Court Opinion

ID: 7806338
Source: CourtListenerOpinion
Date Created: 2022-09-05 00:20:42.446502+00
Date Added: 2024-06-11T16:30:12.279911
License: Public Domain

Dismissed and Opinion filed August 30, 2022.

                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-20-00680-CV

                         DAVID SHELLER, Appellant

                                         V.
 GOLDSTEIN FAUCETT AND PREBEG, LLP; CP WINDUP, LLP F/K/A
  CLEARMAN PREBEG, LLP; PREBEG FAUCETT & ABBOTT, LLC;
  CHRISTOPHER FAUCETT, INDIVIDUALLY; STEPHEN ABBOTT,
 INDIVIDUALLY; MATTHEW PREBEG, INDIVIDUALLY; NEWTON
   SCHWARTZ, INDIVIDUALLY; AND NBS ACQUISITIONS CORP.,
                        Appellees

                    On Appeal from the 151st District Court
                            Harris County, Texas
                      Trial Court Cause No. 2016-77743

                                  OPINION

      In five issues, David Sheller challenges a modified final judgment rendered
by the trial court which assessed monetary sanctions against Sheller for his conduct
during the course of his representation of Carl Sousa, personal representative of the
Estate of Elizabeth Betty Jean Wilwerding in an arbitration proceeding as well as
in the trial court. We conclude the modified final judgment was signed outside of
the trial court’s plenary power and is void. Therefore, we dismiss this appeal.

                                        I. BACKGROUND

       David Sheller represented Sousa in filing suit against Goldstein Faucett and
Prebeg, LLP; CP Windup, LLP f/k/a Clearman Prebeg, LLP; Prebeg Faucett &
Abbott, LLC; Christopher Faucett, individually; Stephen Abbott, individually;
Matthew Prebeg, individually; Newton Schwartz, individually; and NBS
Acquisitions Corp. (the IP attorneys) in Harris County district court in 2016. On
the motion of the IP attorneys, the case was referred to arbitration pursuant to the
contingency-fee agreement between Betty Wilwerding, Schwartz, and Goldstein,
Faucett & Prebeg, LLP (the law firm at which Faucett practiced at the time) and
subsequently ratified by Sousa.1

       After a lengthy and contentious arbitration proceeding, the arbitrator issued
an award in March 2020 which determined Sousa did not prove any of her claims
against the IP attorneys and should take nothing on her claims. The award also
determined that CP Windup, Schwartz, and NBS Acquisitions successfully proved
their counterclaims against Sousa and assessed attorney’s fees against Sousa, as
well as costs and expenses pursuant to AAA rules. The trial court confirmed the
award on the submission of the parties’ motions and rendered a final take-nothing
judgment on Sousa’s claims on May 4, 2020. Sousa filed a motion for new trial (as
well as a supplemental motion for new trial), which the trial court denied less than
two weeks later.

       1
           The factual background underlying Sousa’s claims is addressed in detail in her appeal of
the trial court’s final judgment, confirming the arbitration award. Sousa v. Goldstein Faucett and
Prebeg, LLP, et. al, No. 14–20–00484–CV (Tex. App.—Houston [14th Dist.] July 28, 2022, no
pet. h.). Sousa is the daughter of Betty Wilwerding. After Wilwerding’s death, Sousa served as
the personal representative of her mother’s estate.

                                                2
      On May 29, 2020, the IP attorneys filed a motion for sanctions asking the
trial court to sanction Sheller for his repeated and “extreme” abuse of the judicial
system. The trial court granted the IP attorneys’ motion and signed an order
granting the motion for sanctions and rendering a modified final judgment. Sheller
now appeals the modified final judgment.

                                     II. ANALYSIS

      Sheller argues on appeal that: (1) the modified final judgment is void
because it violates the one-judgment rule; (2) the modified final judgment is void
because it was signed after plenary power expired; (3) the trial court erred by
awarding sanctions against Sheller after the arbitrator refused to award sanctions;
(4) the sanctions award was not supported by factually- and legally-sufficient
evidence; and (5) the trial court abused its discretion in awarding substantial
sanctions against Sheller “in the absence of evidence that the sanctions imposed
are no more severe than necessary to satisfy their legitimate purpose.”

      We begin with Sheller’s issue 2 because it is dispositive of our jurisdiction
and this appeal. Though Sousa filed a motion for new trial, potentially extending
plenary power through July 18, 2020, the trial court denied Sousa’s motion for new
trial on May 18, 2020. See Tex. R. App. P. 26.1(a)(1). Therefore, the trial court’s
plenary power ended on June 18, 2020, unless the IP attorneys’ motion for
sanctions further extended plenary power. See Tex. R. Civ. P. 329b(e). Because the
motion for sanctions was filed within 30 days of the final judgment, it extended
plenary power only if the motion can be construed as a motion to modify within
the meaning of Rule 329b(g). See Tex. R. Civ. P. 329b(g). If it cannot be construed
as a motion to modify, plenary power expired before the trial court signed the
modified final judgment.

      For thirty days after signing the judgment, a trial court has plenary power to

                                         3
vacate it, to modify or correct it, or to grant a new trial. See Tex. R. Civ. P. 329b. If
within that time a party files a motion for a new trial or a motion to vacate, modify,
correct, or reform the judgment, then the trial court’s plenary power is extended for
thirty days after the last such motion is expressly or implicitly overruled. Id. “[T]he
filing of a motion for new trial, Tex. R. Civ. P. 329b(e), or a motion to modify,
correct or reform the judgment, Tex. R. Civ. P. 329b(g), within the initial
thirty-day period extends the trial court’s jurisdiction over its judgment up to an
additional seventy-five days, depending on when or whether the court acts on the
motions.” Lane Bank Equip. Co. v. Smith S. Equip., Inc., 10 S.W.3d 308, 310 (Tex.
2000); see Tex. R. Civ. P. 329b(c).

       In Lane, the supreme court concluded that a motion for sanctions can be
construed to extend plenary power if that motion, on its face, is a motion to
modify, correct, or reform the existing judgment within the meaning of Rule
329b(g). 10 S.W.3d at 312. The motion for sanctions in Lane specifically sought
the rendition of a new final judgment therefore was a motion to modify the
judgment. Id. at 310. However, the court in Lane considered that a motion for
sanctions that does not seek a substantive change in the judgment should not be
construed as a motion to modify within the meaning of Rule 329b(g).2 See id. at
314 (“a timely filed postjudgment motion that seeks a substantive change in an
existing judgment qualifies as a motion to modify under Rule 329b(g)”); see also
id. at 319 (Hecht, J., concurring) (“The Court adds, however, that if the motion had
not expressly requested a change in the judgment itself, but had merely requested
sanctions that could have been imposed by a separate order, the motion would not
have extended the court’s plenary power or the appellate timetable.”).

       2
         A judgment does not have to resolve pending sanctions issues or motions to be final.
Lane, 13 S.W.3d at 312.

                                             4
       This court has previously considered whether a postjudgment motion for
sanctions can be construed as a motion to modify the judgment. See Mann v.
Kendall Home Builders Constr. Partners I, Ltd., 464 S.W.3d 84, 89 (Tex. App.—
Houston [14th Dist.] 2015, no pet.). In Kendall Home Builders, the party seeking
sanctions filed a postjudgment motion for sanctions that did not include an explicit
request for the trial court to render a new final judgment; however, the proposed
order specifically included relief that sought a change in the existing judgment. Id.
at 90.3 This court concluded that the motion for sanctions could be construed as a
motion to modify, although the award of sanctions was ultimately reversed, and
judgment was rendered denying sanctions. Id. at 97. Following precedent in Lane
and Kendall Home Builders, the determination of whether a postjudgment motion
for sanctions can be construed as a motion to modify the judgment is fact-specific.
Therefore, we turn to the motion filed by the IP attorneys.

       The IP attorneys’ motion for sanctions does not specifically request a change
or modification to the final judgment as was requested in Lane. Neither does the
proposed order submitted with the motion contain relief in the form of a modified
judgment. The IP attorneys’ proposed order does not seek judgment with respect to
the sanctions as the movant did in Kendall Home Builders. On its face, there is
nothing included within the motion or the accompanying proposed order which

       3
          One of our sister courts has also had the opportunity to consider the issue. In Cocke v.
Elliot, the Third Court of Appeals concluded in an memorandum opinion that even though a
motion for sanctions did not explicitly request sanctions be incorporated in the judgment “this
was plainly the legal effect and gravamen of [the] motion, whether or not appellees said so, and
we reject Cocke’s attempt to elevate form over substance.” No. 03-12-00667-CV, 2013 WL
4821123, at *7 (Tex. App.—Austin Aug. 27, 2013, pet. denied) (mem. op.). Cocke does not
appear to be consistent with Lane to the extent it removes the requirement that the motion for
sanctions connect the relief requested to a change in the final judgment in order to be considered
a motion to modify within the meaning of Rule 329b(g). In any event, Cocke is distinguishable
from the facts before us as the IP attorneys’ motion for sanctions does not make clear that the
legal effect of their motion was to request a change in the final judgment.

                                                5
would suggest that the IP attorneys sought a modification to the final judgment.

       The IP attorneys argue in response that their motion for sanctions did seek a
substantive change to the final judgment. Specifically, the IP attorneys refer to
language in the motion for sanctions which states: “Movants submit that it is only
fair that Sheller bear the burden of this award along with his client[.]” The IP
attorneys also point to their proposed order which requests the following relief:
“David L. Sheller be and hereby is SANCTIONED and ORDERED to pay to
Defendants the sum of $2,057,169.41 – with, and/or in lieu of, Plaintiff, for those
attorneys’ fees and costs already awarded the Defendants against Plaintiff.”4

       Civil Practice and Remedies Code chapter 10 governs sanctions that may be
imposed on a “person, a party represented by the person, or both” for filing
frivolous pleadings and motions. Tex. Civ. Prac. & Rem. Code Ann. § 10.004(a).
A sanction may include: (1) a directive to the violator to perform, or refrain from
performing, an act; (2) an order to pay a penalty to the court; and (3) an order to
pay to the other party the amount of the reasonable expenses incurred by the other
party because of the filing of the pleading or motion, including reasonable
attorney’s fees. Id. § 10.004(b). Because an award of sanctions might result in a
stand-alone order or it might result in a modification to the final judgment, it is
important that a motion for sanctions, on its face, indicate whether it seeks a
modification of the final judgment. Lane, 10 S.W.3d at 312, 314. The language
relied on by the IP attorneys does not, on its face, identify any substantive change
that it seeks to make to the judgment. The proposed order accompanying the
motion for sanctions seeks alternative relief in the form of sanctions “with, and/or

       4
         The IP attorneys also cite language from the modified final judgment signed on July 13,
2020 to support their claim that the motion for sanctions was a motion to modify the judgment.
Though the trial court clearly intended to modify the final judgment, the trial court’s intent does
not determine whether the trial court had plenary power to act.

                                                6
in lieu of, Plaintiff.” Without a specific request for the modification of the
judgment, a stand-alone order of sanctions would address a request that Sheller be
sanctioned “with” Sousa, and the legal effect of the motion does not necessitate a
modification to the judgment. Therefore, we conclude the IP attorneys’ motion for
sanctions was not a motion to modify the judgment within the meaning of Rule
329b(g). Therefore, the modified final judgment was signed outside plenary power
and is void.

                                     III.    CONCLUSION

       The trial court’s signing of the modified final judgment was void. See Tex.
R. Civ. P. 329b(f). Although appellate courts do not have jurisdiction to address
the merits of appeals from void orders or judgments, they do have jurisdiction “to
determine that the order or judgment underlying the appeal is void and make
appropriate orders based on that determination.” Freedom Commc’ns., Inc. v.
Coronado, 372 S.W.3d 621, 623–24 (Tex. 2012).5 We dismiss this appeal for lack
of subject-matter jurisdiction.

                                            /s/       Charles A. Spain
                                                      Justice

Panel consists of Justices Wise, Spain, and Hassan.

       5
          Mandamus is proper if a trial court issues an order beyond its jurisdiction. In re
Southwestern Bell Tel. Co., 35 S.W.3d 602, 605 (Tex. 2000) (per curiam) (orig. proceeding). The
trial court may also sign an order declaring a previous judgment or order to be void due to the
expiration of plenary power. See Tex. R. Civ. P. 329b(f).

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