Stephen M. Daniels v. Tony R. Bertolino

Opinion

ACCEPTED 03-14-00671-CV 4960826 THIRD COURT OF APPEALS AUSTIN, TEXAS 4/20/2015 5:20:51 PM JEFFREY D. KYLE CLERK

NO. 03-14-00671-CV FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 4/20/2015 5:20:51 PM JEFFREY D. KYLE IN THE THIRD COURT OF APPEALS Clerk AUSTIN, TEXAS

STEPHEN M. DANIELS, Appellant,

v.

TONY R. BERTOLINO, Appellee.

On Appeal from the 250th Judicial District Court of Travis County, Texas Trial Court Cause No. D-1-GN-14-002146

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS AGAINST ELEANOR RUFFNER AND STEPHEN M. DANIELS

Eleanor Ruffner State Bar No. 24047034 THE LAW OFFICE OF ELEANOR RUFFNER, P.C. 1403 West Sixth Street Austin, Texas 78703 (512) 913-7576 (telephone) (512) 681-0800 (facsimile) eruffnerlaw@gmail.com

COUNSEL FOR APPELLANT TO THE HONORABLE THIRD COURT OF APPEALS IN AUSTIN, TEXAS:

Appellant Stephen M. Daniels (“Appellant”) files this Response to Appellee’s

Motion for Sanctions against Eleanor Ruffner and Stephen M. Daniels (the

“Motion”) and in support thereof would respectfully show the following:

I. INTRODUCTION

1. This Motion arises out of an appeal of a summary judgment dismissing

Appellant’s claims against Appellee, Tony Bertolino (“Appellee”). As set forth

more fully below, the Motion is without merit. 1 First, the appeal is not frivolous or

made in bad faith or for the purposes of delay. Moreover, no case law supports

sanctions absent circumstances more egregious than these. Additionally, Appellee

complains that Appellant did not include non-evidentiary hearing transcripts (which

he acknowledges “may not be essential to the merits of assessing the challenged

judgment”) but failed to comply with the rules of procedure requiring him to obtain

and include them in the record himself. Finally, although Appellee seeks to recover

attorney fees, he attaches no evidentiary support. Appellee therefore requests that

the Court deny the Motion and proceed with determining this appeal on the merits.

1 In the interests of efficiency and in recognition of the value of the Court’s time, this Response focuses primarily on just those issues that are sufficient to defeat the Motion, rather than addressing each minor alleged infraction identified by Appellee.

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 2 OF 13 A. APPELLANT’S APPEAL IS NOT FRIVOLOUS.

2. Because Appellant’s Brief shows the facts and the law that justify

reversal of the lower court’s order, this appeal is not frivolous. “To determine

whether an appeal is objectively frivolous, we review the record from the viewpoint

of the advocate and decide whether the advocate had reasonable grounds to believe

the case could be reversed.” Glassman v. Goodfriend, 347 S.W.3d 772, 782 (Tex.

App.—Houston [14th Dist] 2011, pet. denied) (emphasis added); see also Smith v.

Brown, 512 S.W.3d 376, 381 (Tex. App.—Houston [1st Dist.] 2001, pet. denied).

“Rule 45 damages will not be imposed unless the record, viewed from the appellant’s

point of view at the time the appeal was taken, clearly shows that the appeal was

brought only for delay and that the appellant had no reasonable expectation of

reversal.” Hawkins v. Walker, 233 S.W.3d 380, 402 (Tex. App.—Fort Worth 2007,

pet. denied) (emphasis added).

3. This Court has identified circumstances tending to indicate that an

appeal is frivolous:

(1) An unexplained absence of a statement of facts in the appellant’s brief;

(2) An unexplained failure to file a motion for new trial when it is required to successfully assert factual insufficiency on appeal;

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 3 OF 13 (3) A poorly written brief raising no arguable points of error; or

(4) The appellant’s unexplained failure to appear at oral argument.

Norton v. Deer Creek Prop. Owners Ass’n, No. 03-09-00422-CV, 2010 Tex. App.

LEXIS 5895 *28 (Tex. App.—Austin July 22, 2010, no pet.) (citing Faddoul v.

Oaxaca, 52 S.W.3d 209, 213 (Tex. App.—El Paso 2001, no pet.) and In re S.R.M.,

888 S.W.2d 267, 269 (Tex. App.—Houston [1st Dist.] 1994, no writ)). None of those

circumstances are present here.

4. Appellee seems to contend that the third factor is at issue. However,

Appellee may disagree with Appellant’s application of the law to the facts, but

disagreement among adversaries or even a losing appeal does not render the

proceedings frivolous. “If an appellant’s argument on appeal fails to convince the

court, but has a reasonable basis in law and constitutes an informed, good-faith

challenge to the trial court’s judgment, sanctions are not appropriate.” Conseco Fin.

Servicing Corp. v. Klein Indep. Sch. Dist., 78 S.W.3d 666, 676 (Tex. App.—Houston

[14th Dist.] 2002, no pet.) (citing General Elec. Credit Corp. v. Midland Cent.

Appraisal Dist., 826 S.W.2d 124, 125 (Tex. 1991)); see also Jackson v. Hoffman,

312 S.W.3d 146, 156 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (disagreeing

with the merits of appellant’s appeal, but after considering the record and briefs,

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 4 OF 13 determining that the circumstances in that case did not warrant sanction); Columbia

N. Hills Hosp. v. Alvarez, 382 S.W.3d 619, 631 (Tex. App.—Fort Worth 2012, no

pet.) (same); Xtria L.L.C. v. Int’l Ins. Alliance, 286 S.W.3d 583, 598-99 (Tex.

App.—Texarkana 2009, pet. denied) (same); Hazlewood v. Lafavers, 394 S.W.3d

6290, 633 (Tex. App.—El Paso 2012, no pet.) (same); and London v. London, 349

S.W.3d 672, 676 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (same).

5. Appellant is asking this Court to overturn a judgment that is an

erroneous “final” judgment and is also asking the court to reconsider the availability

of a no-evidence summary judgment motion under the circumstances at issue in this

case. The primary argument, identified as Issue No. 1 in the Appeal, is that

Appellant had pled causes of action in the alternative that were not challenged by

Appellee’s motion for summary judgment and that therefore the judgment signed by

the trial court was erroneous. Without rehashing the issues set out in the parties’

briefs, the only contrary evidence in the record is that a subsequent pleading was

entitled “Amended” rather than “Supplemental,” which is a common-enough

occurrence that it has its own Texas Rule of Civil Procedure addressing misnamed

pleadings. TEX. R. CIV. P. 71. Because the remaining causes of action warrant

reversal of the trial court’s erroneous final judgment, this appeal is objectively not

frivolous on this basis alone.

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 5 OF 13 6. The other two issues relate to the granting of the summary judgment

itself. Appellant did not ignore settled law or fail to cite crucial legal authority.

Rather, Appellant made a legitimate argument for a change in the way courts should

consider the requirement that no-evidence summary judgment motions be brought

after an adequate time for discovery has passed. As another court has acknowledged,

“The only way existing law may be changed is through such appeals. . . . An appeal

such as this one, in which the party seeks in good faith to change existing law and

there is no evidence that the appeal was taken for delay, is not an appeal brought

‘without sufficient cause.’” Guzman v. Guzman, 827 S.W.2d 445, 448 (Tex. App.—

Corpus Christi 1992, writ denied). This understanding of frivolity is consistent with

TEX. R. CIV. P. 13, which specifically exempts “good faith argument for the

extension, modification, or reversal of existing law.” This was not a case in which

Appellant turned a blind eye; rather, Appellant is inviting the Court to more closely

scrutinize the practice that has arisen around the no-evidence motion for summary

judgment, which is still relatively new in Texas.

7. Appellant’s arguments represent reasonable arguments for reversal of

the lower court from the viewpoint of the advocate. There is no evidence of truly

egregious conduct showing that the appeal is frivolous or in bad faith. As such, the

Motion should be denied.

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 6 OF 13 B. APPELLEE CITES NO CASE LAW IN SUPPORT OF SANCTIONS IN THESE CIRCUMSTANCES.

8. No case law supports imposition of sanctions here. Whether to grant

sanctions is “a matter of discretion that an appellate court exercise with prudence

and caution and only after careful deliberation in truly egregious circumstances.”

Goss v. Houston Cmty. Newspapers, 252 S.W.3d 652, 657 (Tex. App.—Houston

[14th Dist] 2008, no pet.). Although Appellee cites several cases involving awards

of appellate sanctions, none of them involve substantially similar circumstances:

 Starcrest Trust v. Berry2 involved a party that settled the case while it was on appeal but refused to comply with the mediated settlement agreement.

 Glassman3 involved a party that missed deadlines, subjectively knew that the basis of her appeal was without merit, and had been previously sanctioned.

 Compass Exploration v. B-E Drilling Co.4 involved an appellant who cited only two cases, one statute, and one rule of civil procedure in its entire appellate brief.

2 926 S.W.2d 343, 356 (Tex. App.—Austin 1996, no pet.). 3 374 S.W.3d at 775-77 and. 4 60 S.W.3d 273, 281 (Tex. App.—Waco 2001, no pet.).

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 7 OF 13  Njuku v. Middleton5 involved litigants attempting to “relitigate issues that were decided years ago” in violation of an injunction against further such lawsuits.

 Likewise, Mid-Continent Casualty Co. v. Safe Tire Disposal Corp.6 involved an appeal of a summary judgment that had been granted on the grounds that a judgment in a prior lawsuit collaterally estopped appellant from relitigating the issues.

 Am. Paging of Tex., Inc. v. El Paso Paging, Inc.7 involved a party that deliberately hid an evidentiary hearing transcript actually in its possession and made material misstatements of fact.

 Bradt v. West8 involved appellants who asserted new causes of action on appeal, sought to overturn summary judgment through incompetent affidavits, and failed to respond to a motion for sanctions.

 Casteel-Diebolt v. Diebolt9 involved an appeal in which appellant failed to include any citations to the record.

5 20 S.W.3d 176, 178 (Tex. App.—Dallas 2000, pet. denied). 6 2 S.W.3d 393, 395-97 (Tex. App.—San Antonio 1999, no pet.). 7 9 S.W.3d 237, 241-42 (Tex. App.—El Paso 1999, pet. denied). 8 892 S.W.2d 56, 79-81 (Tex. App.—Houston [1st Dist] 1994, writ denied). 9 912 S.W.2d 302, 304-05 (Tex. App.—Houston [1st Dist.] 1995, no writ).

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 8 OF 13  Tate v. E.I. du Pont de Nemours & Co.10 involved a brief with only two substantive pages, without record citations, filed for the purposes of delay.

 Johnson v. Johnson11 involved an attorney who maligned the trial court’s intelligence and integrity.

 Fox v. Wardy12 and I.P. Farms v. Exxon Pipeline Co.13 did not involve the imposition of sanctions at all.

9. Appellee may disagree with the arguments advanced by Appellant,

particularly because of the subject matter of the appeal. However, in this case,

Appellant has not failed to comply with any agreement, missed deadlines, failed to

include record and case citations, sought to relitigate old judgments, hidden

evidence, brought new causes of action, or impugned the intelligence or integrity of

any court. Appellant acknowledges the possibility that the Court may find itself

unpersuaded by one or more of Appellant’s arguments. However, not every losing

appeal is frivolous, and in fact most are not. Absent truly egregious conduct,

sanctions are unwarranted.

10 954 S.W.2d 872, 875 (Tex. App.—Houston [14th Dist.] 1997, no pet.). 11 948 S.W.2d 835, 840-41 (Tex. App.—San Antonio 1997, writ denied). 12 234 S.W.3d 30, 33 (Tex. App.—El Paso 2007, pet. dism’d w.o.j.). 13 646 S.W.2d 544, 545 (Tex. App.—Houston [1st Dist.] 1982, no writ).

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 9 OF 13 C. APPELLEE FAILED TO SHOW ANY HARM RELATED TO ANY REPORTER’S RECORD.

10. The hearings at issue – one on a motion to transfer venue and one on a

no-evidence summary judgment – were not evidentiary hearings and therefore

consisted of the parties’ arguments, which is not evidence. The motion to transfer

venue is not being appealed, so the only hearing that seems to be at issue is that on

the no-evidence motion for summary judgment. An appellant’s failure to provide a

reporter’s record does not, standing alone, make his appeal frivolous. Sam Houston

Hotel, L.P. v. Mockingbird Rest., Inc., 191 S.W.3d 720, 721 (Tex. App—Houston

[14th Dist.] 2006, no pet.). Therefore, some additional circumstances must bring the

alleged sanctionable conduct to the level of “truly egregious.” However, Appellee

identifies none, and none exist.

11. Moreover, if Appellee believed that a record existed that would contain

evidence to support his position on appeal, the proper approach would have been to

secure the record himself; request that it be added as a supplement to the record; and,

if successful on appeal, include in his prayer for relief a request that the costs he

incurred be taxed against Appellant. See generally TEX. R. APP. P. 34.6, esp.

34.6(c)(2) and (3); and 34.6(d). Moreover, because Appellee never designated any

portion of testimony from any reporter’s record pursuant to Rule 34.6(c)(2) or (d),

the appellate court should presume that the record designated by the parties –

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 10 OF 13 namely, none – constitutes the entire record. TEX. R. APP. P. 34.6(c)(4). Unsworn

assertions in Appellee’s brief cannot overcome this presumption and cannot support

sanctions.

12. Finally, Appellant must bring to the Court’s attention Appellee’s

admission that Appellee failed to timely bring this matter to Appellant’s attention

and that “the reporter’s record for that hearing may not be essential to the merits of

assessing the challenged judgment.” Motion, pp. 6-7. If the record is not essential

to the merits of the challenged judgment, then its inclusion would constitute an

“unnecessary addition” to the record, as contemplated by TEX. R. APP. P. 34.6(c)(3).

In fact, the discussion to which Appellee alludes in footnote 2 on pp. 6-7 of the

Motion confirmed that neither Appellant nor Appellee believed the record to be

essential to the merits. As such, any failure to obtain a reporter’s record at a non-

evidentiary hearing which neither party contends is necessary for determination of

the appeal cannot constitute sanctionable conduct.

D. APPELLEE FAILED TO PROVE ANY RIGHT TO RECOVERY OF ATTORNEY FEES.

13. Appellee asserts that he is entitled to $5,000 in attorneys’ fees. Even if

this Motion had merit, which Appellant denies, Appellee has failed to attach to his

Motion an affidavit proving up his claimed fees. See, e.g., Heldt v. 12811 El Sendero

Trust #0415022, No. 04-04-00615-CV, 2005 Tex. App. LEXIS 8973 *5-*6 (Tex.

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 11 OF 13 App.—San Antonio June 22, 2005, pet. denied) (denying recovery of attorney’s fees

absent proof by way of affidavit or any other manner and declining to award relief

“based on unsworn statements in a brief”); Mocega v. Urquhart, No. 01-04-00172-

CV, 2005 Tex. App. LEXIS 4485 *11-*12 (Tex. App.—Houston [1st Dist.] June 9,

2005, no pet.) (denying sanctions because although the court was “sympathetic with

[Appellee] for the long delay” and the resulting appeals, was “not inclined to award

attorney’s fees based on unsworn statements in a brief”); and Walker v. Hardin, No.

04-03-00864-CV, 2005 Tex. App. LEXIS 2966 *6 (Tex. App.—San Antonio April

20, 2005, no pet.) (denying sanctions when Appellee’s attorney did not attach an

affidavit or establish proof, in any manner, of his attorney’s fees, relying instead on

unsworn statements in his brief). As such, Appellee’s Motion is insufficient to

support the monetary relief he seeks and should therefore be denied.

PRAYER FOR RELIEF

For the foregoing reasons, Appellant respectfully requests that the Court deny

Appellee’s Motion and proceed with determining the underlying appeal on its merits.

Dated April 20, 2015.

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 12 OF 13 Respectfully submitted,

THE LAW FIRM OF ELEANOR RUFFNER, P.C. 1403 West Sixth Street Austin, Texas 78703 Telephone: (512) 913-7576 Facsimile: (512) 681-0800

By: /s/ Eleanor Ruffner Eleanor Ruffner State Bar No. 24047034 eruffnerlaw@gmail.com

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document was

served in accordance with the Texas Rules of Appellate Procedure on Monday, April

20, 2015 as follows:

Tony R. Bertolino Hiba Kazim BERTOLINO LLP 823 Congress Avenue, Suite 704 Austin, Texas 78701 Via Email: tbertolino@belolaw.com and hkazim@belolaw.com

Attorneys for Appellee Tony R. Bertolino

/s/ Eleanor Ruffner Eleanor Ruffner

APPELLANT’S RESPONSE TO APPELLEE’S MOTION FOR SANCTIONS PAGE 13 OF 13