Court Opinion

ID: 4765538
Source: CourtListenerOpinion
Date Created: 2021-08-13 07:25:33.647179+00
Date Added: 2024-06-11T08:09:11.498448
License: Public Domain

In The

                                Court of Appeals

                    Ninth District of Texas at Beaumont

                               __________________

                               NO. 09-21-00092-CV
                               __________________

     IN RE KENNETH A. BITGOOD AND FRANK O. CARROLL III
__________________________________________________________________

                           Original Proceeding
           457th District Court of Montgomery County, Texas
                    Trial Cause No. 20-05-05682-CV
__________________________________________________________________

                          MEMORANDUM OPINION

      Kenneth A. Bitgood and his attorney, Frank O. Carroll III, filed a petition for

mandamus seeking relief from a pre-trial sanctions order issued against both of them,

wherein the trial court dismissed with prejudice the amended petitions seeking a

temporary and permanent injunction that Bitgood filed, jointly and severally ordered

Bitgood and Carroll to pay a $20,000 penalty into the trial court’s registry within 60

days, and ordered Bitgood to pay the real parties in interest, Stephen S. Harkness

and Anna M. Harkness (collectively Harkness or Real Parties) $18,640 in attorney’s

fees within 30 days. We stayed the trial court’s order and obtained a response from

Harkness. In their mandamus petition, Bitgood and Carroll contend the trial court

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abused its discretion by imposing the monetary penalty on Bitgood and Carroll plus

ordering Bitgood to pay Harkness the additional attorney’s fees. They complain that

the trial court received no evidence to support Harkness’s motion for sanctions, the

trial court never held a dispositive hearing or trial on the merits of their claims or on

the motion to dismiss for lack of subject matter jurisdiction, and the defendant never

filed a motion for summary judgment. We conditionally grant in part and deny in

part mandamus relief.

      The trial court based the sanctions order on Chapter 10 of the Civil Practice

and Remedies Code, Texas Rule of Civil Procedure 13, and the trial court’s inherent

power. The trial court found the successive applications for injunctive relief

contained the same facts as previously alleged, without any change in circumstance,

that Bitgood and Carroll alleged Harkness’s property was located within the platted

Tres Subdivision without evidence to support the allegation and either knew the

property was not located in the subdivision or failed to perform due diligence in

locating the property, and they signed and verified the successive pleadings. The

trial court also found there was no basis in law and fact for Bitgood’s filing of the

motion for contempt after the temporary injunction order had already been dissolved.

The trial court explained that the egregious nature of the conduct in filing successive

applications on relief already denied by the court without a change in circumstances

and filing a motion for contempt in bad faith justified not imposing a lesser sanction.

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The trial court also found Carroll’s statements in the March 26th hearing were not

credible.

      This Court recently issued a memorandum opinion pertaining to the

underlying property dispute between Bitgood and Harkness. See Bitgood v.

Harkness, No. 09-20-00263-CV, 2021 Tex. App. LEXIS 4571 (Tex. App.—

Beaumont June 10, 2021, no pet. h.) (mem. op.). Therein, we explained that the

appeal related to a dispute over alleged property restrictions. Id. at *1. Bitgood owns

a .382-acre tract and a .131-acre tract of land and Harkness, Bitgood’s neighbor,

owns a 1.5728-acre tract of land next to Bitgood’s tract. Id. The dispute arose when

Harkness began to build a structure on the 1.5728 acres. Id. Bitgood filed a suit

against Harkness to stop Harkness from building what Bitgood calls a “pole barn”

and what Harkness describes as a “workshop.” Id. Bitgood alleged that Harkness

was violating certain deed restrictions. Id. The trial court initially granted a

temporary injunction in favor of Bitgood, but thereafter the trial court held another

hearing and entered an Order Sustaining Defendants’ Amended Motion to Dismiss

for Lack of Subject Matter Jurisdiction and dissolved the temporary injunction and

dismissed the Plaintiff’s First Amended Application for Temporary Restraining

Order, Temporary Injunction, Permanent Injunction, and Original Petition without

prejudice. Id. at **1-2. Bitgood appealed the trial court’s order (1) sustaining

Appellees’ Amended Motion to Dismiss for Lack of Subject Matter Jurisdiction; (2)

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dismissing without prejudice Bitgood’s First Amended Application for Temporary

Restraining Order, Temporary Injunction, Permanent Injunction, and Original

Petition; and (3) dissolving the temporary injunction. Id. at *2. We affirmed the trial

court’s order. See id. at *10.

      We held that Bitgood lacked standing and failed to meet his burden to

establish the existence of a general plan or scheme applicable to both his and

Harkness’s tracts. Id. at *21. Considering Bitgood purchased his property before

Harkness’s predecessor in title executed a deed with restrictive language, Bitgood

also failed to show the existence of a general plan or scheme of development induced

him to purchase his parcels out of the property conveyed in the 1975 deed for 5.935

acres out of which both Bitgood and Harkness acquired their tracts (the “Larger

Tract”). Id. at *9. Bitgood could not rely on language in the deed to Harkness

because he lacked privity of contract. Id. We held the trial court correctly concluded

that the temporary injunction was entered in error because Bitgood lacked standing

to enforce the alleged restrictions. Id. at 24.

      While Bitgood’s appeal was pending and before we issued our memorandum

opinion on his appeal from the dissolution of the temporary injunction, Bitgood filed

an amended petition with another request for a temporary injunction, monetary

damages, and permanent injunctive relief in the trial court. He alleged that Harkness

had resumed construction that would lead to “further violations of the restrictive

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covenants, further diminution of the value of Bitgood’s property, and further

economic waste” if Bitgood eventually prevailed. In response, Harkness filed an

objection and another motion to dismiss for lack of subject matter jurisdiction.

Harkness alleged that Bitgood was unable to establish his standing to enforce the

restrictions contained in the deed or in the adjoining Tres Subdivision. Bitgood

responded by amending his pleadings again to allege that he could enforce

restrictions affecting the Larger Tract or, in the alternative, that Bitgood could

enforce deed restrictions as an owner of property within the “Tres Subdivision

General Scheme” which he alleged was comprised of 34 properties on Lake Conroe

Drive as expressed in recitals contained in other individual deeds. Bitgood filed a

Fourth Amended Petition on January 5, 2021, and in addition to presenting his deed

restriction theories, he added a complaint that Harkness had erected a fence that

blocked the driveway Bitgood had used to access his property for nearly fourteen

years. Bitgood asked the trial court to maintain the status quo regarding access to his

property and grant him a temporary and permanent injunction.

      On January 22, 2021, Bitgood also filed a motion for contempt, asking the

trial court to hold Harkness in contempt for violating the temporary injunction that

had been dissolved. Bitgood complained that Harkness recommenced construction

on January 16, 2021, in violation of the temporary injunction that had been

dissolved. Bitgood alleged that the dissolution of the injunction was on appeal. But

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Bitgood and his attorney knew that at that point in time the trial court had dissolved

the temporary injunction and the order dissolving the injunction was the subject of

the appeal. Although Bitgood had asked the trial court to supersede the order

dissolving the temporary injunction, the trial court neither suspended the dissolution

order nor set a bond amount and Bitgood never superseded the dissolution order. See

generally Tex. R. App. P. 29.1 (perfecting an appeal from an order granting

interlocutory relief does not suspend the order appealed from unless the order has

been superseded or the appellant is entitled to supersede the order by filing a notice

of appeal).

      In the trial court, Harkness then filed a motion to sanction Bitgood and Carroll

for filing successive applications for injunctive relief on grounds already dismissed

by the trial court. Harkness argued Bitgood sought injunctive relief for the purpose

of harassment and delay. Harkness claimed that the allegations in Bitgood’s first

application for an injunction concerning the location of the Harkness property

irrefutably establish the lack of standing and subject matter jurisdiction in his third

and fourth injunction applications. Harkness also argued that Bitgood could not

establish the requisite change in circumstance to justify a request for successive

injunction applications because he had been aware of his alternative legal argument

when Harkness challenged his standing to bring the first request for injunctive relief.

Harkness argued sanctions were appropriate because Bitgood knowingly made false

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allegations in his most recent successive pleadings seeking injunctive relief.

According to Harkness, Bitgood and his attorney, Carroll, misrepresented the

location of Harkness’s property and alleged the Harkness property was located

within the Tres Subdivision despite having no supporting evidence to establish that

the Harkness tract is in the Tres Subdivision, and Bitgood sought contempt in bad

faith after the trial court had already dissolved the temporary injunction. Harkness

argued that a reasonable inquiry would have revealed that the Harkness property is

not within the Tres Subdivision and Bitgood based his claim of standing in his most

recent third and fourth amended petitions on the false theory that restrictions

included in their deeds are enforceable by any property owners of the 34 lots in the

Tres Subdivision on Lake Conroe Drive.

      On March 26, 2001, the trial court held a hearing on Harkness’s motion for

sanctions. Harkness argued that his tract was not in the Tres Subdivision, that

Bitgood had judicially admitted the facts asserted in his original application for

injunctive relief, that Bitgood’s earlier application showed he was aware at the time

of the initial temporary injunction hearing of the same theory that he was now

asserting, and that no new facts or circumstances had arisen since the November 6th

hearing that would justify reconsidering an injunction. Harkness argued Bitgood’s

successive applications for injunctive relief and his motion to hold Harkness in

contempt for violating a dissolved injunction were brought to harass Harkness, as

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demonstrated by the fact that Bitgood had appealed the order dissolving the

temporary injunction.

      In response, Bitgood argued that the trial court’s earlier ruling was a “changed

circumstance” in that the trial court’s finding allowed them to pursue an “alternative

claim of a general scheme of development.” Bitgood indicated there was no bar to

asserting an alternative theory because Harkness had not sought a summary

judgment and Bitgood’s earlier claims for injunctive relief had been dismissed

without prejudice. Bitgood also suggested that he had filed the motion for contempt

to preserve a claim to funds in the court’s registry in the event he prevailed in his

appeal. Bitgood further also indicated that he had to assert his alternative theory of

a general scheme of development before the pleading deadline to avoid its waiver.

      A trial court may sanction a party or attorney for filing a motion or pleading

that lacks a reasonable basis in fact or law. Low v. Henry, 221 S.W.3d 609, 614 (Tex.

2007). A direct nexus between the improper conduct and the sanction imposed must

exist. Id. An order to pay a penalty not based on expenses must be based on Chapter

10 of the Civil Practice and Remedies Code rather than Rule 13 of the Texas Rules

of Civil Procedure. Id. By signing a pleading or motion, the signatories certify to

their best knowledge, information, and belief, formed after reasonable inquiry, that

the pleading or motion is not being presented for any improper purpose; existing law

or a nonfrivolous argument for extension of existing law warrants each legal

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contention; and each factual contention has evidentiary support or is likely to have

evidentiary support after a reasonable opportunity for further investigation or

discovery. See Tex. Civ. Prac. & Rem. Code Ann. 10.001.

      The trial court found that Bitgood and Carroll falsely alleged that Harkness’s

property was located within the platted Tres Subdivision. This finding is not

supported by the evidence in the record currently before us. The amended pleadings

filed by Bitgood allege the property “is subject to restrictions conveyed in the deed

of the Property to Defendants.” Bitgood also alleged the restrictions were

enforceable “either by the express language of the restrictions” or as “part of the

‘Tres Subdivision General Scheme’ comprised of the 34 properties on Lake Conroe

Drive.” The latter allegation is an assertion that was not contained in the live

pleadings at the time the trial court issued its order dissolving the temporary

injunction. It appears that Bitgood is attempting to enforce the Tres Subdivision

restrictions upon the Harkness property, but it is unclear from his third and fourth

amended pleadings if he is alleging that the Harkness property is within the Tres

Subdivision or merely subject to the restrictions for the Tres Subdivision, and we

conclude the trial court prematurely found the allegations were false because the trial

court did not receive any evidence at the hearing, and had not ruled on any

dispositive motions, nor had it ruled on the pending motion to dismiss for lack of

standing which was filed by the defendant with respect to the amended pleadings.

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The trial court had dismissed the previous application and request for injunctive

relief without prejudice for lack of standing. “[A] dismissal [without prejudice] is in

no way an adjudication of the rights of parties; it merely places the parties in the

position that they were in before the court’s jurisdiction was invoked just as if the

suit had never been brought.” Crofts v. Court of Civil Appeals for Eighth Supreme

Jud. Dist., 362 S.W.2d 101, 104 (Tex. 1962) (orig. proceeding).

      Harkness argues the allegations in Bitgood’s first amended application for

injunctive relief were judicial admissions that barred Bitgood from later disputing

the admitted facts, but Harkness is relying on a general rule that applies to live

pleadings, not to amended pleadings such as those at issue in this case. See generally

Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001).

Assertions of fact contained in pleadings that have been superseded by amendment

are not conclusive and indisputable judicial admissions. Sosa v. Central Power &

Light, 909 S.W.2d 893, 895 (Tex. 1995).

      Harkness also argues sanctions were appropriate because Bitgood’s

subsequent application for injunctive relief was not based on changed circumstances

not known to Bitgood at the time of the first application. The trial court had already

dissolved the temporary injunction because Harkness successfully challenged

Bitgood’s standing to enforce the deed restrictions in Harkness’s deed. The trial

court’s ruling that Bitgood lacked standing was expressly made without prejudice.

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Therefore, assuming there were no pleading deadlines at issue, Bitgood would have

the right to amend his pleadings to allege an alternative legal basis, if applicable, for

imposing restrictions on Harkness and assuming without deciding that Bitgood could

establish standing to enforce such restrictions. If Bitgood once again fails to establish

standing to enforce the property restrictions against Harkness, under his alternative

theory, the trial court may dismiss his amended pleadings, but the trial court abused

its discretion by prematurely issuing an order of sanctions punishing Bitgood and

Carroll for exercising the right to file an amended petition.

      The trial court also held that Bitgood and Carroll signed and filed a motion

for contempt that violated Section 10.001 of the Civil Practice and Remedies Code

because the trial court had dissolved the temporary injunction by a written order

signed on November 6, 2020. The trial court found they had no basis in law or fact

for filing a motion for contempt of a dissolved temporary injunction. Bitgood and

Carroll concede that they filed a motion for contempt but argue they did so only to

preserve the issue for the accelerated appeal. They argue their conduct does not

justify imposing the case-determinative sanctions chosen by the trial court.

      In the exercise of its discretion to impose sanctions for improper conduct, the

trial court must draw a direct nexus between the improper conduct and the sanction

imposed. Low, 221 S.W.3d at 614. “The sanction must be limited to what is sufficient

to deter repetition of the conduct or comparable conduct by others similarly

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situated.” Tex. Civ. Prac. & Rem. Code Ann. § 10.004(b). A just sanction must be

directed against the abuse and toward remedying the prejudice caused the innocent

party and must be no more severe than necessary to satisfy its legitimate purposes.

TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991) (orig.

proceeding).

      We cannot say that the trial court abused its discretion in determining that

Bitgood’s and Carroll’s filing of the motion for contempt was neither supported by

the facts nor the law, nor a good faith extension thereof. But we find the record does

not support the $20,000 sanction or the amount of the attorney’s fees awarded in the

sanction order. Nothing in the record before us supports the award of a $20,000

sanction. Further, the $18,640 in attorney’s fees appears to be excessive and

represents payment for more time than what the affidavit indicated would be a

reasonable fee for the time spent responding to the motion for contempt. The penalty

imposed by the trial court therefore exceeds its legitimate purpose, and the relator

lacks an adequate remedy by appeal because the order requires immediate payment.

      An eventual appeal provides an inadequate remedy when a trial court abuses

its discretion by imposing case-determinative sanctions in an interlocutory order.

See TransAmerican Nat. Gas Corp., 811 S.W.2d at 920. We conclude that the trial

court abused its discretion in imposing sanctions on Relators and that Relators lack

an adequate remedy by appeal for this error. Accordingly, we lift our stay order of

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April 28, 2021, and conditionally grant the petition for a writ of mandamus. We are

confident that the trial court will vacate the Order Imposing Sanctions, in accordance

with this memorandum opinion. A writ shall issue only if the trial court fails to

vacate its order of March 30, 2021. All other requested mandamus relief is denied.

      PETITION CONDITIONALLY GRANTED IN PART; DENIED IN PART.

                                                           PER CURIAM

Submitted on May 28, 2021
Opinion Delivered August 12, 2021

Before Golemon, C.J., Horton and Johnson, JJ.

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