STATE OFFICE OF RISK MANAGEMENT v. Foutz

279 S.W.3d 826, 2009 Tex. App. LEXIS 381, 2009 WL 147041
CourtCourt of Appeals of Texas
DecidedJanuary 22, 2009
Docket11-07-00116-CV
StatusPublished
Cited by10 cases

This text of 279 S.W.3d 826 (STATE OFFICE OF RISK MANAGEMENT v. Foutz) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STATE OFFICE OF RISK MANAGEMENT v. Foutz, 279 S.W.3d 826, 2009 Tex. App. LEXIS 381, 2009 WL 147041 (Tex. Ct. App. 2009).

Opinion

OPINION

RICK STRANGE, Justice.

The State Office of Risk Management (SORM) filed suit against Shawnae R. Foutz seeking judicial review of a finding by the Texas Workers’ Compensation Commission that she had suffered a com-pensable injury while working as a correctional officer for the Texas Department of Criminal Justice. The jury found in favor of Foutz. The trial court then sua sponte issued an order requiring SORM and its attorneys to show cause why they should not be sanctioned for filing a frivolous lawsuit. Following the show cause hearing, the trial court sanctioned SORM $100,000, its lead counsel $5,000, and its co-counsel $3,000. We affirm the imposition of sanctions against SORM but reverse the $100,000 sanction assessed and remand for a new hearing to determine the appropriate sanction.

We do not address the sanctions assessed against SORM’s attorneys because no appeal was perfected on their behalf. 1 See Williams v. Colthurst, 253 S.W.3d 353, 367 (Tex.App.-Eastland 2008, no pet.) (notice of appeal filed by client did not perfect appeal of sanctions assessed against client’s attorney because it did not list attorney as an appellant). SORM’s counsel stated at oral argument that it was SORM’s intent to appeal the sanctions assessed against the individuals as well as itself. However, in addition to the lack of a notice of appeal filed on the individuals’ behalf, we note also that SORM’s brief was filed solely on behalf of itself, that SORM’s appellate attorney is shown solely as counsel for SORM, that SORM’s brief lists only Foutz and SORM as parties, and that no argument specific to the individuals was advanced.

I. Background Facts

Foutz was a Texas Department of Criminal Justice corrections officer. On February 14, 2005, she was working the night shift and was assigned to the control area that opens and closes cell doors. Her shift ended at 6 a.m. At about 5:50 a.m., Foutz heard a banging noise and someone saying, “Let me in. Let me in.” She turned and saw Inmate Gilbert trying to flee from Inmate Caldwell. Caldwell began stabbing Gilbert. TDCJ policies forbade Foutz from opening the cell door and allowing Gilbert into the control area. Instead, Foutz was required to watch the *830 attack so that she could later identify the participants. Other inmates distracted Caldwell, and Gilbert managed to escape. Foutz was relieved from duty at 6:03 a.m. and was instructed to give a written statement. Five to ten minutes later, she learned that Gilbert had died.

Foutz stayed at work participating in the investigation until 1:00 p.m. She went home and tried to rest but was unable to do so because she kept seeing the event over and over. She called her supervisor and reported having problems. He gave her the Emergency Assistance Program phone number, and Foutz scheduled an appointment with Wanda Kendall, a licensed professional counselor. Foutz told Kendall that she was experiencing anxiety and was questioning herself for not preventing Gilbert’s death.

Foutz filed a workers’ compensation claim. SORM disputed it. At SORM’s request, Foutz saw Dr. Edwin Johnstone, a Board Certified Psychiatrist, for an independent medical exam (I.M.E.). He confirmed that Foutz suffered from P.T.S.D. and recommended further treatment. A Texas Workers’ Compensation officer conducted a contested case hearing and found that Foutz suffered a compensable mental-trauma injury on February 14, 2005. The TWCC Appeals Panel affirmed. SORM filed suit for judicial review. The jury found for Foutz, and the trial court awarded her $50,717.47 in attorney’s fees, costs, and expenses. SORM points out that this is $50 more than she requested, but it is not challenging that award.

The trial court sua sponte ordered SORM and its two trial attorneys to show cause why they should not be sanctioned for filing a frivolous suit. The trial court conducted an evidentiary hearing and, following that hearing, sanctioned SORM $100,000, its lead counsel $5,000, and its co-counsel $3,000 for filing a frivolous suit under Tex.R. Civ. P. 13 and Tex. Crv. PRác. & Rem.Code Ann. ch. 10 (Vernon 2002).

II. Issues

SORM contends that the sanctions order is invalid, that it violates the Texas Constitution by granting public funds to a corporation for private purposes, and that it does not justify the amount of sanctions awarded.

III. Analysis

A Standard of Review.

We review the imposition of sanctions under Rule 13 or Chapter 10 for an abuse of discretion. Low v. Henry, 221 S.W.3d 609, 614 (Tex.2007). A trial court abuses its discretion when it acts in an unreasonable or arbitrary manner or when it acts without reference to any guiding principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). This requires an examination of the entire record. Loeffler v. Lytle Ind. Sch. Dist., 211 S.W.3d 331, 347 (Tex.App.-San Antonio 2006, pet. struck). Any conflicting evidence is viewed in the light most favorable to the trial court’s ruling, and all reasonable inferences in favor of that ruling will be drawn. Id. at 348. To determine if the sanctions were appropriate or just, the appellate court must ensure there is a direct nexus between the improper conduct and the sanction imposed. Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex.2003).

B. Sanctions for Frivolous Pleadings.

Courts presume that pleadings are filed in good faith. GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 730 (Tex.1993). But trial courts have the authority to sanction an attorney or party for filing motions or pleadings that lack a reasonable basis in fact or law under Rule 13 and Chapter 10. Rule 13 authorizes the *831 imposition of the sanctions listed in Tex. R.Civ. P. 215.2(b). The only monetary sanctions allowed by Rule 215.2(b) are for the opposing party’s expenses, attorney’s fees, and taxable court costs. Because the trial court’s $100,000 sanction was not based upon expenses, court costs, or attorney’s fees, it is not authorized by either Rule 13 or Rule 215.2(b), and SORM’s first issue is sustained.

Section 10.001 provides:

The signing of a pleading or motion as required by the Texas Rules of Civil Procedure constitutes a certificate by the signatory that to the signatory’s best knowledge, information, and belief, formed after reasonable inquiry:

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279 S.W.3d 826, 2009 Tex. App. LEXIS 381, 2009 WL 147041, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-office-of-risk-management-v-foutz-texapp-2009.