Court Opinion

ID: 9324410
Source: CourtListenerOpinion
Date Created: 2022-12-12 00:11:27.762948+00
Date Added: 2024-06-11T17:14:54.852087
License: Public Domain

NUMBER 13-21-00271-CV

                             COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                      CORPUS CHRISTI – EDINBURG

MIHAIL CHRISSOS A/K/A MIHAIL CHRYSSOS AND
MARIA CHRISSOS A/K/A MARIA CHRYSSOS,                                       Appellants,

                                               v.

PLAINSCAPITAL BANK,                                                           Appellee.

                    On appeal from the 105th District Court
                          of Nueces County, Texas.

                          MEMORANDUM OPINION

               Before Justices Longoria, Hinojosa, and Silva
                  Memorandum Opinion by Justice Silva

      Appellants Mihail Chrissos a/k/a Mihail Chryssos and Maria Chrissos a/k/a Maria

Chryssos appeal the trial court’s imposition of death penalty sanctions and rendering of

judgment in favor of appellee PlainsCapital Bank. By four issues, appellants contend

(1) the trial court’s judgment was not final because it was not signed after a conventional
trial and did not include a Mother Hubbard clause or contain finality language; (2) the trial

court abused its discretion in granting death penalty sanctions; (3) the trial court erred in

denying appellants’ motion for new trial; and (4) the sanctions imposed violated

appellants’ due process rights. We reverse and remand.

                                     I.     BACKGROUND

       On December 10, 2018, appellee brought suit to collect appellants’ deficient

balance owed under a commercial promissory note. Appellants had executed the note

and related deed of trust, which concerned commercial property located in Jim Wells

County in the original principal amount of $828,000, in 2007. The note was modified in

2009, and in 2013, appellee acquired the note, deed of trust, and modification agreement.

Appellants subsequently defaulted, and appellee accelerated the note. Following

appellants’ failure to cure the default, appellee sold the property at a foreclosure auction

to itself at the bid price of $376,148. At the time of filing, appellee sought to collect a total

amount of $308,539.

       Appellants’ original answer and counterclaim followed, wherein appellants alleged

affirmative defenses of accord and satisfaction and failure to mitigate; a statutory defense

under Texas Property Code § 51.003; and a fraudulent misrepresentation by omission

counterclaim. Appellee filed its answer on January 30, 2019, and motion to compel

discovery three months later on April 29, 2019. In appellee’s motion, it attached several

email exchanges with appellants’ trial counsel, wherein appellee sought production of

certain discovery documents. Appellee claimed that its last email to appellants’ counsel,

dated April 17, 2019, received no response.

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       Appellee filed a supplemental motion to compel on November 18, 2019, renewing

its previous discovery request and apprizing the trial court of what had transpired since

filing its initial motion. According to appellee, a hearing was set on June 5, 2019, and the

day before the hearing, appellants’ trial counsel advised appellee that one of the parties

was out of the country and expected to return August 29, 2019. Appellee sent several

successive emails, and on October 28, 2019, appellants’ trial counsel indicated she would

obtain her clients’ signatures and necessary documentation to respond to the outstanding

discovery requests. Appellants’ counsel, however, thereafter stopped replying to

appellee’s emails. Although the clerk’s record indicates a hearing on appellee’s motion

was held on December 3, 2019, the transcript was not provided on appeal. Appellee

maintains the trial court orally ordered appellants to produce the requested discovery.

       On October 26, 2020, appellee filed a motion to compel depositions and for

sanctions, explaining that the parties had agreed to reset previously scheduled

depositions that spring and summer due to COVID-19. However, appellants’ trial counsel

allegedly became unresponsive once more after July 2020. The trial court held a hearing

on appellee’s motion on December 10, 2020, wherein neither appellants nor their trial

counsel appeared; the trial court granted appellee’s motion for sanctions in the amount

of $2,500 and ordered depositions to be scheduled by “December 1, 2020.” 1 On

December 23, 2020, appellee contacted appellants’ trial counsel’s firm and was advised

that appellants’ trial counsel was no longer employed there.

       1 The reporter's record indicates the trial court ordered appellants to schedule depositions by
January 1, 2021. However, the trial court's order provided a deadline date of December 1, 2020.

                                                  3
       On February 5, 2021, appellee filed a motion for judgment under Texas Rule of

Civil Procedure 215.2, citing appellants’ “continuing failure and refusal to confirm their

availability for deposition despite repeated requests spanning multiple months.” See TEX.

R. CIV. P. 215.2(b) (providing for sanctions by the trial court following a party’s failure to

comply with an order or discovery request). Appellants’ trial counsel appeared at the

hearing on appellee’s judgment motion and notified the trial court that, at then-present

time, she was not eligible to practice law in Texas. Trial counsel informed the court that

her clients were not present as they had not received notice of the hearing, she had “not

contacted” them regarding any developments in the case, and she would be “get[ing] in

touch” to “recommend[]” that they “get another lawyer.” The following colloquy ensued:

       THE COURT:                          Okay. Ma’am, I[ a]m going to[,] I guess[,]
                                           allow you to withdraw from this case
                                           considering that you still need to put up
                                           [sic] some things with the [Texas] State
                                           Bar.

       [Appellants’ trial counsel]:        I do. I[ ha]ve got a lot of things to clear
                                           up, Judge. I apologize. I[ ha]ve been
                                           taking care of a [sic] 101[-]year[-]old
                                           mother in Kansas, and my sister with
                                           Parkinson’s in California, and I[ ha]ve got
                                           somebody in the nursing home. It has not
                                           been conducive. And I just need to see to
                                           it my client gets taken care of . . . .

       ....

       THE COURT:                          Sir, do you have anything you want to
                                           address with the [c]ourt at this point?

       [Appellee’s trial counsel]:         Yes, Your Honor. We have attempted to
                                           reach out to [appellants’ trial counsel] on
                                           a number of different occasions. I[ ha]ve
                                           left messages on her cell phone. I[ ha]ve

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                               sent her e-mails. I [ ha]ve sent her actual
                               physical letters. I do[ no]t believe that
                               this—her appearance in this case is
                               timely. We[ ha]ve had to incur attorney’s
                               fees in order to get this case to even
                               move along, Your Honor.

                                       The foreclosure was validly—was
                               validly conducted, and the foreclosure—
                               the first foreclosure sale was passed.
                               The bank did attempt to work with the
                               [appellants] on multiple occasions to
                               bring the loan into good standing.
                               Ultimately, the discussions to enter a
                               forbearance agreement were not fruitful,
                               and the second foreclosure sale was
                               held, and that[ i]s how this decision has
                               arose. There has not been a challenge to
                               the    actual    foreclosure   sale    by
                               [appellants].

                                      And, Your Honor, this case
                               actually here today is about the merits as
                               [appellants’ trial counsel] did note. It[ i]s
                               about her failure to communicate and
                               move this case along, and that[ i]s—
                               which has cost the bank attorney’s fees
                               and delayed the over[]all case standing
                               as well.

THE COURT:                     [Counsel], this sounds like they[ ha]ve
                               been negotiating with your side several
                               times here and it has [no]t worked.

[Appellants’ trial counsel]:   And, Your Honor, I do apologize for that.
                               I have[ no]t been in my office for the most
                               part for the last year or more. And it
                               was—it[ i]s my fault. It[ i]s not my client’s
                               fault. It[ i]s my fault. But there have[ no]t
                               been any jury trials for a year almost, and
                               this case was not set. We did not have a
                               scheduling order from the [c]ourt, and I—
                               it[ i]s my fault. And I—

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       THE COURT:                         But, ma’am, how do you justify the
                                          delaying it any further?

       [Appellants’ trial counsel]:       I do[ no]t justify that. If we can get a
                                          scheduling order before the [c]ourt, and
                                          get deadlines set, and I can get someone
                                          who is—either get my CLE done or get
                                          someone who can, and we will seriously
                                          set those. I[ ha]ve got someone helping
                                          take care of my mom now, so I anticipate
                                          I will be back here and able to meet any
                                          deadlines that the [c]ourt may set.

       ....

       THE COURT:                         Ma’am, they[ a]re not required to work
                                          with your client after a certain point. And
                                          it seems like enough chances have been
                                          given to this point. So—plus your client[
                                          i]s not here. So at this time I[ a]m going
                                          to grant this judgment. So, sir, if you can
                                          give me that order I[ wi]ll get it signed for
                                          you.

       On May 26, 2021, the trial court signed an order granting appellee’s “Motion for

Judgment” against appellants, ordering appellants to pay the unpaid principal amount,

pre-and post-judgment interest, reasonable and necessary attorney’s fees, and “[s]uch

other and further relief, both general and special, at law or in equity, to which [appellee]

may justly be entitled.” This appeal ensued.

                                 II.   JUDGMENT FINALITY

       By appellants’ first issue, they question whether the judgment before this Court is

final and appealable given its inclusion of language contradicting finality in its observance

of unspecified “other and further relief, both general and special, at law or in equity, to

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which PlainsCapital may justly be entitled.” See generally Farm Bureau Cnty. Mut. Ins.

Co. v. Rogers, 455 S.W.3d 161, 163 (Tex. 2015) (per curiam).

       Generally, only final judgments are appealable. See Alexander Dubose Jefferson

& Townsend LLP v. Chevron Phillips Chem. Co., L.P., 540 S.W.3d 577, 581–82 (Tex.

2018) (per curiam); Qwest Commc’ns Corp. v. AT & T Corp., 24 S.W.3d 334, 336 (Tex.

2000) (per curiam) (“An appellate court lacks jurisdiction to review an interlocutory order

unless a statute specifically authorizes an exception to the general rule, which is that

appeals may only be taken from final judgments.”). “Although no ‘magic language’ is

required, a trial court may express its intent to render a final judgment by describing its

action as (1) final, (2) a disposition of all claims and parties, and (3) appealable.” Bella

Palma, LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2020) (per curiam) (citing In re R.R.K.,

590 S.W.3d 535, 543 (Tex. 2019)); Farm Bureau Cnty. Mut. Ins. Co., 455 S.W.3d at 163

(reaffirming its rejection of a Mother Hubbard clause as a necessity for a finality finding).

       This Court abated proceedings and remanded this case to the trial court for

clarification of its May 26, 2021 order. See Bella Palma, 601 S.W.3d at 801 (“If the

appellate court is uncertain about the intent of the order, it can abate the appeal to permit

clarification by the trial court.” (quoting Lehmann v. Har-Con Corp., 39 S.W.3d 191, 206

(Tex. 2001), superseded by statute as recognized in Indus. Specialists, LLC v. Blanchard

Ref. Co. LLC, 652 S.W.3d 11, 14 (Tex. 2022))); see also Garcia v. Gonzalez, No. 13-20-

00221-CV, 2021 WL 5365105, at *1 (Tex. App.—Corpus Christi–Edinburg Nov. 18, 2021,

no pet.) (mem. op.) (abating proceedings sua sponte for clarification of trial court’s order

to ensure appellate jurisdiction).

                                             7
        The trial court held an abatement hearing on October 27, 2022, and plainly

expressed its intent that its judgment be considered final and “completely dispose of all

claims against each of the parties.” See, e.g., Bella Palma, 601 S.W.3d at 802 (“Here, the

clarifying order left no doubt about finality, so the court of appeals erred in turning to the

record to resolve the issue. Instead, the appellate court was obligated to take the

clarification order at face value, as a clear indication that the trial court intended the order

to completely dispose of the entire case.”) (cleaned up). In consideration of the trial court’s

findings, we conclude that the appealed order is in fact a final judgment. See id. at 801

(rejecting a “magic language” requirement). We overrule appellants’ first issue.

                                 III.    DEATH PENALTY SANCTIONS

        Appellants next challenge the trial court’s assessment of death penalty sanctions. 2

        2   The parties’ assert competing characterizations of the judgment with appellee, contending that it
sought and received a favorable judgment using a motion for summary judgment as its vehicle—not a
judgment under Rule 215.2. See TEX. R. CIV. P. 215.2(b). Having reviewed the record, we disagree. Here,
the trial court’s judgment order, an overt response to appellee’s motion, read in relevant part:

        Due to [appellants’] violation of this [c]ourt’s December 16, 2020 Order, and continuing
        failure and refusal to confirm their availability for deposition despite repeated requests
        spanning multiple months, [appellee] respectfully moves the [c]ourt for Judgment pursuant
        to [Rule] 215.2.

        ....

        [Appellee] accordingly requests that the [c]ourt now award the sanctions sought herein
        pursuant to [Rule] 215.2, due to [appellants’] flagrant continuing abuse of the discovery
        process. Specifically, [appellee] requests that the [c]ourt enter judgment by default against
        [appellants], the disobedient party. See TEX. R. CIV. P. 215.2(b)(5).

As further noted in appellee’s motion for default judgment, among the sanctions available under Rule 215.2
are orders “striking out pleadings or parts thereof,” “dismissing with or without prejudice the action or
proceedings or any part thereof,” and “rendering a judgment by default against the disobedient party.” See
id. Such sanctions, which adjudicate a claim and preclude presentation of the merits of the case, are often
referred to as “death penalty” sanctions. See Altesse Healthcare Sols., Inc. v. Wilson, 540 S.W.3d 570, 572
(Tex. 2018) (per curiam); TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 918 (Tex. 1991) (orig.
proceeding) (“When a trial court strikes a party’s pleadings and dismisses its action or renders a default
judgment against it for abuse of the discovery process, the court adjudicates the party’s claims without
regard to their merits but based instead upon the parties’ conduct of discovery.”); Tex. Mut. Ins. Co. v.
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A.      Standard of Review and Applicable Law

        A trial court may impose appropriate sanctions, after due notice and hearing, on

parties who refuse to respond, or who give inadequate responses, to valid discovery

requests or orders. See TEX. R. CIV. P. 215.1–.5; Horizon Health Corp. v. Acadia

Healthcare Co., Inc., 520 S.W.3d 848, 884 (Tex. 2017). Such decision will be set aside

only upon a showing of abuse of discretion. Brewer v. Lennox Hearth Products, LLC, 601

S.W.3d 704, 717 (Tex. 2020). We review the entire record independently to determine

whether the trial court acted without reference to guiding rules and principles such that its

ruling is arbitrary or unreasonable. Id.

        “Although sanctions intended to secure compliance with court orders and deter

noncompliance are often essential to the orderly conduct of trial-court proceedings, our

precedent dictates that courts should avoid a ‘trial by sanctions’ whenever possible.”

Altesse Healthcare Sols., Inc. v. Wilson, 540 S.W.3d 570, 575 (Tex. 2018) (per curiam).

(citing TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 918 (Tex. 1991) (orig.

proceeding)). “Sanctions so severe that they prevent a decision on the merits are not

justified except in the most severe cases of flagrant bad faith.” Id. at 575; Petroleum Sols.,

Inc. v. Head, 454 S.W.3d 482, 489 (Tex. 2014) (requiring that assessed sanctions be

“just”). Reviewing courts generally follow a two-part test in determining whether a

Narvaez, 312 S.W.3d 94, 103 (Tex. App.—Dallas 2010, pet. denied) (treating the trial court’s judgment as
a default judgment under Rule 215 because “[t]he effect of the trial court’s judgment was to preclude
presentation of the merits of the case because of Texas Mutual’s conduct, the same result as if the
sanctions had been case-determinative.”). Notably, no motion for summary judgment accompanied or
preceded appellee’s motion for judgment under Rule 215.2. Thus, it cannot be said that the final judgment,
which granted appellee’s prayer for “judgment by default” is anything but a sanctions-based default
judgment.

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particular sanction for discovery abuse is just. Altesse Healthcare Sols., 540 S.W.3d at

572. “First, a direct relationship must exist between the offensive conduct, the offender,

and the sanction imposed.” Petroleum Sols., 454 S.W.3d at 489. In other words, the

sanction “should be visited upon the offender,” and the “trial court must at least attempt

to determine whether the offensive conduct is attributable to counsel only, or to the party

only, or to both.” TransAmerican Nat. Gas Corp., 811 S.W.2d at 917. “Second, a sanction

must not be excessive, which means it should be no more severe than necessary to

satisfy its legitimate purpose.” Petroleum Sols., 454 S.W.3d at 489; Cire v. Cummings,

134 S.W.3d 835, 842 (Tex. 2004) (“[I]n all but the most egregious and exceptional cases,

the trial court must test lesser sanctions before resorting to death penalty sanctions.”).

B.     Sufficient Attribution

       Appellants principally argue that the trial court’s sanctions unjustly punish them for

their trial counsel’s alleged discovery noncompliance for which they avow there was no

evidence that they were aware of or personally contributed to. See Petroleum Sols., 454

S.W.3d at 489; TransAmerican Nat. Gas Corp., 811 S.W.2d at 917. Appellee conversely

asserts that the offensive conduct—namely, the parties’ failure to produce requested

documents and dates for depositions—is attributable to appellants because they should

have been cognizant of the discovery abuse which spanned over a year, and “[t]he record

does not reflect any effort by [appellants], at any point over the extended time involved in

this lawsuit, to contact the trial court or make any inquiry to the trial court or [appellee]

about the case.”

                                             10
       Although appellee filed two motions to compel discovery in this case, no record

evidence supports the conclusion that appellants had personal knowledge of or any role

in their trial counsel’s failures to timely respond to appellee’s discovery requests

throughout the pendency of the case. See Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882

(Tex. 2003) (per curiam) (concluding that the trial court abused its discretion where there

was no evidence of whether the client or counsel was responsible for discovery abuse).

Appellee filed its first motion to compel three months after its answer, and an agreement

followed, wherein the parties resolved to stay the upcoming hearing on appellee’s motion.

Appellee concedes appellants produced some of the requested documents at that time.

Successive agreed discovery extensions attributable to COVID-19-related circumstances

and intermittent lapses in communication between the attorneys prompted appellee to file

a second motion to compel one year later in October 2020. However, neither appellants

nor their trial counsel appeared for the hearing on December 10, 2020, and the trial court

issued an order granting appellee’s motion to compel, which required that appellants’

“counsel of record provide, within five (5) days of the entry of this [o]rder, [appellants’]

available dates for the depositions of [appellants], and that such depositions be scheduled

by no later than December 1, 2020 [sic].” Cf. Allied Res. Corp. v. Mo-Vac Serv. Co., Inc.,

871 S.W.2d 773, 779 (Tex. App.—Corpus Christi–Edinburg 1994, writ denied) (holding a

motion to compel constituted a lesser sanction because it clearly and unambiguously

warned “that the pleadings ‘[would] be stricken and judgment by default granted’” if the

offending party did not comply with the motion to compel within a specific timeframe); see

also McKeithan v. Condit, No. 13-16-00348-CV, 2018 WL 6219624, at *6 (Tex. App.—

                                            11
Corpus Christi–Edinburg Nov. 29, 2018, no pet.) (mem. op.) (concluding “without more,

an order to compel is not a lesser sanction” under Rule 215). Two months later, appellee

filed its motion for default judgment under 215.2(b)(5). 3 Although it is unclear from the

record how appellants’ trial counsel received notice of the hearing, counsel appeared

without appellants and notified the trial court that she had not been in communication with

appellants for quite some time and that she was then-ineligible to practice law in the state.

Trial counsel further affirmed that appellants were unaware of the hearing or outstanding

discovery responses.

        The events as presented here are insufficient to justify attributing the sanctionable

conduct to appellants. See Spohn Hosp., 104 S.W.3d at 882. Rather, the only evidence

in the record that appellants were somehow involved in the misconduct is the implication

that they knew of their trial counsel’s actions based on the length of the case—an

assumption refuted by appellants’ trial counsel. See Am. Flood Rsch., Inc. v. Jones, 192

S.W.3d 581, 584–85 (Tex. 2006) (per curiam) (reaffirming its TransAmerican holding that

“a party should not be punished for counsel’s conduct in which it is not implicated apart

from having entrusted to counsel its legal representation”). Compare Chandler v. KMCC

Enters., LLC, No. 02-20-00344-CV, 2021 WL 4783160, at *1 (Tex. App.—Fort Worth Oct.

14, 2021, no pet.) (mem. op.) (holding trial court abused its discretion in issuing its default

judgment death penalty sanctions because there was no evidence that appellants “were

personally aware of or carried some responsibility” for their attorney’s sanctionable

         3 Within days of the trial court’s issued order to compel, appellee’s counsel learned that appellants’

trial counsel was no longer employed at the law firm that all electronic case correspondence had been and
would continue to be sent to.

                                                     12
conduct), and Hernandez v. Moya, No. 03-18-00362-CV, 2019 WL 4068568, at *4 (Tex.

App.—Austin Aug. 29, 2019, no pet.) (mem. op.) (concluding “it was improper for the trial

court to impute the discovery non-responsiveness to [appellant]” where “the record

implies that it was [appellant’s attorney] who did not properly and timely respond to

discovery requests,” and there was no evidence of non-responsiveness inferable to

appellant individually), with Franke v. Palau, No. 01-18-00424-CV, 2019 WL 2220112, at

*3 (Tex. App.—Houston [1st Dist.] May 23, 2019, no pet.) (mem. op.) (concluding death

penalty sanctions appropriate where evidence “does not unambiguously show that

counsel alone was to blame,” and counsel denied fault in discovery noncompliance), and

Exergy Dev. Group of Idaho, LLC v. Higher Power Energy, LLC, No. 14-14-00788-CV,

2016 WL 109859, at *8, *10 (Tex. App.—Houston [14th Dist.] Jan. 7, 2016, pet. denied)

(mem. op.) (concluding same where counsel “filed a motion to withdraw . . . because ‘[t]he

attorney-client relationship has become unhealthy and cannot be continued due to the

clients’ failure to fully cooperate in discovery,’” which demonstrated that it was

“Appellants—and not their trial counsel—[whom] failed to comply with their discovery

obligations and demonstrated bad faith conduct”).

      The judgment here is unsupported by evidence necessary to satisfy the two-part

test mandated for the review of sanctions orders. See Petroleum Sols., 454 S.W.3d at

489. Thus, we conclude the trial court abused its discretion in its imposition of a death

penalty sanction. See id.; see also Sosa v. Union Pac. R.R. Co., No. 13-13-00257-CV,

2015 WL 2353024, at *8–9 (Tex. App.—Corpus Christi–Edinburg May 14, 2015, pet.

dism’d) (mem. op.) (concluding the “trial court abused its discretion in imposing case-

                                           13
determinative sanctions on the [appellants]” where “the record does not indicate that the

[appellants] actually were or should have been aware of their counsel’s conduct” during

the six-year pendency of the case). We sustain appellants’ second issue on appeal and

do not reach appellants’ remaining issues. See TEX. R. APP. P. 47.1.

                                  IV.    CONCLUSION

      We reverse and remand for proceedings consistent with this memorandum

opinion.

                                                             CLARISSA SILVA
                                                             Justice

Delivered and filed on the
8th day of December, 2022.

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