In Re: State Farm Mutual Automobile Insurance Company, Betty Genale Thomas, and Carlos Balido v. the State of Texas

• Court: Court of Appeals of Texas
• Decided: December 5, 2024
• Docket: 05-24-00447-CV
• Status: Published

Opinion

Denied and Opinion Filed December 5, 2024

In The Court of Appeals Fifth District of Texas at Dallas No. 05-24-00447-CV

IN RE STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, BETTY GENALE THOMAS, AND CARLOS BALIDO, Relators

Original Proceeding from the County Court at Law No. 5 Dallas County, Texas Trial Court Cause No. CC-23-06609-E

MEMORANDUM OPINION Before Justices Pedersen, III, Goldstein, and Garcia Opinion by Justice Pedersen, III Before the Court is relators’ April 12, 2024 petition for writ of mandamus

challenging two trial court orders imposing monetary sanctions against relator

Carlos Balido, an attorney for relators State Farm Mutual Automobile Insurance

Company and Betty Genale Thomas, who are the defendants in the underlying suit

for damages.1 Specifically, State Farm challenges the sanction orders’ requirement

that the sanctions be paid before final judgment. Entitlement to mandamus relief

requires a relator to show that the trial court clearly abused its discretion and that the

1 Relator Thomas is a State Farm adjuster. For simplicity, and as is consistent with relators’ own petition, we refer to State Farm and Thomas together as State Farm. relator lacks an adequate appellate remedy. In re Prudential Ins. Co. of Am., 148

S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). After reviewing relators’

petition and the record before us, we conclude that relators have failed to

demonstrate entitlement to mandamus relief.

“Trial courts have discretion to require immediate payment of monetary

sanctions, but that discretion is not without limits.” In re Casey, 589 S.W.3d 850,

856 (Tex. 2019) (orig. proceeding) (per curiam). A sanction order that requires a

party to pay a monetary sanction in advance of an appealable judgment raises the

concern whether the order’s effect significantly impairs the party’s willingness or

ability to continue the litigation or substantially impacts its access to the court. See

id. at 855. “[T]o balance the trial court’s discretion to ‘levy some monetary sanctions

during pretrial proceedings’ with the need to ensure that prepayment of ‘more severe

sanctions’ does not significantly impair ‘a party’s willingness or ability to continue

the litigation,’” the supreme court adopted what has come to be known as the Braden

process. Id. at 855 (quoting Braden v. Downey, 811 S.W.2d 922, 929 (Tex. 1991)

(orig. proceeding).

Under the Braden process, subject to good-faith pleading requirements, when

a litigant “contends that a monetary sanction award precludes access to the court,”

the trial court “must either (1) provide that the sanction is payable only at a date that

coincides with or follows entry of a final order terminating the litigation; or (2)

make[] express written findings, after a prompt hearing, as to why the award does

–2– not have such a preclusive effect.” Braden, 811 S.W.2d at 929 (quoting Thomas v.

Cap. Sec. Servs. Inc., 836 F.2d 866, 882–83 n.23 (5th Cir. 1988)); see also Casey,

589 S.W.3d at 855; In re Ford Motor Co., 988 S.W.2d 714, 723 (Tex. 1998) (orig.

proceeding) (“Braden allows a trial court reasonable latitude in curbing discovery

abuse without pressuring a litigant to give up the case altogether.”).

Here, in a motion to reconsider the sanctions orders, State Farm raised the fact

that the immediate-payment requirement of the trial court’s sanctions orders

implicated Braden concerns. But State Farm never made any of the required

contentions under Braden and Casey to invoke their deferral requirement. Instead,

State Farm contended merely that “requiring the payment of sanctions before the

conclusion of the case has a chilling effect on the defense of the Defendants and is

therefore improper under Texas law,” and separately that “[opposing] counsel

routinely seeks immediately due sanctions against State Farm’s counsel to thwart

legitimate arguments that abatement of discovery related to extra-contractual Tex.

Ins. Code violations is required before there is a final judgment as to liability and

damages.” We conclude that these contentions fail to properly invoke the Braden

process. Sanctions have a chilling effect by their nature, and we fail to see how

opposing counsel’s purported attempts to thwart one specific legal argument equates

to the existence of an order precluding State Farm’s access to the court, especially

when the trial court’s sanctions orders were not based on State Farm’s assertion of

this argument.

–3– At no point did State Farm state that the immediate payment of the monetary

sanction at issue would preclude or substantially impact its access to the court or

significantly impair its willingness or ability to continue the litigation. See Casey,

589 S.W.3d at 855. Nor did State Farm allege any facts that would establish a

preclusive effect of the immediate-payment requirement. Having expressly cited to

Braden and Casey, State Farm acknowledged what the supreme court has required

to be pleaded and then failed to plead it. Although we liberally construe the pleadings

in the pleader’s favor where, as here, no special exception is made, “a liberal

construction does not require a court to read into a [pleading] what is plainly not

there.” Bos v. Smith, 556 S.W.3d 293, 306 (Tex. 2018) (internal quotation marks

omitted). And we certainly do not do so when, as here, the supreme court has

required—in more than one opinion—exactly what a party must state. Were we to

deem State Farm’s contentions adequate to invoke the Braden process, which

overrides the trial court’s discretion by making deferral the default, we think it would

significantly disrupt the delicate balance the supreme court aimed to achieve in

Braden. See Casey, 589 S.W.3d at 855–56.

Having decided that State Farm’s contentions are inadequate under Braden

and Casey to have properly invoked the deferral requirement,2 we need not decide

whether State Farm sufficiently brought its contentions to the trial court’s attention

or explore what additional considerations or standards, if any, may apply where, as

2 We express no opinion as to whether relators may subsequently so contend. –4– here, the monetary sanctions are imposed only on counsel—not the party. See id. at

855 & n.4 (declining to explore the circumstances that might substantially impact a

client’s access to the courts when monetary sanctions are imposed only on counsel).

Accordingly, we deny the petition for writ of mandamus. See TEX. R. APP. P.

52.8(a). We also lift the stay imposed by this Court’s April 15, 2024 Order.

/Bill Pedersen, III// 240447f.p05 BILL PEDERSEN, III Goldstein, J., concurring. JUSTICE

–5–