Court Opinion

ID: 4061812
Source: CourtListenerOpinion
Date Created: 2016-09-29 20:18:20.530021+00
Date Added: 2024-06-11T09:36:27.792419
License: Public Domain

ACCEPTED
                                                                                13-14-00516-CV
                                                                THIRTEENTH COURT OF APPEALS
                                                                       CORPUS CHRISTI, TEXAS
                                                                           4/30/2015 6:38:30 PM
                                                                              DORIAN RAMIREZ
                                                                                         CLERK

                        NO. 13-14-00516-CV

                                                     FILED IN
            IN THE COURT OF APPEALS         FOR    THEOF APPEALS
                                             13th COURT
                                          CORPUS CHRISTI/EDINBURG, TEXAS
              THIRTEENTH DISTRICT OF TEXAS    4/30/2015 6:38:30 PM
__________________________________________________________________
                                               DORIAN E. RAMIREZ
                                                      Clerk
           PATRICK HLAVATY AND JEFF STRNADEL,
                          Appellants and Cross-Appellees,

                                  v.

    COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.,
                              Appellee and Cross-Appellant.
__________________________________________________________________

  COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.’S
                      APPELLEE’S BRIEF
__________________________________________________________________

         From the District Court of Wharton County, Texas,
          329th Judicial District; Trial Court Case No. 44081
__________________________________________________________________

DAWN S. HOLIDAY
TBA No. 24046090
MIA B. LORICK
TBA No. 24091415
Roberts Markel Weinberg Butler Hailey PC
2800 Post Oak Blvd., 57th Floor
Houston, TX 77056
Tel: (713) 840-1666
Fax: (713) 840-9404
dholiday@rmwbhlaw.com
mlorick@rmwbhlaw.com
ATTORNEYS FOR APPELLEE / CROSS-APPELLANT,
COMMERCIAL STATE BANK OF EL CAMPO, TEXAS, INC.

                ORAL ARGUMENT REQUESTED
                IDENTITY OF PARTIES AND COUNSEL

Appellants      Trial Court Counsel             Appellate Counsel
/ Cross-
Appellees
Patrick         Howard H. Singleton             Walter James Kronzer, III
Hlavaty         Singleton Law Firm              Walter James Kronzer, III,
and             109 East Milam Street           P.C.
Jeff Strnadel   Wharton, TX 77488               3000 Weslayan, Suite 247
                Tel: (979) 532-9800             Houston, TX 77027
                Fax: (979) 532-9805             Tel: (713) 622-5756
                singletonlaw@sbcglobal.net      Fax: (713) 622-5445
                                                wkronzer@kronzer.com

                                                Howard H. Singleton
                                                Singleton Law Firm
                                                109 East Milam Street
                                                Wharton, TX 77488
                                                Tel: (979) 532-9800
                                                Fax: (979) 532-9805
                                                singletonlaw@sbcglobal.net

Appellee /      Trial Court Counsel             Appellate Counsel
Cross-
Appellant
Commercial      Gregg S. Weinberg               Dawn S. Holiday
State Bank      Dawn S. Holiday                 Mia B. Lorick
of El Campo,    Chase A. Evans                  Roberts Markel Weinberg
Texas, Inc.     Roberts Markel Weinberg         Butler Hailey PC
                Butler Hailey PC                2800 Post Oak Blvd., 57th Fl
                2800 Post Oak Blvd., 57th Fl.   Houston, TX 77056
                Houston, TX 77056               Tel: (713) 840-1666
                Tel: (713) 840-1666             Fax: (713) 840-9404
                Fax: (713) 840-9404             dholiday@rmwbhlaw.com
                gweingerg@rmwbhlaw.com          mlorick@rmwbhlaw.com
                dholiday@rmwbhlaw.com
                cevans@rmwbhlaw.com

                                     ii
                                TABLE OF CONTENTS

IDENTITY OF PARTIES & COUNSEL .................................................... ii

TABLE OF CONTENTS ...........................................................................iii

TABLE OF AUTHORITIES ....................................................................... v

RECORD REFERENCES ....................................................................... viii

STATEMENT OF THE CASE .................................................................. ix

ISSUES PRESENTED ............................................................................... x

STATEMENT REGARDING ORAL ARGUMENT .................................. xi

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

PROCEDURAL HISTORY ......................................................................... 3

SUMMARY OF THE ARGUMENT ........................................................... 5

ARGUMENTS AND AUTHORITIES ........................................................ 8

       I. Standard of Review ........................................................................ 8

       II. Appellants’ argument that CSB’s nonsuit as to all defendants
           was interlocutory is misplaced and incorrect. ........................... 9

               A. Appellants rely on Crites v. Collins and Unifund CCR
                  Partners v. Villa, which are not applicable to the issues
                  presented here. .................................................................. 10

               B. The only matter pending at the time of CSB’s final
                  nonsuit of remaining defendants was Appellants’ Rule 13
                  motion for sanctions. ......................................................... 14

                                                 iii
        III. Appellants did not have any pending counterclaims at the
            time of the final nonsuit on September 1, 2010. ...................... 18

                A. Appellants’ request for attorney’s fees is not an
                   independent cause of action. ............................................. 18

                B. Appellants’ amended counterclaims filed after CSB’s
                   September 1, 2010 nonsuit of all parties are void as a
                   matter of law. ..................................................................... 20

        IV. The trial court retained limited jurisdiction over Appellants’
            Rule 13 motion for sanctions for only a reasonable amount of
            time after CSB’s non-suit—not three and a half years............ 21

                A. Three and a half years is not a reasonable amount of time.
                   ............................................................................................ 22

                B. The trial court lost plenary power on December 15, 2013,
                   and therefore, was without jurisdiction to enter an order
                   of sanctions on June 11, 2014. .......................................... 25

CONCLUSION ......................................................................................... 26

PRAYER .................................................................................................... 27

CERTIFICATE OF COMPLIANCE ........................................................ 28

CERTIFICATE OF SERVICE.................................................................. 28

                                                      iv
                                TABLE OF AUTHORITIES

Case Law
Binford v. Snyder,
   189 S.W.2d 471 (Tex. 1945) ............................................................... 19
CTL/Thompson Tex., L.L.C. v. Starwood Homeowner's Ass’n,
  390 S.W.3d 299 (Tex. 2013) ............................................................... 13
Crites v. Collins,
   284 S.W.3d 839 (Tex. 2009) ................................................... 10, 11, 16
Digital Imaging Assocs. v. State,
   176 S.W.3d 851 (Tex. App.—Houston [1st Dist.] 2005) ................... 20
Downer v. Aquamarine Operators Inc.,
  701 S.W.2d 238 (Tex. 1985) ................................................................. 8
Eichelberger v. Eichelberger,
   582 S.W.2d 395 (Tex. 1979) ................................................................. 8
Gen. Land Office v. Oxy U.S.A., Inc.,
  789 S.W.2d 569 (Tex. 1990) ................................................... 20, 23, 24
Greenberg v. Brookshire,
  640 S.W.2d 870 (Tex. 1982) ................................................... 20, 23, 24
Guidry v. Envtl. Procedures, Inc.,
  388 S.W.3d 845 (Tex. App.—Houston [14th Dist.] 2012) ................ 15
Hansson v. Time Warner Entm’t Advance,
   No. 03-01-00578-CV, 2002 LEXIS 2058 (Tex. App.—Austin Mar. 21,
  2002) .................................................................................................... 20
In re Bennett,
   960 S.W.2d 35 (Tex. 1997) ............................................... 21, 22, 23, 24
In re Fuentes,
   960 S.W.2d 261 (Tex. App.—Corpus Christi 1997) .......................... 25

                                                      v
In re Metro. Lloyds Ins. Co. of Tex.,
   No. 05-08-01712-CV, 2009 LEXIS 1764 (Tex. App.—Dallas Mar. 13,
  2009) .................................................................................................... 23
In re Reynolds,
   No. 14-14-00329-CV, 2014 Tex. App. LEXIS 7105 (Tex. App.—
  Houston [14th Dist.] July 1, 2014) (mem.) ........................................ 17
In re Riggs,
   315 S.W.3d 613 (Tex. App.—Fort Worth 2010) ................................ 20
In the Interest of T.G.,
   68 S.W.3d 171 (Tex. App.—Houston [1st Dist.] 2002) ..................... 14
Kutch v. Del Mar College,
  831 S.W.2d 506 (Tex. App.—Corpus Christi 1992) ............................ 8
Lane Bank Equip. Co. v. Smith S. Equip., Inc.,
  10 S.W.3d 308 (Tex. 2000) ..................................................... 15, 17, 18
Mantri v. Bergman,
  153 S.W.3d 715 (Tex. App.—Dallas 2005) ........................................ 15
Mart. v. Tex. Dep’t of Family & Protective Servs.,
  176 S.W.3d 390 (Tex. App.—Houston [1st Dist.] 2004) ....... 15, 16, 17
Metzger v. Sebek,
  892 S.W.2d 20 (Tex. App.—Houston [1st Dist.] 1994) ....................... 8
Newman Oil Co. v. Alkek,
  614 S.W.2d 653 (Tex. App.—Corpus Christi 1981) .................... 20, 23
Scott & White Mem’l Hosp. v. Schexnider,
   940 S.W.2d 594 (Tex. 1996) ............................................................... 25
Strawder v. Thomas,
   846 S.W.2d 51 (Tex. App.—Corpus Christi 1992) ................ 20, 23, 24
Unifund CCR Partners v. Villa,
  299 S.W.3d 92 (Tex. 2009) ........................................................... 11, 12
United Oil & Minerals v. Costilla Energy,
  1 S.W.3d 840 (Tex. App.—Corpus Christi 1999) .............................. 20

                                                      vi
Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon,
  195 S.W.3d 98 (Tex. 2006) ..................................................... 21, 23, 24
Villafani v. Trejo,
   251 S.W.3d 466 (Tex. 2008) ............................................................... 16

Statutes
Tex. Civ. Prac. & Rem. Code Ann. § 150.002 (West) ............................ 13

Rules
Tex. R. Civ. P. 162 .................................................................... 5, 6, 10, 21
Tex. R. Civ. P. 13 .................................................................................... 15

                                                   vii
                        RECORD REFERENCES

Citations in this Appellee’s Brief to the Parties are as follows:

Appellee Commercial State Bank of El Campo, Texas, Inc. will be

referred to as “CSB” or “Appellee.”

Appellant Patrick Hlavaty will be referred to as “Hlavaty.”

Appellant Jeff Strnadel will be referred to as “Strnadel.”

Appellants Patrick Hlavaty and Jeff Strnadel will be collectively

referred to as “Appellants.”

Citations in this Appellee’s Brief to the record are as follows:

CR – Clerk’s Record designated by Commercial State Bank of El

Campo, Texas, Inc. and filed in this Court on 10/27/2014 (i.e. CR [page];

e.g. CR 1)

Appellants’ Brief – Patrick Hlavaty and Jeff Strnadel Appellants’ Brief

(i.e., Appellants’ Brief [page]; e.g. Appellants’ Brief 1)

                                      viii
                      STATEMENT OF THE CASE

Nature of the case:        This appeal arises from an order granting
                           CSB’s Motion to Dismiss for lack of subject
                           matter jurisdiction and the trial court
                           entering an order of sanctions against CSB
                           after the trial court determined it lost
                           jurisdiction as to all parties in this case.

Trial Court Disposition:   Hlavaty and Strnadel filed a Motion for
                           Rule 13 sanctions against CSB on May 17,
                           2010. (CR 56–59). On June 23, 2010, CSB
                           filed a notice of nonsuit as to Hlavaty and
                           Strnadel. (CR 100). On September 1, 2010,
                           CSB filed a notice of nonsuit as to the
                           remaining defendants. (CR 126). The trial
                           court signed an order of dismissal on
                           November 15, 2013. (CR 559). But on June
                           11, 2014, the trial court granted Hlavaty
                           and Strnadel’s motion for Rule 13 sanctions.
                           (CR 788). CSB subsequently filed a Motion
                           to Vacate the Order for Sanctions for lack of
                           jurisdiction. (CR 791). On August 29, 2014,
                           the trial court denied CSB’s Motion to
                           Vacate the Order for Sanctions. (CR 853).

Trial Court:               329th Judicial District of Wharton County,
                           Texas.

                                  ix
     RESPONSE TO APPELLANTS’ ISSUES PRESENTED

1.   The trial court did not abuse its discretion when it granted CSB’s
     motion to dismiss and found that it lost jurisdiction over this
     matter on December 15, 2013.

2.   The trial court did not abuse its discretion in finding that at the
     time of the final nonsuit, Appellants did not have any pending
     counterclaims.

3.   The trial court did not abuse its discretion in holding that it only
     had a reasonable amount of time to resolve collateral matters such
     as Appellants’ Rule 13 motion for sanctions.

                                   x
          STATEMENT REGARDING ORAL ARGUMENT

     Pursuant to Appellate Procedure Rule 52.8(b)(4), Appellee

respectfully requests oral argument on belief it will materially aid the

Court in determination of the legal and procedural issues presented for

review.

                                   xi
                        STATEMENT OF FACTS

      CSB brought suit for damages arising from fraud and dishonesty

committed by former bank employees.1 The suit was brought against

nine defendants following internal investigations, as well as an ongoing

investigation by the Secret Service, which revealed fraudulent conduct

on behalf of the defendants.2 CSB subsequently nonsuited its claims

against all defendants and the trial court entered an order of final

nonsuit on November 15, 2013.3

      However, on June 14, 2014 – six months after the trial court

determined that it lost plenary jurisdiction over this case, the trial court

entered an order of sanctions against CSB.4 The granting of CSB’s

motion to dismiss and the entry of the order of sanctions post-expiration

of the trial court’s jurisdiction are the subject of this appeal.

      By way of background, on or about February 17, 1987, Patrick

Hlavaty (“Hlavaty”) began employment with CSB as vice president in

the mortgage lending department.5 He was responsible for marketing

the bank’s services as well as evaluating and recommending mortgage

1 CR 23–43.
2 CR 23; CR 777–78.
3
  CR 784.
4 CR 559; CR 788.
5 CR 27.

                                      1
lending and real estate loans to the loan committee.6 On October 31,

2007, Hlavaty was asked to resign from his position because internal

investigations revealed dishonesty, fraud, self-dealing, and numerous

breaches of fiduciary duties owed to CSB.7 The acts that led to Hlavaty’s

requested resignation were falsifying information, failing to disclose his

interest in certain corporations, and accepting kickbacks on loans made

to various customers.8 Hlavaty’s bad acts gave rise to this lawsuit.9

      Jeff Strnadel (“Strnadel”) was also an employee of CSB.10 Part of

Strnadel’s duties and responsibilities were to make physical site

inspections of construction sites to determine whether improvements

had been made, whether construction had been made in a good and

workmanlike manner, and whether payment on requested draws should

be authorized.11 Strnadel failed to inspect job sites and accurately

report his findings to his superiors.12 As early as 2007, Strnadel’s bad

6 Id.
7 Id.
8 CR 32–37.
9 CR 354.
10 CR 39.
11 CR 39.
12 Id.

                                    2
acts were being investigated by the Secret Service.13 And, CSB incurred

damages because of Strnadel’s actions.14

      CSB brought suit in 2009 against Hlavaty, Strnadel, and seven

other defendants alleging fraud, fraud by nondisclosure, negligent

failure to disclose, breach of fiduciary duty, breach of the duty of loyalty,

unjust enrichment, and negligence.15

                       PROCEDURAL HISTORY

      On October 23, 2009, CSB filed its Original Petition against nine

defendants, including Patrick Hlavaty and Jeff Strnadel.16 The

defendants filed an Original Answer on November 20, 2009, and

subsequently filed an Amended Answer on December 2, 2009.17

Defendants Hlavaty and Strnadel filed a Motion for Rule 13 Sanctions

on March 17, 2010.18 On June 23, 2010, CSB filed a notice of nonsuit as

to defendants Hlavaty and Strnadel.19 The trial court signed the

dismissal order as to Hlavaty and Strnadel on June 24, 2010.20

13 CR 777–78.
14 Id.
15 CR 23–43.
16 CR 23.
17 CR 47–49.
18 CR 56–59.
19 CR 100.
20 CR 100.

                                      3
      On September 1, 2010, CSB nonsuited the remainder of the

defendants in the lawsuit.21 However, because an objection was made by

Hlavaty and Strnadel as to the form of the dismissal order relating to

the dismissal of the other defendants, the proposed order of nonsuit was

not signed at that time. In March 2011, Appellants filed a “First

Amended      Counterclaim”   against       CSB.22   Appellants’   “amended

counterclaim” asserted, for the first time, new claims against CSB.23

The last order granting the nonsuit was finally signed by the trial court

on November 15, 2013.24

      On April 8, 2014, CSB filed its Motion to Dismiss and Vacate

Orders.25 The trial court granted CSB’s motion dismissing the case,

specifically stating that the trial court’s “plenary jurisdiction as to all

parties in this case ended on December 15, 2013.”26 Six months after the

trial court lost plenary jurisdiction, on June 11, 2014, the trial court

issued an order of sanctions against CSB.27 CSB filed a Motion to

21 CR 126.
22 CR 249 – 60.
23 Id.
24 CR 559.
25 CR 561.
26 CR 785–86.
27 CR 788.

                                       4
Vacate the Order of Sanctions, which the trial court denied.28 This

appeal followed.

                   SUMMARY OF THE ARGUMENT

        Appellants’ assertion that CSB’s nonsuit as to all defendants was

an interlocutory order is incorrect because the authorities Appellants

rely upon are not applicable here. Specifically, Appellants rely on case

law where statutory sanctions are at issue—not Rule 13 sanctions.

Because some statutory motions for sanctions are treated as affirmative

independent causes of action, Appellants’ arguments are without merit,

as Rule 13 sanctions—the sanctions at issue here—are not affirmative

causes of action, but rather are merely affirmative claims that are not

considered independent causes of action that extend a court’s

jurisdiction.

        The only pending matter at the time of CSB’s September 1, 2010

final nonsuit was a Rule 13 motion for sanctions—implicating Tex. R.

Civ. P. 162. There were no counterclaims or other causes of action

before the trial court at the time of nonsuit. Appellants’ request for

attorney’s fees under Section 37.009 of the Texas Civil Practice and

28   CR 791–94.
                                     5
Remedies Code—because Appellants’ incorrectly contend that CSB, in

seeking a constructive trust as a form of relief in its petition, was

somehow seeking declaratory relief—is not considered an affirmative

claim under Texas law. In addition, there were no counterclaims before

the trial court at the time of the final nonsuit because the filing of

counterclaims by Appellants—after the order of nonsuit—are void as a

matter of law.   Therefore, as stated above, the only pending matter

before the court was a Rule 13 motion for sanctions.

     Texas Rule of Civil Procedure 162 governs Rule 13 motions for

sanctions filed prior to an order of nonsuit. Pursuant to Rule 162, after

the notice of nonsuit is filed, a trial court has a reasonable amount of

time to resolve collateral matters. As such, the trial court should have

ruled on Hlavaty and Strnadel’s pending Rule 13 motion for sanctions

within a reasonable amount of time after CSB’s final nonsuit on

September 1, 2010.

     Appellants’ however, never pursued the Rule 13 motion for

sanctions – even up to the time the trial court determined that it lost

jurisdiction. CSB asserted this argument in its Motion to Dismiss and

Vacate Orders, which the trial court granted. Although the trial court

                                    6
ruled that “as of September 1, 2010 the [it] had a ministerial duty to

timely sign orders of non-suit,” and that it had “no reason to delay

signing orders of non-suit,” and that it “lost plenary jurisdiction on

December 15, 2013,” it still ruled on the motion for sanctions over three

years from the final nonsuit and over six months after its plenary

jurisdiction expired. Specifically, the trial court signed a final order of

nonsuit in November of 2013; therefore, the trial court lost its plenary

power 30 days later in December of 2013. In June of 2014, however, the

trial court signed the order of sanctions.

     The trial court properly granted CSB’s motion to dismiss because

the trial court lost jurisdiction under Rule 162 within a reasonable time

after September 1, 2010, and at the latest on December 15, 2013.

Moreover, the trial court vacated its prior orders issued after September

1, 2010 as a nullity because the trial court determined that as of

September 1, 2010 there were no pending independent causes of action

asserted by any party in the suit. This Court should affirm the trial

court’s dismissal of the suit.

                                     7
                    ARGUMENTS & AUTHORITIES

I.    Standard of Review

      Every trial court has the inherent power to control the disposition

of the cases on its docket with economy of time and effort for itself, for

counsel, and for litigants.29 Such inherent powers are those that a court

may call upon to aid it in the exercise of jurisdiction and administration

of justice.30

      Appellate courts apply an abuse of discretion standard to a review

of a trial court’s actions pursuant to its inherent power.31 The appellate

court reviews the entire record and evidence in the light most favorable

to the trial court’s ruling.32 A trial court abuses its discretion if it acts in

an arbitrary or unreasonable manner, or without reference to guiding

rules and principles.33

29 Metzger v. Sebek, 892 S.W.2d 20, 38 (Tex. App.—Houston [1st Dist.] 1994, writ
denied); Eichelberger v. Eichelberger, 582 S.W.2d 395, 398 (Tex. 1979).
30 Eichelberger, 582 S.W.2d at 398.
31 See Kutch v. Del Mar Coll., 831 S.W.2d 506, 512 (Tex. App.—Corpus Christi 1992,

no writ).
32 See Kutch, 831 S.W.2d at 512.
33 See Downer v. Aquamarine Operators Inc., 701 S.W.2d 238, 241–42 (Tex. 1985).

                                        8
II.      Appellants’ argument that CSB’s nonsuit as to all
         defendants was interlocutory is misplaced and incorrect.

         Hlavaty and Strnadel improperly argue that CSB’s nonsuit on

September 1, 2010 as to all defendants was interlocutory because they

had a pending motion for sanctions.34 To support this assertion, Hlavaty

and Strnadel rely on cases in which statutory sanctions—not Rule13

sanctions—were at issue. Such cases are inapplicable here. Not only

were there no statutory sanctions filed in the trial court, but the cases

cited by Hlavaty and Strnadel do not address the effect of a nonsuit on

TRCP 13 (“Rule 13”) motions for sanctions—the sanctions at issue in

this case.

         This issue can be confusing, as courts have generally referred to

motions for sanctions as affirmative claims. However, the distinction

that Appellants’ fail to recognize is the difference between a motion for

sanctions under a statutory provision, which creates an independent

cause of action that must be disposed of in a final order; and a Rule 13

motion for sanctions, which is an affirmative claim but is not an

independent cause of action and therefore, disposition by final order is

34   Appellants’ Brief 10.
                                      9
not required as the motion is considered a collateral matter governed by

TRCP 162 (“Rule 162”).

         A.    Appellants rely on Crites v. Collins and Unifund CCR
               Partners v. Villa, which are not applicable to the
               issues presented here.

         Hlavaty and Strnadel accuse CSB of ignoring two Texas Supreme

Court cases – Crites v. Collins and Unifund v. Villa – when it asserts

that a trial court has only a reasonable amount of time to rule on

collateral matters following a nonsuit under Rule 162. But CSB did not

ignore the cases referenced by Appellants. To the contrary, CSB found

the cases to be inapplicable, as the cases do not involve Rule 13 motions

for sanctions but rather, independent affirmative causes of action

created by statute.

         Specifically, in Crites v. Collins, the court considered whether a

statutory motion for sanctions filed after an order of dismissal, but

before entry of a final order is a valid claim.35 The Crites court looked to

the nature of the motion for sanctions and determined that because the

sanctions were statutory—under Chapter 74 of the Tex. Civ. Prac. &

Rem. Code—the motion is an affirmative claim that is treated as an

35   Crites v. Collins, 284 S.W.3d 839 (Tex. 2009) (emphasis added).
                                           10
independent cause of action.36 The Crites court reasoned that the order

of dismissal following the nonsuit was interlocutory because it did not

dispose of all claims and parties, as the subsequently filed motion for

sanctions was an independent cause of action. Because of the pending

cause of action, the Crites court held that so long as the trial court had

plenary jurisdiction at the time the motion was filed, the motion for

sanctions was not void and the trial court had jurisdiction to enter an

order.37

      Five months later, in Unifund v. Villa, the same court was

presented with another dispute involving statutory sanctions.38 The

issue before the Unifund court was whether a motion for sanctions filed

under Tex. Civ. Prac. & Rem. Code Chapter 10 survived a voluntary

nonsuit if the court still had jurisdiction and set the hearing for the

motion prior to entering an order of dismissal.39 Relying on Crites, the

Unifund court stated that because the order of dismissal following the

nonsuit did not specifically reference the claim for statutory sanctions,

the motion for sanctions was still pending as an independent cause of

36 Id. at 842.
37 Id. at 842–43.
38 Unifund CCR Partners v. Villa, 299 S.W.3d 92 (Tex. 2009).
39 Id.

                                        11
action—making the order of dismissal interlocutory.40 Therefore, when

the trial court entered an order for sanctions, the Unifund court held

that the trial court did not err on that basis.41

           In Crites, the motion for sanctions was filed after the notice of

nonsuit, making Crites distinguishable on the facts because the motion

for sanctions in this case was filed before the notice of nonsuit—

implicating Rule 162. Similarly, Unifund does not apply because in

Unifund, the court set a hearing on the motion for sanctions prior to

entering an order of dismissal. The court relied on the setting of the

hearing as evidence that the trial court intended to preserve the cause

of action. The trial court in this case did no such thing; therefore,

Unifund, like Crites, is distinguishable.

           However, the most important distinction between Crites, Unifund,

and this case is that in Crites and Unifund, the sanctions were

statutory independent causes of action, rather than a claim that does

not extend a trial court’s jurisdiction. Even in the trial court, Hlavaty

and Strnadel failed to make the distinction as they again incorrectly

relied on a 2013 Texas Supreme Court case involving the issue of

40   Id.
41   Id.
                                       12
whether statutory sanctions under Tex. Civ. Prac. & Rem. Code §

150.002 allowing a dismissal with prejudice survived a nonsuit – a

voluntary dismissal without prejudice.42 Just as in Crites and Unifund,

in CTL/Thompson Texas, LLC, the Texas Supreme Court determined

that sanctions mandated by statute whose purpose is to deter claimants

from filing meritless suits survive a nonsuit.43        Here, there are no

statutory sanctions at issue, only Rule 13 sanctions.             This is a

distinction with a difference.

      Had Hlavaty and Strnadel actually considered the differences in

the two types of sanctions, then they would have been aware that, in

the cases they cite, the motions for statutory sanctions were considered

independent causes of action—making an order of dismissal that does

not specifically reference those causes of action interlocutory. However,

here, Hlavaty and Strnadel filed a motion for Rule 13 sanctions—an

affirmative claim, but not an independent cause of action or

counterclaim. And, pursuant to Texas law, an order of nonsuit is not an

42 CTL/Thompson Texas, LLC v. Starwood Homeowner’s Ass’n, Inc., 390 S.W.3d
299, 300 (Tex. 2013).
43 Id. at 300 – 01 (emphasis added).

                                      13
interlocutory order when a party has filed a pre–nonsuit claim for

sanctions under Rule 13.44

       As a result, Hlavaty and Strnadel’s reliance on Crites and

Unifund here and CTL/Thompson Texas, LLC at the trial court level is

unfounded and misplaced, as the cases are inapplicable to the issues

presented here for the reasons expressed above.

       B.   The only matter pending at the time of CSB’s final
            nonsuit of remaining defendants was Appellants’ Rule
            13 motion for sanctions.

       Hlavaty and Strnadel filed their Motion for Rule 13 Sanctions on

March 17, 2010.45 CSB filed a nonsuit dismissing Hlavaty and Strnadel

from the underlying matter on June 23, 2010. The trial court signed an

order of nonsuit as to Hlavaty and Strnadel on June 28, 2010.46 On

September 1, 2010, CSB filed its notice of nonsuit as to all remaining

defendants.47 At the time of the final nonsuit on September 1, 2010,

Hlavaty and Strnadel did not have any pending counterclaims. The only

pending matter was their motion for sanctions under Rule 13.

44InRe T.G., 68 S.W.3d 171 (Tex. App.—Houston [1st Dist.] 2002, pet denied).
45 CR 56–59.
46 CR 96–101.
47 CR 126–29.

                                        14
      Texas law mandates that a motion for Rule 13 sanctions is not an

affirmative claim for relief that extends a trial court’s jurisdiction under

Rule 162.48 This is because “Texas Rule of Civil Procedure 13 does not

establish an independent cause of action for damages, but instead

provides a basis for a trial court to impose sanctions upon motion or

upon its own initiative.”49

      The cases at which Rule 13 motions for sanctions are at issue use

the term “affirmative claim” when discussing that Rule 13 motions do

not effect a trial court’s jurisdiction, but that is different and distinct

from the court considering it as an independent cause of action or

counterclaim—like in the above referenced cases Crites and Unifund. In

those cases, as well as others that involve statutory sanctions, the

statutory sanctions are considered independent causes of action that

48 See, e.g., Martin v. Texas Dept. of Family & Protective Services, 176 S.W.3d 390,
393 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that defendant’s Rule 13
motion was not an affirmative claim for relief); Lane Bank Equip. Co. v. Smith S.
Equip., Inc., 10 S.W.3d 308, 312 (Tex. 2000).
49 Mart. v. Texas Dept. of Family & Protective Services, 176 S.W.3d 390 (Tex.

App.—Houston [1st Dist.] 2004, no pet.); Mantri v. Bergman, 153 S.W.3d 715 (Tex.
App.—Dallas 2005, pet. denied); Guidry v. Envtl. Procedures, Inc., 388 S.W.3d 845,
860 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (“Texas Rule of Civil Procedure
13 does not establish an independent cause of action for damages, but instead
provides a basis for a trial court to impose sanctions ‘upon motion or upon its own
initiative.’ We therefore construe this portion of the Brokers' pleading not as a
counterclaim for damages but as a motion for sanctions.”).
                                        15
extend the trial court’s jurisdiction.50 But because Rule 13 does not

establish an independent cause of action, it follows that a Rule 13

motion for sanctions will never extend a trial court’s jurisdiction or be

considered as a counterclaim.

      Because there were no statutory sanctions that were considered

independent causes of action at the time of the final nonsuit on

September 1, 2010, and the final nonsuit disposed of all parties,

pursuant to Rule 162, the court only had a reasonable amount of time to

rule on the Rule 13 motion for sanctions. Moreover, as of November 15,

2013—when the trial court signed the final order of nonsuit as to the

remaining      defendants—the        case      was   over   because     the    court’s

ministerial act of signing a final nonsuit is considered a final

judgment.51

      Hlavaty and Strnadel are mistaken when they assert that their

motion for sanctions must be specifically referenced in the order to be

disposed of.52 In fact, a direct quote from Appellants’ brief is illustrative

of why they are wrong. Specifically, Hlavaty and Strnadel state, “if a

50 Villafani v. Trejo, 251 S.W.3d 466, 470 (Tex. 2008); Crites v. Collins, 284 S.W.3d
839, 842 (Tex. 2009).
51 Martin, 176 S.W.3d 390
52 Appellants’ Brief 13.

                                          16
sanctions request is a claim that survives a nonsuit, a judgment is

not final and appealable until the sanctions request is specifically

disposed of by the trial court.”53 CSB agrees with Hlavaty and

Strnadel’s above assertion. Hlavaty and Strnadel would be correct if

this case involved a statutory motion for sanctions that is considered an

independent cause of action. But it does not. Therefore, Hlavaty and

Strnadel are wrong. A judgment need not resolve a pending Rule 13

sanctions motion to be final.54 And, when the trial court signs the order

of nonsuit disposing of all parties, the nonsuit is a final judgment,

thereby starting the clock on the court’s plenary jurisdiction.

Accordingly, all parties and claims were effectively nonsuited as of

September 1, 2010, a final judgment was signed on November 15, 2013,

and the court lost plenary jurisdiction on December 15, 2013—30 days

later.

53 Appellants’ Brief 13 (emphasis added) (citing In re Reynolds, No. 14-14-00329-CV,
2014 Tex. App. LEXIS 7105 *13 (Tex. App.—Houston [14th Dist.] July 1, 2014, orig.
proceeding) (memorandum op.)).
54 Martin, 176 S.W.3d 390; Lane, 10 S.W.3d 308.

                                         17
III. Appellants did not have any pending counterclaims at the
     time of the final nonsuit on September 1, 2010.

      A.    Appellants’ request for attorney’s fees is not an
            independent cause of action.

      According to Appellants’ own assertions, Hlavaty and Strnadel’s

request for attorney’s fees under the Declaratory Judgment Act was

dependent on their mistaken belief that CSB had filed a claim for

declaratory relief. But CSB was not seeking declaratory relief in this

case; it was seeking a constructive trust because of Hlavaty’s ill gotten

gains.55 CSB never brought an action under the Declaratory Judgment

Act and never even sought a constructive trust against Strnadel.56

      Hlavaty and Strnadel’s request for attorney’s fees is not an

affirmative claim for relief because CSB never asserted a claim under

the Declaratory Judgment Act.57 In its Original Petition, CSB claimed,

among other things, that Hlavaty and Strnadel had committed fraud

and breached fiduciary duties.58 In addition to damages, CSB requested

that the court impose a constructive trust over the assets that Hlavaty

improperly obtained. Based on this request for relief alone, Hlavaty and

55
  CR 133; CR 172; CR 270.
56 Id.
57 CR 23.
58 CR 23.

                                   18
Strnadel began calling CSB’s request for a constructive trust against

Hlavaty a “declaratory action,” despite CSB having never asserted a

claim for a declaratory judgment, nor requesting a declaration as to the

rights of the parties.59 And, CSB certainly never sought a constructive

trust against Strnadel. Counsel for Appellants knows that no

declaratory judgment claim exists in this case, yet Hlavaty and

Strnadel still attempt to assert that an independent cause of action

existed. But no such counterclaim existed.

      In Texas, a “constructive trust” is an equitable remedy granted

after there is a breach of fiduciary duty, it is not a claim related to the

Declaratory Judgment Act.60 Therefore, Hlavaty and Strnadel had no

legal basis to claim they were entitled to attorney’s fees under the Act.

      Furthermore, CSB never requested a “constructive trust” against

Strnadel,61 making Strnadel’s request for attorney’s fees entirely

baseless and improper.

      Even if Hlavaty and Strnadel had intended to assert their own

cause of action for declaratory judgment—which they did not—a claim

under the Declaratory Judgment Act, solely for attorney’s fees, is not an
59 CR 61, 96.
60 CR 28; See Binford v. Snyder, 189 S.W.2d 471, 472 (Tex. 1945).
61 CR 28.

                                         19
affirmative cause of action that survives a plaintiff’s nonsuit under Rule

162.62 Accordingly, Hlavaty and Strnadel’s request for attorney’s fees

was not an affirmative claim, and therefore, did not extend the trial

court’s jurisdiction following the final nonsuit.63

      B.     Appellants’ amended counterclaims filed after CSB’s
             September 1, 2010 nonsuit of all parties are void as a
             matter of law.

      On March of 2011—seven months after CSB filed its September 1,

2010 notice of nonsuit as to the remaining defendants—Hlavaty and

Strnadel filed ten new counterclaims.64 But when a final nonsuit is

filed, the rights of the parties become fixed.65 Hlavaty and Strnadel had

62 See Gen. Land Office of State of Tex. v. Oxy, U.S.A., Inc., 789 S.W.2d 569, 570
(Tex.1990); In re Riggs, 315 S.W.3d 613, 615 (Tex. App.—Fort Worth 2010, no pet.);
see also Hansson v. Time Warner Entm't Advance, 03-01-00578-CV, 2002 WL
437297 (Tex. App.—Austin Mar. 21, 2002, pet. denied) (“[A] defendant may not seek
a declaratory judgment simply to recover attorney’s fees.”); Digital Imaging
Associates, Inc. v. State, 176 S.W.3d 851, 855 (Tex. App.—Houston [1st Dist.] 2005,
no pet.) (holding that the trial court did not error in advising parties it no longer
had jurisdiction because the plaintiff had filed a nonsuit and the intervenor's only
claim was for a defensive declaratory judgment that mirrored the plaintiff's claim.);
Newman Oil v. Alkek, 614 S.W.2d 653, 655 (Tex. App.—Corpus Christi 1981, writ
ref'd n.r.e)); United Oil & Minerals, Inc. v. Costilla Energy, Inc., 1 S.W.3d 840, 846
(Tex. App.—Corpus Christi 1999, pet. dism'd).
63 See, e.g., Digital Imaging, 176 S.W.3d at 855; see also Newman Oil, 614 S.W.2d at

655 (holding that the defendant’s alleged counterclaim under the Declaratory
Judgment Act is not a claim for affirmative relief under Rule 162, but “merely
denials of plaintiffs' cause of action).
64 CR 559.
65 Greenberg v. Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder v. Thomas,

846 S.W.2d 51, 59 (Tex.App.—Corpus Christi 1992, no writ); General Land Office v.
Oxy, U.S.A., Inc., 789 S.W.2d 569, 570 (Tex.1990).
                                         20
no pending affirmative claims as of September 1, 2010; therefore, the

later filed counterclaims are void. The Rule 13 motion for sanctions was

the only matter pending at the time of CSB’s final nonsuit. To hold

otherwise would allow parties to file counterclaims well after a case is

nonsuited or dismissed. In the interest of judicial economy, a party

should not be permitted to file counterclaims months after a case is

over.

        As such, the trial court, pursuant to Rule 162, only had a

reasonable amount of time to resolve the pending Rule 13 motion and

did not abuse its discretion in ignoring the void counterclaims.66

IV.     The trial court retained limited jurisdiction over
        Appellants’ Rule 13 motion for sanctions for only a
        reasonable amount of time after CSB’s non-suit—not three
        and a half years.

        Pursuant to Texas Rule of Civil Procedure 162, a plaintiff’s

nonsuit does not prejudice the right of an adverse party to be heard on a

pending claim for affirmative relief.67 However, if there are no pending

affirmative claims, the court then has “a reasonable amount of time”

66 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 100–01; In re Bennett,
960 S.W.2d 35, 38 (Tex. 1997).
67 Tex. R. Civ. P. 162.

                                      21
to hold hearings on those matters that are “collateral to the merits of

the underlying case.”68

         As explained supra, under Rule 162, Texas courts consider

“affirmative claims for relief” to be independent causes of action.

However, Rule 13 motions for sanctions are not independent causes of

action. The plain language of Rule 162 makes a distinction between a

“pending claim for affirmative relief” and “a motion for sanctions.”

While some courts use the phrase “affirmative claim” interchangeably,

Texas law is well settled that a Rule 13 motion for sanctions is not an

independent cause of action that will extend a trial court’s jurisdiction

under Rule 162. Therefore, pursuant to Rule 162, the trial court here

only had a reasonable amount of time to rule on the Rule 13 motion for

sanctions once the final September 1, 2010 notice of nonsuit was filed as

to the remaining defendants.

         A.    Three and a half years is not a reasonable amount of
               time.

         The trial court entered an order on Hlavaty and Strnadel’s

pending motions for sanctions over three years after the final notice of

68   In re Bennett, 960 S.W.2d at 38-39 (emphasis added).
                                           22
nonsuit was filed by CSB.69 But the trial court’s limited jurisdiction

under Rule 162 to resolve Hlavaty and Strnadel’s motion for sanctions

had lapsed.

      Rule 162 permits the trial court to hold hearings and enter orders

affecting costs, attorney’s fees, and sanctions, even after notice of

nonsuit is filed, while the court retains plenary power.”70 If the court

fails to sign the order of nonsuit—as it did in this case—the trial court’s

jurisdiction is still limited under Rule 162. This limited jurisdiction to

hear collateral matters does not continue into perpetuity as Hlavaty

and Strnadel suggest.71 The fact that the trial court does not enter an

order of dismissal following the plaintiff’s timely notice of nonsuit does

not authorize the continuation of the proceeding.72 The collateral

matters must still be resolved within a reasonable amount of time.

69 CR 788.
70 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 101; In re Bennett, 960
S.W.2d at 38.
71 Id.; see also In re Bennett, 960 S.W.2d at 38; In re Metro. Lloyds Ins. Co. of Texas,

05-08-01712-CV, 2009 WL 638253 (Tex. App.—Dallas Mar. 13, 2009, no pet.)
(granting plaintiff’s petition for writ of mandamus holding that “the trial judge
abused his discretion by continuing to exercise jurisdiction over this case because”
plaintiff’s “non-suit of its claims disposed of all parties and claims then pending
before the trial court”).
72 Newman Oil Co. v. Alkek, 614 S.W.2d 653, 655 (Tex. Civ. App.—Corpus Christi

1981) (holding that defendant’s alleged counterclaim under the Declaratory
Judgment Act is not a claim for affirmative relief under Rule 162); Greenberg v.
Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder v. Thomas, 846 S.W.2d 51,
                                          23
      In this case, the trial court without a doubt exceeded its limited

jurisdiction under Rule 162 to resolve Hlavaty and Strnadel’s Rule 13

sanctions motion. After CSB’s last nonsuit on September 1, 2010, the

motion for Rule 13 sanctions was the only matter left pending under the

limited jurisdiction provided by Rule 162.73 The trial court had a

reasonable amount of time to hold hearings on these matters.74

However, the trial court did nothing. Indeed, the trial court expressly

held that “it had no reason to delay signing the orders of non-suit” and

that “[t]his court is aware of no reason which would justify the three

year delay.”75 More than three years passed between CSB’s final notice

of nonsuit and the trial court’s order of sanctions.76 Under any

interpretation of a “reasonable amount of time,” three years exceeds it.

59 (Tex. App.—Corpus Christi 1992, no writ); General Land Office v. Oxy, U.S.A.,
Inc., 789 S.W.2d 569, 570 (Tex.1990).
73 See Greenberg v. Brookshire, 640 S.W.2d 870, 872 (Tex. 1982); Strawder, 846
S.W.2d at 59; General Land Office v. Oxy, U.S.A., Inc., 789 S.W.2d 569, 570
(Tex.1990).
74 Univ. of Texas Med. Branch at Galveston, 195 S.W.3d at 100–01; In re Bennett,
960 S.W.2d at 38.
75 CR 784.
76 CR 788.

                                      24
      B.     The trial court lost plenary power on December 15,
             2013, and therefore, was without jurisdiction to enter
             an order of sanctions on June 11, 2014.

      Although a ministerial act, the trial court signed an order

granting CSB’s notice of nonsuit on November 15, 2013, and the trial

court correctly determined that it lost plenary jurisdiction 30 days

thereafter. The trial court’s plenary jurisdiction expired on December

15, 2013, and thus, the trial court lost its ability to sanction CSB after

this date.

      Orders issued after a trial court’s jurisdiction expires are void.77 A

void order is null within itself and its nullity cannot be waived.78

Therefore, once jurisdiction has expired, a trial court may not sanction

counsel for pre-judgment conduct.79

      In this case, the trial court signed a final order of nonsuit on

November 15, 2013. The entering of the final order triggered the

expiration of the trial court’s plenary jurisdiction. Because the final

order of nonsuit was entered on November 15, 2013, the trial court’s

plenary power expired 30 days later, on December 15, 2013. The trial

77 In re Fuentes, 960 S.W.2d 261, 262 (Tex. App.—Corpus Christi 1997, no writ).
78 Id.
79 Scott & White Mem’l Hosp. v. Schexnider, 940 S.W.2d 594, 596 (Tex. 1996).

                                        25
court entered a final order on June 3, 2014, and in the order, the trial

court stated:

        This event finally triggered the expiration of this
        court’s plenary jurisdiction in this case on December
        15, 2013. . . . No pleading has been filed which would
        operate to extend this court’s plenary jurisdiction.80

        However, on June 11, 2014, the same trial court that admitted to

losing its jurisdiction in December of 2013, entered an order of

sanctions for conduct that allegedly occurred pre-judgment.81 The trial

court lacked jurisdiction to enter such order. Because the trial court was

without jurisdiction to enter an order of sanctions, this Court should set

aside the trial court’s order as null and void as a matter of law.

                                   CONCLUSION

        The trial court properly granted CSB’s motion to dismiss because

the trial court lost plenary jurisdiction on December 15, 2013. Because

the trial court subsequently entered an order of sanctions on June 11,

2014, the trial court was without jurisdiction at the time it entered the

order. Therefore, the order of sanctions should be set aside because it is

void. The order granting CSB’s Motion to Dismiss should be affirmed.

80   CR 784-86 (emphasis added).
81   CR 788–90.
                                       26
                                 PRAYER

     For these reasons, Appellee Commercial State Bank of El Campo,

Texas, Inc. respectfully requests this Court to affirm the trial court’s

granting of its Motion to Dismiss, to reverse the trial court’s Order

Denying Commercial State Bank’s Motion to Vacate Order of Sanctions,

set aside Hlavaty and Strnadel’s June 11, 2014 Order for Sanctions

against Appellee Commercial State Bank of El Campo, Texas, Inc., and

grant Appellee Commercial State Bank of El Campo, Texas, Inc. any

such other and further relief to which it is entitled.

                        Respectfully submitted,

                        ROBERTS MARKEL WEINBERG BUTLER HAILEY PC

                        /s/ Dawn S. Holiday
                        ____________________________________
                        DAWN S. HOLIDAY
                        TBA No. 24046090
                        MIA B. LORICK
                        TBA No. 24091415
                        2800 Post Oak Blvd., 57th Floor
                        Houston, TX 77056
                        Tel: (713) 840-1666;
                        Fax: (713) 840-9404
                        dholiday@rmwbhlaw.com
                        mlorick@rmwbhlaw.com
                        ATTORNEYS FOR APPELLEE / CROSS-
                        APPELLANT, COMMERCIAL STATE BANK
                        OF EL CAMPO, TEXAS, INC.

                                     27
                 CERTIFICATE OF COMPLIANCE

     Pursuant to Rule 9.4 i(3) of the Texas Rules of Appellate

Procedure, I certify that the word count in this Appellee’s Brief is 4,732

words.

                                  /s/ Dawn S. Holiday
                                  _________________________________
                                  DAWN S. HOLIDAY

                    CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the      foregoing
instrument was served upon the parties listed below by         facsimile,
messenger, regular U.S. Mail, certified mail, return receipt   requested
and/or electronic service in accordance with the Texas          Rules of
Appellate Procedure on this the 30th day of April, 2015.

Via Email:                           Via Email:
wkronzer@kronzer.com                 singletonlaw@sbcglobal.net
Walter James Kronzer, III            Howard H. Singleton
Walter James Kronzer, III, P.C.      Singleton Law Firm
3000 Weslayan, Suite 247             109 East Milam Street
Houston, TX 77027                    Wharton, TX 77488

                            /s/ Dawn S. Holiday
                            _____________________________________
                            DAWN S. HOLIDAY

                                    28