Court Opinion

ID: 4149566
Source: CourtListenerOpinion
Date Created: 2017-03-01 22:34:21.181502+00
Date Added: 2024-06-11T07:46:29.393259
License: Public Domain

Affirmed and Opinion filed February 28, 2017.

                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-15-00574-CV

WESTVIEW DRIVE INVESTMENTS, LLC AND JACK YETIV, Appellants
                                       V.
  LANDMARK AMERICAN INSURANCE CO. AND KING-PHILLIPS
INSURANCE AGENCY, INC. AKA INSURTRUST INSURANCE, Appellees

                   On Appeal from the 269th District Court
                           Harris County, Texas
                     Trial Court Cause No. 2012-47829

                                OPINION

      In this insurance-coverage dispute, apartment-complex owner and former
mortgagee Westview Drive Investments, LLC appeals from the take-nothing
judgment rendered after a jury trial on its claims against King-Phillips Insurance
Agency, Inc. for negligent misrepresentation, promissory estoppel, fraud,
violations of the Deceptive Trade Practices–Consumer Protection Act (“DTPA”),
and Chapter 541 of the Texas Insurance Code, and Westview’s claims against
insurer Landmark American Insurance Co. for breach of contract, fraud, and
deceptive trade practices. Westview’s principal and attorney Jack Yetiv appeals
from the three sanctions orders rendered against him for emailing Landmark’s
attorney Bruce Wilkin during the trial and threatening to file a grievance against
him if Wilkin did not make certain statements in open court.

      We overrule Westview’s challenges to the (a) partial summary judgment
against it on the scope of coverage, (b) directed verdict against it on limitations
grounds on its claims against King-Phillips for negligent misrepresentation and for
violations of the DTPA and Chapter 541 of the Texas Insurance Code, and (c) trial
court’s evidentiary rulings. We also overrule Westview’s complaints of charge
error and its complaints that, contrary to the jury’s verdict, the great weight of the
evidence establishes that Landmark breached the policy; that King-Phillips had
apparent authority to act for Landmark; that King-Phillips is liable to Westview
under a theory of promissory estoppel; that Landmark and King-Phillips defrauded
Westview; and that Landmark engaged in unfair or deceptive acts or practices.
Finally, we conclude that the trial court did not abuse its discretion in sanctioning
Yetiv. We accordingly affirm the trial court’s judgment.

                                  I. BACKGROUND

      In early 2008, a group of companies affiliated with Texas Tomic Sharma
Family LP owned four apartment complexes:            Westview Forest Apartments,
Kingsgate Village Apartments, and two others. Each apartment complex appears
to have been owned by a different company. TTSF LP #5 (“TTSF”) owned
Westview Forest Apartments, and the property was the security for a note owned
by FirstVal 1, Ltd.     Despite the different ownership of the four apartment
complexes, all of them were covered under the same insurance policy issued by
Landmark American Insurance Company, which had been obtained by retail

                                          2
insurance broker King-Phillips Insurance Agency, Inc. from a wholesale insurance
broker.

      As the mortgagee of Westview Forest Apartments, FirstVal required proof
that the property was insured, so in February 2008, King-Phillips gave FirstVal a
document referred to as an “EPI” for “Evidence of Property Insurance.” The EPI
identified Landmark and Westchester Surplus Lines as the companies issuing the
insurance; TTSF as the named insured; and Westview Forest Apartments as the
insured property. Under the heading “Additional Interest,” the EPI lists FirstVal,
and FirstVal’s interest is identified as “Mortgagee.” Although FirstVal also owned
a note secured by the Kingsgate Village Apartments, the EPI at issue in this case
concerns only the Westview Forest Apartments.

A.    Westview’s Acquisition of the Note and the Property

      Shortly after FirstVal received the EPI, TTSF filed for bankruptcy
protection. With the approval of the bankruptcy trustee, FirstVal sold the note on
Westview Forest Apartments to Westview Drive Investments, LLC (“Westview”)
in late September of 2008.      Jack Yetiv, president of Westview’s corporate
managing member, signed the note on Westview’s behalf. As part of the sale,
FirstVal assigned the EPI to Westview. On October 7, 2008, Westview foreclosed
on the note and purchased the apartment complex.

B.    Pre-claim Discussions of Insurance Coverage

      Beginning at around the same time as the foreclosure, King-Phillips’s agent
Greg McGehee began speaking with FirstVal’s Dwayne Young, Yetiv, and Yetiv’s
attorney John Quinlan about an unpaid premium on the Landmark policy covering
both the Westview Forest Apartments and the Kingsgate Village Apartments. To
continue the coverage then in effect, Yetiv agreed with Young that FirstVal would

                                        3
pay the premium-finance company the portion of the premium allocable to the
Westview Forest and Kingsgate Village Apartments, and Westview would
reimburse FirstVal for Westview’s share. Regarding the coverage that would be
afforded to Westview under the policy, Quinlan emailed Yetiv that he thought the
carrier needed to agree to change the named insured. After FirstVal made the
premium payment, Yetiv forwarded Quinlan’s email to Young and asked if the
insurer or agent would commit to provide an EPI naming Westview as an insured.
Young forwarded the email chain to McGehee and asked McGehee to address
those concerns. McGehee responded to Young that he did not know the answer,
and asked Young to forward his response “to all parties concerned.” Five days
later, McGehee emailed Young that he still did not have a final answer.

      On November 5, 2008, a fire destroyed the Westview Forest Apartments’
leasing office. Yetiv did not report the fire, but continued to request evidence that
Westview had property coverage under the Landmark policy. On November 13,
2008, McGehee emailed Yetiv that a transfer of coverage was left to the carrier’s
discretion, and on December 5, 2008, King-Phillips wrote to Yetiv that it was
unable to transfer TTSF’s coverage to Westview. Six weeks later, Yetiv reported
the fire to King-Phillips and filed a claim on Westview’s behalf.

C.    Post-claim Discussions of Insurance Coverage

      Westview sought insurance proceeds to cover the replacement of the
building and its contents, and the loss of accounts receivable, valuable papers,
business income, Westview’s business personal property, and Yetiv’s business
personal property that was kept at the apartment complex’s leasing office.
Landmark informed Westview that the policy afforded Westview only the
coverage available to a mortgagee, which was limited to coverage for covered
losses to buildings or structures. The policy defined “building” to include (1)

                                         4
personal property used to maintain or service the building or its premises; and (2)
materials, equipment, and supplies used for making additions, alterations, or
repairs to the building. Landmark paid Westview more than $334,000 for these
losses and to reimburse Westview for its emergency expenses to secure the
building immediately after the fire.

      Westview continued to assert that it was entitled to all of the coverage
afforded to the named insured TTSF, and in addition, Westview made claims “on
behalf of” TTSF.     In response, Landmark pointed out that the policy limited
coverage on TTSF’s claims to the amount of TTSF’s financial interest in the
covered property. Landmark asked for evidence that TTSF’s financial interest in
the property survived the foreclosure, but none was ever produced.

D.    The Claims Against Landmark and King-Phillips

      In August 2012, Westview sued Landmark and King-Phillips.1 Westview
asserted a claim against Landmark for breach of contract and claims against both
defendants    for   promissory    estoppel,   fraudulent   inducement,    negligent
misrepresentation, violations of Chapter 541 of the Texas Insurance Code, and
violations of the DTPA. Westview alleged that McGehee and King-Phillips had
actual and apparent authority to act as Landmark’s agents. With the exception of a
breach-of-contract claim, all of Westview’s complaints against Landmark were
based on conduct by McGehee or King-Phillips as Landmark’s alleged agents.

      The trial court granted Landmark partial summary judgment holding that
under the policy, Westview was a mortgageholder rather than a named insured, and
that the policy did not provide coverage to a mortgageholder for business personal
property, business income, accounts receivable, or valuable papers and records.
1
  Westview initially named Greg McGehee as an additional   defendant, but McGehee is
deceased.

                                         5
The trial court also granted Westview partial summary judgment holding that
under Texas Insurance Code section 4001.051, King-Phillips is Landmark’s agent
for the purpose of claims brought under Chapter 541 of the Texas Insurance Code.
The trial court denied the motion as to any claims that the statute authorized King-
Phillips or McGehee to alter any policy terms.

      Before the case was submitted to the jury, the trial court granted King-
Phillips’s motion for directed verdict on Westview’s DTPA, Insurance Code, and
negligent-misrepresentation claims on limitations grounds. The jury was asked
whether Landmark was liable for breach of contract, promissory estoppel, and
unfair or deceptive acts or practices; whether King-Phillips acted with Landmark’s
apparent authority; and whether either defendant was liable for fraud. The jury
answered each question in the negative.

E.    The Sanctions Against Yetiv

      At trial, Yetiv testified that he waited for over two months before reporting
the fire because Westview’s attorney Edward Rothberg agreed with him that it
would be better to first obtain evidence of insurance coverage. Landmark and
King-Phillips responded by serving Rothberg and Rothberg’s former law firm with
subpoenas duces tecum to discover Rothberg’s communications with Yetiv about
disclosing the fire. Westview moved to quash the subpoenas on the ground that the
documents were protected by attorney-client privilege. In response, Landmark and
King-Phillips argued that the documents fell within the crime-fraud exception to
the privilege, and the trial court agreed.

      After this ruling, Yetiv emailed Landmark’s attorney Bruce Wilkin and
threatened to present disciplinary charges against him and his firm unless by noon
on the next business day Wilkin announced in open court that there was no factual
or legal basis for the argument that the crime-fraud exception applied; apologized
                                             6
for raising the argument; and withdrew it entirely. Wilkin did not do so, and after
both sides rested, Landmark’s lead counsel brought the email to the trial court’s
attention. The trial court ordered Yetiv to show cause why it should not sanction
him under its inherent powers or “take appropriate action” under Canon 3(D) of the
Texas Code of Judicial Conduct.

      After the show-cause hearing, the trial court found that Yetiv violated Rule
4.04 of the Texas Disciplinary Rules of Professional Conduct. It ordered Yetiv to
complete twelve hours of continuing education in ethics and ordered the clerk of
the court to send the transcript of the show-cause hearing and certified copies of
the exhibits and the court’s orders to the Chief Disciplinary Counsel of the State
Bar of Texas. In addition, the trial court sanctioned Yetiv under its inherent
powers, ordering him to pay the defendants’ attorneys’ fees “incurred as a result of
the proceedings arising from” the email. Yetiv did not controvert King-Phillips’s
evidence that it reasonably incurred $551 in attorney’s fees, and the trial court
ordered that amount paid directly to King-Phillips’s lead counsel. Because Yetiv
controverted the amount of Landmark’s attorneys’ fees, the trial court held another
evidentiary hearing, after which it ordered Yetiv to pay Landmark’s attorneys’ fees
of $4,378 into the registry of the court. The trial court then rendered the final
judgment incorporating the partial summary judgments, the directed verdict, the
jury’s verdict, and the sanctions orders, and allowed Westview’s motion for new
trial on factual-sufficiency grounds to be overruled by operation of law.

                              II. ISSUES PRESENTED

      Westview challenges the trial court’s rulings granting Landmark partial
summary judgment on coverage issues; granting King-Phillips a directed verdict
on Westview’s DTPA, Insurance Code, and negligent-misrepresentation claims on
limitations grounds; and excluding evidence that Landmark issued an endorsement

                                          7
to the policy making FirstVal a named insured with respect to Kingsgate Village
Apartments. Westview additionally raises several complaints of charge error, and
challenges the factual sufficiency of the evidence to support each of the jury’s
answers pertaining to Westview’s claims.       Yetiv challenges the trial court’s
sanctions against him.

                            III. WESTVIEW’S APPEAL

      Because Westview is the primary appellant, we address its issues first.

A.    Summary Judgment Regarding the Scope of Coverage

      A movant for traditional summary judgment has the burden of showing that
there is no genuine issue of material fact and that it is entitled to judgment as a
matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).         If the movant initially
establishes a right to summary judgment on the issues expressly presented in the
motion, then the burden shifts to the nonmovant to present to the trial court any
issues or evidence that would preclude summary judgment. See City of Houston v.
Clear Creek Basin Auth., 589 S.W.2d 671, 678–79 (Tex. 1979). We review a
summary judgment de novo. See Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 215 (Tex. 2003). When reviewing a traditional summary judgment,
we consider all the evidence in the light most favorable to the nonmovant,
crediting evidence favorable to the nonmovant if a reasonable factfinder could, and
disregarding contrary evidence unless a reasonable factfinder could not. See Mack
Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).

      1.    The policy’s terms

      An insurance policy generally is governed by the same rules of construction
that apply to other contracts. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113,

                                         8
118 (Tex. 2015). As with any written contract, our primary concern is to identify
the parties’ intentions as expressed in the document. See J.M. Davidson, Inc. v.
Webster, 128 S.W.3d 223, 229 (Tex. 2003). We accordingly begin our analysis
with the policy’s language. See JAW The Pointe, L.L.C. v. Lexington Ins. Co., 460
S.W.3d 597, 602 (Tex. 2015) (“In determining a question of insurance coverage,
we look first to ‘the language of the policy because we presume parties intend what
the words of their contract say.’” (quoting Gilbert Tex. Constr., L.P. v.
Underwriters at Lloyd’s London, 327 S.W.3d 118, 126 (Tex. 2010) (sub. op.))).
We strive to harmonize the entire agreement, giving effect to all of the policy’s
words and provisions so that none are rendered meaningless. Id. at 603.

      If the parties offer differing constructions of the policy but only one is
reasonable, then the policy is unambiguous and we will adopt that construction.
See RSUI Indem. Co., 466 S.W.3d at 118. But if the policy’s provisions are
unclear or inconsistent, and after applying the pertinent rules of construction, more
than one interpretation is reasonable, then the contract is ambiguous. See, e.g.,
J.M. Davidson, Inc., 128 S.W.3d at 229 (addressing contracts generally); Gonzalez
v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990) (specifically addressing
insurance policies). An ambiguous policy is construed against the insurer and in
favor of coverage. See, e.g., Gonzalez, 795 S.W.2d at 737; RSUI Indem. Co., 466
S.W.3d at 118. Whether a contract is ambiguous is a question of law for the court
to decide; the parties’ mere disagreement about the contract’s meaning does not
create an ambiguity. See In re Deepwater Horizon, 470 S.W.3d 452, 464 (Tex.
2015).
             a.    The policy’s “named insured” coverage

      Westview maintains that because it is the owner of the Westview Forest
Apartments, the Landmark policy affords it the same “named insured” coverage

                                         9
provided to the apartment complex’s prior owner TTSF. But at all times from
Westview’s purchase of the note through the date of the fire, the policy listed as
named insureds only TTSF and its affiliated companies having some interest in one
or more of four apartment complexes.2

      When Westview foreclosed on the property, it did not automatically acquire
the same coverage afforded to TTSF. The policy states, “Your rights and duties
under this policy may not be transferred without our written consent except in the
case of death of an individual named insured,” and it defines “‘you’ and ‘your’ [to]
refer to the Named Insured shown in the Declarations.” It is undisputed that
Landmark never consented in writing to the transfer of TTSF’s rights under the
policy to Westview. Thus, under the policy’s unambiguous terms, Landmark did
not provide Westview “named insured” coverage.

             b.    The policy’s “mortgageholders” coverage

      Another policy provision—the “mortgageholders” provision—affords lesser
coverage to an entity other than the named insured. The scope of that coverage is
shown by the provision’s placement in the policy and by its terms.

      The Landmark policy contains two “coverage parts,” namely, commercial
inland marine and commercial property. Each coverage part includes a variety of
“coverage forms.”      The commercial inland marine coverage part includes
“accounts receivable” and “valuable papers and records” coverage forms. The
commercial property coverage part includes “business income” and “building and
personal property” coverage forms. The “mortgageholders” provision is found
only in the “building and personal property” coverage form.

2
 The other limited partnerships were Texas Tomic Sharma Family LP, TTSF LP #2, TTSF LP
#6, and PTS Family Ltd. Partnership.

                                         10
      The mortgageholders provision states, “We will pay for covered loss of or
damage to buildings and structures to each mortgageholder shown in the
Declarations in their order of precedence, as interests may appear.” Under this
unambiguous language, a mortgageholder has coverage for loss of or damage to
Westview Forest Apartments’ “buildings and structures,” as that expression is used
in the policy.

      The declarations identify FirstVal as the mortgageholder on the Westview
Forest and Kingsgate Village properties, and when FirstVal sold the note to
Westview, Westview became the mortgageholder of the Westview Forest
Apartments. Although the declarations page was not amended to add Westview,
Landmark nevertheless honored FirstVal’s assignment to Westview of FirstVal’s
interest in the policy as the mortgageholder of the Westview Forest Apartments.
Landmark accordingly afforded Westview the coverage that the policy provided to
a mortgageholder, that is, coverage for loss of or damage to Westview Forest
Apartments’ “buildings and structures.”

      2.     Westview’s arguments for broader coverage

      Westview contends that the trial court erred in granting partial summary
judgment holding that the policy provided coverage to Westview only as a
mortgageholder. According to Westview, it is entitled to named-insured coverage
because (a) it succeeded to FirstVal’s rights under the policy’s EPI and
declarations; (b) TTSF assigned the policy and all other property to the
mortgageholder, including insurance proceeds from its business-interruption,
accounts-receivable, and valuable-papers coverage; (c) TTSF agreed to procure the
insurance for the mortgageholder’s benefit; and (d) Texas Insurance Code section
862.055 entitles a mortgageholder to collect fully on a fire-insurance policy if the
named insured cannot do so. We discuss each argument in turn.

                                          11
                  a.     A mortgageholder’s coverage under the policy’s EPI and
                         declarations
          The policy’s coverage of FirstVal’s interest in Westview Forest Apartments
was transferred to Westview, but what was the scope of that coverage? According
to Westview, the policy’s EPI and declarations give a mortgageholder the same
coverage as that afforded to a named insured.

          Westview, however, has made mistaken assumptions about the terms used in
these documents. The EPI concerning Westview Forest Apartments identified
TTSF as the only “named insured” and identified FirstVal as an “additional
interest.”      According to Westview, an “additional interest” is the same as an
“additional named insured” or an “additional insured,” and as such, an “additional
interest” is entitled to the same coverage provided to the named insured. This is
incorrect.

          “Additional insured” and “additional named insured” are terms with well-
established technical meanings in insurance policies. See W. Indem. Ins. Co. v.
Am. Physicians Ins. Exch., 950 S.W.2d 185, 188 (Tex. App.—Austin 1997, no
writ). An “additional insured” is one whose status—such as that of an employee or
a household member—places him within the policy’s definition of “insured.” See
id. at 189. An “additional named insured” is one who is specifically identified as a
named insured to an already-existing policy. See id. The EPI contained a box to
be filled in with the identity of any “additional named insured(s),”3 and tellingly,
the box is empty.

          Rather than characterizing FirstVal as an “insured,” the EPI described
FirstVal only as having an “additional interest.” As used in this context, “interest”
means “a stake, share, or involvement in an undertaking, esp. a financial one.”

3
    Full capitalization omitted.

                                           12
NEW OXFORD AMERICAN DICTIONARY 905 (Angus Stevenson & Christine
Lindberg, eds., 3d ed. 2010). This definition describes FirstVal’s interest as a
mortgageholder because when the EPI was issued, FirstVal had a security interest
in the insured property. FirstVal’s financial interest as a mortgageholder is the
only interest that it ever had in Westview Forest Apartments, and that is the only
interest it assigned to Westview.

          Westview’s argument regarding the policy’s declarations follows the same
lines as its argument about the EPI, and fails for the same reason. When the fire
occurred, the declarations identified only the TTSF companies as the named
insureds,4 and listed FirstVal only as “mortgage holder.”                    Moreover, the
declarations state, “In return for the payment of the premium, and subject to all the
terms of this policy, we agree with [TTSF] to provide the insurance as stated in this
policy.”5      Under the policy’s terms, the coverage provided to mortgagees is
specified in the mortgageholders provision, and that coverage is narrower than the
coverage provided to the named insured.

                 b.     Coverage under TTSF’s assignment of its policy to the
                        mortgageholder
          Westview next contends that if a mortgagor has assigned its policy to the
mortgagee, then the mortgagee is entitled to collect all coverages included in the
policy, including proceeds payable for business interruption, loss of accounts
receivable, and loss of or damage to valuable papers. The only case it cites in
support of this proposition is Peacock Hospitality, Inc. v. Association Casualty
Insurance Co., 419 S.W.3d 649, 652 (Tex. App.—San Antonio 2013, no pet.). We
4
  The EPI lists TTSF as the only named insured because it provides evidence of property
insurance for only one property, namely, the Westview Forest Apartments. But the Landmark
policy as a whole covers four properties, so the policy declarations include the named insureds
for all four properties.
5
    Full capitalization omitted, emphasis added.

                                                   13
find no such holding in that case, which is factually distinguishable. Peacock did
not involve demands for coverage for business interruption, accounts receivable, or
valuable papers. The coverage dispute in Peacock concerned only the amount due
for building repairs, and here, Landmark and Westview agreed on the amount to be
paid to replace the leasing office. Further, Landmark’s policy provided that the
TTSF’s rights could not be transferred without Landmark’s written consent, which
was never given.

             c.    Coverage implied by TTSF’s agreement to procure
                   insurance for the mortgagee’s benefit
      Westview also contends that under Texas law, a mortgagee can collect on
the mortgagor’s insurance policy if the mortgagor agreed to procure insurance for
the mortgagee’s benefit. In support of this position, Westview cites several cases
holding that if a security agreement requires the mortgagor to procure insurance for
the mortgagee’s benefit and the policy contains no such provision, then equity will
imply its existence. See, e.g., Beneficial Standard Life Ins. Co. v. Trinity Nat’l
Bank, 763 S.W.2d 52, 55 (Tex. App.—Dallas 1988, writ denied) (op. on reh’g);
Cont’l Ins. Co. v. Stewart & Stevenson Servs., Inc., 306 S.W.2d 415, 420 (Tex.
Civ. App.—Houston 1957, writ ref’d n.r.e.); Fid. & Guar. Ins. Corp. v. Super-Cold
Sw. Co., 225 S.W.2d 924, 927 (Tex. Civ. App.—Amarillo 1949, writ ref’d n.r.e.).
According to Westview, it can collect all coverages afforded by the policy because
the deed of trust between TTSF and the original mortgagee required TTSF to
procure insurance for the mortgagee’s benefit.        Stated differently, Westview
contends that it has an equitable lien on the proceeds of all of coverage available to
the named insured. Cf. Trinity Nat’l Bank, 763 S.W.2d at 54–55.

      An equitable lien is imposed on insurance proceeds when (1) the named
insured owns property, (2) a third party has a secured interest in the property,
(3) the named insured agreed to protect the third-party’s security interest by
                                         14
obtaining insurance with a loss-payable clause in the third party’s favor, and
(4) the named insured failed to procure the agreed coverage.6 See id. In those
circumstances, the third party is entitled to an equitable lien in the amount of the
outstanding secured debt on the insurance proceeds under the principle that “equity
treats that as done which should have been done.” Super-Cold Sw. Co., 225
S.W.2d at 927. The equitable lien then fulfills the missing loss-payable clause’s
purpose “to protect the security interest of one who has advanced money to others
for the purchase of property” by allowing the third party to recover insurance
proceeds up to the amount of the outstanding debt “so that the mortgagee, who has
advanced money on the property, will be protected.” Helmer v. Tex. Farmers Ins.
Co., 632 S.W.2d 194, 196 (Tex. App.—Fort Worth 1982, no writ). Compare
Trinity Nat’l Bank, 763 S.W.2d at 55 (holding that a mortgageholder could not
recover under the equitable-lien doctrine where the property owner’s debt had been
extinguished by the mortgageholder’s foreclosure) with Wade v. Seeburg, 688
S.W.2d 638, 639 (Tex. App.—Texarkana 1985, no writ) (holding that, under the
equitable-lien doctrine, the trial court correctly awarded the secured party the
amount of the outstanding debt). Thus, an equitable lien will not be imposed if the
named insured no longer owns the property or if the debt which the property
secured has been extinguished. See Chartis Specialty Ins. Co. v. Tesoro Corp., 113
F. Supp. 3d 924, 938 (W.D. Tex. 2015), aff’d sub nom. AIG Specialty Ins. Co. v.
Tesoro Corp., 840 F.3d 205 (5th Cir. 2016); Helmer, 632 S.W.2d at 196.

6
  We have stated the requirements as they apply in the context of a mortgagor and mortgagee, but
the same principles apply when the relationship between the named insured and the third party is
that of vendee–vendor or lessee–lessor. See, e.g., State Farm Fire & Cas. Co. v. Leasing Enters.,
Inc., 716 S.W.2d 553, 554 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) (lessee–
lessor); Wade v. Seeburg, 688 S.W.2d 638, 639 (Tex. App.—Texarkana 1985, no writ) (vendee–
vendor).

                                               15
          Although Westview produced some evidence that TTSF agreed to procure
insurance covering the mortgageholder’s interest, Westview did not establish that
the other requirements for imposing an equitable lien were satisfied.                     To the
contrary, the evidence conclusively establishes that TTSF fulfilled its obligation to
obtain a policy containing a loss-payable clause protecting the mortgageholder’s
interest and that, at the time of loss, TTSF neither owned the property nor owed a
particular amount on the mortgageholder’s note. Westview therefore is not entitled
to an equitable lien on insurance proceeds payable under the named insured’s
coverage.7

                 d.      Coverage mandated by Texas Insurance Code section
                         862.055
          Finally, Westview represents that Texas Insurance Code section 862.055
“entitles lenders to collect fully on a fire insurance policy if the named insured
cannot do so, as was the case here.”8 But this statute actually says that “[t]he
interest of a mortgagee” under a fire-insurance policy “may not be invalidated” by
the mortgagor’s or property owner’s act or neglect, or by an occurrence beyond
their control. See TEX. INS. CODE ANN. § 862.055 (West 2009).

          This statute does not apply here because Westview’s interest as a mortgagee
was not invalidated. To the contrary, Westview was treated as a mortgagee under
the policy, and in that capacity, was paid more than $334,000.

7
  This argument fails for the additional reason that TTSF’s coverage was limited to its interest in
the property at the time of the loss. See infra at III.B. Because TTSF no longer had an interest in
the property when the fire occurred, no insurance proceeds were payable to TTSF, and thus,
there were no insurance proceeds to which a mortgageholder’s equitable lien could attach.
8
    Capitalization omitted.

                                                16
      For all of the foregoing reasons, we overrule Westview’s challenge to the
trial court’s partial summary judgment on the scope of its coverage under the
policy.

B.    Directed Verdict on Limitations Grounds

      A trial court properly directs a verdict for a defendant if the evidence
conclusively establishes a defense to the plaintiff’s cause of action. See Prudential
Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). When
analyzing a directed verdict, we review the evidence in the light most favorable to
the party against whom judgment was rendered to determine if any probative
evidence raises a material fact issue on the question presented. See Exxon Corp. v.
Emerald Oil & Gas Co., 348 S.W.3d 194, 220 (Tex. 2011) (sub. op.). If there is
conflicting probative evidence on the issue, then the jury must be allowed to decide
the matter. See White v. Sw. Bell Tel. Co., 651 S.W.2d 260, 262 (Tex. 1983).

      King-Phillips successfully moved for a directed verdict on the ground that
the two-year statute of limitations barred Westview’s causes of action for negligent
misrepresentation and for violations of the DTPA and the Insurance Code. See
TEX. CIV. PRAC. & REM. CODE ANN. § 16.003 (West Supp. 2016) (negligent-
misrepresentation limitations); TEX. BUS. & COM. CODE ANN. § 17.565 (West
2011) (DTPA limitations); TEX. INS. CODE ANN. § 541.162 (West 2009)
(limitations for violations of Chapter 541 of the Insurance Code). The statute of
limitations began to run when these causes of action accrued. See Knott, 128
S.W.3d at 221. Ordinarily, “a cause of action accrues when a wrongful act causes
some legal injury, even if the fact of injury is not discovered until later, and even if
all resulting damages have not yet occurred.” Murphy v. Campbell, 964 S.W.2d
265, 270 (Tex. 1997) (quoting S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)).

                                          17
“Generally, when a cause of action accrues is a question of law.” Knott, 128
S.W.3d at 221.

        The parties agree that Westview’s causes of action would have accrued
when its claims were denied. See Johnson & Higgins of Tex., Inc. v. Kenneco
Energy, Inc., 962 S.W.2d 507, 514 (Tex. 1998) (sub. op.); Murray v. San Jacinto
Agency, Inc., 800 S.W.2d 826, 828, 829 (Tex. 1990). We accordingly review the
evidence to determine if King-Phillips and Landmark conclusively established that
Landmark denied the claims before August 2010, two years before Westview filed
suit.

        The record conclusively establishes that Westview’s causes of action
accrued not later than March 2009. The evidence is uncontroverted that McGehee
informed Yetiv on November 13, 2008, that transfer of coverage from TTSF to
Westview was within the carrier’s discretion.            On December 5, 2008, King-
Phillips’s CEO informed Westview that King-Phillips was unable to transfer
TTSF’s coverage to Westview; in his answering correspondence, Yetiv referred to
that letter as “your denial letter.” After Yetiv reported the fire in January 2009,
Landmark’s coverage counsel Stephen Wedemeyer wrote Yetiv that TTSF’s
coverage had not been transferred to Westview, and on March 9, 2009,
Landmark’s adjuster Andy McRae wrote Yetiv that Landmark would pay
Westview as a mortgageholder for loss or damage to buildings or structures.9

        Wedemeyer wrote Yetiv twice more in March 2009. In the first of these
letters, Wedemeyer specifically told Yetiv that the policy did not cover the
mortgageholder for (1) damage to or loss of certain business personal property,
(2) personal property of others, (3) damage to or loss of accounts receivable,

9
  As previously mentioned, the policy defined “building” to include certain business personal
property.

                                             18
(4) valuable papers and records, or (5) any lost business income. At trial, Yetiv
admitted that he understood from that letter that Landmark was limiting
Westview’s coverage to that of a mortgageholder. In Wedemeyer’s second letter
that month, he addressed Westview’s assertion of claims on TTSF’s behalf.
Wedemeyer pointed out that under the policy’s terms, TTSF’s coverage did not
exceed its financial interest in the property on the day of the fire, and that Yetiv
already had informed Landmark that Westview acquired all of TTSF’s financial
interests in the covered property as part of the foreclosure. Yetiv testified at trial
that he understood from this letter that Landmark would not pay Westview for
claims made on TTSF’s behalf.                  Thus, by March 2009, Landmark had
communicated—and Westview’s principal admittedly understood—that Landmark
would pay Westview in accordance with the mortgageholder’s provision, but had
denied coverage of Westview’s claims on TTSF’s behalf, as well as Westview’s
claims for (1) business personal property not included within the mortgageholder’s
building-and-structures coverage, (2) personal property of others, (3) loss of
accounts receivable, (4) valuable papers and records, and (5) lost business income.

       Westview nevertheless argues on appeal that its negligent-misrepresentation,
Insurance Code, and DTPA claims against King-Phillips never accrued, or if they
did, they accrued no earlier than November 2011.10 Both arguments rest on the
premise that Landmark never denied “the claim” but was simply “stringing
[Westview] along.”         In support of this premise, Westview cites Landmark’s
corporate representative Mark Schwartz’s testimony agreeing that there were “still

10
  Citing Lozada v. Farrall & Blackwell Agency, Inc., 323 S.W.3d 278, 288–89 (Tex. App.—El
Paso 2010, no pet.), Westview represents that if an insurer never denies the claim, then causes of
action for negligent misrepresentation or for violations of the DTPA or Chapter 541 of the
Insurance Code never accrue. The Lozada court did not so hold, but instead affirmed a summary
judgment on limitations grounds based on a denial letter expressly stating that “no policy was in
force and no benefits are payable.” Id. at 289.

                                               19
some items of the claim that were open” in November 2011, and that if Westview
had submitted receipts and invoices in November 2014, Landmark would have
considered them.

       The cited testimony provides no support for Westview’s position because
“the claim” to which Schwartz referred is not the same “claim” on which
Westview’s negligent-misrepresentation, Insurance Code, and DTPA causes of
action against King-Phillips were based. Schwartz was speaking about Westview’s
claims that were in fact covered under the mortgageholder’s provision or the
emergency-expenses provision.11         As discussed further infra, Landmark had
requested documentation in 2009 to support some of the amounts claimed under
these provisions, and when Westview finally responded in November 2011,
Landmark paid the claims that were supported by documentation. In contrast,
Westview’s negligent-misrepresentation, Insurance Code, and DTPA claims
against King-Phillips were based on McGehee’s alleged misrepresentation that the
policy provided coverage for business personal property, loss of important papers,
and business interruption.      Landmark’s 2011 payment of Westview’s covered
claims does not affect its 2009 denial of distinct claims that were not covered.

       After considering each of Westview’s arguments on the subject, we
conclude that the trial court did not err in granting King-Phillips’s motion for
directed verdict on Westview’s claims against it for negligent misrepresentation
and for violations of the DTPA and the Insurance Code.

11
   The policy’s “Duties in the Event of Loss or Damage” provision requires the claimant to
“[t]ake all reasonable steps to protect the Covered Property from further damage, and keep a
record of your expenses necessary to protect the Covered Property, for consideration in the
settlement of the claim.”

                                            20
C.    Evidentiary Rulings

      Westview contends that the trial court erroneously excluded evidence that,
after a different mortgagee foreclosed on a different property covered by the
Landmark policy, Landmark added the mortgagee to the policy as an additional
named insured. Specifically, when FirstVal obtained the EPI from King-Phillips in
February 2008, FirstVal was the mortgagee of both the Westview Forest
Apartments and the Kingsgate Village Apartments.               Months later, FirstVal
foreclosed on the Kingsgate Village Apartments and obtained its own insurance
coverage. FirstVal and McGehee then discussed adding FirstVal as a named
insured to the Landmark policy. FirstVal canceled its independently obtained
insurance, and in late November 2008, Landmark issued an endorsement
retroactively covering FirstVal as an additional named insured on the Kingsgate
Village Apartments, effective as of the date FirstVal became the owner. The
endorsement is part of the insurance policy admitted into evidence, but because it
is undisputed that Landmark did not issue a named-insured endorsement to
Westview, the trial court excluded certain testimony about the FirstVal/Kingsgate
Village endorsement. Westview challenges the exclusion of this evidence.

      We review a trial court’s evidentiary rulings for abuse of discretion. See Sw.
Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 727 (Tex. 2016). Because
the trial court abuses its discretion only if its ruling is arbitrary or unreasonable, see
Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985), we
will uphold the trial court’s ruling if there is any legitimate basis for it. See
Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). We
will reverse based on an erroneous evidentiary ruling only if the ruling probably
caused the rendition of an improper judgment. See TEX. R. APP. P. 44.1(a). To
determine whether the erroneous ruling probably had such an effect, we review the

                                           21
entire record and require the complaining party to demonstrate that the judgment
turned on the excluded evidence. See Tex. Dep’t of Transp. v. Able, 35 S.W.3d
608, 617 (Tex. 2000).

      According to Westview, evidence that Landmark issued an endorsement
retroactively providing FirstVal named-insured coverage on the Kingsgate Village
property should have been admitted to correct a false impression that a lender
never could become a named insured on the policy. Westview contends that
Landmark or King-Phillips injected the issue at trial when questioning Westview’s
expert Zachary Hirsch, King-Phillips’s CEO Ty Hunter, and Landmark underwriter
Bob English. Westview asserts that the trial court’s ruling on a motion in limine
prevented it from impeaching these witnesses’ testimony.

      The trial court’s ruling on a motion in limine could not have prevented
Westview from impeaching a witness’s testimony, because a limine order is not an
evidentiary ruling. By such an order, the trial court neither admits nor excludes
evidence, but merely requires a party to obtain the trial court’s permission, at the
bench or otherwise outside of the jury’s presence, before asking potentially
prejudicial questions or introducing potentially prejudicial evidence.          See
Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d 56, 91 (Tex. App.—
Houston [14th Dist.] 2004, no pet.); Union Carbide Corp. v. Burton, 618 S.W.2d
410, 415 (Tex. Civ. App.—Houston [14th Dist.] 1981, writ ref’d n.r.e.). Westview
did not seek relief from the limine ruling on the ground that Landmark or King-
Phillips had opened the door to the admission of evidence to correct an alleged
false impression created by Hirsch’s, Hunter’s, or English’s testimony.

      Westview sought relief from the limine order only during the direct
examination of one of its own attorneys by another of its attorneys. Westview’s
attorney John Quinlan had advised Westview on the purchase of FirstVal’s note on

                                        22
the Westview Forest Apartments and Westview’s foreclosure on the property. To
provide that advice, Quinlan had reviewed FirstVal’s file on the Westview Forest
property. At trial, Yetiv asked Quinlan if he also had reviewed FirstVal’s file on
the Kingsgate property. Quinlan said that he had, and he was beginning to add to
that answer when King-Phillips’s counsel objected on the ground of relevance.
When the trial court sustained the objection, Yetiv requested a bench conference
during which he stated that Quinlan developed some of his opinions about
McGehee’s apparent authority based on Quinlan’s review of FirstVal’s file on the
Kingsgate property. Yetiv said that Quinlan was “going to talk about what his
perceptions were as he was advising [Westview] in this transaction.” According to
Yetiv, Quinlan would testify that he “became aware through his communications
with [FirstVal’s] Dwayne Young” and through his review of emails in FirstVal’s
file that McGehee had assured Young that FirstVal’s interest in Kingsgate “was
still covered under this policy” even after FirstVal foreclosed on the property. It
apparently was Quinlan’s belief that because Landmark added FirstVal to the
policy as an additional named insured after FirstVal foreclosed on the Kingsgate
Village Apartments, Landmark similarly would add Westview to the policy as an
additional named insured after Westview foreclosed on the Westview Forest
Apartments. Quinlan arrived at that conclusion because, in an email chain about
whether FirstVal had coverage for Hurricane Ike’s damage to the Kingsgate
property, Young wrote, “Just off the phone with Greg [McGehee]. After our
discussions I am comfortable that FirstVal is protected on Kingsgate.” In another
email, Quinlan asked Young, “Is there any issue with the underwriter that a new
owner, by virtue of a foreclosure, is being covered, who is different from the owner
under the group policy[?]” Young replied, “We were assure[d] it did not matter on
kinsgate [sic] and we are moving forward with claim processing. Kingsgate [sic]
would be the same scenario.”
                                        23
      Over the course of the extended bench conference, the defendants made
several counter-arguments, and the trial court did not specify which ones it found
persuasive, ruling only that Yetiv’s request was denied. On this record, we cannot
say that any of the defendants’ counter-arguments lack merit. Among other things,
opposing counsel pointed out that Young’s communications with McGehee
concerned windstorm coverage under a policy issued by Westchester rather than
property coverage under Landmark’s policy. They also showed that none of the
emails were from Landmark (or even from McGehee); thus, neither Young’s
statements nor the inferences Quinlan drew from those statements were relevant to
the issue of King-Phillips’s apparent agency to bind Landmark, because when
determining whether apparent authority exists, “only the conduct of the principal is
relevant.” See Gaines v. Kelly, 235 S.W.3d 179, 182 (Tex. 2007). They further
reminded the trial court of its pretrial ruling that, due to the inadequacy of
Westview’s disclosures, Westview could not introduce testimony “on the
perception of other apartment owners and other insurance matters,” and they
pointed out that Quinlan is an apartment owner. The defendants also argued that
the probative value of Quinlan’s testimony was outweighed by the danger of unfair
prejudice. While Landmark did add FirstVal as an additional named insured on the
Kingsgate property, it did so in late November 2008—after Quinlan reviewed
FirstVal’s file, and after the fire at Westview Forest Apartments. The testimony
would be prejudicial for the further reason that Landmark’s decision to make a
different company an additional named insured on a different property did not
obligate it to make Westview an additional named insured on the Westview Forest
property.

      Because the trial court would not have abused its discretion in excluding the
proffered testimony on any of these grounds, we overrule this issue.

                                        24
D.    The Jury Charge and the Factual Sufficiency of the Jury’s Findings

      Westview contends both that the trial court erred in submitting or failing to
submit certain questions, definitions, and instructions to the jury, and that the
jury’s answers to the questions submitted are based on factually insufficient
evidence. The standard of review intertwines these issues. See Golden Eagle
Archery, Inc. v. Jackson, 116 S.W.3d 757, 762 (Tex. 2003) (explaining that, in a
factual-sufficiency review, “[t]he starting point generally is the charge and
instructions to the jury”).

      We review a trial court’s jury-charge rulings for abuse of discretion. See Sw.
Energy Prod. Co., 491 S.W.3d at 727. If the trial court abused its discretion, we
will reverse only if the error was harmful. Id. at 728. A charge error harmed the
appellant only if it “probably caused the rendition of an improper judgment” or
“probably prevented the appellant from properly presenting the case” on appeal.
See TEX. R. APP. P. 44.1(a); Thota v. Young, 366 S.W.3d 678, 687 (Tex. 2012).

      Our review of factual sufficiency varies depending on whether there was a
valid objection to the jury charge. Absent a valid charge objection, we measure the
factual sufficiency of the evidence by the charge actually submitted.           See
Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000); Chesser v. LifeCare Mgmt.
Servs., L.L.C., 356 S.W.3d 613, 629 (Tex. App.—Fort Worth 2011, pet. denied)
(citing St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 530 (Tex. 2003)). On the other
hand, if the complaining party preserved a valid objection to a defective charge,
then we measure the sufficiency of the evidence by the charge the trial court
should have given. Cf. Wolff, 94 S.W.3d at 530.

      Whether we are measuring the evidentiary sufficiency against the charge
that was given or against the charge that should have been given, we review all of
the pertinent evidence in a neutral light. See Golden Eagle Archery, 116 S.W.3d at
                                        25
761; United Nat’l Ins. Co. v. AMJ Invs., LLC, 447 S.W.3d 1, 7 (Tex. App.—
Houston [14th Dist.] 2014, pet. dism’d). We will set aside the finding only if the
credible evidence supporting the finding is so weak, or so contrary to the
overwhelming weight of the evidence, that the finding should be set aside and a
new trial ordered. See Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d
580, 615 (Tex. 2016); Barker v. Eckman, 213 S.W.3d 306, 313 (Tex. 2006). Given
this standard of review, more evidence is required to set aside a finding than to
uphold it. See AMJ Invs., 447 S.W.3d at 7.

      Because we must measure the factual sufficiency of a finding differently if
Westview’s complaints about that part of the charge are valid, we address each
allegation of factual insufficiency only after first determining if that part of the
charge was erroneous. To avoid repetition, we will address Westview’s complaints
of charge error and factual insufficiency in tandem by working our way through
the charge in order, and when we reach a challenge to a question, an instruction, a
definition, or a finding, we will dispose of any charge-error complaint before
addressing the factual sufficiency of the evidence to support the finding. First,
however, we discuss Westview’s complaint about a charge omission, namely, that
the trial court erred in refusing to submit a question and accompanying instruction
concerning Insurance Code and DTPA liability.

      1.     The proposed Chapter 541 and DTPA question and instruction

      In a case tried to a jury, the trial court must include in the charge the
questions, instructions, and definitions that are raised by the pleadings and the
evidence. See TEX. R. CIV. P. 278. The instructions and definitions are those “as
shall be proper to enable the jury to render a verdict.” TEX. R. CIV. P. 277. A
proper jury instruction is one that assists the jury, accurately states the law, and is
supported by the pleadings and the evidence.            See Columbia Rio Grande

                                          26
Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855 (Tex. 2009). If the trial court
refuses a requested instruction on an issue raised by the pleadings and the
evidence, then we must determine whether the instruction was reasonably
necessary for the jury to render a proper verdict. See Shupe v. Lingafelter, 192
S.W.3d 577, 579 (Tex. 2006) (per curiam).

          Westview submitted a proposed question and instruction under the heading,
“CHAPTER 541/DTPA – LIABILITY – AGENCY UNDER INS. CODE CH.
4001.”          Westview maintains that under Texas Insurance Code section
4001.051(b)12 and certain cases interpreting that provision, King-Phillips was
Landmark’s agent as a matter of law. Westview therefore asked the trial court to
submit a jury question concerning King-Phillips’s and Landmark’s liability under

12
     That provision is as follows:
          Regardless of whether the act is done at the request of or by the employment of an
          insurer, broker, or other person, a person is the agent of the insurer for which the
          act is done or risk is taken for purposes of the liabilities, duties, requirements, and
          penalties provided by this title [i.e., Title 13, “Regulation of Professionals”],
          Chapter 21 [which is inapplicable here], or a provision listed in Section 4001.009
          if the person:
          (1)    solicits insurance on behalf of the insurer;
          (2)    receives or transmits other than on the person’s own behalf an application
                 for insurance or an insurance policy to or from the insurer;
          (3)    advertises or otherwise gives notice that the person will receive or transmit
                 an application for insurance or an insurance policy;
          (4)    receives or transmits an insurance policy of the insurer;
          (5)    examines or inspects a risk;
          (6)    receives, collects, or transmits an insurance premium;
          (7)    makes or forwards a diagram of a building;
          (8)    takes any other action in the making or consummation of an insurance
                 contract for or with the insurer other than on the person’s own behalf; or
          (9)    examines into, adjusts, or aids in adjusting a loss for or on behalf of the
                 insurer.
TEX. INS. CODE ANN. § 4001.051(b) (West 2009).

                                                    27
the DTPA and Texas Insurance Code Chapter 541 (similarly titled “Unfair
Methods of Competition and Unfair or Deceptive Acts or Practices”) and to
include the instruction, “For the purposes of this question, you are instructed that
the conduct of Landmark includes the conduct of King-Phillips.” The trial court
refused the request.

      On appeal, Westview focuses on the trial court’s failure to instruct the jury
that King-Phillips was Landmark’s agent, but because the instruction was
submitted only as part of a question about liability under the DTPA and Chapter
541 of the Insurance Code, our resolution of this matter turns on whether the trial
court abused its discretion in refusing to submit the question. As previously
discussed, the trial court appropriately granted King-Phillips’s request for a
directed verdict on limitations grounds on certain of Westview’s claims, including
its DTPA and Insurance Code claims. Because Westview’s claims against King-
Phillips under these provisions are time-barred, the trial court did not abuse its
discretion in refusing to submit the question as to King-Phillips’s liability.

      As to Landmark’s liability, Westview admitted at trial that, with the
exception of its breach-of-contract claim, all of its claims against Landmark were
based on the agency theory that Landmark was liable for King-Phillips’s conduct.
But, a claim against a principal based on an agent’s conduct is a claim of derivative
liability, and is dependent on the primary wrongdoer’s liability. See El Paso Nat.
Gas Co. v. Berryman, 858 S.W.2d 362, 364 (Tex. 1993). Under Westview’s
theory, King-Phillips was the primary wrongdoer, and as King-Phillips’s principal,
Landmark was derivatively liable. Thus, even assuming, without deciding, that
King-Phillips were Landmark’s agent, King-Phillips’s successful limitations
defense disposed of the DTPA and Insurance Code claims against it. Because
King-Phillips could not be held liable as an agent, Landmark could not be held

                                          28
derivatively liable as the principal. See Featherston v. Weller, No. 03-05-00770-
CV, 2009 WL 1896072, at *5 (Tex. App.—Austin July 3, 2009, no pet.) (mem.
op.) (explaining that there is no derivative liability where the primary wrongdoer
successfully asserts an affirmative defense); TEX. R. CIV. P. 94 (identifying
limitations as an affirmative defense).

      Westview gives two reasons for concluding that the trial court abused its
discretion in refusing the requested instruction, but neither rationale is persuasive.

      First, Westview argues that the trial court’s refusal to include an agency
instruction was inconsistent with its earlier partial summary-judgment ruling that
King-Phillips was Landmark’s agent as a matter of law under section 4001.051(b)
of the Insurance Code. In that ruling, the trial court specified that it granted
Westview’s summary-judgment motion only “as it relates to claims brought under
Chapter 541 of the Texas Insurance Code.” After the trial court properly directed a
verdict as to that time-barred cause of action, there was nothing left of Westview’s
claims under Chapter 541 to submit to the jury. Thus, refusing to submit a Chapter
541 question to the jury was not inconsistent with the trial court’s summary-
judgment ruling, whereas submitting the question would have been inconsistent
with the trial court’s directed-verdict ruling.

      Second, Westview contends that in refusing the requested instruction that
King-Phillips was Westview’s agent as a matter of law, “the trial court erred in
limiting the application [of] § 4001.051(b) only to Chapter 541 claims.” Westview
argues that the trial court instead should have instructed the jury that King-Phillips
was Landmark’s agent for the purpose of Westview’s fraud claim. By its terms,
however, section 4001.051(b) creates an agency relationship only “for the purposes
of the liabilities, duties, requirements, and penalties” of specific statutes; it does
not purport to create an agency relationship for the purpose of a common-law fraud

                                           29
claim. Moreover, Westview submitted this agency instruction only as part of its
requested question on DTPA and Insurance Code claims.

          Because Westview’s proposed jury question and its accompanying
instruction were directed only to claims that had been appropriately eliminated
from the case on limitations grounds, and because the proposed instruction did not
apply to Westview’s common-law fraud claim, the trial court did not abuse its
discretion in refusing to include it in the charge. We overrule these complaints.

          2.     Question 1: Landmark’s alleged failure to comply with the Policy

          In Question 1 of the charge, the jury was asked if Landmark failed to comply
with the policy by failing to pay for all damages to the Building that were caused
by the fire.        The question included an instruction that “Building” means all
structures on the premises, including completed additions, fixtures, permanently
installed machinery and equipment, together with “maintenance and service
personal property” owned by Westview. In the “definitions” section of the charge,
the trial court explained that “‘maintenance and service personal property’ means
items used to maintain, care for, keep up, repair, restore, replace, preserve, or
protect structures located at the premises,”13 and includes keys, key-making
machines, carpet-shampooing machines, and other maintenance tools and parts, but
does not include office supplies, interior office furniture, or televisions. Westview
contends both that the trial court erred in refusing to include an additional
instruction, and that the jury’s failure to find that Landmark breached the contract
is against the great weight of the evidence.

13
     Capitalization omitted.

                                           30
             a.    The trial court did not abuse its discretion in failing to
                   instruct the jury that the Policy covered “important
                   papers” and “dead files.”

      Westview argues on appeal that Question 1 of the charge is defective
because its accompanying instructions and the definition of “maintenance and
service personal property” do not mention “important papers” and “dead files.”
According to Westview, the omission of these two items is inconsistent with the
trial court’s ruling on the first day of trial that Westview “could collect all
‘Buildings’ coverages, including ‘important papers’ and ‘dead files.’”

      This is not an accurate representation of the trial court’s ruling. The trial
court instead ruled that “whether the following categories of personal property fall
within the definitions of Building is a question of fact for the jury to decide:
(1) Files of active residents, (2) Files of inactive residents . . . .”      Because
Westview cites this ruling, we understand Westview to use the expression
“important papers” to mean files of active residents and “dead files” to mean files
of inactive residents. In accordance with its earlier ruling, the trial court left the
jury to decide whether these items were included in “maintenance and service
personal property.” We overrule this complaint.

             b.    The evidence is factually sufficient to support the finding
                   that Landmark did not fail to comply with the Policy.

      Westview asserts that the great weight of the evidence shows that Landmark
failed to comply with the policy because it did not pay for all (1) keys, (2) key-
making machines, (3) carpet-shampooing machines, and (4) maintenance tools and
parts. In support of this position, Westview cites a November 2011 letter to
Westview from Landmark’s adjuster Andy McRae. In the letter, McRae stated that
on receipt of executed copies of Westview’s sworn proof-of-loss statement and
agreement for future payment, a check for a further $20,166.41 would be
                                         31
forwarded to Westview’s principal, including $9,595.21 for “maintenance and
service personal property.”

      In its brief, Westview does not specifically discuss the evidence concerning
the amount, if any, that Landmark was required to pay for keys, key-making
machines, or carpet-shampooing machines, and there is conflicting evidence on
these topics. The policy provided coverage for the replacement cost of these items,
but Landmark was not required to pay until the property was actually repaired or
replaced, and replacement cost was payable only if the replacement was “made as
soon as reasonably possible after the loss or damage.” McRae testified that he did
not believe the key-making and carpet-shampooing machines were covered, but
Landmark’s corporate representative Mark Schwarz testified that Landmark denied
payment for the carpet-shampooing machine because it was not covered, and
denied payment for keys and for the key-making machine because Westview failed
to document the amounts due by providing estimates or receipts.

      According to Yetiv’s testimony, however, none of these amounts were
documented.      Westview replaced the key-making and carpet-shampooing
machines, but it did not provide the receipts to Landmark. Westview also did not
document the cost for replacing the master keys for the apartment doors and
mailboxes, nor did it establish that Westview had replaced them.           Yetiv’s
correspondence with the adjuster instead suggests that two-and-a-half years after
the fire, no replacement triggering the duty to pay had been performed.

      Westview does not identify any other maintenance tools and parts at issue.
From our review of the record, Landmark appears to have paid Westview for all of
its documented, covered losses. Thus, after reviewing the evidence in a neutral

                                        32
light, we conclude that it is factually sufficient to support the jury’s finding that
Landmark did not fail to comply with the policy. We overrule this complaint.14

          3.     Question 5: King-Phillips’s alleged apparent authority to act for
                 Landmark

          The next question answered by the jury was Question 5, in which the jury
failed to find that King-Phillips acted with Landmark’s apparent authority.
Westview argues that an instruction accompanying the question constituted an
impermissible comment on the weight of the evidence and that the jury’s failure to
find apparent authority is against the great weight of the evidence.

          We need not address either argument because, as will be seen, the jury’s
answer to this question is immaterial. This is so because “[a]pparent authority is
not itself a cause of action; rather, it can be used to establish a principal’s liability
when there is no actual authority.” Millan v. Dean Witter Reynolds, Inc., 90
S.W.3d 760, 767 (Tex. App.—San Antonio 2002, pet. denied) (en banc) (citing
Baptist Mem’l Hosp. Sys. v. Sampson, 69 S.W.2d 945, 949 (Tex. 1998)). An
agent’s actions within the scope of its apparent authority are binding on the
principal. See Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex. 1984). Thus, if
King-Phillips acted within the scope of its apparent authority in committing some
wrongdoing, then Landmark could be held liable for King-Phillips’s conduct.
Similarly, if King-Phillips had apparent authority to make a promise on
Landmark’s behalf, then Landmark could be held liable for failure to fulfill the
promise.        But, a finding that King-Phillips had apparent authority to act for
Landmark is immaterial unless there also is a finding that King-Phillips engaged in
some wrongdoing or that Westview reasonably relied on a promise made by King-
Phillips on Landmark’s behalf. Cf. Se. Pipe Line Co. v. Tichacek, 997 S.W.2d 166,

14
     Each factual-sufficiency complaint is a part of Westview’s sixth issue.

                                                  33
172 (Tex. 1999) (explaining that a properly submitted question can be rendered
immaterial by other findings).

      The jury made no findings that could be affected by a finding that King-
Phillips had apparent authority to act for Landmark. The jury was asked if King-
Phillips committed fraud and if Westview actionably relied, before the fire, on a
promise by King-Phillips.        Because the jury answered both questions in the
negative—and as discussed infra, those answers are supported by the record—the
jury’s failure to find that King-Phillips acted with Landmark’s apparent authority is
immaterial. We therefore do not address this complaint further.

      4.     Question 6: Westview’s alleged reliance on a promise by King-
             Phillips

      In Question 6 of the charge, the jury was asked if Westview actionably
relied before November 5, 2008, on a promise by King-Phillips. The question was
accompanied by two instructions. In the first, the trial court stated that a party
actionably relies on a promise if the reliance was (a) substantial, (b) detrimental to
the relying party, and (c) foreseeable to the promising party.        In the second
instruction, the trial court stated that King-Phillips did not have a duty to explain
the terms, conditions, exclusions, or limitations of the policy to Westview.
Westview again argues both that the charge is erroneous and that the jury’s failure
to find in Westview’s favor is against the great weight of the evidence.

             a.    The trial court did not impermissibly comment on the
                   weight of the evidence.

      Westview contends that the trial court abused its discretion in submitting the
instruction that actionable reliance must be substantial, detrimental to the relying
party, and foreseeable to the promising party.        According to Westview, the
instruction fails to follow the pattern jury charge for promissory estoppel and

                                          34
“highlights the obstacles to getting to a ‘yes’ answer.” We understand the latter
assertion as an argument that the instruction is an impermissible comment on the
weight of the evidence. We disagree that the trial court abused its discretion by
including this instruction in the charge.

       In the pattern jury charge, the promissory-estoppel question is phrased, “Did
Paul Payne substantially rely to his detriment, on Don Davis’s promise, if any, and
was this reliance foreseeable by Don Davis?” COMM. ON PATTERN JURY CHARGES,
STATE BAR     OF   TEX., Texas Pattern Jury Charges: Business PJC 101.41 (2014).
The pattern jury charge and the charge submitted differ in form, but not in
substance: both require a jury to answer “yes” only if the plaintiff’s reliance was
substantial, the reliance was detrimental to the plaintiff, and the reliance was
foreseeable by the defendant. The pattern jury charge submits the issue in a single
compound question, whereas the trial court submitted the issue as a question with
an accompanying instruction.

       Westview also argues that the trial court erred in instructing the jury that
King-Phillips did not have a duty to explain the terms, conditions, exclusions, or
limitations of the policy to Westview.              Although Westview objected to the
inclusion of this instruction in a negligent-misrepresentation question, Westview
did not object to the instruction in connection with the promissory-estoppel
question under discussion.15 This complaint therefore is waived.

15
  Westview raised this objection to an instruction accompanying “Question 6,” but the objection
was to a different “Question 6.” At the start of the charge conference, the negligent-
misrepresentation claim appeared as Question 6, and the promissory-estoppel question under
review was Question 8. The trial court then sustained objections to, and removed, Questions 6
and 7. As a result, the promissory-estoppel question that was discussed in the record as Question
8 was submitted to the jury as Question 6. Westview tacitly acknowledges this, because when
discussing its objections to the promissory-estoppel question, Westview cites to the part of the
charge conference in which the trial court heard Westview’s objections to what was then
Question 8.

                                               35
       Westview also says that the trial court erred in refusing to submit
Westview’s proposed promissory-estoppel question, which Westview contends
tracks the pattern jury charge. The pattern jury charge asks if the plaintiff relied on
a promise, “if any,” but Westview’s proposed question omits this language.
Moreover, Westview’s proposed question asks the jury if Westview relied on a
promise by King-Phillips or Landmark, but there is no evidence that Westview
relied on a promise by Landmark. The trial court accordingly did not abuse its
discretion in refusing to submit Westview’s proposed question. See TEX. R. CIV.
P. 278.

       We overrule this charge-error complaint.

              b.     The great weight of the evidence does not show that
                     Westview substantially relied before November 5, 2008, on
                     a promise by King-Phillips.

       In arguing that the great weight of the evidence shows that it substantially
relied to its detriment on a promise by King-Phillips, Westview maintains that the
EPI was a representation of coverage; that Westview substantially relied on the
EPI in paying Westview Forest Apartments’ share of the cost to keep the policy
from lapsing; and that Westview was harmed because it did not receive the
coverage available to a named insured.                The EPI, however, contains no
representation that Westview has any coverage. It instead addresses only the
coverage provided to named insured TTSF as of February 2008, and identifies
FirstVal as the mortgagee. Yetiv testified at trial that McGehee gave him the EPI16
without explaining the coverage that the policy might provide to Westview, and as
previously discussed, the policy did not cover Westview as a named insured or an

16
  In his deposition testimony, however, Yetiv testified that he did not recall how or from whom
he received the EPI.

                                              36
additional insured. Yetiv admitted that McGehee never told him Westview had
such coverage.

      Further, Westview was not harmed by repaying FirstVal for the portion of
the premium allocable to Westview Forest Apartments, because as FirstVal’s
successor, Westview’s interest in the property was covered to the same extent that
FirstVal’s had been. FirstVal’s interest in the property as a mortgageholder had
been covered, and so too was Westview’s. In return for the premium payment of
$6,925.56 for its share of the property coverage, Westview was paid more than
$334,000 under the mortgageholder provision of the policy.

      The great weight of the evidence instead shows that the premium payment
maintained the only coverage available for the property at that time. Sixteen days
before FirstVal sold the note on the property to Westview, Hurricane Ike struck the
area. King-Phillips’s CEO Ty Hunter explained at trial that after a natural disaster,
property insurers are unwilling to issue new policies covering property that might
have preexisting damage, and McGehee’s communications with Westview in
October 2008 occurred after the property-insurance market had “collapsed” and
“shut down” as a result of the hurricane. In his emails, McGehee explained that
property insurers would renew existing policies but were unwilling to write new
ones. King-Phillips’s insurance expert Charles Comiskey similarly testified that it
was important to maintain existing policies at that time because the “ability to go
out and replace that coverage was nonexistent.” Moreover, the insurers’ fears
about writing new property-insurance policies would have applied to this property,
because Westview itself introduced evidence that Westview Forest Apartments had
been damaged in the storm.        On the first business day after the hurricane,
FirstVal’s attorney emailed TTSF’s bankruptcy trustee that the property had been
damaged, and the trustee responded by relaying the information to others—

                                         37
including Young and McGehee—and including McGehee’s contact information
“so we can start the claims process.” There is no evidence that any property
insurer would have agreed to provide Westview with named-insured coverage in
the few weeks between the hurricane and the fire.

      We overrule this complaint.

      5.      Question 8: King-Phillips’s and Landmark’s alleged fraud

      In Question 8 of the charge, the jury was asked if King-Phillips or Landmark
committed fraud against Westview before the fire on November 5, 2008. The
charge included instructions defining “misrepresentation” and permitting the jury
to answer “yes” based on fraudulent misrepresentation or fraudulent non-
disclosure.   Westview contends that the jury’s failure to find fraud by either
defendant is against the great weight of the evidence because (a) King-Phillips
committed fraud through McGehee’s misrepresentation and non-disclosure, and
(b) Landmark ratified King-Phillips’s fraud by retaining the benefits of King-
Phillips’s unauthorized sale of Landmark’s policies from 2004 through 2008.

      Regarding King-Phillips, Westview contends that when McGehee solicited
Westview’s payment to maintain coverage in October 2008, he knew, and was
obligated to tell Westview, that the payment would not buy Westview “any
insurance.” It is undisputed, however, that in return for its payment, Westview
obtained coverage as a mortgageholder. Although Westview cites an email on
October 10, 2008, in which Westview allegedly “specifically stated that it was
willing to make the requested premium payment if it could be assured that it would
be a named insured on the policy,” the actual chronology and content of the emails
exchanged show that no one asked McGehee if Westview could become a named
insured until after the premium had been paid on Westview’s behalf and with
Westview’s agreement.
                                        38
      The record shows that Quinlan emailed Yetiv that morning, “I have always
thought that insurance ends with a change of ownership and that, therefore, there
would have to be some agreement from the insurer to change the named
insured. . . . Where is the contractual liability to pay?” (emphasis added). Yetiv
responded to that question only after he had authorized FirstVal to pay the
premium finance company Westview’s share of the premium and FirstVal
confirmed that it had wired the payment. Yetiv then asked Young, “Can we get a
commitment from the insurance company/agent to submit Evidence of Insurance
according to the terms you described naming Westview Drive Investments, LLC,
as insured for the periods of time we discussed?” Young forwarded the email
chain to McGehee, then added, “I assume you will have to name them as an
additional insured to the policy.” When McGehee responded several hours later,
he said he did not know the answer, and that he wanted the carriers to answer the
question. By answering, “I don’t know,” McGehee neither misrepresented the
scope of coverage nor failed to disclose information. Moreover, Westview could
not have relied on McGehee’s answer, because Westview already had paid the
premium through FirstVal. And, because McGehee did not commit fraud, King-
Phillips also did not commit fraud.

      As for Landmark, Westview argues that the insurer committed fraud by
ratification, but as we have just seen, there was no underlying fraud to ratify.
Westview asserts that Landmark also ratified fraud by King-Phillips in that, from
2004 through 2008, King-Phillips sold Landmark policies without Landmark’s
authorization; however, no such issue was tried.

      We overrule this factual-sufficiency complaint.

                                        39
      6.     Question 10:     Landmark’s alleged unfair or deceptive act or
             practice

      In Question 10, the jury was asked if Landmark engaged in an unfair or
deceptive act or practice that caused damage to Westview. The jury answered,
“No.” Westview contends that this answer is against the great weight of the
evidence because between 2009 and 2011 Landmark neither investigated
Westview’s demands for proceeds covering “dead files,” “important papers,”
“business interruption,” and “maintenance tools and supplies,” nor attempted in
good faith to make a prompt, fair, and equitable settlement of those claims.

      As we have seen, Westview had coverage only as a mortgageholder, and of
the challenged categories of damages, only “maintenance tools and supplies” falls
within the coverage afforded to mortgageholders. Because the policy did not
afford Westview coverage for its business interruption or the loss of “dead files” or
“important papers,” Landmark had no duty to investigate or attempt to settle those
claims.

      As for Westview’s maintenance tools and supplies, the overwhelming
evidence shows that any investigative or payment delays were caused by Yetiv.
Yetiv sent Landmark’s adjuster McRae a “Summary of Remaining Claims” on
October 26, 2009. The summary was written in three columns: “Description of
The Personal Property Lost in the Fire,” “Basis of Value Estimate,” and
“Estimated Value.”      The last row of the summary included the following
description of lost personal property:

      Other office contents—furniture and office equipment including
      computers, printers, internet equipment, telephones, file cabinets,
      office supplies etc. In addition, we stored extensive maint supplies
      and maintenance equipment in the leasing office, and keys to all apts,
      the replacement of which has been very costly. Please note that the
      $70,000 estimate is a very rough estimate—I could be high or low. I
                                         40
      could look up credit card statements and prepare the spreadsheet that I
      discuss in the next column to come up with a more reliable estimate.
      But I don’t want to do that until I know we are heading in the right
      direction by doing this.
In support of this estimate, Yetiv referred McRae to documents Yetiv said were
“lists prepared by two members of the office staff (but not by me).” The lists were
handwritten in Spanish and contained no mention of any item’s value. McRae
wrote to Yetiv on November 23, 2009 that further documentation was required, to
include a legible itemized list of the damaged business personal property, its cost,
its age, and any receipts or photographs to document the loss.

      Yetiv did not respond to the request for further documentation for a year and
a half.   On June 2, 2011, he sent a spreadsheet to McRae, and his email
transmitting the spreadsheet begins, “First, thanks for your patience in allowing me
the extra time to respond to your letter of 11/23/2009 . . . .” Landmark then paid
for the items that were properly documented.

      We overrule this issue. Having now disposed of all of Westview’s appellate
complaints, we affirm the take-nothing judgment against it.

                                IV. YETIV’S APPEAL

      In three issues, Yetiv challenges the trial court’s orders sanctioning him. We
review a trial court’s sanctions orders for abuse of discretion. See Reule v. M & T
Mortg., 483 S.W.3d 600, 624 & n.6 (Tex. App.—Houston [14th Dist.] 2015, pet.
denied); In re S.M.V., 287 S.W.3d 435, 442 (Tex. App.—Dallas 2009, no pet.).
The trial court abuses its discretion if its ruling is not based on some evidence or is
contrary to the only permissible view of properly admitted, probative evidence.
See Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (per curiam)
(citing In re Barber, 982 S.W.2d 364, 366 (Tex. 1998) (orig. proceeding)).

                                          41
A.     Factual Background

       The events culminating in the sanctions order began when, on the second
day of trial, Yetiv stated for the first time that he delayed reporting the fire for two
months on the advice of Westview’s attorney Edward Rothberg.                     Landmark
responded by serving Rothberg with a subpoena deuces tecum requiring him to
appear at trial with Westview’s file.             Landmark’s attorney Bruce Wilkin
specifically wished to see the correspondence between Rothberg and Westview
from the day after the fire until the day the fire was reported. A similar subpoena
was sent to the law firm where Rothberg worked during that time. Westview
moved to quash the subpoenas deuces tecum on the grounds, among others, that
the subpoenas invaded the attorney-client privilege.17 In answer to that objection,
Landmark’s and King-Phillips’s attorneys argued that Yetiv waived Westview’s
privilege when he testified about Rothberg’s legal advice, and that the crime-fraud
exception to the attorney-client privilege applied. See TEX. R. EVID. 503(d)(1)
(providing an exception to the privilege “[i]f the lawyer’s services were sought or
obtained to enable or aid anyone to commit or plan to commit what the client knew
or reasonably should have known to be a crime or fraud”).

       The trial court partially denied the motion to quash, ruling that Yetiv’s
testimony both waived the attorney-client privilege and established that the crime-
fraud exception applied to certain communications. The trial court specifically
referred to bankruptcy fraud and insurance fraud. Yetiv requested an evidentiary
hearing to determine whether the crime-fraud exception applied, and the trial court

17
   Yetiv also objected that Landmark, in response to requests for disclosures, had identified
Rothberg as Westview’s bankruptcy attorney, but had sought no discovery from him and did not
identify him as a witness. Landmark overcame that objection by pointing out that Rothberg was
not identified in Westview’s disclosure responses as “a person having any knowledge
whatsoever.”

                                             42
responded, “It’s my practice that I, of course, allow someone who’s been implicitly
or explicitly accused of something to definitely have their say.”

      The next day, the trial court heard Yetiv’s and Rothberg’s testimony outside
the jury’s presence. In response to questions from the trial court, Yetiv testified
that he had wanted to obtain an EPI listing Westview as a named insured or an
additional insured before reporting the fire. He stood by his earlier testimony, “I
thought if we revealed the fire, they would say: No way we’re doing that.” King-
Phillips’s attorney read Yetiv’s testimony to Rothberg, including Yetiv’s statement
that Rothberg and Quinlan had agreed that it would be best to get an EPI in
Westview’s name before reporting the fire. Rothberg was asked if he had agreed
with Yetiv that it was best not to reveal the fire, and he testified that he had no
recollection of discussions so long ago. Rothberg also stated that if he had been
asked, he would have said that a company, situated as Westview was at the time of
the fire, had no duty to report the fire to the bankruptcy trustee. Rothberg was not
asked whether he would have said that such a company had a duty to report the fire
to the insurance agency or the insurer. After the hearing, the trial court again ruled
that the crime-fraud exception applied.

      The next day—a Friday on which the trial was in recess—Yetiv wrote an
email threatening to contact Wilkin’s superiors and file grievances with the State
Bar against him and his firm unless, by noon on the following Monday, Wilkin
announced in open court, in language to be agreed upon, that there was no legal or
factual basis for Wilkin’s “allegations”; that Wilkin was sorry for having made
them; and that Wilkin withdrew them entirely. Yetiv sent the email to Wilkin, to
Westview’s other trial attorney Michael Yanochik, and to John Quinlan.

      Wilkin did not make the statement Yetiv demanded.

                                          43
      After all parties rested on Monday morning, Wilkin’s co-counsel Stephen
Wedemeyer brought Yetiv’s email to the trial court’s attention.           Wedemeyer
argued that the email violated Rule 4.04(b)(1) of the Texas Disciplinary Rules of
Professional Conduct, which provides that “[a] lawyer shall not present, participate
in presenting, or threaten to present . . . criminal or disciplinary charges solely to
gain an advantage in a civil matter . . . .” See TEX. DISCIPLINARY RULES PROF’L
CONDUCT R. 4.04(b)(1), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit. G, app.
A (West 2013) (Tex. State Bar R. art. X, § 9). Noting that a show-cause hearing
already had been set on whether to sanction Quinlan for violating the trial court’s
limine orders, Wedemeyer asked the trial court to “take this up at the same time
after the jury gets the case.” Yetiv responded that it was Wilkin who had violated
the Rule 4.04; that there was nothing improper about contacting Wilkin’s
superiors; and that “it is absolutely my right to file a grievance” against Wilkin.

      While the jury was deliberating the next day, Landmark’s and King-
Phillips’s attorneys briefly argued that Yetiv’s email violated Disciplinary Rule
4.04, and Yetiv responded that the email spoke for itself. After accepting the
jury’s verdict, the trial court ordered Yetiv to appear before it to show cause why
the trial court should not sanction him. In the show-cause order, the trial court
expressly relied upon its inherent power to sanction and upon Canon 3(D) of the
Code of Judicial Conduct, which provides that “[a] judge who receives information
clearly establishing that a lawyer has committed a violation of the Texas
Disciplinary Rules of Professional Conduct should take appropriate action.” See
TEX. CODE JUD. CONDUCT, Canon 3(D)(2), reprinted in TEX. GOV’T CODE ANN.,
tit. 2, subtit. G, app. B (West 2013).

      At the show-cause hearing, Yetiv testified that the email did not violate Rule
4.04 because his motive for threatening to file a grievance against Wilkin was not

                                          44
to gain an advantage in the litigation. He stated that his intentions were to clear his
name and “to find out if Mr. Wilkin had made an honest mistake or had done
something improper that would trigger an obligation to report it to the State Bar.”
At the conclusion of the hearing, the trial court announced some initial findings,
ordered Yetiv to complete twelve hours of continuing legal education on ethics,
and stated that the court would refer the matter to the State Bar. Two weeks later,
the trial court issued a written order containing these sanctions and additionally
ordering Yetiv to pay Landmark’s and King-Phillips’s reasonable attorneys’ fees
incurred “as a result of the proceedings arising from [Yetiv’s email].” The trial
court invited Yetiv’s opposing counsel to file attorney-fee affidavits, and stated a
deadline for Yetiv to file a controverting affidavit.

      Before the matter of the email finally was resolved, the trial court issued two
more orders and held one more hearing. After Yetiv controverted the amount only
of Landmark’s attorney’s fees, the trial court ordered Yetiv to pay King-Phillips’s
attorney’s fees and issued supplemental findings of fact in support of that order.
The trial court heard evidence on the amount of Landmark’s reasonable and
necessary attorney’s fees, and then issued an order and supporting findings
requiring Yetiv to pay that amount. The trial court incorporated its sanctions
rulings in the final judgment. Yetiv asks us to reverse all three sanctions orders.

      The trial court based the sanctions primarily on its findings that (1) Yetiv
threatened to file a grievance against Wilkin for the sole purpose of gaining an
advantage in this case, (2) sending the threatening email was an abusive tactic
intended to obstruct justice, (3) Yetiv abused the judicial process, (4) his conduct
delayed the orderly and expeditious proceedings in the case, and (5) the court’s
information clearly established that Yetiv violated Rule 4.04 of the Texas
Disciplinary Rules of Professional Conduct. As in the show-cause order, the trial

                                          45
court expressly stated that it sanctioned Yetiv pursuant to its inherent power and
Judicial Canon 3(D)(2).

B.    Sanctions Under the Trial Court’s Inherent Power

      In Yetiv’s first issue, he contends that the trial court abused its discretion in
sanctioning him under its inherent power. Courts have the inherent power to
discipline attorneys by imposing sanctions. See In re Bennett, 960 S.W.2d 35, 40
(Tex. 1997) (orig. proceeding) (per curiam). This includes the power to sanction
individuals for abusing the judicial process or to ensure an adversarial proceeding.
See id. (collecting cases). A court also may employ sanctions to aid in the exercise
of its jurisdiction, in the administration of justice, or in the preservation of the
court’s independence and integrity. See id.; Eichelberger v. Eichelberger, 582
S.W.2d 395, 398 (Tex. 1979); Clark v. Bres, 217 S.W.3d 501, 512 (Tex. App.—
Houston [14th Dist.] 2006, pet. denied).

      1.     Bad faith abuse of the judicial process

      In Yetiv’s first argument for reversal of sanctions imposed pursuant to the
trial court’s inherent power, Yetiv focuses on bath faith abuse of the judicial
process. A trial court has discretion to use its inherent power to sanction “to the
extent necessary to deter, alleviate, and counteract bad faith abuse of the judicial
process, such as any significant interference with the traditional core functions of
Texas courts.” White v. Zhou Pei, 452 S.W.3d 527, 546 (Tex. App.—Houston
[14th Dist.] 2014, no pet.).     These traditional core functions include hearing
evidence, deciding issues of fact raised by the pleadings, deciding questions of law,
rendering final judgment, and enforcing its judgments. See id. Yetiv maintains
that the trial court can use its inherent power to sanction only if it finds that the
conduct at issue interfered with one of these five functions, but as we have just

                                           46
seen, this is not an exhaustive list.             See In re Bennett, 960 S.W.2d at 40;
Eichelberger, 582 S.W.2d at 398.18

       As In re Bennett illustrates, a trial court can properly find that an attorney
abused the judicial process even if the trial court does not find that the attorney
significantly interfered with its traditional core functions of hearing evidence,
deciding issues of fact or law, or rendering and enforcing judgments. To avoid
Nueces County’s local rule requiring random assignment of cases, the attorney in
Bennett filed seventeen lawsuits. See In re Bennett, 960 S.W.2d at 36. When the
seventeenth suit was assigned to a judge that the attorney believed would be
sympathetic, he amended the petition to add approximately seven hundred
plaintiffs and then filed notices of nonsuit in the other sixteen lawsuits. Id. at 36–
37. Judge Bennett, to whom the first case was assigned, found that the attorney
had abused the judicial process by knowingly and intentionally violating the local
random-assignment rule. See id. at 37, 39. The Texas Supreme Court upheld the
trial court’s sanctions under its inherent powers, explaining that the attorney’s
“conduct, if tolerated, breeds disrespect for and threatens the integrity of our
judicial system.” Id. at 40.

18
   The trial court also found that the email caused it “to expend valuable judicial resources of
time and effort to investigate the incident” by drafting and serving the show-cause order, holding
the show-cause hearing, drafting the sanctions orders, and holding an evidentiary hearing on
Landmark’s attorney’s fees. We agree with Yetiv that the trial court could not properly sanction
Yetiv under its inherent powers solely because it expended judicial resources in sanction-related
proceedings. Drafting and serving the show-cause order and holding the show-cause hearing
were prerequisites to the trial court’s exercise of its inherent power to sanction, not its
justification. See Greene v. Young, 174 S.W.3d 291, 298 (Tex. App.—Houston [1st Dist.] 2005,
pet. denied) (stating that due process requires a trial court to provide notice and an opportunity to
be heard before imposing sanctions pursuant to its inherent power). If an attorney or litigant
interfered with the trial court’s core judicial functions any time his conduct prompted a show-
cause hearing, then the mere holding of a show-cause hearing would condemn him rather than
protect his right to due process. As discussed further infra, however, other findings support the
trial court’s exercise of its inherent power to sanction Yetiv.

                                                 47
       For similar reasons, we conclude that the trial court did not abuse its
discretion in sanctioning Yetiv under its inherent power.                This conclusion is
supported by the trial court’s findings that (a) Yetiv threatened to file a grievance
against Wilkin solely to gain an advantage in this case, (b) sending the threatening
email was an abusive tactic intended to obstruct justice, and (c) Yetiv abused the
judicial process. In his email, Yetiv threatened to contact opposing counsel’s
employer and file grievances against opposing counsel and the attorney’s law firm
unless the attorney not only withdrew his successful arguments on his client’s
behalf, but also argued in favor of an adversarial party’s position, in open court,
and in words approved by Yetiv. Yetiv further pointed out that Quinlan was a
client of Winstead P.C., the other attorney’s law firm, and said that “[if Quinlan’s]
name appears in the record, I suspect he may wish to do the same, which may be
especially disconcerting to Winstead given the fact that [Quinlan] is a Winstead
client and has paid Winstead around $100,000 in fees.”19 In sum, Yetiv attempted
to coerce opposing counsel into acting as the mouthpiece for the adverse party. A
lawyer who attempts to coerce a person into recanting and reversing the person’s
unfavorable in-court statements undermines the integrity of the judicial system just
as surely when the targeted person is an adverse attorney as when the person is an
adverse witness.

       2.     Sufficiency of the trial court’s findings

       Yetiv also contends that the trial court cited no evidence in support of its
finding regarding abuse of the judicial process; however, he cites no authority
holding that, when sanctioning a person pursuant to its inherent power, the trial
court must describe the evidence on which it relied. But cf. Zeifman v. Michels,
19
  Yetiv stated that he “suspect[ed]” that Quinlan would complain to Winstead, but because
Yetiv sent the email to Quinlan, it might be more apt to say that Yetiv “suggested” that Quinlan
complain to Winstead.

                                              48
212 S.W.3d 582, 588 (Tex. App.—Austin 2006, pet. denied) (“The court must
make findings on each material issue raised by the pleadings and evidence, but not
on evidentiary issues.”); In re Marriage of Edwards, 79 S.W.3d 88, 95 (Tex.
App.—Texarkana 2002, no pet.) (“[A]n evidentiary issue is one the trial court may
consider in deciding the controlling issue, but is not a controlling issue itself.”).
Moreover, the trial court quoted Yetiv’s email in its sanctions order, and the email
itself supports the trial court’s findings.

       3.     Sufficiency of the evidence to support the findings

       Yetiv additionally argues that the trial court erred in finding that he
threatened Wilkin with sanctions solely to gain an advantage in the case.
According to Yetiv, he was motivated by an attempt to clear his name from the
suggestion that he had engaged in a crime or fraud. The most telling piece of
evidence on this issue is the email itself. We conclude that the face of the email
and the inferences reasonably drawn from it support the trial court’s finding.

       Yetiv stated in the email, “I normally would have reserved this
communication for after trial but I can’t do that because I want the above statement
in the record before trial ends.” If Yetiv was motivated by an intent to clear his
name, then a post-trial statement would have been just as effective as a statement
made during trial.

       From the course of these proceedings and from the content of the email, the
trial court reasonably concluded that Yetiv was trying to accomplish by coercion
what he failed to accomplish by argument or by evidence—namely, changing the
trial court’s ruling. The only evidence to the contrary is Yetiv’s testimony about
his motivation, but the trial court found that Yetiv was “not a credible witness” and
that “[t]he manner in which he conducted himself while giving testimony showed

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his testimony to be untrustworthy.”20 See Stearns v. Martens, 479 S.W.3d 541,
556 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (stating that a trial court acts
within its discretion in determining the credibility of the sanctioned individual’s
evidence).

          Yetiv also devotes much of his brief to arguments that he did not commit
insurance fraud or bankruptcy fraud. Because no such finding was made, implied,
or requested in the trial court, that issue is not properly before us.21 The issue
presented instead is whether the trial court abused its discretion in sanctioning
Yetiv. The trial court did not sanction him for committing a crime or for fraud; it
sanctioned him for using an abusive tactic intended to obstruct justice and for
abusing the judicial process. Yetiv has not demonstrated that the trial court abused
its discretion in doing so.

C.        Sanctions Under Judicial Canon 3(D)(2)

          Judicial Canon 3(D)(2) provides that “[a] judge who receives information
clearly establishing that a lawyer has committed a violation of the Texas
Disciplinary Rules of Professional Conduct should take appropriate action.” The
Canon does not specify what constitutes “appropriate action.”

          The trial court took two actions pursuant to the Judicial Canon. First, the
trial court ordered Yetiv to complete additional continuing legal education on the
topic of ethics. Second, the trial court directed the clerk of the court to forward to
20
     Italics omitted.
21
  Contrary to Yetiv’s assumptions, the trial court’s ruling that certain documents, if in existence,
were discoverable under the crime-fraud exception to attorney-client privilege is not the
equivalent of a finding that Yetiv in fact committed a criminal or fraudulent act. Compare
Horizon Shipbuilding, Inc. v. BLyn II Holding, LLC, 324 S.W.3d 840, 850 (Tex. App.—Houston
[14th Dist.] 2010, no pet.) (describing the elements of fraud by nondisclosure) with In re Gen.
Agents Ins. Co. of Am., Inc., 224 S.W.3d 806, 819 (Tex. App.—Houston [14th Dist.] 2007, orig.
proceeding) (describing the showing necessary to bring evidence within the crime-fraud
exception to attorney-client privilege).

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the State Bar’s Chief Disciplinary Counsel a transcript of the show-cause hearing
and certified copies of the show-cause order, the sanctions order, and the exhibits
offered at the show-cause hearing. Because those orders have been carried out,
Yetiv’s appeal of those portions of the sanctions order is moot.

      Yetiv nevertheless contends in his second issue that the trial court abused its
discretion “when it decided to pursue the sanctions prosecution rather than refer
the matter to the State Bar,” thereby committing “an impermissible ‘judicial end
run’ around the well-established grievance rules and system.” But once received
by the State Bar’s Chief Disciplinary counsel, the materials that the trial court
ordered forwarded to that office became, by definition, “a grievance.” See TEX.
RULES DISCIPLINARY P. R. 1.06(R), reprinted in TEX. GOV’T CODE ANN., tit. 2,
subtit. G, app. A-1 (West 2013) (defining a “grievance” as “a written statement,
from whatever source, apparently intended to allege Professional Misconduct by a
lawyer, or lawyer Disability, or both, received by the [State Bar of Texas’s] Office
of the Chief Disciplinary Counsel”); TEX. RULES DISCIPLINARY P. R. 1.06(W)(1)
(defining “Professional Misconduct” to include any violation of the Texas
Disciplinary Rules of Professional Conduct).         Far from circumventing the
grievance system, the trial court ordered a grievance referred to the appropriate
authority.

      In arguing that the trial court made a “judicial end run” around the grievance
system, Yetiv may have intended to imply that if an attorney’s alleged misconduct
properly can be made the subject of a grievance, then the trial court is limited to
referring the matter to disciplinary authorities and cannot use its inherent power to
sanction the same conduct. We cannot imply such a rule. Courts have the inherent
power to discipline attorneys, and the Texas Supreme Court has addressed some
violations of the disciplinary rules under both the State Bar’s disciplinary system

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and its own inherent powers. See, e.g., Merrell Dow Pharm., Inc. v. Havner, 953
S.W.2d 706, 732–33 (Tex. 1997) (order on denial of reh’g) (ordering attorneys
who filed a motion for rehearing attacking the court’s integrity to show cause why
the court should not refer them to disciplinary authorities and impose monetary
penalties).

      Although Yetiv concedes that the Judicial Canons empower the trial court to
refer an attorney’s violation of the disciplinary rules to the Chief Disciplinary
Counsel, he argues in his third issue that he did not violate Disciplinary Rule 4.04
as the trial court found. It is unnecessary for us to address that question further,
because it can make no difference to the outcome of this appeal. See TEX. R. APP.
P. 47.1 (requiring the appellate court to address “every issue raised and necessary
to final disposition of the appeal”). The trial court already has acted on the finding
by referring the matter to the Office of the Chief Disciplinary Counsel, and the
question of whether Yetiv violated a disciplinary rule will be addressed through the
grievance process. Yetiv cites no authority in which a court held that a judge
abused his or her discretion by referring an alleged rule violation to the Office of
the Chief Disciplinary Counsel. He also cites no authority that this court could
rescind another court’s referral of such a matter.

      We overrule each of the issues presented in Yetiv’s appeal, and affirm the
trial court’s sanctions orders.

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                                 V. CONCLUSION

      We conclude that Westview has not shown that any of the trial court’s
rulings were erroneous or that the jury’s failure to find any basis for liability is
against the great weight of the evidence. We further conclude that the trial court
did not abuse its discretion in sanctioning Yetiv. We accordingly affirm the trial
court’s judgment.

                                      /s/    Tracy Christopher
                                             Justice

Panel consists of Justices Boyce, Christopher, and Jamison.

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