law-sanctions-courts-inherent-power | sanctions on appeal | frivolous appeal | sanctions case law |


STANDARD OF REVIEW ON APPEAL OF ORDER IMPOSING SANCTIONS

We review a trial court’s imposition of sanctions for an abuse of discretion. Low v. Henry, 221 S.W.3d 609,
614 (Tex. 2007).  A trial court abuses its discretion in imposing sanctions when it acts “without reference to
any guiding rules and principles, such that its ruling was arbitrary or unreasonable.”  Id.  We presume that
pleadings are filed in good faith, and the party seeking sanctions bears the burden of overcoming this
presumption.  Id.  In reviewing the sanctions order, we review the entire record to determine whether the trial
court abused its discretion.  Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006) (per
curiam).


SANCTIONS ENTERED BASED ON COURT'S INHERENT POWER

    If a sanction order refers to a specific rule, either by citing the rule, tracking its language, or both, we
determine whether the sanction is appropriate under that particular rule.  Finlay v. Olive, 77 S.W.3d 520,
524 (Tex. App.—Houston [1st Dist.] 2002, no pet.).   In this case, the trial court’s sanction order does not
specify the rule used to sanction Harmouch, nor does it track the language of any rule. Woodlake urged the
trial court to sanction Harmouch under its inherent power.  The alleged sanctionable conduct does not
involve discovery proceedings or the content of a pleading.  The trial court’s inherent power thus appears to
be the source of authority for its sanction.  See Houtex Ready Mix Concrete & Materials v. Eagle Constr. &
Envtl. Servs, L.P., 226 S.W.3d 514, 524 (Tex. App.—Houston [1st Dist.] 2006, no pet.); see also Kings Park
Apts, Ltd. v. Nat’l Union Fire Ins. Co., 101 S.W.3d 525, 541 (Tex. App.—Houston [1st Dist.] 2003, pet.
denied).

    A trial court has the inherent power to sanction a party for an abuse of the judicial process even when
the party’s conduct is not covered by a specific rule or statute.  In re Bennett, 960 S.W.2d 35, 40 (Tex.
1997) (per curiam); Houtex, 226 S.W.3d at 524 (citing Island Entm’t, Inc. v. Castaneda, 882 S.W.2d 2, 5
(Tex. App.—Houston [1st Dist.] 1994, writ denied)).  This inherent power allows trial courts to impose
sanctions to the extent necessary to deter, alleviate, and counteract “bad faith abuse” of the judicial
process, i.e., when a party significantly interferes with the court's legitimate exercise of its core functions.  
Houtex, 226 S.W.3d at 524.  

    Bad faith is more than bad judgment or negligence. Elkins v. Stotts-Brown, 103 S.W.3d 664, 669 (Tex.
App.—Dallas 2003, no pet.); Campos v. Ysleta Gen. Hosp., Inc., 879 S.W.2d 67, 71 (Tex. App.—El Paso
1994, writ denied).  To show bad faith, the moving party must present evidence of conscious wrongdoing for
a dishonest, discriminatory, or malicious purpose.  Mattly v. Spiegel, Inc., 19 S.W.3d 890, 896 (Tex. App.—
Houston [14th Dist.] 2000, no pet.).  In Houtex, we upheld the trial court’s decision to impose sanctions
against the plaintiff’s attorney based on its inherent authority.  226 S.W.3d at 524–25.  The attorney there
failed to notify opposing counsel that he would be absent from a hearing even though the attorney knew
days in advance he would be unavailable.  Id. at 524.  As a result, his opposing counsel needlessly traveled
720 miles roundtrip to attend the hearing.  Id.  We held that evidence existed that the attorney acted in bad
faith in his failure to notify opposing counsel of his absence.  Id.; cf. Onwuteaka v. Gill, 908 S.W.2d 276,
280–81 (Tex. App.—Houston [1st Dist.] 1995, no pet.) (reversing sanction award because record contained
no evidence attorney acted in bad faith when he was late to trial, although his conduct may have been
negligent); McWhorter v. Sheller, 993 S.W.2d 781, 789 (Tex. App.—Houston [14th Dist.] 1999, pet. denied)
(reversing sanction award because record contained no evidence attorney acted in bad faith when she
recorded phone call between trial court, opposing counsel and herself so that she would draft order in
accordance with instructions given by trial court during call); Island Entm’t, Inc., 882 S.W.2d at 5 (reversing
sanction award because record contained no evidence party acted in bad faith when party breached
settlement agreement after mediation).

    The core functions of trial courts include hearing evidence, deciding issues of fact raised by the
pleadings, deciding questions of law, entering final judgments, and enforcing judgments.  Island Entm’t, Inc.,
882 S.W.2d at 5; compare Phillips & Akers, P.C. v. Cornwell, 927 S.W.2d 276, 280 (Tex. App.—Houston [1st
Dist.] 1996, no writ) (overturning trial court's imposition of sanctions under its inherent power to sanction
absent evidence that party “acted in a manner such as to interfere with the administration of justice or
detract from the trial court’s dignity and integrity.”) with King's Park Apts., 101 S.W.3d at 541 (upholding
sanctions against party based on allegation that party instructed a paralegal to steal documents from
chambers of special trial judge); Lawrence v. Kohl, 853 S.W.2d 697, 699–700 (Tex. App.—Houston [1st
Dist.] 1993, no writ) (upholding sanctions based on party’s failure to correct order that party knew to be
erroneous).  

    Nevertheless, trial courts should rely on rules and statutes when possible because “[t]he amorphous
nature of this power, and its potency, demands sparing use.”  Kutch v. Del Mar Coll., 831 S.W.2d 506, 510
(Tex. App.—Corpus Christi 1992, no writ), accord Crowe v. Smith, 151 S.W.3d 217, 243 (5th Cir. 1998).  
When a trial court imposes sanctions under its inherent power, it should make specific findings to support its
conclusion that the conduct complained of significantly interfered with its legitimate exercise of its core
functions.  Houtex, 226 S.W.3d at 524.



When a trial court uses its inherent powers to sanction, the trial court’s discretion is limited in the following
ways: (1) there must be a direct relationship between the offensive conduct and the sanction imposed; and
(2) the sanction imposed must not be excessive. Greiner v. Jameson, 865 S.W.2d 493, 499 (Tex. App.—
Dallas 1993, writ. denied); State v. PR Investments & Specialty Retailers Inc., 180 S.W.3d 654, 673 (Tex.
App.—Houston [14th Dist.] 2005, no pet. h.). In other words, the punishment should fit the crime; the
sanction must be directed against the abuse and toward remedying the prejudice caused to the innocent
party. Id. Because we have concluded that United waived its right to assert the pretrial complaints that
resulted in sanctions, we further conclude that the trial court must reassess the sanctions imposed to
address only the sanctionable conduct that occurred after the commencement of trial. Moreover, we note
that United presented the same evidence regarding false documents produced by Long as a basis for the
jury to award punitive damages. The jury did so, and thus, United relies on this evidence to support the jury’
s award of punitive damages against Long. We therefore reverse the $45,000 sanctions award for
redetermination in light of the holdings in this opinion. 01-03-00034-CV

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