Diana Harmouch v. Michael A. Rassner, D.D.S, D/B/A Woodlake Dental, Michael A. Rassner, D.D.S. and Priscilla Medina

Opinion issued April 14, 2011.

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-10-00367-CV

———————————

Diana Harmouch , Appellant

V.

Michael A. Rassner,

D.D.S., P.C. d/b/a Woodlake Dental, Michael A. RassneR, D.D.S., & Priscilla

Medina , Appellee

On Appeal from the 164th District Court

Harris County, Texas

Trial Court Case No. 0772091

MEMORANDUM OPINION

In

this personal injury lawsuit, Diana Harmouch appeals the trial court’s order

imposing $6,793.00 in

sanctions against her pursuant to its inherent power and dismissing her case

with prejudice when she failed to pay the sanctions. Harmouch contends the trial court erred in

imposing sanctions and dismissing her case because the trial court failed to

identify the bad faith conduct that warranted the sanctions. We agree. We therefore reverse and remand the

trial court’s judgment.

Background

In

November 2007, Harmouch filed a personal injury lawsuit against Michael A. Rassner, D.D.S., P.C.

d/b/a Woodlake Dental, Michael A. Rassner, D.D.S., and Prescilla Medina

(collectively, “Woodlake”) . In January 2009, Harmouch’s first attorney

moved to withdraw from the case, asserting that he no longer had time to

represent Harmouch. The trial court

granted the motion. Harmouch’s second

attorney then moved for a continuance to avoid a March 2009 trial setting. The trial court did not rule on the motion,

but reset the trial date to November 2009.

In October 2009, the attorney again moved for a continuance, which the

trial court denied. The trial court reset

the trial date to December 10, 2009 to allow the parties to mediate their

dispute.

On

December 10, 2009, after the parties’ unsuccessful mediation, the trial court

conducted a pretrial hearing. Harmouch’s

attorney moved for a continuance because he had immigration proceedings in

cases for two other clients during the following week and had not focused his

attention on Harmouch’s case. At the pretrial

hearing, the attorney said that he had studied the case, but did not think he

was as prepared as he should be for his client.

The trial court

denied the motion, but accommodated the attorney’s scheduling conflicts and

swore in the jury panel. On December 14,

2009, when the parties arrived for jury selection, Harmouch’s attorney moved to withdraw from the case, asserting that he

was unable to communicate with Harmouch in a manner consistent with good

attorney-client relations. He said that

Harmouch refused to follow any advice he had given her, and he no longer

believed in her cause. He was convinced

that he could not fairly represent her because he questioned the justness and

fairness of her case. At the hearing,

Harmouch stated that her attorney was unprepared to try the case. Woodlake opposed the motion to withdraw,

stating that it had closed its dentist office, and it was ready to try the case.

The trial court granted the

motion to withdraw and released the jury panel.

Woodlake moved for sanctions and

reimbursement of costs caused by Harmouch’s

continuance of the case and termination of her attorney. In its motion, Woodlake claimed that Harmouch

was uncooperative with her attorney, and her lack of cooperation led to the

attorney’s withdrawal. Woodlake offered an

affidavit from its attorney, showing the expenses it incurred in his

preparation for the December 14th trial.

It also attached an affidavit from Dr. Rassner, showing the expenses he incurred

in closing his dentist office to appear for the trial. In response, Harmouch claimed that her former

attorney notified her about his intention to withdraw on the morning he filed

the motion. She asserted that the trial

court should direct any sanctions against him.

In reply, Woodlake asserted that Harmouch took an untenable position on

her case, lashed out against everyone involved, and made allegations with no

factual basis. According to Woodlake,

Harmouch contacted the two Houston Police Officers who had investigated the

incident underlying her personal injury suit in an attempt to get them to change

the reports they filed. Woodlake

attached excerpts from the two officers’ reports. In the reports, the officers state that

Harmouch approached them about changing their reports because she believed the

reports were not fair to her and did not reflect what truly occurred. Woodlake contended that Harmouch’s conduct

created a conflict for her attorney and forced him to withdrawal.

Without

holding a hearing, the

trial court granted the motion for sanctions and required Harmouch to pay

$6,793.00 in damages by January 28, 2010.

The trial court ruled that it would dismiss her case with prejudice if

she did not make the payment. Harmouch

failed to pay the damages. In February

2010, Woodlake filed a motion to dismiss the case for Harmouch’s failure to

comply with the sanctions order. Harmouch responded to the motion, contending that the

Texas Rules of Civil Procedure did not authorize sanctions for any of her

conduct. See Tex. R. Civ. P. 13 &

215 .1 – 215.6. Woodlake replied that the trial court had the

inherent power to impose sanctions for Harmouch’s bad faith

conduct. See Chambers v. Nasco, Inc. , 501 U.S. 32 , 47 – 48 (1991).

The trial court

dismissed the case with prejudice and issued judgment for Woodlake.

Discussion

Standard of Review

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). A trial court abuses its discretion in

imposing sanctions when it acts “without reference to any guiding rules and

principles, such that its ruling was arbitrary or unreasonable.” Id. We presume that pleadings are filed in good

faith, and the party seeking sanctions bears the burden of overcoming this

presumption. Id. 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)

(per curiam).

Trial Court’s Inherent

Power to Sanction

If a sanction order refers to a

specific rule, either by citing the rule, tracking its language, or both, we

determine whether the sanction is appropriate under that particular rule. Finlay v. Olive , 77 S.W.3d 520, 524 (Tex. App.—Houston [1st Dist.] 2002, no

pet.). In this case, the trial court’s sanction order

does not specify the rule used to sanction Harmouch ,

nor does it track the language of any rule. Woodlake urged the trial court to

sanction Harmouch under its inherent power. The alleged sanctionable conduct does not

involve discovery proceedings or the content of a pleading. The trial court’s inherent power thus appears

to be the source of authority for its sanction. See Houtex

Ready Mix Concrete & Materials v. Eagle Constr. & Envtl. Servs, L.P. ,

226 S.W.3d 514, 524 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ; see also Kings Park Apts, Ltd. v. Nat’l

Union Fire Ins. Co. , 101 S.W.3d 525, 541 (Tex. App.—Houston [1st

Dist.] 2003, pet. denied).

A trial court

has the inherent power to sanction a party for an abuse of the judicial process

even when the party’s conduct is not covered by a specific rule or statute. In re Bennett , 960 S.W.2d 35, 40 (Tex. 1997) (per curiam); Houtex , 226 S.W.3d at 524 (citing Island

Entm’t, Inc. v. Castaneda, 882 S.W.2d 2, 5 (Tex. App.—Houston [1st Dist.]

1994, writ denied) ).

This inherent power allows trial courts

to impose sanctions to the extent necessary to deter, alleviate, and counteract

“bad faith abuse” of the judicial process, i.e., when a party significantly

interferes with the court's legitimate exercise of its core functions. Houtex , 226 S.W.3d at 524 .

Bad faith is

more than bad judgment or negligence. Elkins v. Stotts-Brown , 103 S.W.3d 664, 669 (Tex. App.—Dallas

2003, no pet.); Campos v. Ysleta Gen. Hosp., Inc. , 879 S.W.2d 67, 71 (Tex. App.—El Paso 1994, writ denied). To show bad faith, the moving party must

present evidence of 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.). In Houtex ,

we upheld the trial court’s decision to impose sanctions against the

plaintiff’s attorney based on its inherent authority. 226 S.W.3d at 524–25. The attorney there failed to notify opposing

counsel that he would be absent from a hearing even though the attorney knew days

in advance he would be unavailable. Id. at 524. As a result, his opposing counsel needlessly

traveled 720 miles roundtrip to attend the hearing. Id. We held that evidence existed that the

attorney acted in bad faith in his failure to notify opposing counsel of his

absence. Id. ; cf. Onwuteaka v. Gill ,

908 S.W.2d 276 , 280–81 (Tex. App.—Houston [1st Dist.] 1995, no pet.) (reversing

sanction award because record contained no evidence attorney acted in bad faith

when he was late to trial, although his conduct may have been negligent); McWhorter v. Sheller , 993 S.W.2d 781,

789 (Tex. App.—Houston [14th Dist.] 1999, pet. denied) (reversing sanction

award because record contained no evidence attorney acted in bad faith when she

recorded phone call between trial court, opposing counsel and herself so that

she would draft order in accordance with instructions given by trial court

during call); Island Entm’t, Inc. ,

882 S.W.2d at 5 (reversing sanction award because record contained no evidence

party acted in bad faith when party breached settlement agreement after

mediation).

The core

functions of trial courts include hearing evidence, deciding issues of fact

raised by the pleadings, deciding questions of law, entering final judgments,

and enforcing judgments. Island Entm’t,

Inc. , 882 S.W.2d at 5 ; compare Phillips & Akers, P.C. v. Cornwell , 927 S.W.2d 276, 280 (Tex. App.—Houston [1st Dist.] 1996, no

writ) (overturning trial court's imposition of sanctions under its inherent

power to sanction absent evidence that party “acted in a manner such as to

interfere with the administration of justice or detract from the trial court’s

dignity and integrity.”) with King's Park Apts. , 101 S.W.3d at 541 (upholding

sanctions against party based on allegation that party instructed a paralegal

to steal documents from chambers of special trial judge); Lawrence v. Kohl , 853 S.W.2d 697 , 699–700 (Tex. App.—Houston

[1st Dist.] 1993, no writ) (upholding sanctions based on party’s failure to

correct order that party knew to be erroneous).

Nevertheless,

trial courts should rely on rules and statutes when possible because “[t]he

amorphous nature of this power, and its potency, demands sparing use.” Kutch v. Del Mar Coll. , 831 S.W.2d 506, 510 (Tex. App.—Corpus

Christi 1992, no writ), accord Crowe v.

Smith , 151 S.W.3d 217, 243 (5th Cir. 1998).

When a trial court imposes sanctions under its inherent power, it should

make specific findings to support its conclusion that the conduct complained of

significantly interfered with its legitimate exercise of its core

functions. Houtex , 226 S.W.3d at 524 .

Analysis

Here, the

trial court made no findings to support its conclusion that Harmouch’s bad

faith conduct significantly interfered with the trial court’s legitimate

exercise of its core functions. We nonetheless

review the entire record to determine whether the trial court abused its

discretion. Am. Flood Research , 192 S.W.3d at 583 . The trial court did not conduct a hearing, so

we rely solely on the affidavits Woodlake proffered, the clerk’s record, and the

reporter’s record from the hearing on the attorney’s withdrawal.

Woodlake claimed

Harmouch did not cooperate with her attorney.

According to Woodlake, Harmouch took an untenable position on her case,

made allegations with no factual basis, and attempted to persuade two police

officers to change their reports on the incident underlying the lawsuit. Woodlake contends that these actions created

the conflict which forced her attorney to withdraw. Woodlake offered the police reports from the officers. Additionally, at the hearing on his motion

to withdraw, Harmouch’s

attorney stated that he was unable to communicate with Harmouch in

manner consistent with good attorney-client relations and convinced that he

could not fairly represent her. But no evidence exists that she caused

the attorney’s withdrawal in a bad faith effort to disrupt or interfere with

the court’s docket. See Mattly , 19 S.W.3d at 896 . According to the officers’ reports, Harmouch

asked them to change their reports relating to her personal injury claims

because she believed they did not reflect what occurred; she did not ask the

officers to lie. Although this action

may show bad judgment on Harmouch’s part, it occurred well before the hearing

on the motion to withdraw. No evidence

exists that Harmouch took any dishonest or malicious act to interfere with the

trial setting. See Onwuteaka , 908 S.W.2d at 280–81; McWhorter , 993 S.W.2d at 789 ; Island Entm’t, Inc., 882

S.W.2d at 5 . In fact, she learned of her

attorney’s decision to withdraw only that morning and still appeared for

trial.

Also, “a

party should not be punished for counsel’s conduct in which it is not implicated

apart from having entrusted to counsel its legal representation.” See TransAm.

Natural Gas Corp. v. Powell , 811 S.W.2d 913, 917 (Tex. 1991). Harmouch claimed that her attorney withdrew

because he was unprepared for trial, and not because she was uncooperative. The record supports her claim. On the day trial was set and four days before

his withdrawal, Harmouch’s attorney moved for a continuance. He told the court that he sought the

continuance because he had not been able to devote his attention to Harmouch’s

case due to his other pending cases. He stated

that he was not as prepared as he should be for his client.

We hold that no evidence exists that

Harmouch’s bad faith conduct interfered with the legitimate exercise of the

trial court’s core functions. She did

not deprive the trial court the power to hear any evidence, to decide any

issues of fact or questions of law, to enter a final judgment, or to enforce a

judgment. See Island Entm’t, Inc. , 882 S.W.2d at 5 . Accordingly, we hold that the trial

court abused its discretion in imposing sanctions against Harmouch based on its

inherent authority. Because the trial

court dismissed Harmouch’s case because of her failure to pay the sanctions, we

also hold that the trial court erred in dismissing her case.

Conclusion

We

reverse and remand the judgment of the trial court.

Jane

Bland

Justice

Panel

consists of Chief Justice Radack and Justices Alcala and Bland.