dismissing with or without

prejudice the actions or proceedings or any part thereof,” and “rendering a judgment by default

against the disobedient party.” TEX. R. CIV. P. 215.2(b)(5). These sanctions, which adjudicate a

claim and preclude presentation of the merits of the case, are often referred to as “death penalty”

sanctions. Shops at Legacy, 418 S.W.3d at 232; Perez v. Murff, 972 S.W.2d 78, 81 (Tex. App.—

Texarkana 1998, pet. denied) (any sanctions which are “case determinative” constitute “death

penalty” sanctions).

        Although the choice of sanction is left to the sound discretion of the trial judge, the

sanctions imposed must be just. TransAmerican, 811 S.W.2d at 916; Shops at Legacy, 418 S.W.3d

at 232; TEX. R. CIV. P. 215.2. When determining whether a trial court’s imposition of sanctions

was just, an appellate court considers the following two standards: (1) whether there is a “direct

relationship” between the abusive conduct and the sanction imposed; and (2) whether the sanction

is excessive. TransAmerican, 811 S.W.2d at 917; Shops at Legacy, 418 S.W.3d at 232.

        “A sanction imposed for discovery abuse should be no more severe than necessary to

satisfy its legitimate purposes. It follows that a court must consider the availability of less stringent

sanctions and whether such lesser sanctions would fully promote compliance.” Shops at Legacy,

418 S.W.3d at 232–33 (quoting TransAmerican, 811 S.W.2d at 918). Under this standard, the trial

court need not test the effectiveness of each available lesser sanction by actually imposing the

lesser sanction before issuing the death penalty. Id. at 233. Rather, the trial court must analyze the

available sanctions and offer a reasoned explanation as to the appropriateness of the sanction

imposed. Id.

                                                  –9–
       Death penalty sanctions are harsh and may be imposed as an initial sanction only in the

most egregious and exceptional cases “when they are clearly justified and it is fully apparent that

no lesser sanctions would promote compliance with the rules.” GTE Commc’ns Sys. Corp. v.

Tanner, 856 S.W.2d 725, 729 (Tex. 1993). “The imposition of very severe sanctions is limited,

not only by these standards, but by constitutional due process.” TransAmerican, 811 S.W.2d at

917–18. Discovery sanctions cannot be used to adjudicate the merits of a party’s claims or defenses

unless a party’s hindrance of the discovery process justifies a presumption that its claims or

defenses lack merit. Id.

       Further, the record must include some explanation to justify the granting of death penalty

sanctions. Shops at Legacy, 418 S.W.3d at 233. “A conclusory statement that no lesser sanction

would be effective is not sufficient to constitute the required analysis of available sanctions and

the reasoned explanation of the sanction’s appropriateness.” In re Estate of Perez-Muzza, 446
S.W.3d 415, 425–26 (Tex. App.—San Antonio 2014, pet. denied) (citing GTE Commc’ns Sys.

Corp., 856 S.W.2d at 729 and Shops at Legacy, 418 S.W.3d at 234).

       B.      Application of Law to Facts

       Here, the sanctions order states that the court “has considered lesser sanctions, and now is

of the opinion that the amount ordered above adheres to guiding principles of law authorized by

Rule 215.2(b)(l)-(5) and (8) and is limited to costs associated with Plaintiff’s preparation to address

Defendants’ allegations of theft in the anticipated Temporary Injunction and Show Cause Hearing

and Defendants’ pleadings being stricken from the record.” Other than this single sentence,

however, there is no indication in the record that the trial court considered a less stringent sanction.

The trial judge did not discuss alternatives to the proposed sanctions during the hearing on the

motion for sanctions. The trial judge simply asked Renew’s counsel what sanctions he was seeking

from the court and, when told Renew wanted the pleadings stricken, the judge asked “is that the

                                                 –10–
least punitive level of sanctions.” Renew’s counsel responded that he would “leave that to the

Court” but noted that his client wanted to recover, at a minimum, the amount of fees incurred to

uncover Aludogbu’s lies concerning the Ondamed machine. The trial judge took the matter under

advisement at the end of the hearing and asked counsel to provide the court with case law guidance

to decide if death penalty sanctions were warranted here. The trial court did not state that it had

concluded that lesser sanctions would not be effective and, as such, did not explain its reasons for

concluding that lesser sanctions would not be effective. The conclusory statement in the order that

the court “has considered lesser sanctions” is not sufficient to constitute the required analysis of

available sanctions and the reasoned explanation of the sanction’s appropriateness. GTE

Commc’ns Sys. Corp., 856 S.W.2d at 729; Shops at Legacy, 418 S.W.3d at 234; In re Estate of

Perez-Muzza, 446 S.W.3d at 425–26. Accordingly, the trial court abused its discretion by striking

relators’ pleadings as a sanction.

        Moreover, striking relators’ pleadings was an excessive and unjust sanction in this case.

As explained in TransAmerican, discovery sanctions can be used to adjudicate the merits of a

party’s claims when a party’s hindrance of the discovery process justifies a presumption that its

claims lack merit. TransAmerican, 811 S.W.2d at 918. A presumption that a party’s claim lacks

merit is not justified “when the party makes a false statement about matters unrelated to the core

elements of [the cause of action].” Fletcher v. Blair, 874 S.W.2d 83, 85–86 (Tex. App.—Austin

1994, writ denied) (death penalty sanctions not justified, even though plaintiff had lied about her

education and income, when lies did not directly relate to the underlying claim for personal

injuries).

        Here, Renew sought sanctions against relators because Aludogbu falsely accused Renew

of theft in three motions filed before the temporary injunction hearing and repeatedly lied about

whether he had possession of the machine he accused Renew of taking. The lies Aludogbu told

                                               –11–
about his possession of the Ondamed machine and the false allegation that Renew stole the

machine, however, are unrelated to the causes of action asserted in the main litigation. Renew sued

relators for breach of contract, fraud, money had and received, and civil theft to recover damages

caused by Aludogbu’s alleged breach of the oral agreement. Aludogbu and Restorative Healthcare

brought counterclaims for breach of contract, quantum meruit, and promissory estoppel seeking

damages related to Renew’s alleged breach of the purported lease agreement and alleged promise

to make Aludogbu a business partner. The location and possession of the Ondamed machine when

the relationship ended is irrelevant to those causes of action and the damages alleged by the parties.

Although Aludogbu’s conduct likely did not bolster his credibility in the eyes of the trial judge,

that conduct does not justify a presumption that relators’ claims lack merit because Aludogbu’s

false statements concerned matters unrelated to the core elements of the causes of action asserted

in the case, and there is not a direct relationship between the offensive conduct and the sanction

imposed. The trial court abused its discretion by striking relators’ pleadings.

                                           CONCLUSION

        We conclude the trial court abused its discretion by ordering death penalty sanctions

against relators, and relators lack an adequate remedy by appeal as to those sanctions. However,

relators have an adequate remedy by appeal regarding the award of fees against them. Accordingly,

we conditionally grant the petition for writ of mandamus as to the portion of the sanctions order

striking relators’ pleadings and deny the petition as to the award of attorney’s fees. We direct the

trial court to issue a written ruling within thirty days of the date of this opinion vacating the portion

of the sanctions order striking relators’ pleadings.

                                                       /Robbie Partida-Kipness/
                                                       ROBBIE PARTIDA-KIPNESS
                                                       JUSTICE
191159F.P05
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