Court Opinion

ID: 9769477
Source: CourtListenerOpinion
Date Created: 2023-08-29 14:52:13.964207+00
Date Added: 2024-06-11T15:37:40.525153
License: Public Domain

FOWLER, Justice,
dissenting.
I respectfully dissent from the majority opinion for two very specific reasons. First, this record is devoid of any evidence that the suit was brought in bad faith or for purposes of harassment. Second, the appellant’s lawsuit is not groundless, much less “blatantly vacuous” or absurd. I find nothing vacuous about the lawsuit and, to my mind, the only absurd thing about this case is the trial judge’s unique and unorthodox findings of fact. For these reasons, I believe the trial court abused its discretion in imposing sanctions against appellants.
STANDARD OF REVIEW
I would like to emphasize select aspects of the standard of review for this case. According to Rule 13, a trial court may impose sanctions against an attorney, a represented party, or both, who files a pleading which is either groundless and brought in bad faith, or groundless and brought for the purposes of harassment. See Tex.R. Civ. P. 13; GTE Communications Sys. Corp. v. Tanner, 856 S.W.2d 725, 730 (Tex.1993). Rule 13 defines “groundless” as having “no basis in law or fact and not warranted by good faith argument for the extension, modification, or reversal of existing law.” Tex.R. Civ. P. 13. The purpose of the rule is to check abuses in the pleading process. See Home Owners Funding Corp. of America v. Scheppler, 815 S.W.2d 884, 889 (Tex.App.—Corpus Christi 1991, no writ). Trial court work under the presumption that parties and their counsel file all papers in good faith, and the party seeking sanctions must overcome that presumption and has the burden of showing his right to relief. See Tex.R. Civ. P. 13; GTE Communications Sys. Corp., 856 S.W.2d at 731; Monroe v. Grider, 884 S.W.2d 811, 817 (Tex.App.—Dallas 1994, writ denied).
In addition, “[rjule 13 requires the trial court to hold an evidentiary hearing to make the necessary factual determinations about the motives and credibility of the person signing the groundless pleadings, and the trial court must examine the facts available to the litigant and the circumstances existing when the litigant filed the pleading.” Karlock v. Schattman, 894 S.W.2d 517, 523 (Tex.App.— Fort Worth 1995, no writ); see, e.g., Tex.R. Civ. P. 13. As Justice Baker wrote when he was on the Fifth Court of Appeals, “Without hearing evidence on the circumstances surrounding the filing of the pleading and the signer’s credibility and motives, the trial court had no evidence to determine that the [plaintiff] or [his] attorneys filed the pleading in bad faith or to harass.” McCain v. NME Hospitals, Inc., 856 S.W.2d 751, 757-58 (Tex.App.—Dallas 1993, no writ). Although the rule does not give a reason for why the judge must hold a hearing and make findings of fact, common sense tells us that it is to ensure that Rule 13 sanctions are entered only when they are warranted.
NO EVIDENCE TO SUPPORT FINDINGS
There are two problems with the trial court’s findings of fact. First, findings 6, 9, 11, 12, and 13 could not support a sanction *829order because they are immaterial to the ultimate issue in the case. The ultimate issue before the judge was whether appellants filed a lawsuit that was (1) groundless and brought in bad faith or (2) groundless and brought for purposes of harassment. Findings 6, 9, 11, 12, and 13, make inappropriate observations such as, “Plaintiffs, as lawyers, were already on the short end of the stick in public opinion polls” and “Currently, lawyers are not doing a good job of acting in such a way that will put an end to this type of public dissatisfaction.” These irrelevant and immaterial findings have no bearing on the ultimate issue and could not support a sanctions order.
A second, more fundamental, insurmountable flaw affects each of the 20 findings of fact: the record contains no evidence to support them. The reporter’s record only contains testimony about attorney’s fees and two other allegedly frivolous lawsuits filed by Falk & Mayfield. In fact, the record of the sanctions hearing contains no evidence relevant to the ultimate issue. There is not even any evidence proving the language on the sign in controversy.
The parties now act as if evidence is before us on appeal. The briefs describe the lawsuit and the background facts and rely on facts not in the record. Although appellate rule 38.1 authorizes this court to accept un-contradieted facts in briefs as true, it does not transform those facts into admitted trial court evidence. See Tex.R.App. P. 38.1. Even if the trial court granted the appellee’s request to take judicial notice of the court’s file and admit the pleadings into evidence, the factual allegations in the pleadings still would not be proved. See Howell v. Hecht, 821 S.W.2d 627, 631 (Tex.App.— Dallas 1991, writ denied) (stating that pleadings are not usually considered legally cognizable evidence). To prove the factual allegations in the pleadings, appellees would still have to present testimony and/or documents at an evidentiary hearing. See Hidalgo v. Surety Savings & Loan Ass’n, 462 S.W.2d 540, 543 (Tex.1971) (stating pleadings are not evidence); see also Black’s Law Dictionary 555 (6th ed.1990) (defining evidence as “[a]ny species of proof ... legally presented at the trial of an issue, by the act of the parties and through the medium of witnesses, records, documents, exhibits, concrete objects, etc., for the purpose of inducing belief in the minds of the court or jury as to their contention”) (emphasis added). In fact, the only things accomplished by appellees’ request for judicial notice were that the judge (1) agreed to consider the whole file before him, including his knowledge of what had transpired procedurally and historically in the case and what had happened in the hearings before him and (2) was aware of the allegations contained in the pleadings. These considerations did not and could not prove up the factual allegations in the pleadings.
Appellees had to prove up the circumstances surrounding the bringing of the lawsuit before they could prove appellants acted in bad faith and to harass appellee. Appel-lees did not prove up these circumstances. As a result, the reporter’s record contains no evidence supporting the imposition of sanctions. See, e.g., GTE Communications Sys. Corp., 856 S.W.2d at 730-31 (referring to what the evidence in the record showed and noting that the record contained no proof of a fact essential to support the trial court’s imposition of a sanction); Karlock, 894 S.W.2d at 523 (holding that a tidal court has no evidence to determine that a pleading is filed in bad faith or to harass if it does not hear evidence on the circumstances surrounding the filing of the pleadings signer’s credibility and motives); accord McCain, 856 S.W.2d at 757-58.
Perhaps the parties stipulated to the background facts and the stipulation is not in the record. Perhaps the judge made his decision based on conduct in hearings before him. In any case, if the parties stipulated to the facts, the stipulation either should have been reduced to writing and filed in the record or read into the record. If the judge based his decision in part on events that happened in hearings before him, he needed to put that on the record. As it is, we have nothing in the record other than the testimony about the attorney’s fees and the testimony about unrelated lawsuits.
The trial judge had no evidence before him to support his findings, and there is no evi-*830denee of the circumstances surrounding the filing of appellant’s suit.1 Accordingly, there was no evidence to support any imposition of sanctions.
The majority apparently decided that the appellees could show bad faith/harassment by presenting testimony about other allegedly frivolous lawsuits brought by appellants; appellees presented a witness who was the defendant in an unrelated lawsuit and a witness who was a defendant’s lawyer in another unrelated lawsuit. But, none of the parties in the three lawsuits were the same, and none of the issues in the lawsuits were the same. Further, no Rule 13 sanctions had been imposed in either case, even though the witnesses felt they were subjected to frivolous lawsuits.
This testimony was both irrelevant and inappropriate in a Rule 13 hearing. If the court used this testimony to conclude that appellants’ petition against appellees was groundless, it abused its discretion. Furthermore, if the court used this testimony to conclude that appellants brought the petition in bad faith or for purposes of harassment, it abused its discretion.
In a Rule 13 hearing, the only way a judge can tell if a pleading is groundless is by looking at the pleading in question. A court cannot determine if one pleading is groundless by looking at other pleadings; it must look to the law governing the allegations in a pleading to decide if a pleading is groundless. Likewise, a court cannot determine that a suit has been brought in bad faith or to harass one defendant by looking at other lawsuits against other defendants. This restriction is most especially true when a court has not found those other lawsuits to be sanctionable under Rule 13. Other unrelated lawsuits are, simply stated, irrelevant. The only time that I can conceive of allowing testimony about other lawsuits in a Rule 13 hearing is if 1) the lawyers or party were sanctioned by a court under Rule 13 for bringing the lawsuit, and 2) the information was used only as an additional factor by the court in determining the amount of sanctions to award.
I conclude that, because the judge had no evidence before him to support the sanctions order, he abused his discretion in awarding sanctions.
THE SUIT WAS NOT GROUNDLESS
Since the majority spent a fair amount of time discussing that the petition was groundless, I feel obligated to address the subject. Before a court can say a pleading is groundless, it must conclude that the pleading has no basis in law or fact and is not warranted by a good faith argument for the extension, modification, or reversal of existing law. See Tex.R. Civ. P. 13; GTE Communications Sys. Corp., 856 S.W.2d at 730.
The elements of libel are defined in Texas Civil Practice and Remedies Code as
a defamation expressed in written or other graphic form that tends ... to injure a living person’s reputation and thereby expose the person to public hatred, contempt or ridicule, or financial injury or to impeach any person’s honesty, integrity, virtue, or reputation or to publish the natural defects of anyone and thereby expose the person to public hatred, ridicule, or financial injury.
Tex. Civ. PRAC. & Rem.Code Ann. § 73.001 (Vernon 1997).
Libelous statements must be construed as a whole, in light of surrounding circumstances based upon how a person of ordinary intelligence would perceive the entire statement. See Diaz v. Rankin, 777 S.W.2d 496, 498-99 (Tex.App.— Corpus Christi 1989, no writ). Whether a matter is libelous is a question of law for the court. See id. at 498. But if the court determines the complained of language is ambiguous or of doubtful import, it should allow a jury to determine the statement’s meaning and the effect the statement has on the ordinary reader or listener. See id. at 499.
Appellees claimed the sign was not libelous for two reasons. First, they claimed it was quintessentially an opinion, that it was not objectively verifiable, and in this regard was *831like the phrase “governmental waste.” Second, they argued the average reader would understand that the phrase was meant as an epithet and would not take the sign seriously. Although appellees presented no case law to the judge in support of these positions, the majority apparently agrees with both these contentions.
I disagree with both conclusions and base my disagreement primarily on Milkovich v. Lorain Journal Co., a 1990 United States Supreme Court opinion cited by appellants to the trial court. See Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990). In my opinion, Milkovich responds to both of appellees’ contentions. See id. I will not recite the facts in Milko-vich.2 I need only describe the debate before the court. The defendants maintained that an allegedly libelous newspaper column was opinion, not fact. Relying on a 1974 United States Supreme Court opinion, the defendants claimed that only facts could be libelous and that opinions were excepted from libel laws as protected speech. See id. at 8, 110 S.Ct. 2695 (citing Gertz v. Welch, 418 U.S. 328, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974)). The Supreme Court granted certio-rari “to consider the important questions raised by the Ohio courts’ recognition of a constitutionally required ‘opinion’ exception to the application of its defamation laws.” Id. at 10, 110 S.Ct. 2695.
The Supreme Court held there is no opinion exception, disavowed the defendants’ interpretation of Gertz,2 and explained that a paragraph from Gertz had been misinterpreted by the courts to recognize “another First-Amendment-based protection for defamatory statements which are categorized as ‘opinion’ as opposed to ‘fact’.” Id. at 17, 110 S.Ct. 2695.
Thus, we do not think this passage from Gertz was intended to create a wholesale defamation exemption for anything that might be labeled “opinion.” ... Not only would such an interpretation be contrary to the tenor and context of the passage, but it would also ignore the fact that expressions of “opinion” may often imply an assertion of objective fact.
If a speaker says, “In my opinion John Jones is a liar,” he implies a knowledge of facts which lead to the conclusion that Jones told an untruth. Even if the speaker states the facts upon which he bases his opinion ... the statement may still imply a false assertion of fact. Simply couching such statements in terms of opinion does not dispel these implications; and the statement, “In my opinion Jones is a liar,” can cause as much damage to reputation or the statement, “Jones is a liar.” As Judge Friendly aptly stated: “[It] would be destructive of the law of libel if a writer could escape liability for accusations of [defamatory conduct] simply by using, explicitly or implicitly, the words T think’.”
Id. at 18-19, 110 S.Ct. 2695 (brackets in original). The Court refused to acknowledge a number of factors developed by the lower courts to determine whether a statement was an opinion or fact. The Court found that, for *832the freedoms of expression to survive, the court must not rely on an “artificial dichotomy between ‘opinion’ and fact.” Id. at 19, 94 S.Ct. 2997.
The cases the majority cites rely on the artificial distinction between opinion and fact rejected by the Supreme Court. The Yiamouyiannis v. Thompson opinion the majority relies on predates Milkovich and cites the very language from Gertz the Supreme Court cautioned against misinterpreting too broadly. See majority opinion at n.2; Yiamouyiannis v. Thompson, 764 S.W.2d 338, 341 (Tex.App.—San Antonio 1988, writ denied), cert. denied 493 U.S. 1021, 110 S.Ct. 722, 107 L.Ed.2d 742 (1990). In fact, the majority opinion appears to rely on the very distinction disavowed by the Milkovich court when it states that “an essential element of libel is that the alleged defamatory statement be a statement of fact rather than opinion.” See majority opinion at p. 5.
Instead of looking at whether the column was “opinion,” the U.S. Supreme Court looked first at “whether a reasonable factfin-der could conclude that the statements in the ... column imply an assertion that petitioner Milkovich perjured himself in a judicial proceeding.” Milkovich, 497 U.S. at 21, 110 S.Ct. 2695. The Court then asked whether the inference that Milkovich committed perjury was sufficiently factual to be susceptible of being proved true or false.
This question should guide us in our inquiry. If one were to apply these questions to this ease, one would ask if a reasonable fact finder could conclude (1) that appellees accused appellants of engaging in lawsuit abuse, and (2) that the phrase “lawsuit abuse” would tend to injure appellant’s reputation exposing them to public contempt, ridicule, or financial injury or to impeach appellant’s integrity or reputation and thereby expose appellants to public hatred, ridicule, or financial injury. See Tex. Civ. Prac. & Rem.Code Ann. § 73.001 (Vernon 1997). Based on the pleadings, and depending on the testimony, a reasonable juror arguably could determine that the phrase “lawsuit abuse” could injure appellee’s reputation and that such an allegation under these circumstances was financially injurious. See, e.g., Frank B. Hall & Co. v. Buck, 678 S.W.2d 612, 617 (Tex.App.— Houston [14th Dist.] 1984, writ ref'd n.r.e.) (stating that the communication of disparaging remarks like “classical sociopath” and “zero” is slander), cert. denied, 472 U.S. 1009, 105 S.Ct. 2704, 86 L.Ed.2d 720.
After answering these questions, we would then ask if the act appellants were accused of committing is susceptible of being proved true or false. Appellees’ allegations of lawsuit abuse stemmed from a very specific incident and lawsuit. Based on the file before us, it appears that they are capable of being proved true or false.
It is my job, not to defend appellant’s lawsuit, but to determine if the lawsuit has any arguable basis in law or fact. In my opinion, the phrase “lawsuit abuse” arguably is a defamatory statement, and, in my opinion, appellant’s lawsuit has an arguable basis in law. Therefore, I would find that the trial court abused its discretion in holding that appellees’ suit was groundless.4
In summary, the' trial court abused its discretion in entering sanctions against ap-pellees because the findings of fact are unsupported by the record. Finding that appellants’ points of error three and four should be sustained, I would reverse the sanctions award. For these reasons, I respectfully dissent.

. Possibly, a pleading could be so meritless on its face that one would not need to prove the circumstances surrounding the filing of the lawsuit, but this pleading is not in that category.

. Although I am not going to review the facts, I will set out the libelous newspaper column. The column said that Milkovich, the coach of a high school wrestling team and Scott, the superintendent of school, testified differently in a court hearing than they had testified during an OSHAA hearing. Id. at 4-5, 110 S.Ct. 2695. The column stated that Milkovich and Scott taught their students one thing by their testimony:
" ‘It is simply this: If you get in a jam, lie your way out. " ‘If you're successful enough, and powerful enough, and can sound sincere enough, you stand an excellent chance of making the lie stand up, regardless of what really happened.... "‘Anyone who attended the meet, ... knows in his heart that Milkovich and Scott lied at the hearing after each having given his solemn oath to tell the truth.
Milkovich, 497 U.S. at 4-5, 110 S.Ct. 2695 (quotes in original).

. Having stated my opinion on the issue, I cannot help but also mention that the district judge sitting as the ancillary judge for the Harris County district courts must have felt the suit had some merit, because she set for a show cause hearing the appellant’s request for a restraining order. If she thought the suit was blatantly and obviously vacuous, she should not have required appellees to respond to the charges.