Sanctions Under Rule 13 and Chapter 10 in Texas

Under Texas Rule of Civil Procedure 13, the signer of any paper filed with the court must read the instrument and be satisfied after reasonable inquiry that both of the rule’s two tests are met. Sanctionable conduct can thus occur in two different ways:  (1) the filing must not be “groundless and brought in bad faith” or (2) the filing must not be “groundless and brought for the purpose of harassment.”  “Groundless” is defined in a later portion of the rule as having “no basis in law or fact and not warranted by good faith argument for the extension, modification, or reversal of existing law.” A party seeking to impose sanctions pursuant to Rule 13 must demonstrate first that the party’s pleadings are groundless, and then the party must demonstrate that the groundless pleadings were either filed in bad faith or filed for the purposes of harassment. See Gomer v. Davis, 419 S.W.3d 470, 477 (Tex. App.-Houston [1st Dist.] 2013, no pet.). The trial court must examine the facts available to the litigant and the circumstances existing when the litigant filed the pleadingParker v. Walton, 233 S.W.3d 535, 539-540 (Tex. App.-Houston [14th Dist.] 2007, no pet.).The two part test uses a snapshot rule (i.e. examine facts and circumstances when litigant filed the pleading not later time) to determine whether sanctions are appropriate.

Rule 13 states in part “If a pleading, motion or other paper is signed in violation of this rule [13], the court, upon motion or upon its own initiative, after notice and hearing, shall impose an impropriate sanction available under 215-2b (now 215.2(b)), upon the person who signed it, a represented party or both.” Rule 215.2(b) is entitled “Sanctions by court in which action is pending.” Rule 215.2(b) lists 8 sanctions that may be awarded by court in which action is pending. Rule 13 sanctions also do not survive a nonsuit unless the motion for sanctions was pending prior to nonsuit. See Powers v. Palacious, 771 S.W.2d 716, 718 (Tex. App.—Corpus Christi 1989, writ denied). Chapter 10 of the Texas Civil Practice and Remedies Code was enacted to strengthen the sanctions available for groundless and bad faith pleadings. However, the enactment did not eliminate Rule 13 sanctions.

Chapter 10.002 entitled “Motion for Sanctions” expressly states that a party may make a motion for sanctions or that a court on its own initiative may enter an order describing the specific conduct that appears to violate Chapter 10.01. Chapter 10.001 entitled “Signing of Pleadings & Motions” 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;

(2)        each claim, defense, or other legal contention in the pleading or motion is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(3)        each allegation or other factual contention in the pleading or motion has evidentiary support or, for a specifically identified allegation or factual contention, is likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4)        each denial in the pleading or motion of a factual contention is warranted on the evidence or, for a specifically identified denial, is reasonably based on a lack information or belief.

The Dallas Court of Appeals in Manti v. Bergman, 153 S.W.3d 715 (Tex. App.-Dallas 2005, pet. denied) held that an alleged violation of Chapter 10 of the Texas Civil Practice and Remedies Code does not create an independent cause of action that may be asserted against litigants who allegedly file frivolous lawsuits. The Court in Manti further held that a motion under Chapter 10.001 must also be brought in the litigation that was allegedly frivolous and once the court loses plenary power, the ability to bring the Chapter 10 motion is lost. Manti v. Bergman, 153 S.W.3d 715 (Tex. App.-Dallas 2005, pet. denied) (holding that “the only court with jurisdiction over a request for sanctions, whether styled as a motion or otherwise, is the court where the allegedly frivolous litigation was pending, and then only while the court has plenary jurisdiction over the cause  in which the allegedly frivolous litigant was pending). However, there is one exception. If a case is non-suited by one party to avoid a sanction for a frivolous claim and there is a motion for sanctions pending by another party prior to the nonsuit, the nonsuit is not a final, appealable judgment and the motion for sanctions remains pending unless the dismissal order contains specific language  either granting or denying relief as to all pending claims. Unifund CCR Partners v. Villa, 299 S.W.3d 92 (Tex. 2009).

While rare, motions for sanctions still pop up now and then in litigation. Litigants have two main avenues for sanctions in Texas courts for non-discovery issues, Texas Rule of Civil Procedure 13 and Chapter 10 of the Texas Civil Practice and Remedies Code. The opinions in this blog are solely the author’s and any comments, replies or suggestions are welcome and should be sent to john@jrjoneslaw.com.

 

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