Zuehl Land Development, LLC, Dorothy Golding and Diane Wiemann v. Zuehl Airport Flying Community Owners Association, Inc. ( 2015 )

ACCEPTED
01-14-00562-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
1/9/2015 5:08:15 PM
CHRISTOPHER PRINE
CLERK
NO. 01-14-00562-CV
IN THE FILED IN
1st COURT OF APPEALS
FIRST COURT OF APPEALS HOUSTON, TEXAS
HOUSTON, TEXAS 1/9/2015 5:08:15 PM
CHRISTOPHER A. PRINE
Clerk
ZUEHL LAND DEVELOPMENT, L.L.C., DOROTHY GOLDING, et al.,
Appellants
v.
ZUEHL AIRPORT FLYING COMMUNITY OWNERS ASSOCATION, INC.,
Appellee
BRIEF OF APPELLEE,
ZUEHL AIRPORT FLYING COMMUNITY
OWNERS ASSOCATION, INC.
ROBERT L. WILSON III
State Bar No. 50511773
R L WILSON LAW
111 W. Olmos Drive
San Antonio, Texas 78212
(210) 223-4100
(210) 223-4200 (telecopier)
Email: rlw3d@sa-law.com
ATTORNEY FOR APPELLEE,
ZUEHL AIRPORT FLYING COMMUNITY OWNERS ASSOCIATION,
INC.
IDENTITY OF PARTIES AND COUNSEL
The following is a list of all parties, and the names and addresses of those
parties’ counsel.
Parties to Appeal
Zuehl Land Development, L.L.C. Appellant/Plaintiff
Dorothy Golding Appellant/Plaintiff
Diane Wieman Appellant/Plaintiff
Zuehl Airport Flying Community Appellee/Defendant
Owners Association, Inc.
Counsel for Parties to Appeal
William D. Crist Trial and Appellate Counsel for
The Crist Law Firm, PLLC Appellants/Plaintiffs
3123 N.W. Loop 410 Dorothy Golding, Zuehl
San Antonio, Texas 78230 Land Development, L.L.C. and
Diane Wieman
Robert L. Wilson III Trial and Appellate Counsel for
R L Wilson Law Appellee/Defendant,
111 W. Olmos Drive Zuehl Airport Flying
San Antonio, Texas 78212 Community Owners
Association, Inc.
Non-Appealing Parties
Phoenix Air Transport, Inc. Non-Appealing Plaintiff
James MacIvor Non-Appealing Plaintiff
David Goad Non-Appealing Plaintiff
Walter Schmidt, deceased Non-Appealing Plaintiff
i
TABLE OF CONTENTS
Page
IDENTITIES OF PARTIES AND COUNSEL ......................................................... i
TABLE OF CONTENTS ......................................................................................... ii
TABLE OF AUTHORITIES ................................................................................... iv
STATEMENT OF THE CASE ............................................................................... vi
ISSUES PRESENTED ............................................................................................ ix
STATEMENT REGARDING ORAL ARGUMENT ............................................. ix
STATEMENT OF FACTS ....................................................................................... 3
A. Background Facts ....................................................................................... 3
B. Relevant Procedural History ....................................................................... 8
SUMMARY OF THE ARGUMENT ..................................................................... 16
ARGUMENT AND AUTHORITIES..................................................................... 17
I. The Trial Court Properly Denied Appellants’ Request for
Attorneys’ Fees Because Appellants were not a “Prevailing Party”
in the Trial Court……......………………………………………………17
A. The Trial Court Expressly DENIED Appellants’ Claims for
Breach of Restrictive Covenant and Rendered a TAKE
NOTHING Summary Judgment.
B. The Relief, If Any, Obtained By Appellants Was Not Based on
Court Determination of Breach of Any Restrictive Covenant
C. Every Substantive Order Entered in The Litigation Authorized,
Validated and Protected the Fence Erected by the Association
D. All Parties had Legitimate Interests to pursue.
ii
II. The Trial Court Properly Imposed Sanctions on Golding, and
Did Not Abuse its Discretion, Based Upon Clearly-Established
Misconduct as a Litigant………………………………………...…………26
A. Golding Failed to Produce any Evidence to Rebut Evidence of Her
Misconduct, or that Demonstrated Good Faith
B. Although Present When the Court was Considering the Bad Faith
and the Imposition of Sanctions Against Her, Golding Declined to
Testify in her Own Defense, or Call Any Witnesses
C. Golding Has Waived Any Objection to Excessiveness of the
Sanctions Award by Failing to Raise That Issue in the Trial Court
D. The Trial Court Did Not Abuse Its Broad Discretion In
Sanctioning Golding Based Upon the Seriousness of Golding’s
Violations
CONCLUSION AND PRAYER ................................................................................ 41
CERTIFICATE OF COMPLIANCE .......................................................................... 42
CERTIFICATE OF SERVICE ................................................................................... 42
iii
TABLE OF AUTHORITIES
Page
CASES
Anderson v. New Prop. Owners' Ass'n of Newport, Inc.,
122 S.W.3d 378, 390 (Tex.App.-Texarkana 2003, pet. denied) .................. 19
Arkoma Basin Exploration Co. v. FMF Assocs. 1990-A, Ltd.,
249 S.W.3d 380, 387 (Tex. 2008) ............................................................... 32
Brooks v. Northglen Ass'n.
141 S.W.3d 158 (Tex. 2004) ........................................................................ 25
Cire v. Cummings,
134 S.W.3d 835 (Tex. 2004) ........................................................................ 26
Dear v. City of Irving,
902 S.W.2d 731, 739 (Tex.App.-Austin 1995, writ denied) ....................... 18
E.I. du Pont de Nemours & Co. v. Robinson,
923 S.W.2d 549 (Tex. 1995) ....................................................................... 33
Farrar v. Hobby,
406 U.S. 103, 111-12 (1992) ....................................................................... 20
FDIC v. Graham,
882 S.W.2d 890, 900 (Tex.App.-Houston [14th Dist.] 1994, no writ)......... 18
GTE Commc'ns Sys. Corp. v. Tanner,
856 S.W.2d 725, 730 (Tex.1993) ............................................................... 29
Intercont'l Group P'ship v. KB Home Lone Star, L.P.,
295 S.W.3d 650 (Tex.2009) ........................................................................ 19
Jakab v. Gran Villa Townhouses Homeowners Ass'n, Inc.,
149 S.W.3d 863, 867 (Tex.App.-Dallas 2004, no pet.) ............................... 18
Low v. Henry,
221 S.W.3d 609 (Tex. 2007) ........................................................................ 26
iv
McCain v. NME Hosps., Inc.,
856 S.W.2d 751, 757 (Tex. App.-Dallas 1993, no writ) ………………… 34
Meyerland Cmty. Improvement Ass'n v. Belilove,
624 S.W.2d 620, 620-21 (Tex.App.-Houston [14th Dist.] 1981,
writ ref'd n.r.e.) ............................................................................................. 19
Nath v. Texas Children’s Hosp.,
2014 Lexis 756…....………………………………………………………..29
Pebble Beach Prop. Owners' Ass'n v. Sherer,
2 S.W.3d 283, 291-92 (Tex.App.-San Antonio 1999, pet. denied) ............. 19
Spohn Hosp. v. Mayer,
104 S.W.3d 878, 882 (Tex. 2003) ............................................................... 37
TransAmerican Natural Gas Corp. v. Powell,
811 S.W.2d 913, 917 (Tex. 1991) ............................................................... 36
Unifund CCR Partners v. Villa,
299 S.W.3d 92, 97 (Tex. 2009)……………………………………….........29
STATUTES
TEX. PROP. CODE § 5.006…………………………………………………...............8
TEX. CIV. PRAC. & REM. CODE § 37.001. et. seq………………………………….22
RULES
TEX.R.CIV.P. 13 ...................................................................................................... 33
TEX.R.CIV.P. 166a(h) ............................................................................................. 39
TEX.R.CIV.P. 215 .................................................................................................... 38
v
STATEMENT OF THE CASE
Nature of the Case: Zuehl Airport Flying Community Owners Association,
Inc. (“ZAFCOA”) filed suit in 2008 seeking injunctive
and other relief against various individuals and their
corporate alter-egos arising from such individuals’
tampering with and destroying a boundary fence
constructed by the Association pursuant to the express
terms of a prior Judgment of the Guadalupe County trial
court. That relief – and the legal sanctity of the fence –
was upheld by the trial court by way of a Temporary
Injunction, and after referral to arbitration by a Modified
Temporary Injunction entered by the arbitrator.
Following remand of the arbitration back to the trial
court, the Court adopted the arbitrator’s Modified
Temporary Injunction, and, again, upheld the legality of
the fence. The fence remained in place until it was
voluntarily removed by ZAFCOA upon a determination
that it was no longer desirable (and prior to entry the
Partial Summary Judgment and/or Final Judgment) relied
upon by Appellants.
In a separate suit, that was ultimately consolidated with
ZAFCOA’s request for judicial intervention to stop the
destruction of ZAFCOA’s boundary fence, Appellants
filed suit alleging that the fence was constructed in
violation of applicable restrictive covenants.
On June 27, 2012, the Court entered a Partial Summary
Judgment in the consolidated suit, thereby resolving all
controversies, expressly denying various causes of action
asserted by and between the parties, and disposing of all
parties’ claims, save and except ZAFCOA’s entitlement
to a Sanctions Award against Golding, and the parties’
competing claims for attorneys’ fees under Tex.Prop.
Code § 5.006.
The trial court liquidated the Sanctions Award against
Golding on October 31, 2013, and entered Final
Judgment on May 21, 2014, providing that all parties
bear their own costs and attorneys’ fees.
Trial Court: The Honorable Gary Steel, Judge, 25th District Court,
Guadalupe County, Texas.
vi
Trial Court Action: On December 7, 2011, the trial court conducted a hearing
on ZAFCOA’s Objections to Evidence (including sworn
Affidavits) submitted by Appellants in connection with
the parties’ competing Motions for Summary Judgment.
Although present in the courtroom during such hearing,
Golding failed to testify in her own defense. At the
conclusion of that hearing, the Court determined that
Golding had engaged in litigation abuse in connection
with pleadings she filed, her discovery responses, her
affidavit testimony and her deposition testimony. As such
the Court made a bench announcement that she should be
sanctioned, but reserved for future consideration the
amount of sanctions to be imposed.
On June 27, 2012, the trial court entered a Partial
Summary Judgment that was agreed-upon and jointly
submitted by all parties. In that Partial Summary
Judgment, the Court expressly DENIED and entered a
TAKE NOTHING Judgment on: (i) all parties’ tort
claims; (ii) all parties’ claims for “breach of contract
(Restrictive Covenant)”; and (iii) all parties’ requests for
injunctive relief. In that same Partial Summary Judgment
the Court made certain declarations, and expressly
“reserved for future consideration”: (i) the parties’
competing claims for attorneys’ fees; and (ii) the amount
of the sanction to be paid by Golding arising from her
earlier-determined litigation and discovery misconduct.
On September 17, 2012, the trial court entered its written
“Order on Defendant’s Objections to Summary Judgment
Evidence.” In such Order – which resulted from the
hearing conducted on December 7, 2011 -- the trial court
found that Dorothy Golding (who was present in the
courtroom but failed to testify) should be sanctioned for
various litigation abuses, but reserved the amount of
sanctions for later determination.
On September 16, 2013, the trial court conducted a
hearing for the purpose of considering and liquidating the
amount of attorneys’ fees and costs to be assessed against
vii
Golding as a sanction for the litigation abuses and
misconduct she was previously-determined to have
committed. Golding did not attend the September 16,
2013 hearing, and her counsel did not cross-examine
ZAFCOA’s witness testimony or object to documentary
evidence offered to the Court. The Court took the matter
under advisement, and on October 31, 2014, entered a
Sanctions Order awarding ZAFCOA $30,528.00 as a
sanction against Golding under Tex. R. Civ. P. 13, 215
and 166a(h), and the Court’s inherent power.
On May 21, 2014, the Court entered its Final Judgment
in the consolidated case. The Final Judgment: (i) adopted
and incorporated the June 27, 2012 Agreed Partial
Summary Judgment; (ii) DENIED all parties’ claims for
costs and attorneys’ fees; (iii) ORDERED that all parties
bear their own costs and attorneys’ fees; and (iv)
incorporated the October 31, 2013 Sanctions Order
(thereby making it final).
No Motion for New Trial or other request to reform,
modify or correct the Final Judgment was filed by
Appellants prior to filing this appeal.
viii
ISSUES PRESENTED
1. Did the trial court err by denying the parties’ competing claims for
attorneys’ fees and costs under Tex.Prop.Code § 5.006, and finding that
Appellants did not “prevail?”
2. Did the trial court abuse its discretion in imposing sanctions against
Golding as the result of her litigation and discovery abuses?
STATEMENT REGARDING ORAL ARGUMENT
Appellee believes oral argument will not significantly aid this Court in
considering and determining the legal issues presented in this matter. The matters
at issue are all well established such that the Court of Appeals would not benefit
from oral argument. TEX.R.APP.P. 39.
ix
NO. 01-14-00562-CV
IN THE
FIRST COURT OF APPEALS
SAN ANTONIO, TEXAS
ZUEHL LAND DEVELOPMENT, L.L.C., et al.
Appellants
V.
ZUEHL AIRPORT FLYING COMMUNITY
OWNERS ASSOCIATION, INC.
Appellee
BRIEF OF APPELLEE,
ZUEHL AIRPORT FLYING COMMUNITY
OWNERS ASSOCIATION, INC.
TO THE HONORABLE COURT OF APPEALS:
Appellee/Defendant, Zuehl Airport Flying Community Owners Association,
Inc., respectfully presents its brief. For the sake of clarity, all Appellants will be
collectively referred to as “Appellants,” while Appellant, Dorothy Golding,
individually (as the only party who appeals the trial court’s sanctions award), will
be referred to as “Golding.” Appellee, Zuehl Airport Flying Community Owners
Association, Inc., will be referred to as “ZAFCOA” or “Appellee.” The clerk’s
record will be cited as [CR __]. The supplemental clerk’s record will be cited as
[SCR ___]. The reporter’s record of the hearing will be cited as [RR ___] with an
indication as to volume denoted by “V.”
2
STATEMENT OF FACTS
A. Background Facts
This appeal is the most recent chapter in a series of litigations between these
same and/or associated parties arising out of planning, platting, conveyancing and
drafting deficiencies created by Dorothy Golding’s development of the Zuehl
Airfield subdivision of Guadalupe County, Texas. Prior actions arising from these
defects have been heard in Texas state district courts in Guadalupe and Bexar
Counties, the U.S. District Court for the Western District of Texas (San Antonio
division), various Texas courts of appeals, and by two (2) separate arbitrators.
The litigation campaign represented by the case at bar is a seven year ordeal,
which – in addition to expenditure of substantial attorneys’ fees and costs by all
involved -- has resulted in:
• Entry of four (4) separate orders upholding the ability of the Appellee
to maintain the fence that is at the heart of this dispute;
• Entry by the trial court of an agreed Partial Summary Judgment whose
express terms denied Appellants’ claims for breach of the applicable
restrictive covenant and vindicated various of the Appellee’s claims,
including its right to erect and maintain a fence and restrict access to
the Zuehl Airport Flying Community, P.U.D. Subdivision [CR 880-
886]; and
• Imposition of litigation and discovery abuse sanctions of $30,528.00
against Appellant, Golding, by the same trial court judge who has
presided over the parties’ litigation campaigns for their duration, and,
3
as such, maintains intimate familiarity with the parties.1 [CR 969-
980].
ZAFCOA is the property owners’ association for the Zuehl Airport Flying
Community, P.U.D. (the “subdivision” or “Zuehl Airport subdivision”), who,
pursuant to Tex. Prop Code § 202.001(2) and the applicable dedicatory instrument2
manages and regulates the platted Zuehl Airport subdivision of Guadalupe County,
Texas.
On or about April 3, 2008, ZAFCOA erected a fence separating a substantial
portion of the platted subdivision (sometimes referred to as “Unit 1”) from un-
platted property owned by various persons and/or their corporate alter egos. Such
un-platted property abuts – but is distinctly and undisputedly beyond -- the eastern
edge of the platted subdivision, and is commonly referred to as “Lands Reserved
for Future Development” or “LRFD.”
The “Lands Reserved for Future Development” are comprised of various
parcels of real property which were never platted, and never incorporated into the
platted Zuehl Airport subdivision. Appellants (but not Appellee) commonly refer
to the collective “Lands Reserved for Future Development” as “Unit 2” of the
subdivision because the “Lands” were designated by Appellant Golding (as the
original developer of the subdivision) as such on the subdivision’s Preliminary
1
For more than a decade, the Honorable Gary Steel has presided over various litigations between
these parties. His involvement in the numerous legal disputes amongst the Zuehl Airport
property owners pre-dates representation by any of the current attorneys for the parties.
2
Referred to herein as the “Declaration” or the “restrictive covenants.”
4
Overall Development Plan (“POADP”) that she filed with the City of San
Antonio.3
However, notwithstanding Golding‘s designation of the “LRFD” as “Unit 2”
of the subdivision – and her express representations that she intended to
develop/plat and incorporate such territory into the platted subdivision -- Golding
unilaterally and permanently abandoned all efforts to plat the “LRFD” several
years before the commencement of the litigation giving rise to this appeal. As such,
the “LRFD” remain un-platted to this day, and will so remain for the foreseeable
future because they have been sold to third-parties.
Golding’s failure to develop the subdivision as planned, her inclusion of
vagaries and ambiguities in the applicable restrictive covenants that she (as
Declarant) recorded in connection with the subdivision,4 and her subsequent efforts
to exploit these self-created deficiencies5 resulted in prior litigation filed by
ZAFCOA on November 12, 2003, under Cause No. 03-1901-CV. [CR 97]. That
3
Although located in Guadalupe County, the subdivision is situated with the Extra-territorial
jurisdiction (“ETJ”) of the City of San Antonio, Texas.
4
As the Declarant, Golding caused the Declaration to be drafted and recorded. Since recording
the Declaration she has commenced various legal actions – including this suit -- arising from
drafting deficiencies contained in that very document.
5
For example, Appellants allege that construction of the subject fence violated the applicable
Declaration because of its proximity to a taxiway. However, Golding’s unilateral decision to sell
the unplatted LRFD to a third-party who had no obligation to develop or plat those lands in
accordance with her POADP changed the planned boundaries of the subdivision. This sale, and
Golding’s failure to develop and plat the LRFD, created an internal conflict within the express
language of the Declaration, which both (i) authorizes ZAFCOA to secure the subdivision,
including by constructing a boundary fence (Section Ten); and (ii) prohibits placement of objects
near taxiways. This conflict occurred because Golding’s sale of the LRFD without platting or
completing construction of the roadways (in “Unit 2”) shown on the POADP caused what was an
internal taxiway to become a perimeter road on the subdivision boundary.
5
litigation involved challenges (by Golding and others) to a fence previously erected
in approximately the same location as the fence at issue in this suit.6 Ultimately,
the 2003 lawsuit was settled at a marathon mediation session, and an Agreed
Judgment incorporating the settlement terms – including an express right of
ZAFCOA to erect a fence separating the platted subdivision from the LRFD -- was
entered by the Guadalupe County District Court. [RR V.10 pp. 6-13].
In reliance upon the 2003 Agreed Judgment entered in cause No. 03-1901-
CV and the express provisions of Section Ten of the applicable
declaration/restrictive covenants, ZAFCOA constructed the fence at issue in this
suit (the “subject fence”). Said fence was built entirely upon “common area”
property owned by ZAFCOA (six inches inside the eastern boundary of the platted
subdivision, with no portion of situated upon the “LRFD” or any land owned by
any Appellant) and constitutes ZAFCOA’s personal property. In building the
fence, ZAFCOA exercised its discretionary authority, with a good faith basis
arising from the Agreed Judgment entered in 03-1901-CV.
Despite the clear legal authority for the fence at the time it was constructed,
Appellants and/or their associates repeatedly damaged, destroyed, removed or
otherwise tampered with the subject fence. As a result, ZAFCOA filed suit in
6
Footnotes 3 and 4 of Appellants’ Brief correctly states that the pleading containing the history
of the 2003 litigation was omitted from the Clerk’s Record filed in this cause. However, copies
of the Agreed Final Judgment and mediated settlement agreement signed by the parties appear in
Volume 10 of the Reporter’s Record, and are cited in this brief.
6
Guadalupe County District Court on November 6, 2008 [CR 97], and was shortly
thereafter awarded injunctive relief preventing further damage to or alteration of
the subject fence [SCR 2-3; SCR 4-5].
Throughout this litigation – including during a short stint at arbitration --
Appellants’ opposition to (and destruction of) the fence stemmed from their claims
that the fence precluded them from using the Association’s privately-owned
roadway and taxiway (referred to as “Lot 119” in the subdivision Plat) to access
the un-platted “LRFD” property situated outside of the platted subdivision.
Appellants have also argued against the validity of the Agreed Judgment that
Golding requested to be entered by the Court in Cause No. 03-1901-CV. [RR V. 10
pp. 6-13].
In an effort to develop her claims related to the fence whose construction she
had agreed-upon in the 2003 lawsuit [RR V. 10 pp. 6-13], Appellant Golding
materially misrepresented to the trial court (and to ZAFCOA) her ownership of,
and legal interests in, the LRFD. Once these material misrepresentations contained
in pleadings and discovery materials were exposed, the Court determined that
Golding should be sanctioned, with the sanction amount to be liquidated at a later
date. [SCR 73-75][RR V. 7].
Thereafter, the parties amicably resolved the substantive issues presented in
7
this suit by way of an agreed Partial Summary Judgment [CR 880-888].7 Following
entry of the agreed Partial Summary Judgment, the only issues remaining for the
trial court were a determination of the amount of sanctions to be assessed against
Golding, and whether any party was entitled to an award of attorneys’ fees. Id.
Eventually, the Court liquidated the amount of sanctions imposed against
Golding by way of a Sanctions Order8 [CR 969-980] and subsequently entered a
Final Judgment that incorporated the terms of the agreed Partial Summary
Judgment and the Sanctions Order, and taxed court costs and attorneys’ fees
against the party incurring same. [CR 1124-1126].9
B. Relevant Procedural History
1. Procedural History of the Merits of the Parties’ Claims
Relating to the Subject Fence
On April 18, 2008, Appellants filed a lawsuit (Cause No. 08-0632-CV) in
the 25th District Court of Guadalupe County, Texas, asserting claims for
declaratory relief and “breach of declaration” against ZAFCOA. [CR 2-10]. In
their Petition, Appellants sought, inter alia, recovery of attorneys’ fees under
Tex.Prop. Code § 5.006. Id. Notably, Appellants did not seek – and have never
7
The agreed Partial Summary Judgment is attached as “Exhibit 3” to Appellant’s Brief. In
accordance with Tex.R.App.P. 9.7, it is adopted by reference herein.
8
The Sanctions Order is attached as “Exhibit 1” to Appellant’s Brief. In accordance with
Tex.R.App.P. 9.7, it is adopted by reference herein.
9
The Final Judgment is attached as “Exhibit 2” to Appellant’s Brief. In accordance with
Tex.R.App.P. 9.7, it is adopted by reference herein.
8
been awarded -- any temporary or permanent injunctive relief related to their
complaints about the fence.
During the early pendency (and dormancy) of Cause No. 08-0632-CV,
various individuals routinely and purposely damaged and altered the subject fence.
As a result, ZAFCOA filed a separate lawsuit on November 6, 2008 (Cause No.
08-1872-CV) seeking injunctive relief to prevent damage or destruction to the
subject fence.10
On December 15, 2008, the Court (in Cause No. 08-1872-CV) conducted a
hearing on ZAFCOA’s Application for Temporary Injunction following the fence
being cut. [RR V. 2]. Following that hearing, the Court granted the Temporary
Injunction, and also authorized ZAFCOA to replace and re-install those portions of
the fence that had been damaged. Id.
On September 1, 2009 – after additional parties were joined in Cause No.
08-1872-CV -- the trial court, again, considered and granted an application by
ZAFCOA for a Temporary Injunction preventing damage, destruction or alteration
of the fence, and allowing destroyed sections of the subject fence to be restored
(again). [RR V. 3 at pp. 61-65]. On September 2, 2009, the Court entered its
“Order on Plaintiff’s Motion for Temporary Injunction” to reduce to writing its
rulings made from the bench on September 1, 2009. [SCR 4-5].
10
As noted by Appellants in footnote 4 of their Brief, this pleading – although requested and
designated by the undersigned attorney for Appellee – does not appear in the Clerk’s Record.
9
On or about October 20, 2010, the two 2008 lawsuits were consolidated
under Cause No. 08-1872-CV. [CR 108-110]. The consolidated case was referred
to arbitration on October 20, 2010, with Thomas J. Smith appointed as arbitrator.
[CR 108-110]. Thereafter, the parties were re-aligned such that ZAFCOA was the
Defendant, and all other parties were aligned as Plaintiffs under in Cause No. 08-
1872-CV. [CR 111-126].
Immediately upon referral to arbitration, Appellants sought to set-aside the
trial court’s then-year-old (September 2, 2009) Temporary Injunction validating
and protecting the subject fence. On November 22, 2010, the Arbitrator considered
Appellants’ request, and entered an “Order Modifying Temporary Injunction and
Granting Temporary Injunction” thereon. [CR 111-126]. In such Order – which
was entered following a contested hearing and extensive briefing by the parties --
the Arbitrator expressly permitted the fence to remain in place. Id. Such ruling was
consistent with the trial court’s previous approval of the fence’s construction.
Thereafter, the Arbitrator remanded – and the trial court accepted – the
action back to Guadalupe County District Court upon a finding that the arbitration
agreement between the parties (contained in the mediated settlement agreement of
the 2003 lawsuit)11 was void. [CR 118- 120].
Following remand, Appellants petitioned the trial court, again, for removal
11
See [RR V.10 pp. 10-13].
10
of the fence on April 27, 2011. [CR 111-126]. Following a hearing that lasted for
several hours – at which Golding testified in opposition to the fence -- the Court
entered a “Judgment Confirming Arbitration Award, Granting Temporary
Injunction and Aligning Parties” on May 11, 2011. [CR 111-126]. Thus, yet again,
when presented with a request by Appellants to order the removal of the subject
fence, the trial court declined the invitation, and instead adopted the following
language in its Injunction Order:
“The Court DENIES Applicant’s request for relief…require[ing]
ZAFCOA to remove the fence in question during the pendency of this
litigation; instead, this Court confirms and adopts the Arbitrator’s
Temporary Injunction…as this Court’s Temporary Injunction, effective
during the pendency of this suit.” Id.
Despite four (4) bites at the proverbial apple, Appellants never obtained any
ruling or Order from any tribunal determining that the subject fence, or any act or
omission of ZAFCOA, violated the Declaration/restrictive covenants. Rather, both
the trial court and the Arbitrator to whom the action was referred consistently
upheld the validity of the fence and insisted that Appellants not interfere with,
remove or damage it.
Subsequently, Appellants and Appellee resolved their substantive disputes
through negotiation, and jointly-petitioned the Court for entry of a Partial
Summary Judgment whose express terms: (i) denied their respective claims for
breach of contract (restrictive covenant): (ii) established that ZAFCOA owned the
11
subdivision’s roadways; (iii) characterized such roadways as private property (and
not public); (iv) recognized that, notwithstanding anything to the contrary
contained-therein, Section Ten of the Declaration “authorizes [ZAFCOA] to
restrict access to the subdivision by the erection of a fence;” and (v) expressly
acknowledged that – prior to entry of the Partial Summary Judgment – ZAFCOA
voluntarily removed the subject fence based upon its unilateral determination that
the fence was “no longer desirable to the Association.” [CR 880-888] (emphasis
added). Said Partial Summary Judgment was entered by the Court on June 27,
2012. Id.
Approximately one and one-half years after entry of the parties’ Agreed
Partial Summary Judgment, Appellants filed their “Application for Attorney’s Fees
and Motion to Enter Final Judgment.” An extensive hearing was conducted upon
such Motion on March 26, 2014 [RR V.9]. Following such hearing, the trial court
requested that all parties furnish the Court with materials and authorities
supporting their respective positions concerning attorneys’ fees, and took such
Motion under advisement.
On May 21, 2014 – after having considered all of the evidence presented to
it, and having presided over both every hearing in the case at bar and the lion’s
share of the parties’ protracted litigation campaigns – the trial court determined
that no party “prevailed” under any claim for breach of restrictive covenant. As
12
such, the trial court denied all parties claims for costs and attorneys’ fees, and
entered Final Judgment ordering that costs and fees be borne by the party incurring
same. [CR 1124-1126]. In addition, the express terms of the Final Judgment
adopted and incorporated the Partial Summary Judgment entered on June 27, 2012,
as well as a Sanctions Order entered on October 31, 2013. Id.
Appellants did not file a Motion for New Trial, or any request to reform or
modify the Final Judgment. Instead, this appeal was filed.
2. Procedural History of the Sanctions Award
On September 9, 2011, all parties filed substantial cross-Motions for
Summary Judgment. [CR 166-187; CR 188-496; CR 501-540]. Appellants’ Motion
for Partial Summary Judgment appended, and was ostensibly supported by,
extensive affidavit testimony offered by Dorothy Golding, and executed under oath
on September 8, 2011. Id.
Similarly, Appellants’ joint Response to ZAFCOA’s Motion for Partial
Summary Judgment, had attached (as “Exhibit A”) Golding’s “Affidavit In
Opposition to Defendant’s Motion for Summary Judgment.” This “Response
Affidavit” was executed by Golding on September 30, 2014, and filed with the
Court on or about October 5, 2011. [CR 501-540].
Throughout a substantial portion of the time that this suit was pending
(beginning with the “Plaintiff’s Second Amended Petition” filed on September 10,
13
2010 [CR 99-107]), Golding made material misrepresentations about the status of
her ownership of the LRFD. These representations continued throughout the
discovery period -- in response to written discovery propounded by ZAFCOA and
in deposition -- and were never corrected until the time that ZAFCOA disclosed
Golding’s misconduct to the Court in October, 2011 [CR655-726]. Even in
Appellants’ Fourth Amended Original Petition filed on July 1, 2011 [CR 127-139],
Appellants affirmatively (and falsely) represented and alleged that Dorothy
Golding was the legal owner of two tracts of land (comprised of 10.21 acres and
19.138 acres, respectively) which were:
(i) situated in the unplatted Lands Reserved for Future Development;
(ii) subject to existing and active Contracts for Deed in favor of James
MacIvor (who was alleged to be the “equitable owner” of such tracts);
(iii) benefitted by “express easement appurtenant” language contained
within the Contracts for Deed in favor of MacIvor (which language
allegedly “references language in an earlier Contract for Deed from
Dorothy Golding to her daughter, Glenda Cupit); and
(iv) Not the subject of any “warranty deed” executed by Dorothy
Golding. Id.
Based upon the fortuitous discovery by ZAFCOA in October 2011 of the
existence of previously-undisclosed document conveying interests in the LRFD
14
away from Golding, ZAFCOA objected to and moved to strike Golding’s affidavit
testimony from the summary judgment record. [CR 655-726]. Following
ZAFCOA’s request for court intervention, Appellants – for the first time –
produced a General Warranty Deed dated May 28, 2009, from Dorothy Lee
Buffington12 to James P. MacIvor which was recorded at V2749 P0858 of the real
property records of Guadalupe County as a “Supplemental Summary Judgment
Response Exhibit” (Exhibit No. 6) on October 19, 2011. [CR 819-861; CR 731-
818]. This instrument was clearly responsive to discovery requests propounded by
ZAFCOA, but never produced by Appellants. Moreover, this same deed clearly
contradicted Golding’s prior deposition testimony, and undermined Appellants’
claims and contentions in the litigation, including those related to Golding’s
ownership of the various tracts of land implicated in the lawsuit.
On December 7, 2011, the trial court conducted a hearing on ZAFCOA’s
Objections to Evidence (including Golding’s sworn summary judgment and
summary judgment response affidavits) [CR 655-726]. Although present in the
courtroom during that hearing, Golding declined to testify in her own defense. [RR
V. 7]. Several months later (on September 17, 2012), the trial court entered its
written “Order on Defendant’s Objections to Summary Judgment Evidence.” [SCR
73-75]. In that Order – which resulted from the hearing conducted on December 7,
12
As stated on page 4 (Statement of Facts) of Appellant’s Brief, Dorothy Golding was, at one
time, married to Robert Buffington. As such, “Dorothy Buffington” is the same person as
Appellant, Dorothy Golding.
15
2011 -- the trial court found that Dorothy Golding should be sanctioned for various
litigation and discovery abuses, but reserved the amount of sanctions for later
determination upon an evidentiary hearing. Id.
On September 16, 2013, the trial court conducted a hearing (upon
ZAFCOA’s Motion) for the purpose of considering and liquidating the amount of
attorneys’ fees and costs to be assessed against Golding as a sanction for the
litigation abuses and misconduct she was previously determined to have
committed. [RR V. 8]. Following that hearing (which Golding failed to attend and
declined to cross-examine ZAFCOA’s proffered testimony), the Court, on October
31, 2013, entered a Sanctions Order awarding ZAFCOA $30,528.00 as a sanction
against Golding. [CR 969-980].
Golding never requested that the trial court reconsider, vacate or otherwise
modify the Sanctions Order, or conduct a re-hearing on ZAFCOA’s request for
sanctions.
SUMMARY OF THE ARGUMENT
The Final Judgment and the Sanctions Order entered by the trial court
should both be affirmed because the applicable law, the facts, and the evidentiary
record support them in this case.
The Final Judgment properly assessed attorneys’ fees against the party
incurring same because no party “prevailed” in its claim for breach of restrictive
covenant. Rather, the Court expressly denied Appellants’ claim for breach, at the
16
joint request of all parties. That denial expressly incorporated a Take Nothing
Judgment on the Appellants’ claim for breach of restrictive covenant. Further,
Appellants did not “prevail” in their claims for breach of restrictive covenant
because the court awarded them no relief, nothing of any value, and no damages on
their claim for breach of restrictive covenant. Likewise, the Court never made any
finding that Appellee violated any restrictive covenant. To the contrary, the Court
repeatedly affirmed ZAFCOA’s right to construct and maintain the fence.
The trial court did not abuse its discretion in imposing sanctions against
Appellant Golding because it acted with reference to guiding rules and principles.
The evidentiary record before the trial court supports the sanctions award, and
contains no exculpatory evidence to demonstrate that Golding acted in good faith
or for proper purpose in providing false testimony and filing knowingly false
pleadings. In addition, Golding has waived any challenge to the excessiveness of
the sanctions award by failing to raise that issue in the trial court, or at any time
prior to this appeal.
ARGUMENT AND AUTHORITIES
I. The Trial Court Properly Denied Appellants’ Request for Attorneys’
Fees Because Appellants were not a “Prevailing Party” in the Trial
Court
A. The Trial Court Expressly DENIED Appellants’ Claims for Breach
of Restrictive Covenant and Rendered a TAKE NOTHING
Summary Judgment.
In their Opening Brief, Applicants artfully and selectively quote the
17
provisions of the Partial Summary Judgment entered by this Court on June 27,
2012. However, Applicants completely ignore Paragraph 3, which specifically
addresses the parties’ competing claims for breach of restrictive covenant. That
provision provides:
“Plaintiffs’ claims and Defendant’s counterclaim for breach of contract
(Restrictive Covenant) are hereby DENIED, and it is ORDERED,
ADJUDGED and DECREED that all parties take nothing by way of
their claims for breach of contract asserted in this suit, except as
contemplated by Section 6 below.” [CR 971].
This paragraph of the agreed Partial Summary Judgment is the provision
most relevant to this Court of Appeals’ analysis because it contains the trial court’s
express adjudication of the merits of the parties’ competing claims for violation of
the applicable Declaration. In their Brief, Appellants reference various other
sections of the Partial Summary Judgment in an effort to bootstrap a fallacious
argument that they somehow “prevailed” in their claims for breach of restrictive
covenant. However, the express language of Paragraph 3 quashes that argument,
and is determinative of the parties’ claims for attorneys’ fees under Section 5.006
of the Property Code.
A prevailing party is the party to a suit that either successfully prosecutes the
action or defends against it, prevailing on the main issue. Jakab v. Gran Villa
Townhouses Homeowners Ass'n, Inc., 149 S.W.3d 863, 867 (Tex.App.-Dallas
2004, no pet.); FDIC v. Graham, 882 S.W.2d 890, 900 (Tex.App.-Houston [14th
18
Dist.] 1994, no writ). "Simply stated, the prevailing party is the party vindicated by
the judgment rendered." Jakab, 149 S.W.3d at 867; Dear v. City of Irving, 902
S.W.2d 731, 739 (Tex.App.-Austin 1995, writ denied).
Based upon the express language of Paragraph 3 of the Partial Summary
Judgment, and the appearance of the signature of Applicants’ attorney on the
Partial Summary Judgment, itself, it is obvious that Applicants did not prevail on
their claims for breach of restrictive covenant because they settled such claims in
such manner as the Court DENIED such claims and Ordered that they TAKE
NOTHING. As such, Applicants’ claim for breach of restrictive covenant -- the
only claim that would entitle them to a mandatory award of attorneys’ fees under
Section 5.006 -- was not “vindicated,” but rather, expressly rejected by the trial
court.
B. The Relief, If Any, Obtained By Appellants Was Not Based on
Court Determination of Breach of Any Restrictive Covenant
A Court may properly deny an applicant’s request for attorney's fees when
such applicant is not the prevailing party in a lawsuit. See Anderson v. New Prop.
Owners' Ass'n of Newport, Inc., 122 S.W.3d 378, 390 (Tex.App.-Texarkana 2003,
pet. denied); Pebble Beach Prop. Owners' Ass'n v. Sherer, 2 S.W.3d 283, 291-92
(Tex.App.-San Antonio 1999, pet. denied); Meyerland Cmty. Improvement Ass'n
v. Belilove, 624 S.W.2d 620, 620-21 (Tex.App.-Houston [14th Dist.] 1981, writ
ref'd n.r.e.).
19
In Intercont'l Group P'ship v. KB Home Lone Star, L.P., 295 S.W.3d 650
(Tex.2009), the Texas Supreme Court undertook to define “prevailing party” in the
context of a mandatory fee-award contract that did not define the term “prevailing
party.” In that case, a jury found that Intercontinental had breached a written
contract mandating a fee award, but answered “0” on damages while awarding KB
Home $66,000.00 in attorneys’ fees. Id. at 652-53. Deferring to United States
Supreme Court precedent, the Texas Supreme Court held that to be a prevailing
party entitled to recover fees, "a claimant must obtain actual and meaningful relief,
something that materially alters the parties' legal relationship." Id. at 652 (citing
Farrar v. Hobby, 406 U.S. 103, 111-12 (1992)). In this case, Appellants were not
awarded damages on their claim for breach of restrictive covenant. Instead, the
trial court expressly denied that claim.
Appellants argue in their Brief that they were afforded some relief relative to
the fence, and therefore “prevailed” because the “ultimate relief sought was
removal of the offending fence.” Thereafter, Appellants cite a string of cases that
analyze, on a global basis, whether a party prevailed under any cause of action,
claim or theory of recovery it asserted for the purpose of a fee award. This
“shotgun” analysis is inappropriate however, because of the “rifle-shot” scope of
the Section 5.006 of the Texas Property Code.
Unlike a contract that provides for a fee award to a party who prevails in any
20
claim or dispute arising from that contract or the parties’ relationship, Section
5.006 limits its mandatory fee award provision to parties who prevail in actions
“based on breach of a restrictive covenant.” Tex.Prop. Code § 5.006. Therefore,
when the trial court expressly DENIED Appellants’ cause of action for “breach of
restrictive covenant” and ordered that they TAKE NOTHING thereon, it is
undeniable that their entitlement to a mandatory award of attorneys’ fees under
Section 5.006, likewise, perished.
Only a party who successfully prosecutes a claim alleging a breach of a
restrictive covenant is entitled to an award of attorney's fees under section 5.006.
Meyerland Cmty. Improvement Ass'n v. Belilove, 624 S.W.2d 620, 620-21
(Tex.Civ.App.-Houston [14th Dist.] 1981, writ ref. n.r.e.). There was no liability
finding from the trial court (or the Arbitrator) that Appellee breached a restrictive
covenant found in the applicable Declaration; thus, Appellants are clearly not
entitled to recover attorneys’ fees under Section 5.006 because they have not
successfully prosecuted a claim alleging breach of a restrictive covenant. See Id.;
Anderson v. New Prop. Owners' Ass'n of Newport, Inc., 122 S.W.3d 378, 390
(Tex. App.-Texarkana 2003, pet. denied); Pebble Beach Prop. Owners' Ass'n v.
Sherer, 2 S.W.3d 283, 291-92 (Tex. App.-San Antonio 1999, pet. denied);
Assuming, arguendo, that Appellants did receive some relief through the
21
Agreed Partial Summary Judgment,13 it is inescapable that any such relief was not
based upon Appellants’ cause of action for “breach of restrictive covenant.”14
Quite the contrary, the trial court specifically ordered that Appellants would “Take
Nothing” on such claim. [CR 880-886]. Thus, to the extent that Appellants
received any relief whatsoever, (including declaratory relief, for example) they still
did not prevail in an “action based on breach of a restrictive covenant.” As such,
Tex.Prop. Code § 5.006 was not implicated, and the trial court had no statutory
obligation to award any party attorneys’ fees.15 Thus, the trial court did not err in
denying Appellants’ application for attorneys’ fees under Section 5.006.
C. Every Substantive Order Entered in The Litigation Authorized,
Validated and Protected the Fence Erected by the Association
During the pendency of this suit, the District Court considered the legality of
the subject fence on four occasions. Likewise, the Arbitrator considered the
legality of the fence at Appellants’ request. In each of these instances, the presiding
official (determiner of issues of law) issued a ruling authorizing the fence, and
rejecting requests by Appellants to order it removed. [SCR 4-5; CR 111-126].
13
Appellee does not concede this fact. Rather, the Agreed Partial Summary Judgment expressly
provides that the Court had received into evidence a Resolution by Appellee in which Appellee
unilaterally determined that the fence was no longer desirable to it, and had, resultantly, removed
the fence prior to entry of the Agreed partial Summary Judgment.
14
When Appellants’ counsel executed the Partial Summary Judgment to indicate Appellants’
approval of the “Form and Content” of the document, Appellants affirmatively petitioned the
Court to determine that no party prevailed in its cause of action for breach of restrictive
covenant, and that all relief requested by all parties under that claim should be wholly denied.
15
The Declaratory Judgments Act, Tex. Civ. Prac. & Rem.Code Ann. § 37.001 et seq., provides
that a trial court may award costs and reasonable attorney's fees when doing so is equitable and
just. To the extent that Appellants requested a fee award under the UDJA, the trial court was
within its sound discretion in denying such a discretionary award.
22
Shortly after this suit was filed on November 6, 2008, the trial court entered
a Temporary Injunction preventing the then-Defendants from tampering with or
altering the fence made the subject of the Association’s claims in this suit. [RR V.
10 pp. 16-159 (Court Ruling on p. 151).] Again, on September 2, 2009, the trial
court entered a Temporary Injunction (“Order on Plaintiff’s Motion for Temporary
Injunction”), which expressly prohibited destruction of the fence, and authorized
the construction of additional portions thereof. [SCR 4-5]. This Injunction was
entered following a contested hearing, during which then-Defendants adamantly
opposed the erection and maintenance of the subject fence. [RR V.3].
On November 22, 2010, Thomas J. Smith -- the Arbitrator to whom this case
was referred – entered yet another Temporary Injunction, which modified this
Court’s Injunction entered on September 2, 2009. By way of his “Order
Modifying Temporary Injunction and Granting Temporary Injunction,” the
Arbitrator permitted the fence to remain in place. [CR 111-126].
The Applicants’ request for removal of the fence came before the Court once
again on April 27, 2011, during a hearing that lasted several hours. Following that
hearing – at which at least one of the Applicants provided testimony in opposition
to the fence -- the Court entered a “Judgment Confirming Arbitration Award,
Granting Temporary Injunction and Aligning Parties” on May 11, 2011. [CR 111-
126]. Once again, when presented with a request by Applicants to order the
23
removal of the subject fence, this Court declined, and adopted the following
language in its Injunction Order:
“The Court DENIES Applicant’s request for relief…requir[ing]
ZAFCOA to remove the fence in question during the pendency of this
litigation; instead, this Court confirms and adopts the Arbitrator’s
Temporary Injunction…as this Court’s Temporary Injunction, effective
during the pendency of this suit.”
Thus, notwithstanding multiple attempts, Applicants and their co-
parties/affiliates never obtained any Order from the trial court or the arbitrator
determining that the ZAFCOA violated the applicable restrictive covenant. Rather,
the trial court and arbitrator consistently upheld the validity of the fence, and
enjoined any damage to or destruction of it. Given these rulings, Applicants have
clearly not prevailed in their claims that ZAFCOA breached the applicable
restrictive covenant.
D. All Parties had Legitimate Interests to pursue.
ZAFCOA filed and maintained its lawsuit seeking, among other relief,
judicial declarations concerning the legality of constructing a boundary fence as
contemplated by Section Ten of the Declaration, and the ability to regulate access
to and control over the subdivision and its roadways, runway and other common
areas. [CR 49-68]. In addition, ZAFCOA alleged that Appellants breached the
applicable restrictive covenants. Id. The Court’s Agreed Partial Summary
Judgment entered on June 27, 2012, vindicated many of the Association’s claims,
24
as follows:
• ZAFCOA’s claim that Lot 119 is not a public roadway, but rather,
a private roadway owned by the Association;
• That this Court’s Order Agreed Order entered on April 6, 2006
was intended, in part, to permit construction of the fence;
• That ownership of property outside of the platted subdivision (and
specifically in the “Lands Reserved for Future Development”)
does not confer membership in the Association and/or any right to
use the Association’s runway; and
• That Section Ten of the applicable Declaration authorizes the
Association to restrict access to the subdivision by the erection of
a fence; including a perimeter/boundary fence. [CR 880-888].
Based upon these prior determinations by the Court, it is readily apparent
that ZAFCOA had legitimate interest to pursue in this lawsuit, and actually
prevailed in protecting those interests. In instances where, as here, both parties to a
dispute involving the alleged breach of a restrictive covenant have legitimate
interests to pursue, a trial court may, in its discretion, decline an award of
attorneys’ fees. See Brooks v. Northglen Ass'n., 141 S.W.3d 158 (Tex. 2004).
25
II. The Trial Court Properly Imposed Sanctions on Golding, and Did Not
Abuse its Discretion, Based Upon Clearly-Established Misconduct as a
Litigant
Most important to Golding’s appeal of the sanctions imposed against her is
the standard applicable to this Honorable Court of Appeals’ analysis in this case.
That standard, which was articulated by the Texas Supreme Court in Low v.
Henry, 221 S.W.3d 609, 614 (Tex. 2007) (citing Cire v. Cummings, 134 S.W.3d
835, 838-39 (Tex. 2004), provides that the trial court may be reversed only if it
acted “without reference to any guiding rules and principles, such that its ruling
was arbitrary or unreasonable.” Thus, the imposition of sanctions, and the amount
thereof, are limited only by the duty of the trial court to act within its sound
discretion upon consideration of the relevant factors described in Low, 221 S.W.3d
620-21, and the provisions of Texas Rule of Civil Procedure 215, Texas Rule of
Civil procedure 166a, and Texas Rule of Civil Procedure 13.
As set-forth below, the trial court was presented with ample evidence of
Golding’s misconduct, and Golding failed to tender exculpatory documents or
testimony to rebut that evidence. The Sanctions Order, itself, contains lengthy
Findings of Fact and Conclusions of Law, and expressly addresses the
considerations required of a trial court when assessing sanctions. As such, the
Sanctions Order facially demonstrates that the Court did not act arbitrarily or
unreasonably in imposing non-death penalty sanctions against Golding.
26
Finally, Golding has waived any challenge to the excessiveness of the
sanctions imposed against her by failing to present that issue to the trial court. She
cannot raise that issue for the first time on appeal.
A. Golding Failed to Produce any Evidence to Rebut Evidence of Her
Misconduct, or that Demonstrated Good Faith
Appellants attack the sufficiency of the evidence demonstrating that
Golding’s conduct was sanctionable and assert that such a determination required
additional evidence or testimony than was presented to the trial court. However,
when ZAFCOA first brought Golding’s perjury to the Court’s attention through its
“Objections to Summary Judgment Evidence” filed on October 19, 2011 [CR 655-
726], the Court already had before it the entire summary judgment record by virtue
of the parties’ previously-filed Cross-Motions for Summary Judgment and
Responses. [CR 166-187; CR 188-496; CR 501-540; CR 577-589; CR 590-642].
In addition, ZAFCOA’s “Objections to Summary Judgment Evidence” cited
and appended as exhibits additional evidence of Golding’s perjury and groundless
pleadings, including a deed whose existence Appellants had failed to disclose [CR
655-726], and excerpts from Golding’s prior deposition testimony rendered in this
suit. Id. Most importantly, as expressly reflected in the Sanctions Order, the trial
court took judicial notice of numerous pleadings, instruments, and file contents –
all of which are identified in the Sanctions Order. [CR 969-980]. These pleadings
included the various (original through Fourth Amended) petitions filed by Golding
27
and her affiliated entity, Zuehl Land Development, [CR 99-107; CR 127-139].
Accordingly, at the time of the December 9, 2011 hearing [transcribed in RR
V. 7], and most certainly by October 31, 2013 (the date of entry of the Sanctions
Order), the Court had before it substantial evidence of Golding’s bad faith,
including her offensive affidavits, groundless pleadings and false deposition
testimony, and even a “Supplemental Affidavit” in which Golding purported to
offer “corrected” testimony and differed materially from the testimony initially
offered in connection with her Motion for Summary Judgment and her deposition.
[CR 819-861]; [RR V7 p. 10]. Likewise, the Court received – without challenge or
objection – substantial testimony and documentary evidence of ZAFCOA’s
reasonable and necessary out-of-pocket expenses and attorneys’ fees resulting from
Golding’s misconduct. [RR V 8 pp. 9-25]; [RR V. 10 pp. 44-100].
Despite this substantial evidentiary record before the trial court when it
considered imposing santions, Golding failed to tender a single witness, document
or other record (other than her own “corrected” Affidavit) demonstrating any valid
or good faith basis for her prior testimony, or any evidence that the testimony was
not false when made. Instead, as echoed in her Appellant’s Brief, Golding’s
counsel attempted to divert the trial court’s attention away from her intentional
perjury by arguing that her falsehoods were “immaterial” to the facts and issues
presented in the litigation. [RR V7 pp. 28, 33, 37, 52, 63].
28
Appellees acknowledge the judicial presumption that pleadings and other
papers are filed in good faith, as set-forth in GTE Commc'ns Sys. Corp. v. Tanner,
856 S.W.2d 725, 730 (Tex.1993). However, ZAFCOA clearly overcame this
presumption and presented the Court with abundant evidence that Golding knew
that she had deeded the property in question to a third-party (MacIvor) on May 28,
2009, and, similarly, that she knew that a General Warranty Deed reflecting such
conveyance existed since that time. Yet, despite this knowledge, Golding persisted
for 2 years in filing multiple petitions, filing a summary judgment motion and
response, offering deposition testimony, answering written discovery, and offering
affidavit testimony that was designed to misrepresent the true ownership of the
lands in question, and falsely claim that she was the owner of the property she had
unmistakably conveyed to MacIvor.
Once the presumption of good faith pleadings was overcome by ZAFCOA’s
“Objections to Summary Judgment Evidence” and attached exhibits [CR 655-726],
Golding’s failure to tender exculpatory evidence or offer a good faith basis for her
misstatements properly resulted in the Court finding that bad faith existed on her
part, that she had taken a groundless position in the suit, that she had offered false
testimony, and that she should be sanctioned. [SCR 73-75] [RR V. 7]. This ruling
should not be disturbed because the trial court’s discretionary sanctions award is
clearly supported by the evidence. See Unifund CCR Partners v. Villa, 299
29
S.W.3d 92, 97 (Tex. 2009); Nath v. Texas Children’s Hosp., 2014 Lexis 756.
B. Although Present When the Court was Considering the Bad Faith
and the Imposition of Sanctions Against Her, Golding Declined to
Testify in her Own Defense or Call Any Witnesses
In the introductory portion of Section II of their Brief, Appellants argue that
the trial court acted unjustly and abused its discretion in sanctioning Golding
because there was no affirmative showing of bad faith on Golding’s part. In
support of that assertion, Appellants make extensive reference to the transcript of
the hearing conducted on September 16, 2013 and contained in Volume 8 of the
Reporter’s Record [RR V. 8]. Notably, however Appellants failed to make any
mention, whatsoever, of the lengthy hearing conducted on December 9, 2011, and
transcribed in Volume 7 of the Reporter’s Record [RR V. 7]. This is not accidental.
In what can only be characterized as a “litigation strategy,” Golding did not
bother to appear at the September 16, 2013 hearing that was conducted solely to
determine the amount of attorneys’ fees to be awarded to Appellee. [RR V. 8].
Thus, by her non-attendance, Golding purports to construct the argument that the
trial court lacked sufficient evidence of her motives for her bad faith and perjurious
summary judgment affidavits and deposition testimony. That is, Golding argues in
the Appellant’s Brief that she was, in some manner, denied due process because
she failed to offer a defense or otherwise explain her misconduct. Alternately, she
incorrectly suggests that the absence of her testimony deprived the Court of
30
sufficient evidence to determine her bad faith.
Despite numerous references to the September 16, 2013 hearing to liquidate
the sanctions award (at which Golding was absent but represented by counsel),
Appellants conveniently ignore the fact that Golding was physically present in the
Courtroom during the hearing at which the Court actually determined the existence
of bad faith – on December 9, 2011. [RR V. 7 at p. 59-60]. During that lengthy
hearing Golding, perhaps somewhat wisely, declined to testify in her own defense
or even suggest a good faith basis for her false testimony. [RR V. 7]. She also
failed to call any other witnesses. Id.
This declination is not surprising, given the fact that—at the time of the
hearings related to sanctions (including on December 9, 2011) -- Golding was
already serving a term of criminal probation from a prior perjury charge that arose
from her false testimony in other litigation concerning her activities as the
subdivision’s developer [SCR 956-968].16 As such, during the December 9, 2011
hearing, the trial court advised Golding’s counsel to admonish her of her Fifth
Amendment rights. [RR V. 7 at pp. 59 -- 60]. Ostensibly, Golding heeded this
warning and did not offer any testimony – of herself or any other person – at the
December 9, 2011 hearing where the Court first determined her bad faith and other
16
One factor articulated by the Texas Supreme Court in assessing sanctions is “any prior history
of sanctionable conduct on the part of the offender.” See Low v. Henry, 221 S.W.3d 609, 620-21,
n. 5. Given her history as a litigant and criminal Defendant in the Guadalupe County District
Courts, Judge Steel is keenly aware of Golding’s propensity for deception.
31
misconduct. [RR V. 7].
Likewise, once discovered, Golding – even in her Appellant’s Brief – has
never suggested that her deposition and the affidavit testimony she rendered
(twice) were true; instead, she simply characterizes such testimony as “incorrect.”17
C. Golding Has Waived Any Objection to Excessiveness of the
Sanctions Award by Failing to Raise That Issue in the Trial Court.
Golding did not file any Motion for New Trial, or to modify or reform the
trial court’s Sanctions Order (or the Final Judgment incorporating such sanctions).
Likewise, she did not request a re-hearing on the sanctions determination. Golding
also failed to argue in any pleading filed in the trial court that the sanctions
assessed against her were excessive. By failing to raise the issue of excessiveness
with the trial court, Golding failed to preserve this issue for appellate review. See
TEX.R.APP.P.33.1(a).
Similarly, in addition to failing to provide exculpatory evidence or
testimony, Golding failed to challenge, object-to, or even cross-examine
Appellee’s testimony and evidence relating to the amount of attorneys’ fees and
costs incurred by ZAFCOA. [RR V 8 pp. 9-25]. These failures to object amount to
a waiver of any challenge to the excessiveness of the sanctions award because, in
order to merit appellate review, an objection must be clear enough to give the trial
court an opportunity to correct the asserted error. See Arkoma Basin Exploration
17
See Appellant’s Opening Brief at pp. 37-38.
32
Co. v. FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 387 (Tex. 2008). Thus,
Golding has waived any right to challenge the excessiveness of the amount of
sanctions imposed by the trial court for her litigation misconduct.
D. The Trial Court Did Not Abuse Its Discretion In Sanctioning
Golding Based Upon the Seriousness of Golding’s Violations
Appellate Courts in Texas must review the imposition of sanctions under an
abuse of discretion standard. Low, 221 S.W.3d at 614 (Tex. 2007). In determining
whether a trial court abused its discretion, a court of appeals must decide whether
the trial court’s action was arbitrary or unreasonable. Id.; Cire, 134 S.W.3d at
838–39 (Tex. 2004). A Court of Appeals cannot conclude that a trial court abused
its discretion merely because it would have ruled differently in the same
circumstances. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549,
558 (Tex. 1995).
In Appellant’s Brief, Golding has failed to identify any evidence that would
tend to indicate that her pleadings, offensive affidavits and/or deposition testimony
were not: (i) groundless and brought in bad faith in violation of Texas Rule of Civil
Procedure 13; (ii) unjust or inappropriate as the result of her abuse of discovery
under Texas Rule of Civil Procedure 215; and/or (iii) made in good faith, as
required by Texas Rule of Civil Procedure 166a(h). Moreover, Golding
improperly suggests, without saying, that the sanctions imposed against her were
33
case-determinative. Clearly they were not, as she seeks a holding from this Court
that she was the “prevailing party” in the trial court.
1. Sanctions Under Texas Rule of Civil Procedure 13
Rule 13 provides that pleadings that are groundless and in bad faith,
intended to harass, or false when made are sanctionable. See TEX. R. CIV. P. 13.
The very purpose of Rule 13 is to check abuses in the pleading process. See
McCain v. NME Hosps., Inc., 856 S.W.2d 751, 757 (Tex. App.-Dallas 1993, no
writ).
In its Sanctions Order, the trial court entered highly-detailed and
chronological Findings of Fact & Conclusions of Law expressly determining that
Golding violated Rule 13, that her deposition and affidavit testimony were
“knowingly and intentionally” false, and that her pleadings asserted “groundless
legal arguments.” Thus, the trial court clearly determined that Golding’s pleadings
and challenged affidavits were both groundless and made in bad faith / false when
made. The Court also cited numerous factors upon which it made its
determinations of falsehood and groundlessness, including the following:18
23. Golding’s bad faith is evidenced by the fact that she failed to disclose the
existence of the May 28, 2009 General Warranty Deed to her attorney of
record in this cause, William D. Crist. According to pleadings filed
herein, Mr. Crist has represented Golding since at least 2008, but has
18
Although not cited by the trial court in the Sanctions Order, the fact that Golding had an
attorney other than her current counsel (who actively represented her in 2009) draft the
undisclosed General Warranty Deed dated May 28, 2009 is suspicious and bears consideration
with regard to analyzing her “bad faith.”
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denied knowledge of the existence or contents of the May 28, 2009
General Warranty Deed until such document was produced by the
Association as an Exhibit to “ZAFCOA’s Objection To and Motion to
Strike Summary Judgment Evidence and Summary Judgment Response
Evidence.”
24. Golding’s bad faith is further evidenced by the fact that Golding executed
the General Warranty Deed conveying the property to MacIvor, and
caused such deed to be recorded, prior to each and all of the following:
a. the time that Golding executed an Affidavit supporting Plaintiffs’
Response to the Association’s Plea to the Jurisdiction filed in
Cause No. 08-0632-CV (September 10, 2010);
b. the time that Golding caused Plaintiffs’ Third Amended Original
Petition to be filed in Cause No. 08-0632-CV (September 10,
2010);
c. the entire pendency of the arbitration proceedings conducted in this
cause;
d. the time that Golding caused Plaintiffs’ Fourth Amended Original
Petition to be filed in this Cause (July 1, 2011);
e. the time that Golding rendered her sworn deposition testimony in
this cause (September 2011);
f. the time that the Golding served responses to the Association’s
Requests for Production propounded in this cause (September 30,
2011);
g. the time that the Golding Plaintiffs served their responses to the
Association’s Requests for Disclosure propounded in this cause;
h. the time that Golding rendered her sworn Affidavit testimony in
support of Plaintiffs’ joint Motion for Partial Summary Judgment
(September 8, 2011); and
35
i. the time that Golding rendered her sworn Affidavit testimony in
connection with Plaintiffs’ Response to ZAFCOA’s Motion for
Partial Summary Judgment (September 30, 2011).
26. Golding’s bad faith is further evidenced by the fact that her affidavit
testimony rendered in connection with the parties’ cross-motions for
summary judgment is largely consistent with the affidavit testimony of
James MacIvor (a co-Plaintiff and grantee under the subject deed)
rendered on September 6, 2011 and September 30, 2011. In their
Affidavits, which were jointly submitted to the Court, both MacIvor
and Golding failed to disclose the existence of the General Warranty
Deed dated May 28, 2009, but expressly referenced the contracts for
deed which were superseded by such deed. This corroborating omission
and misrepresentation suggests a collaborative effort by the Plaintiffs,
including Golding, to conceal the existence of the General Warranty
Deed dated May 28, 2009 from the Court and the Association.
27. Golding’s bad faith is further evidenced by the fact that, at the time that
she signed the summary judgment affidavits containing the false
statements referenced herein, Golding was actively serving a sentence
of criminal probation based upon her plea of “Guilty” to the charge of
Perjury in Case No. 09-0024-CR, filed in the same county and judicial
district as this cause.
28. Golding’s bad faith is further evidenced by the filing of her “corrected
affidavit” (dated October 24, 2011) disclosing the existence of the
General Warranty Deed, but only after the existence of such document
was brought to the Court’s attention by the Association. [CR 974-977].
All of these findings meticulously cited in the Sanctions Order are buttressed
by evidence in the record, and, therefore, support sanctions awarded under Rule
13.
The Court also met both prongs of the due process test set-forth in
TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991)
36
by (i) establishing a direct nexus between the offensive conduct (false affidavit and
deposition testimony and groundless legal arguments asserted in pleadings for
more than two years), Golding as the offender, and the sanction award; and (ii)
tempering the proportionality of the punishment relative to Golding’s
misconduct.19 That is, the trial court was deliberative in its analysis and entered an
appropriate sanction (approximately half of the more than $60,000.00 in attorneys’
fees claimed by ZAFCOA) that was expressly directed against Golding’s abusive
conduct with an eye toward remedying the prejudice caused to ZAFCOA (as the
innocent party).
Likewise, the trial court considered less stringent sanctions than the amount
ultimately assessed against Golding, but expressly determined that “[l]ess stringent
sanctions than those imposed…would not fully promote Golding’s future
compliance with her obligations as a litigant.” In that regard, the trial court
determined that Golding -- a repeat offender who had already been criminally
prosecuted for perjury and a known litigant in several cases filed in the Guadalupe
County district courts -- necessitated a sanction that satisfied the legitimate
purposes of securing future compliance with the relevant rules of civil procedure,
punishing her violations, and deterring other litigants from similar misconduct.
These are appropriate objectives of a just and sanctions award. See Spohn Hosp. v.
19
As set-forth above, ZAFCOA maintains that Golding has waived any right to challenge the
sanction award on “excessiveness” grounds because that issue was not presented to the trial
court.
37
Mayer, 104 S.W.3d 878, 882 (Tex. 2003).
The trial court, clearly, could have imposed more severe sanctions, but did
not. The sanction award imposed against Golding was not case-determinative, did
not constitute “death penalty” sanctions, did not prevent a decision of the parties’
claims in the merits, or even strike any of Golding’s evidence other than her
admittedly untrue affidavits. In short, the sanctions awarded against Golding under
Texas Rule of Civil Procedure 13 were just, appropriate and not excessive.
Moreover, they were supported by evidence, and therefore not assessed in an abuse
of discretion. See Unifund, 299 S.W.3d at 97.
2. Sanctions Under Texas Rule of Civil Procedure 215
When a trial court finds a party has abused the discovery process, it is
authorized to impose a sanction that is just under the circumstances. Tex. R. Civ. P.
215.3. The sanctions available under Rule 215 include "an order charging all or
any portion of the expenses of discovery or taxable court costs or both against the
disobedient party …" Tex.R. Civ. P. 215.2(b)(2). Sanctions are used to assure
compliance with discovery and deter those who might be tempted to abuse
discovery in the absence of a deterrent. Cire, 134 S.W.3d at 839.
When determining whether a sanction under Rule 215 is just, a court first
considers whether there is a reasonable relationship between the abusive conduct
and the sanction imposed. Transamerican, 811 S.W.2d 913, 917 (Tex. 1991)
38
Second, a court considers whether the sanction is excessive. Id. at 917.
In its Sanctions Order the trial court clearly articulated Golding’s discovery
obligations, including her obligation “to disclose the existence of” the Warranty
Deed she concealed, to produce such instrument in response to ZAFCOA’s written
discovery requests, and to not testify falsely during her deposition examination in
this case. The Court further examined the evidence of Golding’s discovery abuses,
and determined that she violated Rule 215 by failing to produce the Deed in
question, and by falsely testifying in her deposition about ownership of the lands in
question. [CR 972-979].
Having determined that Golding violated Rule 215, the Court imposed
sanctions “in accordance with the Court’s inherent power, and the provisions of
Tex.R.Civ.P. 215.2(b) and 215.3,” requiring that Golding shall pay to ZAFCOA, as
a sanction, its reasonable expenses, including attorneys’ fees, incurred in
conducting the written discovery and deposition in which the discovery abuse
occurred. [CR 978-79]. In furtherance of this award, the Court accepted into
evidence uncontroverted testimony and documentary evidence related to
ZAFCOA’s reasonable expenses incurred as the result of Golding’s violative
conduct. [RR V 8 pp. 9-25]; [RR V. 10 pp. 45-100]. Because this award is
supported by the evidence, and expressly authorized under Rule 215, no abuse of
discretion occurred.
39
3. Sanctions Under Texas Rule of Civil Procedure 166a(h)
Texas Rule of Civil Procedure 166a(h) provides that the trial court may
require a party who presents a summary judgment affidavit in bad faith "to pay to
the other party the amount of the reasonable expenses which the filing of the
affidavits caused him to incur, including reasonable attorney's fees[.]" Tex.R. Civ.
P. 166a(h). In connection with its analysis of the propriety of sanctions under Rule
166a(h), the trial court found:
38. Dorothy Golding had an obligation under Texas Rule of Civil Procedure
166a to not present summary judgment affidavits in bad faith.
39. Golding’s Summary Judgment affidavit and Summary Judgment
Response affidavit were each materially false, and contained testimony
that Dorothy Golding knew to be fictitious, groundless and presented in
bad faith, in violation of Tex.R.Civ.P. 166a(h). Specifically, Golding’s
affidavit testimony described in paragraphs 15 and 16 hereof was
knowingly and intentionally false at the time Golding filed her Affidavit
in Support of Plaintiffs’ Motion for Summary Judgment.
40. Golding’s knowing and intentionally false testimony and groundless
legal arguments asserted in pleadings were made for the purposes of
and/or had the practical effect of frustrating and interfering the Court’s
core functions, including deciding questions of law presented by the
parties. That is, Golding’s false testimony rendered by way of affidavit
and deposition significantly interfered with the Court’s core judicial
functions, including by making it impracticable for the Court to dispose
of this suit by way of summary judgment. [CR 977-979].
As a result of the foregoing Findings of Fact/Conclusions of Law, the Court,
in accordance with Tex.R.Civ.P. 166a(h) and the Court’s inherent power, ordered
Golding to pay, as a sanction, “reasonable expenses, including reasonable
40
attorney’s fees, which the filing of her summary judgment and summary judgment
response affidavits caused ZAFCOA to incur, including but not limited to all costs
of drafting, filing and presenting ZAFCOA’s Summary Judgment Response,
ZAFCOA’s Objection and Motion to Strike such affidavits from the summary
judgment record, and ZAFCOA’s Objection and Motion to Strike Golding’s
“Revised and Corrected” affidavit.” [CR 978]. Such an award is expressly
permitted by Rule 166a(h), and, accordingly, no abuse of discretion occurred.
CONCLUSION AND PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellee, Zuehl Airport
Flying Community Owners Association, Inc. asks this Honorable Court of Appeals
to affirm the Sanctions Order and Final Judgment entered by the trial court.
Appellee further prays for such other relief to which it may be entitled consistent
with this Court’s opinion, together with an award of attorneys’ fees on appeal.
Respectfully submitted,
/s/ Robert L. Wilson III__
ROBERT L. WILSON III
State Bar No. 50511773
RL WILSON LAW
111 W. Olmos Drive
San Antonio, Texas 78212
(210) 223-4100 (Telephone)
(210) 223-4200 (Facsimile)
Email: rlw3d@sa-law.com
ATTORNEY FOR APPELLEE,
ZUEHL AIRPORT FLYING
COMMUNITY OWNERS
ASSOCIATION, INC.
41
CERTIFICATE OF COMPLIANCE WITH T.R.APP.P. 9.4(i)(3)
I certify that the this computer-generated Brief contains 11,267 words
(including words contained in footnotes and headings). I have determined this
number by utilizing the “Word Count” feature contained within the Microsoft
Word computer program.
/s/_ Robert L. Wilson III
ROBERT L. WILSON III
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Appellee’s
Brief has been served on the following counsel by electronic service and/or such
method as is prescribed by Tex.R.App.P. 9.5. on January 9, 2015:
William D. Crist
The Crist Law Firm, PLLC
3123 NW Loop 410
San Antonio, Texas 78230
/s/ Robert L. Wilson III
ROBERT L. WILSON III
42