german-chavira-and-alejandro-fabela-both-individually-and-both-dba-el ( 2014 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
GERMAN CHAVIRA AND
ALEJANDRO FABELA, BOTH § No. 08-12-00169-CV
INDIVIDUALLY AND BOTH D/B/A
EL PASO PAVEMENT SPECIALIST § Appeal from
AND EL PASO PAVEMENT
SPECIALIST, LLC, § County Court at Law No. 5
Appellants, § of El Paso County, Texas
v. § (TC # 2011-397)
QUARRY HILLS MANAGEMENT, §
LLC, §
Appellee. §
OPINION
In this appeal we are asked to review a trial court’s final judgment and two contempt
orders which were entered following two show cause hearings. The contempt proceedings
resulted from the Appellants’ alleged refusal to comply with an agreed temporary injunction.
For the reasons that follow, we lack jurisdiction to review the contempt rulings and the judgment
which is based on the contempt findings on direct appeal.
FACTUAL SUMMARY
Quarry Hills Management, LLC (Quarry Hills) filed suit against German Chavira and
Alejandro Fabela, individually and doing business as El Paso Pavement Specialist and El Paso
Pavement Specialist, LLC (collectively referred to as EPPS) on February 1, 2011. The suit
alleged that Quarry Hills had retained EPPS as a subcontractor on three federal construction
projects. The suit raised a number of claims, including business disparagement, breach of
contract, tortious interference with contractual relationships, fraud, and conversion.
In particular, Quarry Hills complained that EPPS had not turned over “certified payroll”
forms for several projects. On federal construction projects, certified payroll forms are one of
the items that a contractor must submit to the owner to obtain final payment due under the job.
40 U.S.C. § 3145(a) (2014). The original petition sought a temporary restraining order and
temporary injunction requiring EPPS to turn over certified payroll forms for three projects
identified as “IBCT2-POV (Contract #W912HY-09-D-0004), BCT-3-CAB-POV (Contract No
W912HY-09-000-0003) and/or BCT-3-POV (Contract No W912HY-09-D-0009,0002).” Upon
the filing of the suit the trial court issued a temporary restraining order, conditioned on the
posting of a $500 bond, which required that the certified payroll forms for the three specified
contracts be turned over to Quarry Hills immediately. The temporary restraining order was
extended by a second ex parte order of the trial court which recited that the bond had been
posted. The trial court extended the restraining order three additional times by agreed orders
approved by Quarry Hills and counsel for at least one of the Appellants.1 The agreed extensions
continued the temporary restraining order in force through a temporary injunction hearing set for
June 6, 2011. Quarry Hills and EPPS mediated their disputes and reached a partial settlement
which included an agreement by EPPS to prepare and file by May 20, 2011 certain certified
payroll records, identified in a letter which is not of record. The mediation agreement
contemplated that the parties would continue the June 7, 2011 temporary injunction hearing.
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None of the Appellants had filed an answer or formal appearance during this time period. An attorney identified
in the extension orders as “counsel for Defendant” approved each of the extension orders as to form.
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That hearing was reset to August 30, 2011 and the parties mutually agreed to extend the
temporary restraining order until the date of that hearing. EPPS’s initial counsel of record
withdrew on August 5, 2011 and new counsel appeared on August 26, 2011.
At the temporary injunction hearing on August 30, the parties through counsel announced
an agreement on the issuance of a temporary injunction. The agreement which was reduced to a
written order recited that Quarry Hills would suffer irreparable injury unless the relief sought
was granted and that the bond had already been posted. The agreed temporary injunction
required that certified payroll records from two contracts be delivered by September 19, 2011.2
At the August 30 hearing, the trial judge instructed EPPS’ counsel to inform Appellant German
Chavira that it is “very, very important -- and I’m going to hold his feet to the fire -- that he
produce those records on September 19th.” EPPS counsel agreed to do so.
Quarry Hills filed a first “Plaintiff’s Motion for Contempt and for Sanctions” on
September 23, 2011. The motion contended that the payroll records had not been produced by
the September 19 deadline in the temporary injunction. The motion was supported by the
affidavit of David Venegas who swore that the United States Army Corp of Engineers was still
demanding the certified payroll records; that failure to provide the forms was preventing the
project from being closed out; and the situation was jeopardizing Quarry Hills’ ability to contract
for future federal projects. A show cause hearing was set for October 3, 2011.
German Chavira appeared at the October 3 hearing and testified as a partner of El Paso
Pavement Specialist, LLC. It would have been evident to the trial court that there was some
confusion amongst the parties as to the correct descriptive terms used to identify the different
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The projects were identified in this Order as: “BCT-3-CAB-POV (Contract No W91211Y-09-000-0003) and/or
BCT-3-POV (Contract No W91211Y-09-D-0009,0002).” The temporary injunction thus differs from the temporary
restraining order in that one project was deleted and in the other two, an “H” in the contract number was replaced
with “11.”
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projects at issue. The agreed temporary injunction required EPPS to produce certified time
records for project “BCT-3-CAB-POV (Contract No W91211Y-09-000-003) and/or BCT-3-POV
(Contract No W91211Y-09-D-0009,0002).” German Chavira testified to performing work on
project “BCT-POV.” He brought some records to the hearing, prepared by a third party
identified as “TNT,” which combined projects “BCT-3-POV and “CAB.” Quarry Hills’ counsel
contended that it really needed the certified payroll records for projects “BCT-POV” and “BCT-
CAB-POV” and contended there was a third project called “BCT-3” which was done for another
entity but for which payroll data had been intermingled.
Partly to resolve any confusion over the project descriptors, the trial court ordered the
parties to meet the next day at a time and place certain. A third party auditor who had come to
the hearing with Venegas was ordered to attend as well. German Chavira was ordered to bring
all of his back up paperwork on the jobs, including time cards and all notes reflecting who was
working on the two projects that he did for Quarry Hill. Chavira indicated that his secretary had
provided the original time sheets to TNT for it to prepare what reports it did. The show cause
hearing was reset for two days later on October 5.
When the parties reconvened the show cause hearing on October 5, EPPS’ counsel
informed the trial court that the meeting the day before had lasted about ten minutes. EPPS’
counsel determined that the meeting would be fruitless without TNT’s participation. None of the
back-up records, such as time cards, were brought to the meeting. Instead, EPPS’ counsel
indicated that he had just recently made contact with TNT and was intending to have it assist in
preparing the certified payroll records. The trial court recessed the hearing to permit EPPS’
counsel to confer with TNT to insure it would indeed meet with EPPS to prepare the certified
payroll records. After the recess, EPPS’ counsel represented to the trial court that TNT would
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work with German Chavira to prepare the certified payroll records, and that Chavira would assist
in that effort.
The trial court then ordered that EPPS pay $1,350 in attorney’s fees and $150 in costs as
sanctions. EPPS was to produce the certified payroll records on or before October 15, 2011 and
failing that, EPPS would be fined $300 per day until the records were delivered. The trial court
warned Chavira, who was in the court room, that he needed to cooperate and that he risked arrest
and confinement. The trial court specifically informed him:
The Court: That’s a very drastic measure, but if that’s what I have to do,
Mr. Chavira, I’m going to do it. So, you’d better cooperate. I looked over there a
little while ago and you were smiling and laughing. This is not a smiling and
laughing matter. You’ve pushed me to the limit. Do you understand that,
Mr. Chavira?
The Defendant: Yes, sir.
On January 6, 2012, Quarry Hills filed a motion to compel discovery responses. On
January 17, 2012, it filed Plaintiff’s Second Motion for Contempt and Sanctions. The trial court
signed an order setting a show cause hearing on January 30, 2012. The order cites each of the
Appellants for failure to produce the “Certified Payroll on the CAB-POV and the BCT-3-POV
projects” and failure to pay the monetary sanctions ordered on October 5, 2011. The record does
not show service of the show cause order personally on any of the Appellants. Their counsel,
however, did file a response to the motion and appeared at the hearing on January 30, 2012.
EPPS’ response to the contempt motion raised several procedural challenges to the show
cause hearing, including lack of personal service of the show cause order on any of the
Appellants. The response also asserted that EPPS should not be required to produce any of the
certified payroll records until EPPS was paid sums allegedly due it. Along with the response,
EPPS served a notice of deposition for a corporate representative for Quarry Hills, requiring
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production of twenty-two categories of documents. The deposition was set three days from the
date of filing the notice itself.
Both the show cause hearing and a motion to compel were set for January 30, 2012. At
the hearing, EPPS’ counsel restated its position that once the certified payroll records were
produced, the project would be “closed out” and EPPS would lose its ability to seek what it
claimed it was owed. EPPS then orally moved to increase the bond to $250,000 which was the
amount of its claim. Effectively, EPPS was arguing first that it could create the certified payroll
records, but that it did not want to until it was paid or the bond was increased. It also argued that
it could not create the certified payroll records without assistance.
The trial court noting, that it had “bent over backwards” more than in any other case,
granted the motion for contempt and sanctions. It signed two orders on January 30, 2012. The
first, labeled as an “Order,” compelled EPPS to pay $33,600 to Quarry Hills and struck EPPS’
pleadings. The trial court apparently arrived at this amount by multiplying the $300 per day fine
for not producing the certified payroll reports by the number of days between October 15, 2011
and January 30, 2012, and by adding the $1,500 attorney’s fee and costs that had been awarded
at the October 5, 2011 hearing. The order contains no finality language which would indicate
that all issues between all parties had been finally resolved. But on the same day, the trial court
signed a “Judgment” which also awards Quarry Hills $33,600 against EPPS based on all of
Quarry Hills’ pleaded causes of action. The judgment includes pre-judgment and post-judgment
interest as well court costs. It recites that “[t]his Judgment finally disposes of all parties and all
claims and is appealable.”
In this direct appeal, EPPS raises sixteen issues. Issue One complains that the trial court
abused its discretion by imposing death penalty sanctions in a contempt proceeding. Issues Two,
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Seven, Ten, Twelve, Fourteen, and Fifteen raise procedural defects with the agreed temporary
injunction, or the procedural issues attendant to the show cause hearings. Issues Eight, Nine,
Eleven, and Thirteen challenge the sufficiency of the evidence to support a finding of contempt.
Issues Three through Six contend in various ways the judgment cannot be supported as discovery
sanction. Issue Sixteen generically asserts that EPPS was harmed by the contempt orders and
Judgment.
JURISDICTION
EPPS filed its notice of appeal complaining of both the Order and Judgment signed on
January 30, 2012. Many of its issues also attack the October 5, 2011 contempt order awarding
$1,500 in attorney’s fees and costs, and assessing a $300 per day fine for continued non-
compliance with the agreed temporary injunction.
Quarry Hills initially contends that this Court lacks jurisdiction to hear any part of this
appeal because contempt orders, even if final, are not reviewable on direct appeal. The Texas
Supreme Court has held a number of times that a contempt order cannot be reviewed on direct
appeal. Texas Animal Health Commission v. Nunley, 647 S.W.2d 951, 952 (Tex. 1983);
Deramus v. Thornton, 160 Tex. 494, 333 S.W.2d 824, 827 (1960)(orig. proceeding)(“We have
uniformly held in this State . . . that the validity of a contempt judgment can be attacked only
collaterally and that by way of habeas corpus.”); Wagner v. Warnasch, 156 Tex. 334, 295
S.W.2d 890, 893 (Tex. 1956). A contempt order involving incarceration must be reviewed
through an application for writ of habeas corpus. Ex parte Williams, 690 S.W.2d 243, 243 n.1
(Tex. 1985). When the contempt order only involves money fines, and habeas relief would be
unavailable, mandamus is the appropriate procedure for obtaining review of a contempt order. In
re Long, 984 S.W.2d 623, 625 (Tex. 1999)(orig. proceeding)(per curiam)(“Contempt orders that
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do not involve confinement cannot be reviewed by writ of habeas corpus, and the only possible
relief is a writ of mandamus.”); Rosser v. Squier, 902 S.W.2d 962, 962 (Tex. 1995)(orig.
proceeding)(per curiam)(issuing mandamus to invalidate fine exceeding $500 limit imposed by
Government Code when no incarceration was at issue); Hernandez v. Hernandez, 318 S.W.3d
464, 466 n.1 (Tex.App.--El Paso 2010, no pet.); In re Office of Atty. Gen. of Texas, 215 S.W.3d
913, 916 (Tex.App.--Fort Worth 2007, no pet.).
Whether the order complained of is final or not does not alter this equation; even a final
contempt order is not subject to direct appeal. Wagner v. Warnasch, 295 S.W.2d at 893 (“If, by
a liberal construction, the order should be held to be a judgment of contempt, it would,
nevertheless, not be an appealable order.”); Beeler v. Fuqua, 351 S.W.3d 428, 433 (Tex.App.--
El Paso 2011, pet denied). But certainly, if a final judgment is entered in a proceeding that also
might include some contempt issue, the non-contempt portion of final judgment is directly
reviewable. Richey v. Bolerjack, 589 S.W.2d 957, 959 (Tex. 1979). In Richey, for instance, the
proceeding involved a request to modify a child support order, and a contempt motion for the
failure to pay past child support. Id. at 958. The court of appeals concluded it could not hear
any part of the case because the trial court had not ruled on the contempt motion. Id. The Texas
Supreme Court reasoned that the trial court judgment was final and remanded the case to the
court of appeals to hear the appeal. Id. at 959. On remand, the court of appeals decided the
modification and child support issues, but did not decide any issue related to failure of the trial
court to rule on the contempt motion. Richey v. Bolerjack, 594 S.W.2d 795 (Tex.Civ.App.--
Tyler 1980, no writ). The portion of a direct appeal from a final judgment which challenges a
contempt finding should be dismissed; any other remaining issues should be decided on the
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merits. Metzger v. Sebek, 892 S.W.2d 20, 55 (Tex.App.--Houston [1st Dist.] 1994, writ denied),
cert. denied, 516 U.S. 868, 116 S. Ct. 186, 133 L. Ed. 2d 124 (1995).
These defined avenues for review have formed a “judicial path so well landmarked” that
the Texas Supreme Court has been reluctant to depart from it. Deramus, 333 S.W.2d at 827.
This court, and our sister courts of appeals, have followed that path on many occasions. E.g.,
Beeler, 351 S.W.3d at 433; Hernandez, 318 S.W.3d at 466 n.1; Tracy v. Tracy, 219 S.W.3d 527
(Tex.App.--Dallas 2007, no pet.); Vernon v. Vernon, 225 S.W.3d 179 (Tex.App.--El Paso, 2005
no pet.); Cadle Co. v. Lobingier, 50 S.W.3d 662, 671 (Tex.App.--Fort Worth 2001, pet.
denied)(en banc)(“A contempt judgment is reviewable only via a petition for writ of habeas
corpus (if the contemnor is confined) or a petition for writ of mandamus (if no confinement is
involved)”).
EPPS responds to this line of cases by claiming that when the trial court utilizes non-
traditional contempt remedies, such as here when the trial court strikes an answer, that ruling
may be attacked by direct appeal. EPPS relies on Roloff Evangelistic Enterprises, Inc. v. State,
598 S.W.2d 697 (Tex.Civ.App.--Austin 1980, no writ) which reviewed a civil penalty awarded
in a contempt proceeding by direct appeal. The Austin Court of Appeals reasoned that the civil
penalty at issue was actually a fine authorized by the Child Care Licensing Act, rather than a fine
arising out of a contempt proceeding. Id. at 700. In other words, while the judgment said it is
was a contempt order, it really was something else. Later, the Corpus Christi Court of Appeals
in State v. Barraza, 742 S.W.2d 784, 785 (Tex.App.--Corpus Christi 1987, no writ) cites Roloff
as support for an exception to the rule of no direct appeals from a contempt order. The exception
arises “where the relief prayed for in the motion and afforded in the judgment is not of the
character associated with contempt proceedings.” Id. at 785.
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Were we writing on a clean slate, we might be persuaded that an exception such as stated
in Barraza, or something like it, would make for good policy. We are certainly troubled here by
the prospect of what appears on its face to be a final judgment, and denominated as being
“appealable,” but which cannot be directly appealed. Nonetheless, we are persuaded that the
court in Barraza misread the rationale in Roloff to create an exception where none existed.
Barraza itself was not applying any exception, so its discussion of Roloff was dictum. Neither
Barraza nor Roloff have been cited in support of this “exception” in the many years since they
were decided. Constrained by the prior precedent of the Texas Supreme Court and this court, we
decline to venture forth to create a new exception to the rule that contempt orders must be
addressed collaterally by either habeas corpus or mandamus.
Moreover, we note that in the record below that there is an order dated October 7, 2011
finding Appellants in contempt and assessing attorney’s fees, costs, along with a daily fine for
non-compliance. The record contains a January 30, 2012 order assessing a $33,600 judgment
consisting of the unpaid attorney’s fees and costs, and the sum of the accumulated daily fines.
Even if the final judgment here were subject to direct review, we would decline to hear issues
surrounding the two other contempt orders for want of jurisdiction. See, Metzger, 892 S.W.2d at
55)(dismissing for want of jurisdiction those portions of appeal pertaining to contempt finding).
And any relief that this court might issue with respect to the final judgment would therefore
leave intact the almost identical contempt penalties which are found in the January 30, 2012
order. Unless EPPS validly challenges both the final judgment and the January 30, 2012 order,
any error associated with challenging only one of the orders is harmless.
Accordingly, we lack the jurisdiction to hear EPPS’s Issue One, Two, Seven, Eight, Nine,
Ten, Eleven, Twelve, Thirteen, Fourteen, Fifteen, and Sixteen as each of these issues seek to
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challenge by direct appeal the trial court’s rulings arising out of contempt proceedings and
dismiss the appeal with respect to these issues on appeal.
DISCOVERY SANCTIONS
In Issues Three, Four, Five, and Six, EPPS also challenges the judgment to the extent it
was based on a discovery sanction authorized under TEX.R.CIV.P. 215. In varying ways, EPPS
contends the “death penalty” sanction cannot stand under the safeguards set out in
TransAmerican Natural Gas v. Powell, 811 S.W.2d 913 (Tex. 1991) and its progeny. EPPS no
doubt raises these issues because at the second show cause hearing the parties were concurrently
hearing a motion to compel. But as Quarry Hills concedes in its briefing, the trial court never
entered any orders on the motion to compel and the judgment and contempt orders were not
based on discovery abuse. Rather, the judgment and contempt orders were based on the failure
to create and provide a certified payroll form. In fact, a discovery request can only seek a
document that is in a party’s possession, custody or control; it cannot compel a party to create a
document where none exists. In re Colonial Pipeline Co., 968 S.W.2d 938, 942 (Tex. 1998).
Because the challenged orders were not the result of a discovery sanction, we overrule Issues
Three, Four, Five, and Six. If properly challenged, the judgment and the contempt orders will
survive, or not survive, based only on the procedural and substantive issues encompassing EPPS’
apparent refusal to create and provide the certified payroll forms as it agreed to do in a temporary
injunction. We affirm the judgment of the trial court below.
December 1, 2014
ANN CRAWFORD McCLURE, Chief Justice
Before McClure, C.J., Rivera, and Rodriguez, JJ.
(Rivera, J., not participating)
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