Court Opinion

ID: 9401792
Source: CourtListenerOpinion
Date Created: 2023-06-14 06:08:34.185149+00
Date Added: 2024-06-11T17:19:55.306908
License: Public Domain

Reverse and Vacate and Opinion Filed June 9, 2023

                                                  In The
                                   Court of Appeals
                            Fifth District of Texas at Dallas
                                         No. 05-21-01114-CV

                SCOTT FRENKEL, Appellant
                            V.
   STEPHEN COURTNEY, M.D., STEPHEN COURTNEY, M.D., P.A.,
 CAMERON CARMODY, M.D., AND CAMERON CARMODY, M.D., P.A.,
                        Appellees

                     On Appeal from the 296th Judicial District Court
                                  Collin County, Texas
                         Trial Court Cause No. 296-03470-2016

                               MEMORANDUM OPINION
                          Before Justices Reichek, Nowell, and Garcia
                                  Opinion by Justice Nowell
         Attorney Scott Frenkel appeals from the trial court’s March 1, 2021 Order

sanctioning him.1 We reverse and vacate the trial court’s March 1, 2021 Order.

                                             BACKGROUND2

           Cameron Carmody and his professional association, Cameron Carmody,

M.D., P.A., sued Stephen Courtney, Stephen Courtney, M.D., P.A. and Plano

   1
       The trial court signed the order on March 1, 2021, but the order was file stamped the next day.
   2
     The facts underlying Frenkel’s appeal of the sanctions order are familiar to the parties and to the
Court. See In re Frenkel, No. 05-21-00194-CV, 2021 WL 2943939, at *1 (Tex. App.—Dallas July 13, 2021,
Orthopedics & Sports Medicine. Eventually, the Courtney Parties filed third-party

claims against Kelly Liebbe, an attorney, and others. During the lawsuit, Liebbe

represented herself at various times and, at other times, she was jointly represented

by Frenkel. Frenkel entered his appearance as co-counsel on behalf of Liebbe on

July 31, 2020.

        On July 20, 2020, the Carmody Parties and Courtney Parties filed a joint

motion to compel Liebbe to produce an audio recording. The motion also sought

sanctions against Liebbe. Liebbe filed her response in opposition on August 6, 2020.

The response is electronically signed by Liebbe and includes Frenkel’s signature

block as counsel for Liebbe. Liebbe’s response makes allegations about Courtney

and attaches an exhibit in support of those allegations. The exhibit is a seven-page

document on the letterhead of the Texas Medical Board discussing alleged bad acts

by Courtney (hereinafter “Document at Issue”).

        On August 7, 2020, the Courtney Parties filed a reply to Liebbe’s response to

the motion to compel. The reply states:

                Defendant Liebbe has falsely represented to this Court that the
        Texas Medical Board made certain findings against Dr. Courtney when
        the “evidence” she cites in her response were actually mere allegations
        . . . in a complaint that was dismissed by the Texas Medical Board for
        lacking merit with an apology to Dr. Courtney.

orig. proceeding) (mem. op.). The facts underlying the lawsuit generally are not relevant to this appeal, and
we do not recite them here. See TEX. R. APP. P. 47.4 (Memorandum Opinions).
                                                    –2–
The Courtney Parties requested the Court sanction Liebbe pursuant to Rule 13 of the

Texas Rules of Civil Procedure and Chapters 9 and 10 of the Texas Civil Practice

and Remedies Code. The Carmody Parties also filed a reply stating Liebbe’s

misrepresentation “is obvious and appears on letterhead purporting to be from the

Texas Medical Board (and also includes – peculiarly – neither a front page nor a

signature from any state official.)” Liebbe filed a sur-reply on August 8, 2020. Like

the response, the sur-reply is electronically signed by Liebbe and includes Frenkel’s

signature block as counsel for Liebbe.

      The trial court held a hearing on August 10, 2020, to consider the joint motion

to compel. At the beginning of the hearing, Frenkel announced himself as counsel

for Liebbe. At that hearing, counsel for the Carmody Parties informed the trial court:

      Judge, in her reply brief to the motion to compel, Ms. Liebbe cites to a
      Texas Medical Board finding of fact regarding Dr. Courtney. . . the
      finding that they refer to or that she refers to is on Texas Medical Board
      letterhead, and is clearly forged. . . . It is a forged document. And Ms.
      Liebbe says it is an authentic document and also says that she verified
      the document, and it simply can’t be the case.

In response, Frenkel stated: “There are lies occurring in this case, but it is not with

Ms. Liebbe; and she certainly didn’t attach TMB documents that were forged.”

Frenkel continued: “And, by the way, nothing was forged from the TMB. Those

were actual findings from the Texas Medical Board about Courtney.” The trial judge

told the lawyers: “if that’s a falsified document, for example, the credibility of

anyone after that - - by the way, the person propounding it and the one defending

                                         –3–
against it is important to me, and so if someone has been lying to me on either side

- - and someone is lying. It’s either authentic or it is not.” At the end of the hearing,

the court scheduled a sanctions hearing on October 6, 2020. The judge then added:

      Also, too, and I tell you something, it really disturbs me that there is a
      possibility, and I don’t know - - but someone is lying to me about the
      authenticity of the Medical Board document, for example. I want to get
      to the bottom of that before that hearing. I want to hear what that is. So
      if y’all need subpoenas, if y’all need me to order depositions on written
      questions or subpoena somebody from the Texas Medical Board with
      their file for - -” the October 6 hearing “- -then y’all do that, and I will
      sign it, okay?

      On September 14, 2020, the Courtney Parties and the Carmody Parties filed a

joint motion for sanctions against Liebbe and Frenkel. The motion details allegations

that Liebbe and Frenkel misrepresented the Document at Issue to the trial court. The

movants attached an affidavit made by Scott Freshour, the General Counsel for the

TMB, which states his understanding that

      there is a dispute over 12 pages of documents attached to this affidavit.
      . . The Documents at Issue are not official TMB documents, as the
      documents and their content were not created by TMB. The Documents
      at Issue do not constitute any findings, conclusions, statements, or any
      other determination by TMB. The Documents at Issue were created and
      submitted to TMB by a private citizen. The use of TMB letterhead by
      this private citizen was not authorized by TMB.

The motion sought death-penalty sanctions.

      Liebbe was represented by new counsel at the October 6 hearing, and Frenkel

appeared at the hearing with his own counsel. Liebbe testified that, as to the

statements in her August 6 sur-reply, she believed the Document at Issue contained

                                          –4–
findings by the TMB. She ultimately conceded the Document at Issue did not contain

TMB findings.

      Liebbe confirmed she made no effort to verify whether the Document at Issue

was authentic after the Carmody and Courtney Parties filed their replies, and she

claimed she did not “see that August 7” reply brief. During her testimony, she had

the following exchange with the judge:

              The Court: Did you do anything between August the 7 th, which
      is the, I believe, the notification by the Plaintiffs, and August the 10th,
      which is the hearing date in front of the Court, to show or to verify
      before you made such a bold statement to the Court purporting that
      these documents were authentic?
              Ms. Liebbe: No, I did not.
              The Court: Do you think that an attorney has a legal obligation
      to do a reasonable investigation as to representations they make to the
      Court?
              Ms. Liebbe: I do.
              The Court: Do you believe that you in your efforts were
      reasonable - - were a reasonable investigation before you made such a
      bold statement and, frankly, double-down [sic] on it in your motions?
              Ms. Liebbe: Your Honor, I don’t believe I did anything wrong.
              The Court: I didn’t ask you that. . . . did you do any reasonable
      investigation prior to coming into court and making that representation?
              Ms. Liebbe: I did not. I did not get that August 7 notification that
      they said it was not authenticated.
              The Court: You didn’t get it? Is that what you’re saying?
              Ms. Liebbe: Yeah, I don’t remember getting that. And had I
      received that, I absolutely would have backed off and said you are right,
      I was wrong.
              The Court: Okay. On August the 10th, when you or Mr. Frenkel
      on your behalf stated to the Court, apparently twice, that these were not
      forged documents, these are authentic, these are authentic findings from
      the Medical Board, did y’all do anything on your own, since it is your
      representation, from August the 10th until September the whatever,
      when they filed, I guess, a motion for this hearing, did you do anything
      to verify or to correct your statements to the Court?

                                         –5–
             Ms. Liebbe: No.

      Discussing the Document at Issue during the hearing, the judge stated: “There

is no way in the world that [document] comes from a Medical Board. It is so

grammatically incorrect; it is so stream of conscious. It is - - it obviously, I think by

just looking at it and reading it very quickly on my part, not for any substance,

obviously didn’t come from a Medical Board.” During the hearing, the judge also

learned that, when the Document at Issue was produced in discovery, it included

additional pages that Liebbe omitted from her filing; the additional pages show the

Document at Issue is only a complaint and not findings by the TMB.

      Frenkel testified he represents Liebbe, he represented her at the August 10

hearing, and she is lead counsel. However, he stated, he did not file the document;

Liebbe did so while acting as her own counsel.

      Frenkel did no research to determine whether the Document at Issue

represented findings by the TMB before telling the court it was not forged; he had

no reason to believe his statement was wrong at the time he made it. Rather, he

explained, he saw the document was Bates labeled when he “look[ed] at them very

quickly and briefly before the hearing.” He became aware the document did not

reflect actual findings when “I heard one of y’all say that.” Frenkel testified: “And,

Judge, this is not something that I would do in your courtroom or any other

courtroom.” The judge replied:

                                          –6–
       Here’s my problem, Mr. Frenkel. I read it, and it just oozes of not
being accurate.
       ...
       [I]t is typographically wrong, grammatically wrong; it doesn’t
sound like a Medical Board. I have never dealt with the Medical Board
before, but it doesn’t sound likely any Medical Board that we want in
the State of Texas. It is atrocious if that came out of our Medical Board.
       And that concerns me that you and/or Ms. Liebbe didn’t at least,
before making these gigantic accusations against somebody, that you
didn’t question it just for a second and go wait a second, this doesn’t
seem right. And now I know, just today, that the production made by
[counsel] on behalf of Mr. McMurrey included pages before the pages
that were submitted to the Court that, obviously, show that it was a
complaint and not a finding or factual rendition of what occurred before
a medical board.

After testimony, the trial judge stated:

       To say that I’m very concerned about the conduct in this case is
probably an understatement. Although people make mistakes, and we
all do, we as attorneys have certain obligations to do things so that we
don’t perpetuate falsehoods or lies or anything else. And right now, I’m
talking about the Texas Medical Board purported records.
       I read the records and I knew from moment one that there is no
way in the world this came from the Texas Medical Board. And, by the
way, I only apparently read part of it because I got the rest of it today.
I knew from the grammatical errors and the way it was written, and
there was really no medical analysis from it at all, that it was suspicious.
       And I think attorneys before they represent things to the Court
have an obligation - - in fact, the rules say that they have an obligation
to do a reasonable investigation prior to making certain representations
to the Court, and that did not happen here.
       Now that I know that the production by Mr. McMurrey included
pages that preceded the ones that were provided to the Court that said
it was a complaint, now I am even more concerned that the lawyers
were fast and loose with this report and didn’t do a reasonable
investigation as they should and repeated allegations from a complaint
as though they were findings from the Texas Medical Board. And now
those complaints are made part of a falsified pleading; the pleading is
not true but for the public to see.
       ...

                                   –7–
              The question that presents, though, what am I going to do about
      it. Death penalty sanctions are pretty severe. I’ve been involved in, as a
      judge and as a lawyer, in death penalty sanctions. And it is to be
      reserved for the most egregious conduct and after progressive sanctions
      are done. . . .
              I believe there is something else that I can do. What that is, I am
      not - - I am kind of stuck on what’s the most appropriate sanction for
      the conduct that I believe was inappropriate by Ms. Liebbe. I think that
      Mr. Frenkel was blissfully ignorant to have his name being put on
      pleadings that were filed. . . . I think that’s ignorance on [Frenkel’s]
      part. I don’t know if that’s sanctionable.

Later in the hearing, the judge stated: “Let me talk about Mr. Frenkel. . . I think when

you put your name on a block to sign a pleading that you have an obligation as an

attorney, because then every attorney would say, well, I didn’t really do that; I know

my name is on it, but my legal assistant did it, or whatever. . . . I’m going to order

that you take ten hours - - additional hours of ethics training over the next 24 months.

I am going to fine you a thousand dollars.”

      The trial court signed an order on March 1, 2021 granting the joint motion for

sanctions. In the March 1 Order, the trial court noted that Liebbe electronically

signed the sur-reply and Frenkel appeared on the signature block as her co-counsel

of record. The court also noted that three days later, on August 10, 2020, Frenkel

told the court in a hearing that “nothing was forged from the TMB. Those were actual

findings from the Texas Medical Board about Courtney.” The March 1 Order states:

             Until the hearing on October 6, 2020, neither Liebbe nor Frenkel
      made any attempt with the Court or Drs. Courtney and Carmody to
      retract or withdraw their prior representations that the Documents at
      Issue were, in fact, actual findings made or adopted by the Texas
      Medical Board. Specifically, Liebbe and Frenkel testified that neither

                                          –8–
      of them made any effort to contact the Texas Medical Board to
      determine the authenticity or legitimacy of the Documents at Issue as
      being actual findings made or adopted by the Texas Medical Board
      before the October 6, 2020 hearing.
             Defendant Liebbe’s Exhibit 5 for the sanctions hearing was
      admitted into evidence, but in sustaining Dr. Courtney’s objection for
      optional completeness, the documents Bates Numbered MCM-001509
      though MCM-001512 were added to Defendant Liebbe’s Exhibit No.
      5. The documents Bates Numbered MCM-001509 though MCM-
      001512 show on their face that it was a complaint registered or
      submitted with the Texas Medical Board by Dr. Courtney’s ex-wife,
      Cynthia Ellis.
             A simple reading of the Documents at Issue show that they
      contain extensive and obvious grammatical errors, incomplete
      sentences and salacious allegations, and also lack the formality that an
      official document or record of a government agency would typically
      reflect.
             Liebbe’s representations that the Document at Issue were actual
      findings made or adopted by the Texas Medical Board against Dr.
      Courtney, as she set forth in her Response and Sur-Reply to the Joint
      Motion to Compel, were false.
             Liebbe’s sworn testimony given during the October 6, 2020
      hearing that she did not read the Replies is not credible because she
      filed a Sur-Reply to those Replies.
             Liebbe’s Response and Sur-Reply to the Joint Motion to Compel
      constitute fraudulent pleadings before the Court as they pertain to the
      Documents at Issue.
             Frenkel’s representation to the Court, as Liebbe’s counsel of
      record, during the August 10, 20202 hearing of “And, by the way,
      nothing was forged from the TMB. Those were actual findings from the
      Texas Medical Board about Courtney,”. . . was false. Before making
      that representation to the Court, Frenkel knew, should have known, or
      should have made a reasonable investigation that would have revealed
      that the Documents at Issue were not actual findings made or adopted
      by the Texas Medical Board against Dr. Courtney.

The March 1 Order states that, pursuant to Rule 215 of the Texas Rules of Civil

Procedure and the court’s inherent power, sanctions are warranted against Liebbe

and Frenkel. The court ordered Frenkel to pay $1,000 to Texas Lawyers’ Assistance

                                        –9–
Program (TLAP) and attend an additional 10 hours of continuing legal education on

legal ethics as a sanction.

      The parties now all agree the Document at Issue does not contain actual

findings made or adopted by the TMB.

                                 LAW & ANALYSIS

      In a single issue, Frenkel challenges the March 1 Order and argues the trial

court abused its discretion by imposing sanctions against him. Specifically, Frenkel

asserts the trial court had no basis to impose sanctions under Rule 215, had no

evidence to impose sanctions under its inherent authority, and neither appellees nor

the trial court provided written notice that sanctions would be sought under the trial

court’s inherent authority.

      We review a trial court’s sanctions order for abuse of discretion. Brewer v.

Lennox Hearth Products, LLC, 601 S.W.3d 704, 717 (Tex. 2020). In our review, we

consider the entire record, including the evidence, counsels’ arguments, the

circumstances surrounding the offending party’s discovery abuse, and all of the

offending party’s conduct during the litigation. Duncan v. Park Place Motorcars,

Ltd., 605 S.W.3d 479, 488 (Tex. App.—Dallas 2020, pet. withdrawn) (citing

Westfall Family Farms, Inc. v. King Ranch, Inc., 852 S.W.2d 587, 590 (Tex. App.—

Dallas 1993, writ denied); Hill & Griffith Co. v. Bryant, 139 S.W.3d 688, 694 (Tex.

App.—Tyler 2004, pet. denied)). We view the evidence in the light most favorable

to—with all reasonable inferences drawn in support of—the trial court’s ruling. Id.

                                        –10–
         A.     Rule 215.3
      Frenkel argues the trial court had no basis under Texas Rule of Civil

Procedure 215 to impose sanctions. The Courtney Parties concede that the sanctions

imposed by the trial court are not included within Rule 215’s enumerated list of

sanctions.

      Texas Rule of Civil Procedure 215.3 permits a court to impose sanctions on a

party who abuses the discovery process. See TEX. R. CIV. P. 215.3 (Abuse of

Discovery Process in Seeking, Making, or Resisting Discovery). The available

sanctions for abusing the discovery process while resisting discovery are enumerated

in Rule 215.2(b). See TEX. R. CIV. P. 215.2(b); see also TEX. R. CIV. P. 215.3. The

sanction assessed by the trial court, a $1,000 fine payable to TLAP and additional

hours of CLE, do not fall within the relevant paragraphs of Rule 215.2. See TEX. R.

CIV. P. 215.2(b). Accordingly, we conclude Rule 215 cannot form the basis for

affirming the trial court’s sanctions order. We sustain Frenkel’s issue to this extent.

         B.     Inherent Power to Sanction
      Courts possess inherent powers that aid the exercise of their jurisdiction,

facilitate the administration of justice, and preserve the independence and integrity

of the judicial system. Brewer, 601 S.W.3d at 718. A court’s inherent authority

includes the “power to discipline an attorney’s behavior.” Id. Accordingly, courts

are “empowered to punish an attorney’s behavior even when the offensive conduct

is not explicitly prohibited by statute, rule, or other authority.” Id.

                                          –11–
      However, a court’s inherent authority to sanction is limited by due process;

sanctions must be just and not excessive and must be exercised with restraint and

great caution. Id. “To that end, invocation of the court’s inherent power to sanction

necessitates a finding of bad faith.” Id. Bad faith is not just intentional conduct but

intent to engage in conduct for an impermissible reason, willful noncompliance, or

willful ignorance of the facts. Id. at 718-19. “Bad faith” includes “conscious doing

of a wrong for a dishonest, discriminatory, or malicious purpose.” Id. at 719. Errors

in judgment, lack of diligence, unreasonableness, negligence, or even gross

negligence—without more—do not equate to bad faith. Id. Improper motive, not

perfection, is the touchstone. Id. Bad faith can be established with direct or

circumstantial evidence, but absent direct evidence, the record must reasonably give

rise to an inference of intent or willfulness. Id.

      Frenkel incorrectly represented to the trial court that “nothing was forged from

the TMB. Those were actual findings from the Texas Medical Board about

Courtney.” Addressing Frenkel’s statement, the March 1 Order states: “Before

making that representation to the Court, Frenkel knew, should have known, or

should have made a reasonable investigation that would have revealed that the

Documents at Issue were not actual findings made or adopted by the Texas Medical

Board against Dr. Courtney.” The March 1 Order concludes the sanctions are

warranted to deter Frenkel “from making any further false representations to the

Court.” Frenkel argues the March 1 Order uses “negligence-like language to describe

                                          –12–
Frenkel’s alleged sanctionable conduct,” which cannot form the foundation for a bad

faith finding. We agree.

      The March 1 Order includes the trial court’s findings, which are consistent

with the concerns the judge verbally expressed, noting his belief that Frenkel “was

blissfully ignorant to have his name being put on pleadings that were filed. . . . I

think that’s ignorance on [Frenkel’s] part.” The judge also stated his concern the

“lawyers were fast and loose with this report and didn’t do a reasonable investigation

as they should and repeated allegations from a complaint.” Neither the March 1

Order nor the judge’s comments provide a basis for finding Frenkel acted in bad

faith; they do not show Frenkel engaged in the wrongful conduct for an

impermissible reason or out of willful noncompliance or willful ignorance of the

facts. Id. at 718-19. Rather, they indicate lack of diligence, negligence, or gross

negligence, which do not alone equate to bad faith. See id. at 719. The evidence

presented does not show Frenkel engaged in the “conscious doing of a wrong for a

dishonest, discriminatory, or malicious purpose.” Id. at 719.

      Frenkel’s failure to investigate the source of the Document at Issue before

making his bold proclamation that the document was not forged was ill advised.

However, reviewing the evidence in the light most favorable to the trial court’s

ruling, see Duncan, 605 S.W.3d at 488, we cannot conclude the evidence gives rise

to an inference of intent or willfulness or indicates improper motive, see Brewer,

                                        –13–
601 S.W.3d at 719. The trial court abused its discretion by assessing sanctions

without finding bad faith. We sustain Frenkel’s issue to this extent.

      We need not address Frenkel’s third argument challenging the sanctions order

on the basis that he did not receive sufficient notice. See TEX. R. APP. P. 47.1.

                                    CONCLUSION

      We reverse and vacate the trial court’s March 1 Order as it relates to Frenkel.

                                            /Erin A. Nowell//
211114f.p05                                 ERIN A. NOWELL
                                            JUSTICE

                                         –14–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                  JUDGMENT

SCOTT FRENKEL, Appellant                       On Appeal from the 296th Judicial
                                               District Court, Collin County, Texas
No. 05-21-01114-CV           V.                Trial Court Cause No. 296-03470-
                                               2016.
STEPHEN COURTNEY, M.D.,                        Opinion delivered by Justice Nowell.
STEPHEN COURTNEY, M.D.,                        Justices Reichek and Garcia
P.A., CAMERON CARMODY,                         participating.
M.D., AND CAMERON
CARMODY, M.D., P.A, Appellees

      In accordance with this Court’s opinion of this date, the trial court’s March 1
Order Granting Opposed Joint Motion for Sanctions Against Defendant Kelly
Liebbe and Her Counsel, Scott Frenkel, and Entry of Protective Order as to Certain
Falsely Submitted Documents is REVERSED as to the sanctions against appellant
Scott Frenkel.

      It is ORDERED that each party bear its own costs of this appeal.

Judgment entered this 9th day of June 2023.

                                        –15–