George A. Young and Shirley A. Young v. Texas First Bank and Mynde S. Eisen

• Court: Court of Appeals of Texas
• Decided: April 15, 2010
• Docket: 01-08-00835-CV
• Status: Published

Opinion

Opinion issued April 15, 2010.

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-08-00835-CV

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GEORGE A. YOUNG AND SHIRLEY YOUNG, Appellants

V.

Texas First Bank, Appellee[1]

On Appeal from the 212th District Court

Galveston County, Texas

Trial Court Case No. 08CV0107

MEMORANDUM  OPINION

          Appellants, George A. and Shirley Young, appeal from a final judgment rendered upon motions for summary judgment and from a post-judgment order, rendered within the trial court’s plenary power, awarding sanctions against the Youngs and to appellee, Texas First Bank (“the Bank”).  We determine whether (1) the trial court had jurisdiction over the Bank’s claims; (2) the trial court erred in rendering summary judgment on the Bank’s claims for attorney’s fees and rent; (3) the trial court erred in rendering a take-nothing judgment on the Youngs’ cross claim for wrongful foreclosure and in declaring the foreclosure of their home valid; and (4) the trial court abused its discretion in ordering that the Youngs pay the Bank sanctions.  We affirm the judgment in part, reverse it in part, and remand the case.  We further affirm the sanctions order.

BACKGROUND

          In 2005, to purchase a home in Galveston (“the property”), the Youngs executed a real estate note, payable to the Bank, for $525,000.  The note was secured by a deed of trust on the property.  The note’s maturity date was extended twice, the last extension being signed in March 2007. 

          The Youngs filed for bankruptcy in June or July 2007, and that case was dismissed with prejudice in July 2007; the dismissal order precluded refiling of bankruptcy proceedings for six months.  The Youngs defaulted on the note, after which the Bank posted the property for foreclosure.  In September 2007 and October 2007, respectively, the Youngs filed second and third bankruptcy proceedings.  Both cases were dismissed in the months that they were filed, but in the third case, the Bank sought and received an order lifting any automatic stay that may have existed.  The Bank again posted a foreclosure sale after the order lifting stay was rendered.

          For various reasons, that foreclosure did not occur and was eventually reposted for early January 2008.  In late December 2007, the Youngs sued for, and obtained, a temporary restraining order (“TRO”) against the Bank to prevent the foreclosure.  The Youngs eventually nonsuited that case, and the Bank reposted the foreclosure for early February 2008.  On February 4, 2008, the Youngs filed the instant suit against the Bank and Mynde S. Eisen, the Bank’s counsel and the substitute trustee under the deed of trust, seeking a TRO and temporary injunction to prevent the February foreclosure.  The ensuing TRO precluded the February foreclosure, which the Bank then reposted for March 4, 2008.  On February 12, 2008, the Bank counterclaimed, suing for the outstanding balance on the note. 

          On February 18, 2008, the parties entered into an agreed order dissolving the TRO, precluding the Youngs from seeking further injunctive relief to stop the foreclosure, and dismissing Eisen in her capacity as substitute trustee under the deed of trust.  The Youngs nonsuited their claims on March 17, 2008.

          Nonetheless, the Youngs filed a fourth bankruptcy on February 29, 2008, just days before the March 4 foreclosure.  On March 3, the Bank filed an emergency motion to declare that no automatic stay was in effect.  The Bank conducted the foreclosure on March 4.  The bankruptcy court later declared that the stay was not in effect at the time of the foreclosure, and the bankruptcy case was dismissed in mid-March.  The Bank was the successful bidder at the foreclosure, purchasing the property for the full amount remaining on the note. 

          After the Youngs failed to vacate the property, the Bank amended its counterclaim, seeking “judgment for forcible detainer,” possession, rent, and attorney’s fees and dropping its suit to collect on the note.  The Bank eventually amended this counterclaim again, seeking possession (citing the forcible-detainer statute), a declaration that the foreclosure sale was valid and that the Bank was entitled to possession, a writ of possession, and attorney’s fees.  The Youngs filed a “cross claim” for wrongful foreclosure, alleging that the foreclosure was void for having occurred at a time when an automatic bankruptcy stay was in effect. 

          The Bank moved for traditional summary judgment on its claims and for no-evidence summary judgment on the Youngs’ cross claim.  The trial court granted the Bank’s motions and rendered a final judgment declaring that “the foreclosure was valid to recover possession” and was not void or voidable; declaring that the trustee’s deed from the sale not be set aside; awarding “immediate possession” of the property to the Bank; awarding costs and attorney’s fees of $27,500 to the Bank, along with $30,000 total in possible appellate attorney’s fees; awarding past rent of $24,600 to the Bank and $4,100 in rent for each month that the Youngs continued in possession; and rendering a take-nothing judgment on the Youngs’ cross claim.  The court set supersedeas at $700,000 and ordered immediate issuance of a writ of possession.  The Youngs did not supersede the judgment.

          The Youngs moved for new trial and for reconsideration of the supersedeas.  The trial court denied both motions.  When the writ of possession finally issued about a week later, the Youngs sought emergency relief in this Court, which was denied, and then filed an emergency motion to vacate the writ and for sanctions in the trial court.  The Bank responded with its own motion for sanctions.  Upon hearing, the court denied the Youngs’ motion and found it frivolous, granted the Bank’s motion for sanctions, and sanctioned the Youngs in the amount of $25,000.  The Youngs appeal both the final judgment and the sanctions order.

JURISDICTION OVER FORCIBLE-DETAINER PROCEEDINGS

          In their first issue, the Youngs contend that the Bank’s suit against them was one for forcible detainer within the justice court’s exclusive jurisdiction, depriving the district court of subject-matter jurisdiction over the Bank’s suit.

A.      The Law

          Whether the trial court had subject-matter jurisdiction over some or all of the Bank’s claims is a question of law that we review de novo.  Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998).

          “‘The procedure to determine the right to immediate possession of real property, if there was no unlawful entry, is the action of forcible detainer.’”  Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 432 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (quoting Rice v. Pinney, 51 S.W.3d 705, 709 (Tex. App.—Dallas 2001, no pet.)).

          Justice courts (and county courts, in appeal by trial de novo from the justice court) have exclusive jurisdiction over proceedings for forcible detainer.  E.g., It’s the Berrys, L.L.C. v. Edom Corner, L.L.C., 271 S.W.3d 765, 770 (Tex. App.—Amarillo 2008, no pet.); Rice, 51 S.W.3d at 713.  For this reason, forcible-detainer proceedings cannot be brought in any court other than the justice court.  See It’s the Berrys, 271 S.W.3d at 770 (holding that such suit could not be maintained in district court).

          Although “a justice of the peace court has exclusive jurisdiction over forcible entry and detainer actions under the Texas Property Code,” it “does not have exclusive jurisdiction to determine the right of possession of real property, a question which may be determined in a trespass to try title action for instance.” Breceda v. Whi, 224 S.W.3d 237, 240 (Tex. App.—El Paso 2005, no pet.); McCloud v. Knapp, 507 S.W.2d 644, 647 (Tex. Civ. App.—Dallas 1974, no writ).  This is because “‘a judgment of possession in a forcible detainer action is a determination only of the right to immediate possession and does not determine the ultimate rights of the parties to any other issue in controversy relating to the realty in question.’”  Hong Kong Dev., 229 S.W.3d at 433 (quoting Lopez v. Sulak, 76 S.W.3d 597, 605 (Tex. App.—Corpus Christi 2002, no pet.)) (emphasis in original).  Accordingly, “a forcible-detainer action is cumulative of, not exclusive of, other remedies that a party may have.”  Id. at 437; see Tex. Prop. Code Ann. § 24.008 (Vernon 2000) (“An eviction suit does not bar a suit for trespass, damages, waste, rent, or mesne profits.”).  For this reason, “a forcible-detainer suit in justice court may run concurrently with another action in another court—even if the other action adjudicates matters that could result in a different determination of possession from that rendered in the forcible-detainer suit.”  Hong Kong Dev., 229 S.W.3d at 437.

          Because justice courts lack subject-matter jurisdiction to adjudicate title to land, “[w]here a claimed right of immediate possession necessarily requires resolution of a title dispute, the justice court lacks subject matter jurisdiction.”  It’s the Berrys, 271 S.W.3d at 770; see Tex. Gov’t Code Ann. 27.031(b)(4) (Vernon 2004).  If the justice court lacks subject-matter jurisdiction to adjudicate the right to immediate possession for this reason, then a forcible-detainer action may not be maintained in any court at that time, although a party may proceed in another court with some other claim to resolve title and possession.  See Breceda, 224 S.W.3d at 240; see also It’s the Berrys, 271 S.W.3d at 770.

B.      Discussion

          In its first-amended counterclaim, the Bank expressly alleged a claim seeking a “judgment . . . for forcible detainer,” but also sought “judgment . . . for possession of the Property.”  The Bank eventually amended its counterclaim to remove any mention of “forcible detainer” while still asserting a claim for “possession”; nonetheless, the Bank continued to cite the forcible-detainer statute as the basis for its possession claim.  Some of its summary-judgment pleadings and its motion to dismiss the Youngs’ cross claim also asserted the forcible-detainer statute as a basis for possession, rent, and attorney’s fees.  A district court such as the trial court here has no subject-matter jurisdiction to consider a forcible-detainer proceeding or to apply the statutes or rules applicable to such proceedings.  See It’s the Berrys, 271 S.W.3d at 770.  And even if the issues of title and immediate possession had been so intertwined that a justice court could not have entertained a forcible-detainer suit—and they were not here—that fact would not have infused the district court with jurisdiction to entertain such a suit, contrary to the Bank’s assertions here and below.  See Breceda, 224 S.W.3d at 240; see also It’s the Berrys, 271 S.W.3d at 770.

          What the district court had jurisdiction to consider, however, were claims for title and possession.  See Breceda, 224 S.W.3d at 240; McCloud, 507 S.W.2d at 647.  This is what the Bank also sought, both by pleading and by summary-judgment motion: an ultimate adjudication of the validity of the foreclosure (and thus title) and of possession.  The trial court rendered judgment declaring that the foreclosure was valid, that the substitute trustee’s deed from the foreclosure sale would not be set aside, and thus that the Bank have immediate possession of the property.  The court did use the term “immediate,” but it was obviously awarding possession based on its substantive holding adjudicating title in the Bank.  All of this the trial court had jurisdiction to do.  The trial court also awarded rent, but this claim did not fall within the exclusive jurisdiction of the justice court.  See Tex. Prop. Code Ann. § 24.008; Tex. R. Civ. P. 738.  And although the statute allowing the award of attorney’s fees in a forcible-detainer could not support the court’s award of attorney’s fees in this suit,[2] the Bank’s summary-judgment motion alleged other bases in support of its claim for attorney’s fees.

          Simply put, the Bank’s forcible-detainer pleadings and summary-judgment grounds that were outside the court’s jurisdiction did not preclude the court from rendering judgment on the Bank’s other claims and grounds that were within its jurisdiction.  We overrule issue one.

SUMMARY JUDGMENT

          In issues two and four, the Youngs contend that the trial court erred in rendering summary judgment for the Bank.

A.      Attorney’s Fees

          Under issue two, the Youngs argue that the trial court erred in awarding attorney’s fees to the Bank for two reasons: (1) there was no legal basis to support the award and (2) alternatively, a fact issue existed on the reasonableness and amount of fees.

          “Texas has long followed the ‘American Rule’ prohibiting fee awards unless specifically provided by contract or statute.”  MBM Fin’l Corp. v. Woodlands Op. Co., L.P., 292 S.W.3d 660, 669 (Tex. 2009).

          The Bank’s “live” pleading sought attorney’s fees under the note, Texas Civil Practice and Remedies Code section 38.001,[3] and the Declaratory Judgment Act.[4]  The Bank moved for summary judgment on its claim for attorney’s fees based on the forcible-detainer statute,[5] the note, and the Declaratory Judgment Act.  The Youngs challenge all bases for attorney’s fees alleged by petition or summary-judgment motion.

          The Bank’s live pleading alleged the following claim for “declaratory judgment/possession”:

[A]s the owners of the Property, [the Bank] is entitled to possession of the Property.  [The Bank] gave [the Youngs] written notice to turnover the Property, but [they] have [failed to do] so.

[The Bank] is entitled to a declaratory judgment declaring that the foreclosure sale on March 4, 2008 was a valid foreclosure sale under its Deed of Trust and declaring that the [Youngs] relinquish possession of the Property.

[The Bank] is entitled to a writ of possession granting it possession in the Property.

By its pertinent summary-judgment motion, the Bank sought a declaration that the foreclosure was valid, a determination that title was thus vested in the Bank, and a writ of possession. 

          On appeal, the Bank describes its claims as being in the nature of trespass to try title.  We agree: the Bank sought by declaration the same things available in a trespass-to-try-title action.  The Declaratory Judgment Act does not support the award of fees in this situation.  See, e.g., Martin v. Amerman, 133 S.W.3d 262, 267 (Tex. 2004); Southwest Guar. Trust Co. v. Hardy Rd. 13.4 Joint Venture, 981 S.W.2d 951, 956 (Tex. App.—Houston [1st Dist.] 1998, pet. denied).  And for the reasons discussed above, the forcible-detainer statute cannot support fees, either.[6] 

          The only remaining basis that the Bank’s motion alleged in support of its claim for attorney’s fees was the note.  The note provided:

[I]n the event default is made in the prompt payment of this note when due or declared due, and the same is placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through Probate, Bankruptcy or other judicial proceedings, then the makers agree and promise to pay a reasonable amount, not less than Ten percent (10%) additional on the amount of principal and interest then owing, as attorney’s fees.

(Emphasis added.) 

          “Texas courts do not regard agreements to pay attorney’s fees based on a percentage of the unpaid balance and interest on a promissory note as absolute promises to pay the contractual amount, but as contracts to indemnify the holder of the note for attorney’s expenses actually incurred in collecting the principal and interest on the note.”  F.R. Hernandez Constr. & Supply Co. v. Nat’l Bank of Commerce of Brownsville, 578 S.W.2d 675, 676 (Tex. 1979).  “Consequently, the obligor of the note can challenge the reasonableness of contractual attorney’s fees.”  Id.  To do so, however, “the obligor must first plead and prove that the contractual fee is unreasonable” and “must also prove a lesser amount that is reasonable under the circumstances.”  Id. at 677.

          We begin with the Bank’s summary-judgment grounds relevant to attorney’s fees on the note.  The Bank did not seek the 10 percent minimum allowed by the note’s quoted provision, with reasonable fees above that percentage.  Rather, for all three bases alleged in support of fees, the Bank sought only reasonable and necessary fees actually incurred, not a contractual percentage of the note’s remaining value.  The fact that 10 percent of the loan amount at time of foreclosure was $54,500, but that the Bank sought only the $26,424.14 that Eisen had actually incurred, reveals that the Bank was not invoking the 10-percent provision by its motion.  We strictly construe a summary-judgment motion’s grounds against the movant.  See Nexen Inc. v. Gulf Interstate Eng’g Co., 224 S.W.3d 412, 424 n.14 (Tex. App.—Houston [1st Dist.] 2006, no pet.).  Accordingly, we hold that the Bank’s summary-judgment motion did not seek fees under the note’s 10-percent provision, but instead sought only the Bank’s “reasonable” fees.

          Against this backdrop, the Youngs argue on appeal that

the Bank has already foreclosed, bid the full amount due, and extinguished the note.  Accordingly, the Bank amended its pleadings and dropped the suit on the note.  The Bank did not obtain a judgment on the note.  This allegation does not support an award of attorney’s fees.

The Youngs also argue that fact issues on attorney’s fees exist because, among other things, Eisen’s “affidavit does not . . . break out time [spent] prior to foreclosure from time [spent] after the foreclosure,” and they urge that “the Bank bid the full debt at the time of the foreclosure, presumably including prior attorney’s fees.”  Given the totality of the Youngs’ challenges, we liberally construe their argument that the note could not support any fees because the Bank had abandoned its claim on the note as including an argument that the note could not support at least some of the fees that the Bank sought because the Bank had abandoned its claim on the note.  See Tex. R. App. P. 38.1(f), 38.9; Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989) (“[I]t is our practice to construe liberally points of error in order to obtain a just, fair and equitable adjudication of the rights of the litigants.”).

          The Bank’s summary-judgment evidence showed that the note was payable to it; that the note and its extensions were secured by a deed of trust, on which the Bank was the holder; that the Youngs defaulted on the note; that the Bank foreclosed on the property under the deed of trust; that the Bank purchased the property at the foreclosure sale; that the Bank bid the full remaining debt of $545,000 at the foreclosure; and that Eisen was employed “to collect the claims on which this suit is based” and to foreclose on the property, which she did.  The Bank produced the note itself.  The Bank’s original counterclaim alleged a suit on the note, but that claim was nonsuited soon after foreclosure.  The Bank also tendered Eisen’s affidavit in support, which recited:

          . . . Since the foreclosure, I have incurred attorney’s fees relating to the following: [listing 15 activities occurring post-foreclosure].

          I have been a practicing attorney in Harris County, Texas for twenty-two years.  My customary hourly rate is $300.00, which is, in my opinion, a reasonable attorneys [sic] fee.  Per my agreement with [the Bank], the fees have been charged for my time at $275.00 per hour, which is a reasonable fee for handling this matter.  I and paralegals in my office have incurred (including anticipated time for the summary judgment hearing) 98.25 hours of time for a total fee of $25,874.14.  Additionally, I have incurred expenses in the amount of $3,779.64.  The total fees and expenses are $26,424.14, which are reasonable expenses for fees for this matter.  All of these fees have been necessary.

. . . .

          Eisen’s affidavit listed only post-foreclosure activities for which attorney’s fees had been incurred, most of which were patently unrelated to the nonsuited claim to collect on the note, but then listed “total fees and expenses” of a fixed amount.  This discrepancy rendered the affidavit unclear.  See Tex. R. Civ. P. 166a(c) (requiring that affidavit of interested party and of expert be clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and readily controvertible); compare also Nguyen v. Smith & Lamm, P.C., 714 S.W.2d 144, 148 (Tex. App.—Houston [1st Dist.] 1986, no writ) (“[T]he reasonableness of attorney’s fees is a question of fact and must be supported by competent [summary-judgment] evidence.”) (emphasis added).  This is important because the claim for collection on the note was nonsuited after foreclosure and the note’s relevant provision allowed for recovery of only those reasonable fees related to the note’s collection.  Cf. Estate of Montague v. Nat’l Loan Investors, L.P., 70 S.W.3d 242, 251-52 (Tex. App.—San Antonio 2001, pet. denied) (in suit on note containing 10-percent clause like that in instant case, except for omission of “not less than” qualifier, holding that note’s holder was able to recover reasonable attorney’s fees exceeding contractual percentage under same logic as in F.R. Hernandez Construction, which allows for recovery of expenses actually incurred in collecting on note).  We hold that the Bank did not conclusively prove its entitlement to obtain all of the attorney’s fees that it sought on the basis of the note—whether those fees sought were for work already rendered or for appeal.

          Given our holdings above, we need not reach the Youngs’ remaining arguments concerning fees.  We sustain the challenge under issue two regarding the award of attorney’s fees.

B.      Rent

          Also under issue two, the Youngs argue that the trial court erred in rendering summary-judgment for the Bank on its claim for rent for two reasons. 

          The Youngs first argue that because “the rent [claim] was merely ancillary to a forcible detainer suit over which the trial court had no jurisdiction,” the award for rent “should be set aside and that claim should be dismissed.”  We have already rejected this argument in our jurisdictional discussion.  See Tex. Prop. Code Ann. § 24.008; Tex. R. Civ. P. 738. 

          We overrule this argument under this portion of issue two.

          The Youngs next contend that a fact issue existed on the amount of rent.  The sole evidence of reasonable rent was the affidavit testimony of Allen Wilkenfeld, the Bank’s vice president.  That testimony, in its entirety, was: “Pursuant to Tex. Prop. Code § 24.0051 [sic], [the Bank] is entitled to receive reasonable rent for [the] Youngs’ holding over and refusal to vacate the property.  A reasonable monthly rent for the Property would be $4,500 per month.”  The Youngs contend that “[a] pure conclusion or ipse dixit such as this is no evidence whatsoever and will not support a judgment even when admitted without objection.”  We agree.  Conclusory statements by interested witnesses will not support traditional summary judgment.  See, e.g., Tex. R. Civ. P. 166a(c); Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.—Houston [1st Dist.] 1997, no pet).  This is true of both legal and factual conclusions.  See Rizkallah, 952 S.W.2d at 587.  The first sentence of Wilkenfeld’s affidavit was nothing more than a mere legal conclusion; it was also legally incorrect.  See id.  The second sentence was a factual conclusion, which is “not proper as summary judgment proof” because it “does not provide the underlying facts to support the conclusion.”  Id.  Conclusory statements such as these, by an interested witness such as Wilkenfeld, cannot support summary judgment.  See id.

          We sustain this argument under this portion of the Youngs’ issue two.

C.      Wrongful Foreclosure and Declaratory Relief

          In their issue four, the Youngs complain that the trial court erred in “granting a take-nothing judgment on [their] claim for wrongful foreclosure and in granting a declaratory judgment” that the foreclosure was valid.  In support, the Youngs argue that the Bank was not entitled to no-evidence summary judgment on the three elements of a wrongful-foreclosure suit: (1) a defect in the foreclosure sale proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price.  See Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no pet.).

          The Youngs’ “Cross Action Against Defendant” asserted that “[t]his is a suit for wrongful foreclosure sale posted under an unlawful declaration of default . . . ,” but the basis for the claim was that the foreclosure was void for having occurred at a time when an automatic bankruptcy stay was allegedly in effect.  The Bank moved for no-evidence summary judgment on this cross claim on the bases, among others, that no evidence showed that (1) an automatic bankruptcy stay was in effect when foreclosure occurred or (2) the foreclosure was void.  Although the clerk’s record does not contain a response by the Youngs to this motion, their earlier responses to the Bank’s other summary-judgment motions (1) described their cross claim as an “affirmative defense,” (2) alleged that the foreclosure was void for having occurred during the bankruptcy stay, and (3) attached the bankruptcy court’s “Order Declaring That No Automatic Stay Exists,” which mistakenly declared both that “no stay is imposed” and that “the bankruptcy stay is in effect.”  Of course, in reply the Bank produced the corrected bankruptcy court order declaring that the stay was not in effect on the date of foreclosure. 

          It is surely for this reason that the Youngs do not reassert on appeal their sole argument and claim below, which was that the alleged bankruptcy stay voided the foreclosure sale.  Rather, they contend that the foreclosure was wrongful because the Bank did not give sufficient notice, the price was grossly inadequate, and the lack of sufficient notice was presumed to have contributed to an inadequate price.  These matters were not alleged as a basis for their cross claim, and they are non-responsive to the summary-judgment grounds attacking that claim.  Additionally, the Youngs did not raise new bases for their cross claim in any summary-judgment response, meaning that no new bases for the claim could have been tried by consent.  See Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) (“When [the plaintiff-nonmovant] asserted the discovery rule for the first time in its summary judgment response, [the defendant-movant] had two choices: it could object that the discovery rule had not been pleaded, or it could respond on the merits and try the issue by consent.”).  Finally, the evidence of fair-market value on which the Youngs rely on appeal is an appraisal attached to a response to a motion separate from the summary-judgment pleadings.  They did not point to this evidence in any summary judgment response.  See Plotkin v. Joekel, No. 01-06-00624-CV, 2009 WL 3152093, at *15 & n.12 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (holding that nonmovant must point to evidence that it contends defeats no-evidence summary judgment). 

          We overrule issue four.

SANCTIONS

          In issue three, the Youngs argue that the trial court erred in awarding sanctions in the amount of $25,000 against them.

A.      Procedural Background

          The trial court’s final judgment of July 31, 2008 awarded “immediate possession” to the Bank and ordered that a writ of possession issue “upon entry of this judgment.”  The Youngs have never superseded that judgment.  The trial court denied the Youngs’ motion for new trial on October 7, 2008. 

          The writ of possession was served on October 13, 2008 and ordered the Youngs to vacate by the next afternoon.  On October 15, 2008, the Youngs moved for emergency relief in this Court, which motion was denied the same day.  That day or the next, the writ was executed, and the Youngs’ furniture was removed from the property to a storage facility.  On October 16, 2008, the Youngs moved the trial court to vacate the writ of possession, to stay further proceedings, and to have the Bank sanctioned.  They urged that the writ had issued prematurely, in violation of Texas Rule of Civil Procedure 627.  See Tex. R. Civ. P. 627.  The Youngs sought an order vacating the writ of possession, an order to return their property to the house, an order that no execution could issue until 30 days from the overruling of the motion for new trial (i.e., until just over two weeks from the motion’s scheduled hearing), and sanctions against the Bank and Eisen for their conduct in wrongfully taking the Youngs’ property. 

          The Bank responded to the motion, asserting, among other things, that the writ was properly issued under the forcible-detainer statute, which allows a writ’s issuance if the judgment has not been superseded within 10 days.  The Bank moved for sanctions in the amount of $25,000, representing “both expenses from potential mechanics & materialmen’s liens and attorney’s fees.” 

          The trial court heard both motions on October 20, 2008, four or five days after the writ’s execution.  The Bank put on testimony of Wilkenfeld in support of its motion.  The trial court denied the Youngs’ motion, granted the Bank’s motion for sanctions, and awarded sanctions against the Youngs for $25,000, reciting that the Youngs’ motion was “without merit and frivolous.”  The order did not specify under what authority—Texas Rule of Civil Procedure 13 or Texas Civil Practice and Remedies Code chapter 10—sanctions were being imposed.  See Tex. Civ. Prac. & Rem. Code Ann. §§ 10.002, 10.004 (Vernon 2002); Tex. R. Civ. P. 13.  Nor did the order include findings as to what the bases of the sanction were.  See Tex. Civ. Prac. & Rem. Code Ann. § 10.005 (Vernon 2002) (requiring court to describe in sanctions order sanctionable conduct and basis for sanction); Tex. R. Civ. P. 13 (requiring that sanctions order state particulars of good cause supporting sanctions).  However, the Youngs do not complain of these omissions on appeal.  See Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993) (“We have held repeatedly that the courts of appeals may not reverse the judgment of a trial court for a reason not raised in a point of error.”).

B.      The Law

          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).  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).

          Under rule 13, the signatures of attorneys or parties “constitute a certificate by them” that they have read the pleading, motion, or other paper that they are filing and that, to the best of their knowledge, information, and belief and after reasonable inquiry, “the instrument is not groundless and brought in bad faith or groundless and brought for the purpose of harassment.”  Tex. R. Civ. P. 13.  “Courts shall presume that pleadings, motions, and other papers are filed in good faith.”  Id.  A pleading is “groundless” when it has “no basis in law or fact and [is] not warranted by good faith argument for the extension, modification, or reversal of existing law.”  Id.  To show bad faith, the movant must show 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.).  Rule 13 sanctions may be imposed only for good cause.  Tex. R. Civ. P. 13.  

          “If a pleading, motion or other paper is signed in violation of [rule 13], the court, upon motion or upon its own initiative, after notice and hearing, shall impose an appropriate sanction available under [Texas Rule of Civil Procedure] 215 upon the person who signed it, a represented party, or both.”  Id.  Rule 215, which concerns abuse of the discovery process, allows a trial court to assess such sanctions “as are just” against a party, which may include discovery expenses and “the reasonable expenses, including attorney fees, caused by the failure” to obey a discovery order.  Tex. R. Civ. P. 215.2(b). Rule 13 requires that sanctions be “appropriate,” which is the equivalent of “just” under rule 215.  GTE Communications Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993).  A two-part test determines whether a sanction is just: (1) there must be a direct nexus between the improper conduct and the sanction imposed and (2) the award must not be excessive.  Low, 221 S.W.3d at 614; TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991).

          Under chapter 10,

[t]he signing of a pleading or motion . . . constitutes a certificate by the signatory that to the signatory’s best knowledge, information, and belief, formed after reasonable inquiry:

          (1)     the pleading or motion is not being presented for any improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation;

. . .

Tex. Civ. Prac. & Rem. Code Ann. § 10.001(1) (Vernon 2002).  When a party prevails on a motion for sanctions under section 10.001, the court may award “the reasonable expenses and attorney’s fees incurred in presenting or opposing the motion, and if no due diligence is shown the court may award to the prevailing party all costs for inconvenience, harassment, and out-of-pocket expenses incurred or caused by the subject litigation.”  Id. § 10.002(a), (c) (Vernon 2002).  The sanction “must be limited to what is sufficient to deter repetition of the conduct or comparable conduct by others similarly situated” and may include, among other things, “an order to pay to the other party the amount of the reasonable expenses incurred by the other party because of the filing of the pleading or motion, including reasonable attorney’s fees.”  Id. § 10.004(b), (c) (Vernon 2002). 

C.      Discussion

          Because forcible-detainer rules have no application in a district court proceeding, the Youngs were correct that a writ of possession could not issue 10 days after judgment.  Compare Tex. R. Civ. P. 632 and 627 (providing for 30 days after denial of new trial motion for execution writ, including writ of possession, to issue if judgment is not superseded) with Tex. Prop. Code Ann. § 24.0061(b) (Vernon 2000), id. § 24.007 (Vernon 2000), and Tex. R. Civ. P. 748 (providing for shorter time to issue unsuperseded writ of possession in forcible-detainer suits in justice court).  Nonetheless, it was not an abuse of discretion for the trial court to have found that their motion was frivolous.  The motion was not filed in a vacuum: rather, the court had before it evidence of a long history of the Youngs’ actions that could reasonably have been interpreted as delay tactics, resulting in expenses and fees to the Bank.[7]  Moreover, the Youngs had already been evicted for four or five days by the time that their motion to vacate the writ of possession was heard, and by that motion, they sought to regain possession of, and to return their possessions to, the property—in which they had been living without paying rent until the final judgment in this case and without paying insurance or certain property taxes—for only around two more weeks.  The trial court was well within its discretion to conclude that the request to vacate the writ at this point and under these circumstances was frivolous and, at the very least, indicated an “improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation.”  Tex. Civ. Prac. & Rem. Code Ann. § 10.001(1); cf. New York Underwriters Ins. Co. v. State Farm Mut. Auto. Ins. Co., 856 S.W.2d 194, 205 (Tex. App.—Dallas 1993, no writ) (in considering whether filing violates rule 13, trial court may consider acts or omissions of party or counsel, not merely legal merit of pleading or motion).

          Alternatively, the Youngs contend that the sanctions amount was an abuse of discretion because there was no rational relationship between the award and the filing of the frivolous motion.  On this record, with this order, and in light of the Youngs’ appellate challenges, we disagree.

          The sole basis recited in the order that could support sanctions was the Youngs’ filing of a frivolous motion.  As noted above, the order did not contain any further findings, but the Youngs did not complain below, and do not complain here, of this defect.  See Walling, 863 S.W.2d at 58.  The reason for findings in a sanctions order is, in part, to enable the appellate court to review the order in light of the facts found by the trial court.  See GTE Communications Sys. Corp. v. Curry, 819 S.W.2d 652, 654 (Tex. App.—San Antonio 1991, orig. proceeding).  “Without the findings required by rule 13, effective review of the sanctions is unavailable because the sanctioned party would be unable to overcome the presumption that the trial court found necessary facts in support of its judgment.”  Id.

          It is true that the Bank did not prove up its attorney’s fees and expenses incurred in defending against the frivolous motion; in fact, Wilkenfeld testified that he did not know even the amount of attorney’s fees that the Bank had incurred since final judgment.  The only relevant evidence that the Bank adduced was that it had incurred attorney’s fees in all of its efforts to recover the property—appearing to include, as the Youngs correctly point out, those fees already awarded in the final judgment—and “expenses on the property”—which included between $17,200 and $19,000 to pay off cleaning expenses that the Youngs had incurred after Hurricane Ike and before their motion to vacate, without the Bank’s permission, while they were tenants at sufferance after the March foreclosure.  Wilkenfeld testified that the aggregate amount of these various fees and expenses “equal[ed] or exceed[ed] 25 thousand dollars.”  There was also evidence at the hearing that the Youngs did not pay certain property taxes while they occupied the property, and in the the summary judgment evidence—which the court could have considered when it took judicial notice of its file at the hearing—that the Youngs had not paid $11,000 and about $8,000 for 2006 and 2008 property taxes, respectively.  The Bank also produced evidence that it had had to insure the property because the Youngs did not do so during their possession.

          Sanctions under rule 13 must have a reasonable relationship to the offending conduct.  See Low, 221 S.W.3d at 614 (requiring direct nexus between improper conduct and sanction imposed under rule 13).  Likewise, “[t]he determination of the amount of a penalty to be assessed under Chapter 10, which is not limited to attorney’s fees and costs, should nevertheless begin with an acknowledgment of the costs and fees incurred because of the sanctionable conduct” because “[t]his provides a monetary guidepost of the impact of the conduct on the party seeking sanctions and the burdens on the court system.”  Low, 221 S.W.3d at 621; see also Tex. Civ. Prac. & Rem. Code Ann. § 10.004(b), (c) (providing that sanction “must be limited to what is sufficient to deter repetition of the conduct or comparable conduct by others similarly situated” and may include, among other things, “an order to pay to the other party the amount of the reasonable expenses incurred by the other party because of the filing of the pleading or motion, including reasonable attorney’s fees.”).  However, sanctions under section 10.004 are not limited to attorney’s fees and costs.  See Low, 221 S.W.3d at 621.  They may, for example, be assessed “to deter repetition of the conduct.”  Tex. Civ. Prac. & Rem. Code Ann. § 10.004(b). 

          Because the order contained no findings, and given the lengthy history that the court could have reasonably construed as delay tactics by the Youngs (including the filing of the very motion for which they were sanctioned), the trial court may have found that the imposition of $25,000 was necessary to deter future delay tactics like the frivolous motion to vacate.  In support of such a finding, the court could also have considered that the sanctionable motion sought to return the Youngs and their possessions to the property for only a few weeks, with the result that the Youngs would continue possession even though they had not paid rent, certain property taxes, or insurance.  Given the lack of findings, the lack of appellate complaint about the findings’ omission, and the evidence before the court, we cannot say that the trial court acted outside its discretion in assessing a $25,000 sanction, even though the Bank did not prove fees and expenses incurred in defending the motion to vacate.

          We overrule issue three.

CONCLUSION

          We reverse those portions of the final judgment awarding rent and any attorney’s fees to the Bank.  We affirm the judgment in all other respects.  We further affirm the sanctions order.  We remand the case for further proceedings not inconsistent with this opinion.

                                                                   Sherry Radack

                                                                   Chief Justice

Panel consists of Chief Justice Radack and Justices Alcala and Higley.

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[1]           Mynde S. Eisen, counsel here and below for Texas First Bank, was a party to the trial court’s judgment.  She and Texas First Bank have filed a joint appellees’ brief.  However, the Youngs raised no challenges to those portions of the judgment concerning Eisen.  Accordingly, Eisen is not an appellee in this appeal.  See Showbiz Multimedia, L.L.C. v. Mountain States Mortgage Ctrs., Inc., No. 01-07-00810-CV, 2009 WL 3248211, at *1 n.3 (Tex. App.—Houston [1st Dist.] Oct. 8, 2009, no pet.).

[2]        See Tex. Prop. Code Ann. § 24.006(a) (Vernon 2000). 

[3]           See Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (Vernon 2008).

[4]           See id. § 37.009 (Vernon 2008).

[5]           See Tex. Prop. Code Ann. § 24.006 (Vernon 2000).

[6]           The Bank did not move for summary judgment under section 38.001 on its claim for attorney’s fees.  See, e.g., Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997) (“Because [the movant] did not raise this ground in its [summary-judgment] motion, we hold that [it] is not entitled to a summary judgment on this claim.”).  Nonetheless, even if the Bank had, that provision could not have supported the award because the Bank nonsuited its collection suit on the note before final judgment.  See Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (Vernon 2008); Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (“To recover attorney’s fees under section 38.001 a party must (1) prevail on a cause of action for which attorney’s fees are recoverable and (2) recover damages.”).

[7]           At the Youngs’ request, the trial court took judicial notice of its file during the sanctions hearing, which included summary-judgment evidence showing these things.